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Ethical Leadership at British Petroleum

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 2003 words Published: 9th Oct 2020

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The framework of ethical leadership implies a form of leadership that is governed by respect for ethical values and beliefs and for the rights and dignity of others. Concepts such as trust, honesty, charisma, equality, and consideration define an ethical leader and among the keys to organisational success is ethical leadership. An ethical leader guides people and leads by setting out good examples to emulate and does the right thing without compromising on personal values (Ciulla). The construct of corporate citizenship is closely associated with proper leadership and is the responsibility of an organisation towards society with the aim of improving the quality of life for communities and simultaneously maintaining profitability for stakeholders (Ciulla). These two concepts ultimately affect business outcomes with impacts on elements such as employees commitment, engagement, and job satisfaction. This paper will evaluate the broad concept of ethical leadership with a focus on the case study of BP (British Petroleum) Company.

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At the very basic point, the British multinational oil and gas company has its mission and vision founded upon an organisational code of conduct and value statements that govern employee performance and leadership. BP emphasises on being a renowned company that has remarkable competitive success since they believe in their potential of making a huge global difference by satisfying the needs of clients and meeting the rising demands for heat, light, and mobility (Saha 572). They plan to achieve this objective by producing environmental-friendly, secure, sustainable, and affordable energy and that course of action illustrate ethical conduct. The core values that direct leadership include are responsibility, progressiveness, innovation, honesty, and performance-driven. They help leaders value the concept of mutual advantage and maintain resourceful relationships with each other, clients, and partners (Ciulla). By being responsible, they are dedicated to ensuring the safety and development of the people they lead, their respective communities, and the societies within which they operate. For instance, BP strives to create a conducive work environment for employees and the environment that minimises their exposure to hazards (Saha 572). Based on innovativeness, they strive to maintain high standards of performance for company output and overall employee development on a personal level. Moreover, they push beyond limits to create breakthroughs for the future via their technology and employee empowerment. They also ensure timely and precise delivery of any promises made to the public or to their own employees.

Such values guide BP leadership team in conducting business because they require high standards of ethics and actions which align with major areas of rules and regulations regarding health, security and safety, fair and equal treatment of employees, and guidance on how to maintain ethical conduct with partners (Ciulla). Other key areas are guidance about company maintaining integrity and direction for positive engagement with communities and higher governing bodies. The leadership structure aligns with the corporate culture because the leaders and members have accepted norms that relate to every individual within the organisation. BP leaders work based on the elements of integrity, respect for everyone, human culture, and a non-hierarchical way of carrying out duties (Saha 575). However, their ethical conduct has been on the spot following the Gulf of Mexico oil spill incident that was partly contributed to by the use of a cheaper, low-quality casing seal (Saha 575). One of the executives at BP claimed that the safety of BP’s operations was everyone’s responsibility hence every individual was answerable (Saha 575). However, such an incident raises the leadership question that whenever each member of a company is responsible, it is challenging to identify whoever is accountable for such happenings (Saha 576).

Nonetheless, BP leadership has a commendable element of ethical conduct based on their extent of social responsibility. The company constructed a 1,200 km-long pipeline in Alaska, and it was among the most incredible and biggest infrastructure projects in the North America. Moreover, the planning process and design considered environmental sensitivity, which shows ethical conduct. The CEO at that time of construction, Tony Hayward, stepped down because his earlier decisions cost him his job and that portrayed the key factor of leading by example, which constitutes ethical leadership (Saha 576).

A leader’s strategic choice is typically based on their individual personalities and values, and they directly impact how a firm performs. Their ethical attributes greatly affect strategic decision-making, hence, a company and its performance reflect the ethical traits that leaders embody (Ciulla). Ethical leadership is directly associated with organisational performance and overall employee satisfaction because the former affects company’s performance positively. An ethical leader also ensures that corporate social responsibility (CSR) influences performance because it improves how employees and leaders relate with other stakeholders (Jones). From a commercial standpoint, better stakeholder relationships encourage new opportunities for investment while from an operational standpoint, an enhanced relationship translates to trustworthy associations. Moreover, ethical behaviour motivates leaders to develop socially responsible conduct that improves the relationship with stakeholders.

