Introduction
Management of business ethics is advantageous because it enables organizations to establish and retain good employees. In addition, ensuring that workers receive better pay also ensures they have favorable working environments that lead to maximum productivity and reduce conflicts within the organization. The essay identifies two specific ethical issues in the Richardson Drilling case and explains why they are ethical matters and not legal problems.
Ethical Issues Identified
Bribery
In the case study, it is necessary to examine the circumstances in which a conflict arises between what is right and what is wrong. Ethical matters are not essentially illegal, even though they may involve moral dilemmas. Bribery is the first key ethical issue identified in the case involving clients in overseas countries, specifically Mexico. Although bribery is permitted in certain countries and not considered a wrong act, it is also prohibited in the United States (US), where it is illegal and presents an ethical dilemma.
A bribe is something, for example, a favor or money given or offered to an individual in a position of power to influence his/her conduct or view. Bribery is an ethical issue because, in addition to violating moral and legal codes, it poses significant threats to international trade and the country’s economic development (Hope, 2020). In Mexico, although it is regarded as culturally tolerable, it does not automatically confer the right to do so.
Furthermore, during the first year working with Richardson Drilling, Jacob learned that, despite the firm’s policy prohibiting bribes to contractors and governments, most contractors were engaging in bribery. For instance, in Mexico, the principle was that 1% of the contract would go into somebody in power in the form of money. It compelled Richardson to contravene its policy and engage in bribery activities, as the oil sector experienced intense competition, and this often forced most US standards to be applied.
Furthermore, the corporation had purchased replacement parts from other suppliers that were of substandard quality. Upon being warned, the site manager noted that bribes are paid on a weekly basis and accidents do occur. It is also noted that bribes, specifically in Latin American nations, are a prevalent ethical problem (Rosenmüller, 2019). This has led many companies operating there to have no alternative but to give bribes, as others do, to save their operations.
The stakeholders to be considered in bribes are oil companies, governments, contractors, partners, suppliers, and employees. The corporations are taken into account because they are the ones providing money to receive favors from the government or contractors, as in the case of Mexico and the Richardson Drilling firm. They might be moved, although a simple gift, such as money, might cause significant harm to other stakeholders, including suppliers, employees, and partners.
Further, in terms of the right theory, which considers the rights being respected and those being violated. In the case of Richardson Drilling Company, the right to be treated equally is compromised; for instance, when the government or contractors in the country request a bribe to obtain a contract to drill oil. In this circumstance, companies that gave bribes received better treatment, and the equal rights of companies that did not pay bribes were violated (Ha et al., 2021).
Therefore, Richardson finds itself in an ethical dilemma involving bribery while operating in Mexico. Despite it being an unethical activity for US citizens to give money or favors for business gains, in Latin American countries such as Mexico, bribery is accepted and is a standard norm of business practice (Rosenmüller, 2019). A bribe given to a government official or contractor directly influences the independence and impartiality of an officer or contractor; thus, it breaches the right to fair business operations. The employer’s ethical duty is to be responsible for employees, providing a safe and secure workplace. Jacob should offer regular training on bribery to raise and maintain awareness among workers about what is and is not acceptable.
Giving Sensitive Information to the Seattle Company
Another ethical issue arises when Jacob goes to Seattle and meets with the other company, unintentionally communicating specific sensitive information. Furthermore, it is unacceptable to conduct business without considering whether one is contemplating a shift to another corporation, as this could create a conflict of interest that violates one’s duty of loyalty to Richardson. The duty of loyalty implies the fiduciary’s loyalty to a company.
Jacob’s responses are highly favorable to Seattle Corporation and might influence his actions and decisions regarding Richardson Drilling Corporation. Moreover, he could have conveyed trade secrets concerning his firm. Many things could be compromised when communicating information to others whom one does not know well. It is an ethical problem because one has a confidentiality agreement with a firm they work for, not to relay any unknown or critical information that could breach that trust.
Moreover, the ethical issue entails both the Richardson Company and Jacob. He had learned about many events that happened approximately seven years ago due to the failed liner with many Richardson items. He was asked to remain silent on the circumstance, which might lead to future accidents and potential risks if not addressed. Although he told his supervisor, she asserted that they could often discount the rest of the stock to oil fields overseas, which had fewer protocols and less constricting regulations.
This type of behavior is unethical because it places people’s lives in danger and involves selling inferior quality liners to countries with fewer restrictions and regulations. It is an ethical issue that contradicts the corporation’s report on the incident; therefore, Jacob must remain silent. The utilitarian approach provides a relatively direct mechanism for determining the ethically right course of action in any given circumstance one may encounter in life (Hennig & Hütter, 2020). Utilitarianism fails to consider whether the company’s profits are generated through manipulation, lies, or coercion.
Additionally, the corporation’s organizational ideas are concealing other incidents that have resulted from the firm’s utter negligence. Examples of this form of conduct include when the company’s president came to examine the failed liner but provided no explanations and could not assure that the issue would be resolved. Despite Jacob going to his manager, Hillary, to discuss the issue of several corporations declining to buy future products from Richardson Company, she advised him to remain silent, suggesting that all may be resolved in a few years. Jacob should ensure there is a firm foundation within the firm; hence, moral leadership at the management level may aid the rest of the workers when they experience ethical dilemmas. Further, Jacob needs to advocate for the rights of the stakeholders who are being affected.
Conclusion
The ethical issues identified in the case study are bribery and the disclosure of sensitive information. These are considered unethical practices because they are morally wrong due to the harm they cause to others. Ethical problems have devastating consequences for stakeholders, including workers, shareholders, consumers, and the broader community.
The ethical theories employed are correct theory and utilitarianism to argue that other companies, which fail to engage in bribery, have the right to fair business practices. Jacob has to fight for the rights of all stakeholders affected by the issues. He must honestly assess his resources and avoid manipulation to provide accurate information about the company for the benefit of all parties, not for personal gain.
References
Ha, L. T., Nam, P. X., & Thanh, T. T. (2021). Effects of Bribery on Firms’ Environmental Innovation Adoption in Vietnam: Mediating Roles of Firms’ Bargaining Power and Credit and Institutional Constraints. Ecological Economics, 185, 107042.
Hennig, M., & Hütter, M. (2020). Revisiting the divide between deontology and utilitarianism in moral dilemma judgment: A multinomial modeling approach. Journal of Personality and Social Psychology, 118(1), 22–56.
Hope, Sr, K. R. (2020). Channels of corruption in Africa: analytical review of trends in financial crimes. Journal of Financial Crime, 27(1), 294–306.
Rosenmüller, C. (2019). Corruption and Justice in Colonial Mexico, 1650–1755. In Corruption and Justice in Colonial Mexico, 1650–1755 (Cambridge Latin American Studies, p. I). Cambridge: Cambridge University Press.