Petroleum Trading Essay
This paper assesses the political , social , ethical and legal environments of British petroleum and Kuwait oil firm and the impact of these to management decision making . The two firms experience similar challenges which include legal fines and probations due to violations of environmental laws, ethical challenges due to the death of human beings and animals as a result of pollution , social challenges inform of under representation of ladies in the management and political bickering which leads to stalling of major projects. Kuwait oil industry has experienced more political interference with some of its oil wells being burnt by Iraq. British petroleum has on the other hand experienced more legal challenges than Kuwait oil industry due to its environmental insensitivity.
The first firm to consider is the British Petroleum (BP). This firm has in the recent past struggled with legal challenges with its subsidiaries being convicted three times in Alaska and Texas of environmental laws violations. Two of these cases were actually felonies and the firm remained on probation for two of the cases (Nelson ,2008 ). This firm has also been heavily fined for violating work safety requirements in U.S. One of these fines include $69,000 for thirteen safety violation offences at its Cherry point refinery(Nelson ,2008 ) . A close scrutiny of BP’s operations history also reveals a pattern of ethically questionable and illegal practices that the company has struggled with for decades. The firm also experienced ethical and legal challenges when it was given a fine of $50,000,000 and a probation of up to three years after its oil refinery plant exploded in Texas killing 15 workers and injuring 180 others (Nelson ,2008 ).
The firm was also engaged in legal battles in 1995 when one of its contractors , Doyon Drilling illegally dumped harmful substances down oil well shafts in Alaska oil production area (Ghosh , 1999).The company was convicted in 2000 of failing to report the dumping and was fined $3 million and a five years probation. The company was also required to come up with a nationwide environmental management program that cost the firm a fortune. British petroleum experienced ethical challenges recently following oil spill at the gulf of Mexico which contaminated pelagic zones affecting over 400 species of fish, invertebrates, birds, and marine mammals. This greatly jeopardized the lifes of people who consume marine animals hence an ethical challenge (Razavi ,2005) .
Social challenges are quite serious in this firm. There are fewer female managers as compared to male managers in the firm’s management. Gender differences as a result of cultural , political and biological differences between men and women has greatly affected decision making process within the firm. Men and women in the firm approach issues differently with women being more sensitive to risks and more environmentally aware than men (Razavi ,2005).Political bickering within the firm has also been a challenge. This has led to stalling of oil mega projects since decision making has been greatly affected. Stiff opposition of projected projects by parliament has also slowed down the progress of the firm(Razavi ,2005) . Managers of the firm actually claim that the oil sector’s strategic decisions have reached impassable levels due to political disputes from within and without the firm following the recent gulf of Mexico oil spill.
Kuwait’s oil firm, the country’s lifeline has experienced challenges quite similar to those experienced by British Petroleum. Political bickering and interference have stalled several projects due to their negative influence on decision making processes . Recently, three mega projects with an estimated cost of about $40 billion were put on hold following political interference from the country’s parliament and also from within the firm (Razavi ,2005). This has put the firm in a serious decision making crisis with plans and strategies being frozen. Gender disparities are also rife in this firm with the better percentage of the management being made up if men. The few ladies in the management don’t seem to view things in a similar way to the men. The ladies seem to be more environmentally sensitive than the men and this has caused difficulties in decision making( Khan, 2009).
The industry has faced several decisions and technological challenges concerning the methodologies of producing, transporting and refining heavy oil (Tiernan , 2003). Environmental damage including pollution of water resources and contamination of the soil has affected human beings due to contamination of vegetation and livestock. Fish have perished as a result of water pollution and deforestation in the oil drilling sites has led to the death of animals . This has given the firm unbearable legal and ethical challenges due to loss of lives and fines (Tiernan , 2003). Social differences have also been witnessed inform of conflict over oil- producing regions. Military aggression to damage the natural oil resource especially by Iraq has resulted to the death of human beings hence an ethical challenge( Khan , 2009).
The two firms should consider employing more female managers who are more environmentally sensitive . These managers would put measures in place which would help avoid costly oil spills, and deforestation which leads to the death of wild life . giving women appointments throughout the firm and especially in key decision making positions would improve the performance of the firms. The firms should develop a more sustainable and environmentally friendly business. This would help the firms avoid fines and probations which slow down progress. The firms should also try to remain ethical by avoiding practices that endanger life. Bad politics should be avoided to ensure a smooth decision making process. The managers should also learn to respect each others opinions in order to make decision making processes smooth.