Organizational Ethics: Evolving Priority

Introduction

Over the past few decades, organizational ethics has growth to become a priority in every organization whether business oriented or non-profit entity. According to Fassin (2005) and Kaptein (2011), profit-oriented organizations prioritise on interest of the shareholders guided by the revenue and income margins with little regards to the consequences their actions and behaviour have on environment and stakeholders. Some scholars have argued that mostly ethical considerations or regulations aimed at ensuring organizations behaviour ethically are largely informed by experiences functioning as reactive measure to consequence to past practices. For instance, if an organization released radioactive materials to a water source to communities downstream resulting in health complications might lead a government to come up with framework deterring such a behaviour or force involved parties to compensate for the damages caused (Bishop, 2013). As such, governing bodies exert pressure to organizations especially the business-minded ones to conduct their operations while bearing in mind the wellbeing and welfare of the stakeholders and other parties such as consumers, employees, public, as well as the environment.

Concept of organizational ethics

The concept of organizational ethics takes a multifaceted perspective. Understanding its place in modern society and effects on organization growth, sustainability, and relationship with stakeholders (consumers, employees, and environment), it is critical to have a deep view and understanding of what organizational ethic is. Parboteeah and Cullen (2013) associated ethics to social setting based on what is perceived as wrong and right. Ferrell (2016) viewed ethics in three aspects namely discerning right from wrong, doing the right, and committing to doing the right thing. It entails the code of values founding the behaviours and conduct revolving around other people and accordingly the environment in which an organization conducts its operations (Sekerka et al., 2014; McLeod et al., 2016). This goes beyond the actions taken by an organization such as evading established regulations and procedures but also includes working in good faith taking into account the needs and expectation of the immediate communities and employees like giving back some of the profits back to the society or ensuring the products have no health complications to the end user. Building on the Koglberg’s 1969 theory, ethics are informed by self-interest, conforming to rules and norms, and individual consideration of the larger established values and principles based on ultimate consequence on people and wider community. In her Op-ed in Harvard Business Review, Paine (1994) argued that many managers perceive organizational ethics in terms of personal principles pointing out as “a confidential matter between individuals and their consciences” describing any wrongdoing as an isolated case and nothing to the role and scope of management. However, unethical business practices incorporate activities and actions by an organization but not limited to cooperation with others, which captures the behavioural patterns, beliefs, values, and attitudes reflecting respective operating cultures (Paine, 1994; Sims, 1991; Elango et al., 2010). The consequentialists argue that people should be judged on the rightness or wrongness of their behaviour particularly towards others (Kalajtzidis, 2013; Palmer, 2017). In organizational perspective, the policies of a business entity should be optimally the needs of the consumers while putting at minimal the potential harm from the operation whether directly or indirectly.

Organizational ethics in energy sector

In energy sector, observing ethical practices goes beyond generation and use of energy but revolves into the effects of the by-products during generation and use of such on the environment, people, and animals. The recent increasing in awareness and heightening campaigns towards climate changes and subsequent effects on the environment such as extreme weather, rising ocean levels, and melting glaciers have exert a different perspective towards the organizations in the energy sector and their role on global warming. Evidence from studies have shown that global warming experienced is attributable to greenhouse gases such as carbon dioxide and methane mostly produced during energy generation (Gillett, and Matthews, 2010; Zecca, and Chiari, 2010). Energy companies primarily those dealing with fossils fuels as their main product have encountered intense attacks from environmental lobbyists and sympathizers of climate change. For example, British Petroleum has been criticised over the years for not putting enough structures and policies aimed at preventing and mitigating disastrous pollution. Although one can argue that such attacks are genuine and not ill advised, portraying coal companies as evil because their operations entails producing energy by using ‘unclean’ raw materials is arguably double standards. According to Chiras and Reganold (2013), most of the issues are grounded on the resource conservation, pollution, waste disposal (solar and nuclear), and global warming. Nikiforuk (2012) held that dependence on energy putting human into servitude status in relation to it make it unethical for organizations in the field to produce and subsequent consumption of inequitable energy. It is worth noting that most proponents of forcing organizations in the energy sector particularly those operations are rooted on the fossils fuel to have in place structures aligned to limiting danger of their operating culture to environment and human health. Studying the effects of coal as sources on energy, Burt et al. (2013) found the effects to range from respiratory complication, death from accidents, and dangerous waste and toxic metals (mercury, carbon dioxide, and nitrogen oxides) in addition to the environment destruction. The proponents of the coal-use argue that the benefits gain in terms of the energy generated outweighs the continual increase in greenhouse gases associated to it, which the critics widely disagree.

