A. Clearly define your specific ethical question
Should BHP Billiton expand its business in oil and gas industry?
b. Provide a brief background discussion of your chosen ethical question that explains why it is important and in need of analysis
It is evident that paradigm shift can be observed instead of being spoken therefore; the similar approach can be considered for addressing the ethical issues of management of natural resources. BHP Billiton is an Anglo Australian petroleum company which is headquartered in Melbourne. It is a public company which was founded by Broken Hill Proprietary in 1885 which serves worldwide (BHP Billiton Sustainability Report, 2015). The company is facing challenges due to ethical issues involved in its business due to nature of industry in which it operates. This oil company has interrelated challenges to sustainability therefore; it can be a wise ethical question to address the future strategy of aforesaid oil company in Australia (Thakadu, 2005)
Ethical issues are inherent for every business but there are some industries which significantly witness to threat of being ethically challenged. Oil and gas industry has witnessed various challenges for development and implementation of expansion industry because over extraction of resources can create social and legal obligations for the company. BHP, the mining and Natural Resource Company needs to take necessary decisions for achieving sustainability because its business activities are not favorable for environmental protection. Thus, while developing expansion plan, management may be confronted to an ethical dilemma i.e. whether to increase production of natural resources or not because acting in this manner can bring the sustainability of the company into questionable situation (Adams and Hulme, D., 2001).
Furthermore, BHP Billiton Ltd. operates in some of the most challenging places in the world due to which it can face complex human rights related issues. Therefore, selection of this company can said to be backed with suitable reasons. Furthermore, the issue explained above is also justifiable because it can assist the oil and natural gas companies to actively get involved in promotion of human rights and ethical business practices. Ethical issues in natural management can be related to business, scientific, political, economical, social and technological dimensions. The ethical framework of BHP Billiton is affected by climate change which is a prime ethical issue in oil and natural gas industry of Australia. Thus, due to tension between CO2 emission and maximization of profits the oil company is confronted with above discussed ethical issues. Thus, it can be said that the selection of above ethical issue is justifiable as various ethical dilemmas for BHP Billiton can be addressed by doing this study (Grebner, Bittenger and Siry, 2012).
C. Identify and fully reference facts relevant to the analysis of your ethical question
The facts relevant to the identified ethical issues have been addressed in these headings which seek to describe the significance of this study and investigation for answering the identified research questions. The facts have been addressed on the basis of identified strategies used by BHP Billiton and other oil companies which can be directly linked to the ethical issues and their significance. For each of the identified dilemma of oil industry, the facts and relevance has been described separately (Sovacool, 2013).
Identifying the priorities on business consequences
This is a common dilemma witnessed by oil and gas companies which is faced while placing priority on the business consequences while weakening the perception that greenhouse gas emissions are causing climate change. One of the most negative consequences of business operations of BHP Billiton is that it causes climate change which is not favourable for society and community. In other words, businesses often neglect the seriousness of their operations on climate change which is a severe issue. Ethics is more or less related to identification of difference between right and wrong doings therefore, it becomes an ethical issue for business to prioritize profitability. Thus, if oil companies like BHP Billiton plans for expansion then it be unethical. Expansion plan of oil companies is often related to use of new technologies and entry in new markets for greater oil extraction which is not favourable for social welfare and environment protection. Therefore, this ethical dilemma can be addressed by investigating this research question (Bettinger and et. al., 2010).
Identifying the priorities on the need of modification
This is another strategy of oil and gas companies in which they prioritize the need for modification in the business process by limiting the adverse effects on environment and climate change in natural resource management. The research question seeks to answer the appropriateness of the approach of oil and gas companies like BHP Billiton to expand their business. Identifying such priorities on the need of modification is further an ethical issue as it is difficult to address the tension between CO2 emission and profit maximization. Thus, BHP Billiton needs to identify appropriate way to achieve sustainability in its growth and expansion plan without creating adverse condition for society (Agrawal, 2001).
