Organizations, Management Behavior and Economics

Wednesday, July 05, 2006

A Word on Ethics...

As you guys saw in class, the idea of business ethics is a particularly messy one, where conventional wisdom may not always provide the "right" answer. Below is a classic example, courtesy of wikipedia:

Brent Spar or Brent E, was an oil storage and tanker loading buoy in the Brent oilfield, operated by Shell UK. With the completion of a pipeline connection to the oil terminal at Sullom Voe in Shetland, the storage facility had continued in use but was considered to be of no further value as of 1991. Brent Spar became an issue of public concern in 1995, when the British government announced its support for Shell’s application for disposal in deep Atlantic waters at North Fenni Ridge (approximately 250 km from the west coast of Scotland, at a depth of around 2.5 km).

Greenpeace organised a worldwide, high-profile media campaign against this plan. Although Greenpeace never called for a boycott of Shell service stations thousands of people stopped buying their petrol at Shell. Shell's sales went down by 70%. Greenpeace activists occupied the Brent Spar for more than three weeks. In the face of public and political opposition in northern Europe (including some physical attacks and an arson attack on a service station in Germany), Shell abandoned its plans to dispose of Brent Spar at sea - whilst continuing to stand by its claim that this was the safest option, both from an environmental and an industrial health and safety perspective. Greenpeace’s own reputation also suffered during the campaign, when it had to acknowledge that sampling errors had led to an over-estimate of more than one hundredfold of the oil remaining in Brent Spar’s storage tanks. Following Shell’s decision to pursue only on-shore disposal options - as favoured by Greenpeace and its supporters - Brent Spar was given temporary moorings in a Norwegian fjord. In January 1998 Shell announced its decision to re-use much of the main steel structure in the construction of a new harbour facilities near Stavanger.

My advice to the world, when thinking about ethical issues? Make sure you've done your homework before you get your pants all in a twist about what is "right"- it could make everyone better off.


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