Corporate social responsibility is fundamental to any organisation, and it is not a short-term engagement, thus, should be formed on the grounds of strong leadership, as such leaders would efficiently invest in and implement better CSR initiatives that can affect a firm’s overall performance positively (Jones). Similarly, if an ethical leader fails to engage actively in CSR activities, their style of leadership cannot directly affect the performance of a company because ethical leadership indirectly affects firm performance through CSR activities (Jones). The wide range of operating measures that a firm establishes in its attempts to handle and form relationships with its stakeholders and the natural environment make up CSR and the activities of CSR play a role in a firm’s social validity (Jones). Thus, ethical leadership promotes socially-focused initiatives and changes to a firm as a driver of CSR initiatives.

Effective, ethical leadership ensures a sustainable workforce that is goal-oriented as well. Just like in the case of BP company, when employees are engaged, contented, and committed to their work, they make a productive workforce that facilitates the easier and faster accomplishment of goals due to higher productivity (Saha 576). Ethical leadership demands that employees are treated fairly and given equal opportunities and that is what leads to their satisfaction and commitment to their work areas. In return, they demonstrate their satisfaction through quality customer service thus generating more business for the firm. Generally, employees who are satisfied with their work grant the company the competitive advantage of consistent productivity due to job retention for long periods (Kim and Brijesh 447). On the contrary, dissatisfied employees are usually the product of unethical leadership hence resulting in poor work or more employees quitting their jobs to join other firms. The challenge of losing productive employees is that apart from losing skilled and competent individuals, the organisation suffers the loss of spending more resources in hiring new staff members (Kim and Brijesh 447). Moreover, people with useful skills deny the company the privilege of having staff members who are committed towards the attainment of business goals in a timely manner.

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The primary advantage associated with having employee commitment, engagement and job satisfaction is that they are familiar with the best strategies that are relevant in the achievement of organisational goals (Kim and Brijesh 447). Employee retention is a rising concern for virtually every company because it is a determinant of how fast and how well organisational objectives are attained on a long-term basis. Leaders must highly regard the relationship between employee engagement, job contentment, and commitment of employees to their work to ensure they retain the necessary talent and skills for maintaining a competitive advantage (Kim and Brijesh 447). Satisfied employees present the advantage of outstanding results because they prioritise organisational goals before their own, thus, improving productivity and profitability. Besides, employees are an incredible source of value creation for the firm, especially with reference to industries such as BP that require skilful practices for ensuring sustainability and good relationships with stakeholders (Saha 577). Hence, the primary step towards ensuring employees retain their positions in the company is increased engagement and satisfaction through ethical practices that make them feel valued and appreciated.

Employees should be included more in making major decisions that affect the company as it initiates the aspect of them feeling like a fundamental body of the firm. Teamwork is essential in making decisions because it aligns all objectives into one single context that every employee can work with towards accomplishing goals within the stated time frame (Jones). The engagement of employees also entails communicating useful information that is relevant to them in a timely manner and through the right channels to facilitate easier operations and better management of problems the moment they arise. In the case of BP, the crisis of oil spillage at the Gulf of Mexico that killed about ten people and injured others (Saha 576) was an indication of slight irregularities in the designation of tasks and engagement of employees because nobody was responsible for the aftermath because of no particular individual to be answerable to that particular area.

Conclusively, ethical leadership is paramount to every organisation regardless of the size or orientation because the right form of leadership sets the pace for achieving short-term and long-term goals. The leadership dictates how employees relate with the management body and other stakeholders and such relationships are integral to attaining stipulated objectives. Ethical leadership basically encompasses doing the right thing as a leader without compromising individual values as a leader and simultaneously setting a good example for employees to emulate and apply in their operations with clients. Good leadership requires traits such as honesty, equity, integrity, responsibility, and fairness for all employees and the external environment. In the case study of BP company, ethical leadership is among their most essential points of focus since it dictates how customers perceive and relate to the organisation. Ethical leadership promotes employee engagement, satisfaction, and retention which are fundamental to the retention of skills and talents necessary for company development.

Works Cited

  • Ciulla, Joanne B. The Ethics of Leadership. Wadsworth/Thomson Learning, 2003.
  • Jones, Bertram. The Relationship of Employee Engagement and Employee Job Satisfaction to Organizational Commitment. Walden University, PhD Dissertation, 2018.
  • Kim, Min-Seong, and Brijesh Thapa. "Relationship of ethical leadership, corporate social responsibility, and organizational performance." Sustainability, vol. 10, no .2, 2018, p. 447.
  • Saha, Indrani. “A Case Study on BP’s Sustainability and Ethical Performances - Reflecting on its Leadership.” Journal of Business Ethics, vol. 120, no. 4, 2015, pp. 571-584.


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