The concept of Corporate Social Responsibility (CSR) is becoming popular among the oil and natural gas companies as these companies have identified the need for becoming responsible towards the society and community. Natural resource management concept focuses on the ways by which natural resources can be used in an effectual manner. It is often argued that growth and expansion plans of oil companies like BHP Billiton can be considered as their act of avoiding responsibility. However, the aforesaid company has adopted different approach. Management of BHP Billiton believes in balancing the ever demanded natural resources with sustainable development (Barrett, Brandon, Gibson and Gjertsen, 2001). The management of BHP Billiton believes that if the society has granted licence to the company then it will also demonstrate to host communities and governments by taking necessary steps for environment protection and natural resource management. In addition to this, it is also important to note that BHP Billiton has taken necessary initiatives for limiting negative potential impact on environment. Nonetheless, the business of this entity will most likely impact the environment which cannot be compensated with these initiatives. Furthermore, need to natural resources is also ever increasing therefore, it will be wrong to blame the decisions of management for the growth of the company.
d. What assumptions are needed to fill gaps in the available facts?
Various assumptions which are required to fill gaps in the available facts are explained here under:
Natural resource management requires complex decisions
From the analysis of facts, it was found that BHP Billiton has adopted sustainable ethical practices and considered the loss to the natural environment for society and community. It is assumed here that diversified resource companies need to make complex decisions for reducing the potential impact on society and environment. This assumption is required to fill the gap in available facts (Anderson, 2013). The reason for selecting this assumption is that management of oil industry needs to make complex decisions for natural gas management. This assumption is based on the fact that natural resources like minerals, oil and gas are basic necessities of human beings and their productions may not be prohibited. Further, by appropriate decisions, natural resource management initiatives can be taken by the management so that companies like BHP Billiton can find sustainable solutions.
Oil industry is a sustainable industry
There has been witnessed the continuing success and sustainability of the company which can be heavily dependent on maintain the license of operating by the company. Therefore, the company operates actively by ethical conduct as it has taken various initiatives like improving efforts, quality of life, community and environment protection etc (Gadd, 2005). The core focus of the company has increased to the problem of climate change as shared responsibility has been recognized and implemented by BHP Billiton. All these initiatives have been taken on the assumption that oil industry is a sustainable business which can be expanded and improved by following ethical business practices.
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Oil companies can reduce the tension between CO2 emission and profitability maximization
By considering ethical aspects, company will be able to reduce consumption of CO2 along with the maximisation of profits. For this purpose, new and innovative techniques can be used for the extraction of natural resources. In this manner, they can expand their operational activities without causing adverse impact to environment. Further, suitable strategies can be implemented by considering environmental factors. For this aspect, focus of company will be on reduction of exploitation of natural resources by consuming minimum cost. Above described aspects can be implemented by making assumption that industry of oil and gas is a sustainable business.
e. Analyse the ethical question using act utilitarianism
Utilitarianism is one of the most influential moral theories as its core idea is that whether actions are morally right or wrong depends on their effects. Thus, Utilitarianism can be considered as an effort for providing an answer to the practical ethical question. The above stated ethical question has been investigated using utilitarianism which in the notion of effects includes good or bad produced by the act. This relies upon the theory of intrinsic value in which it is investigated that something is wrong or right (Lamb and Goodrich, 2006). The tradition of value of natural resource management is measured by its impact on humanity. The utilitarian principle is conventionally expressed “always act to produce the greatest happiness for the greatest number of people”. As the utilitarianism principle involves happiness of greatest number of people therefore, the above mentioned ethical question can also be analyzed by applying this principle. However, it is important to note here that different results can be achieved for a single question as it depends upon the way in which question is answered (Waithaka, 2004).
Oil companies like BHP Billiton seek to improve their business and increase profitability but the tension arises between natural resource management and maximization of profitability. The growth and expansion plans of BHP Billiton can produce various adverse impacts on the society and community which is a major stakeholder of the company. However, expansion of business will help the company for producing the benefits for other stakeholders like suppliers, customers, society, shareholders etc. Thus, from the above analysis, it can be said that it is not wrong to plan for expansion of business if company is realizing and taking initiatives for Corporate Social Responsibility.
f. Provide an ethical conclusion
On the basis of this report, it can be conclude that company must considered ethical issues while using the natural resources as it can affect the society and environment as well. Natural environment must be used by considering different aspects such as effect over society, negative impact on nature and other related. Further, company must consider the same while planning for expansion and sole motive of profit maximization should not be kept. With this, sustainable development can be attained along with gaining support from the society where it actually operates. Moreover, it is also required that company must take significant steps for supporting the environment so that overall objectives can be attained. In addition to it, strategies should be developed by the company for the purpose of safeguarding the nature and also to innovate alternative resources. Moreover, it is required to conduct complex decisions making activity so that balanced decision can be taken within the controversy of reduction CO2 emission and profit maximization. Apart from this, it is required to involve certain other tactics by the management with a motive to gain best from the natural resources.
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