Business
Introduction
The biggest menace most countries face today is the environmental pollution; earth, water, plants and animals are the first impaired factors affected by pollution. Our earth is becoming warmer because of fraud practices of certain companies that never cease burning more energy every day to accumulate more profit and generate higher revenue levels. One of these companies we will discuss in this paper is Williams Energy; a famous cash cow company based in Tulsa, Oklahoma, working in the field of energy. With its additional petroleum and electricity generation assets, Williams Energy plays a critical role in polluting the environment and damaging the wildlife in the area of Colorado. In this paper, we will highlight the fraud practices of Williams Energy in damaging its surrounding environment and how these practices can be explained from the perspective of the Utilitarianism theory.
Damaging Effects of Oil and Gas Spills Caused by Williams Energy
Inside its plants of liquid natural gas processing, Williams Energy managed to spill more than 240 barrels of mixed liquid natural gas; unfortunately, the spills found its way into the waterway, some of which eventually washed as benzene into Parachute Creek. Near the area of Colorado, citizens were wondering if there is something stuck in the water; their complaints led officials to stop the flow of creek water into a reservoir following the natural-gas fluid spill. Few weeks later, citizens were seeking for an explanation for this massive spill; they were hoping to see punishments for the company that causes this damage to the water; they were wondering why the state has failed to issue any fines.
The latter case is an obvious example of fraud practices performed by a famous company that put its own interests before the interests of the public.
After being spilled in the water, liquid natural gas (LNG) vaporizes in the air forming a cloud close to the ground. In the presence of an ignition source, with vapour concentration between 5-15% in the air, vapour cloud can ignite and burn leaving behind disastrous effects on both living creatures and assets. Unfortunately, it is not an easy mission to remove LNG spills for the following reasons:
- Variable thickness of the LNG pool as it spreads
- Spreading race of the leading edge of the LNG pool
- Evaporation rate of LNG on water
- Friction between the water and LNG pool
For these reasons, officials' movement to remove the spill can be a bit paced. The consequences of these spills raised benzene levels in the area above safe-to-drink five parts per billion, this eventually caused by a faulty pressure gauge on a four-inch pipeline. Near the plant of Williams Energy, officials closed head gates that control water flow from Parachute Creek into an irrigation reservoir after the discovery of the spill.
In the heart of Colorado's hydraulic cracking country, underground leak is located near Parachute; such leak, which flows into the Colorado River, represents a contaminating threat to Parachute Creek. Most of underground oil and gas pipelines located in this area are operated by Williams Energy; the company is trying to contain the spill, but it has not taken actual responsibility regarding the damage caused by its plant. No response was received from Williams Energy spokespeople, despite the several inquiries sent to them regarding the issue. The problem is that before the discovery of the underground plume pollution, no one can figure out how long the plume pollution was growing in the area. The spill was first identified by Williams Energy workers on March 8th, but the company's administration did not tell officials in the area about it until five days later. The last practice can give us a clear understanding of the intended violation the company did in order to maintain its own interests even if this represents a threat to the region's population.
The Utilitarian Approach to Business Ethics
As being one of normative ethics theories, utilitarianism implies that the proper course of action is the one that maximize utility, in other words, to maximize total benefit and reduce suffering to its minimum. The ideal perception of the theory is to love one's neighbor as oneself. The theory can represent a hedonistic approach only if the action results do not directly cause negative effects of others. According to utilitarianism, resulting consequences are the only determinants of moral worth of an action. Debates have been raised considering how much consideration should be given to actual, intended and foreseen consequences. The theory is based on the principle of bringing the greatest happiness to the greatest number of people; according to the theory, this principle is the measure of right and wrong.
Greatest Balance of Benefits over Harms
Utilitarianism holds that, in any situation, the morally right course of action is the one that produces the greatest balance of benefits over harms for affected party. The constitutive factor here is the level of benefits produced that everyone can reach, no matter the methods followed to reach the benefit; it can be, for instance, by lies, coercion, or manipulation. Indeed, most of us follow this moral reasoning type in making our day to day decisions. We always use the benefit or goodness as grounds for our infringed courses of action. In the business, field for instance, analysts and legislators weight the resulting benefits and harms of policies in their decision-making process based on the utilitarian approach.
Over time, utilitarian principles has been expanded and refined, so we can find different views of the significance of benefits or harms; some define their meanings in terms of pleasure and harm, while other link them to the level of satisfaction based on individual personal preferences. Most explanations economically tie the degree of benefit or harm to the monetary benefits over monetary costs.
Application of Utilitarianism Theory to the Case of Williams Energy
Assessing the actions in terms of outcomes, defining the net benefits and costs to all stakeholders, and striving to reach the greatest good for the greatest number of people, these three principles summarize the dogma of utilitarian approach in business. Managers and business owners may find themselves in a dilemma when they are forced to make a decision that may have potential bad effects on certain parties than the others. In such case, they need to follow utilitarian approach of balancing the degree of harm to the level of benefit that most of stakeholders can obtain. For any set of options, producing the best balance of benefits over harm will be the most ethical business option available to managers, based on quantifying outcomes as contentment and suffering, while considering certain factors such as short-term and long-term course of actions, monetary gain or loss, and individual preferences.
In the case of Williams Energy, utilitarian approach can be applied from the perspective of defining the percentage of people who received benefits and harm. Right and wrong will be measured based on the total benefits gained by the biggest number of people, and the extent harm occurred. According to statistics, the LNG spills caused harm to most residents in Colorado River, which can reduce the percentage of parties who may receive benefits from draining in the river; the only beneficial party will be the company and its stakeholders, who will gain greater profits from the plant production. Utilitarian approach justifies using fraud methods to reach the benefit, either by lies, coercion, or manipulation; however, it implies that benefits must reach the maximum number of people, and harm be at its minimum level. This is not the case for Williams Energy; benefits will be distributed to a small portion of people, while the harm will reach most of Colorado citizens.
Conclusion
Business ethics become more problematic in modern organizations that have for objective to reach the highest revenue indexed no matter the fraud practices they may follow to reach their investing objectives. In this paper, we used Williams Energy as an example of companies that cause environmental hazards to the area of Colorado by spilling LNG in Colorado River. We analyzed the company practice from the utilitarian perspective, which is based on the principle of ensuring benefits are gained by the maximum number. According to utilitarianism, Williams Energy did not perform the right course of action because consequences imply that benefits will reach the least percentage of people while harm will be suffered by most of Colorado citizens who represent the larger percentage. References
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