Nevertheless, according to Sovacool (2013) and Frigo (2017), the actions and behaviours of business entities in the sector should not be driven by self-interest but rather have a wider perspective on the lasting consequence of such dangerous greenhouse gasses on the environment and humanitarian cost of climate change. The question on the responsibilities of the business entities as well as consumers of fossil fuels products to the future generations has been of central to ethical practices in the field given the hazardous fumes and lost energy source that cannot be renewed once used. First, should organizations consider regulating through energy conservation the consumption rate or enhancing energy efficiency of equipment as a responsibility? Secondly, over time, the alternative sources of energy such as renewables such as nuclear and geothermal will be expensive compared to fossil fuels limiting the poor communities from access such safer and less polluting sources putting into question fairness and equality in distribution of energy sources. Renewables sources are not exempted from ethics-related criticism ranging from noises and destruction of animal habits from wind turbines (Loder, 2008; Sutton, 2011). Whereas, solar is largely accused for failure to set in place recycling structures or disposal of toxic chemicals that include cadmium telluride, copper indium selenide, lead, silicon tetrachloride, and hexafluorothane (Tsang et al., 2016; Hernandez et al., 2014). These have been associated with serious health complications such as lack of weight gain, lung fibrosis, and lung damage.

Ethics policies in Energy Sector

In the US, Acts such as the Nature Conversation Act and special provisions on protected areas, the Environmental Protection Act, and the Act on the Protection of Wilderness Reserves have been enacted to preserve the protected areas (conserving nature and biodiversity) and nature from exploration by primarily coal and petroleum industries (Brockington et al., 2012; Stevens, 2014). Similarly, in the UK, several structures regulating exploration and consumption of energy sources are in place. The department for Business Energy and Industrial Strategy (BEIS) handles policies and regulation related to energy and climate change whereas the Oil & Gas Authority was established by oversee enforcement of environmental legislation as applied to oil and gas activities in upstream (OGUK, 2019). Furthermore, the UK government mandates the Health and Safety Executive (HSE) to implement health and safety legislation that includes regulating work activities in the gas and oil industries that might result in affecting or cause health problems (HSE, 2018). Additionally, the Offshore Safety Directive Regulator (OSDR) oversees compliance in the energy sector to the EU directive on safety during exploration and production of oil and gas offshore (HSE, 2017). Importantly, the government through licensing and leasing exploration and production of oil and gas demands prevention of environmental damage and upholding health standards by associated organizations. Formulating policies and regulations directed to inform the ethics in the industry can either take an individualistic or public dimensions. Curbing down global warming that is largely associated to fossil fuels cannot be achieved by taking an individualistic route rather demands a collective, if not global, effort. Whereas, energy conservation approach might be perceived in both individualistic and collective means where people can be encouraged to, although depends largely on personal preference and moral value, take up frugal and conservative lifestyle while organizations in the field pushed to adopt energy efficient methods and products (Baselga, and Araújo, 2009; Rapacciuolo et al., 2014). One major impediment to drafting and implementation of energy saving-oriented methods is individual freedom and liberty of choosing lifestyle that best fits one preference that include energy use.

Arguably, a government cannot enact a policy requiring its citizens to user energy efficient products or clean energy-powered vehicles in attempt to limit global warming or energy conversation but rather, it can set in place platforms that incentivises shift to cleaner energy sources. Encouraging cleaner and energy efficient approaches and putting incentive to it would mostly up the competitive market then setting optimal distribution by pitting against the alternative based on the benefits and effects of energy production and consumption (Garcia et al., 2012; Marcantonini, and Ellerma, 2015). As such, consumers who value clean, safe, and energy efficient sources and equipment can choose freely to go for solar or wind sources. However, individualistic approach faces number of challenges that include practicality of economic theory characterised by monopoly in production and externality of pollution in case market fails. Moreover, if an individual decides to drive a high fuel-consuming car to work daily can be missed as no significant moral issues to the environment. Nevertheless, extending such a scenario to a reasonably large population, the effect to the global warming through carbon dioxide emission can be colossal. Such a decision might seem minor at an individual level but have significant consequences at a large group make it. Although, several studies and activist have pointed that such scenario can be averted by taxing petroleum products, requiring automobiles industries to emphasis on the efficiency per mileage, and incentives to alternative fuel transportation.

Conclusion

In a social system where a governments approach of not regulating the industry but rather setting incentives to cleaner and safer sources such as wind and solar means the meeting the desires of proponents of mitigating global warming and fostering energy conservation are met while respecting the preference and freedoms of the others. Although energy production and consumption has focused mainly on the transportation sector fossil fuels burning by automobiles, the industry entails much more going beyond energy need in lighting, heating, and cooking to industrial operations. Studies have demonstrated that by-products of energy consumption such as methane, carbon dioxide, lead, and other toxic chemicals have significant impact on the health and environment. Ethics in the industry ought to cover from as low as household use of energy to large industry consumption delving into ways in which individual and collective production and consumption ultimately leave a lasting footprint to the environment and health issues to oneself and others. However, in line to practicing ethics, the question of balancing individual and environmental effects associated to the production and consumption of different energy sources with benefits either economic and lifestyle as well as freedom of living satisfactorily remains challenging. Any form of government has a role to protect the environment and public through formulation of the regulation informed by the same but at the same time ensuring reliable sources of energy to foster economic development and comfortable living. The UK government supports the industry by establishing economic viable and exploration of the energy sources while at the same time ensuring framework regulating wellbeing and concerns associate to it on human health and environmental effects under players ethical practices.

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