Marketing Management Case Analysis

1. The section on “Managerial Ethics” highlights three sets of relationships involved in the exercise of managerial ethics – the relationships of the organization to its employees, of its employees to the firm, and of the firm to other economic agents. Explain how each of these relationships was a factor in the ethical failings of the Minerals Management Service. In your opinion, which of the three was the biggest factor? Explain your answer.

The manner in which the employees are treated by the organization is an essential factor in determining the effectiveness of managerial ethics. In the case of Minerals Management Service, it is observed that despite the organization being aware of the various discrepancies such as accepting royalty in kind, selling oil and gas in open market, allowing buyers to revise the bids to the contract, consuming alcohol, cocaine and offering sexual relationship with representatives, the management failed to fire and punish those employees (Griffin 2013, p.p. 114). Instead of firing and banning, the employees were transferred out of the program but remained on the government payroll (Savage, 2008).The employees of the firm failed to differentiate between what potentially benefits the individual to the possible detriment of the organization. (Griffin, 2013. p. p. 91). Despite there being regulations which forbid the employees from carrying out any sort of unethical acts, the employees of MMS did not comply by those policies. Finally the biggest factor which triggered the ethical failings of the Minerals Management Service is the relationship of the firm with the economic agents such as customers, competitors, stockholders, suppliers, dealers, and unions (Griffin, 2013. P.p. 93). The employees of the firm deviated from being public servants to individuals with no ethics. They did not comply with any of the regulations, they mixed professional and personal relationships and satisfied their personal interest at the cost of government and public resources. For example the contract between the MMS and BO was unethical from its initiation and the end result was the oil leakage which killed 11 workers and affected 4,200 miles of coastline. With MMS falling apart on ethical grounds, the firm was dissolved on May 2010, which proves that anything unethical and immoral cannot survive on a long term basis.

1. Its too late now, but if you had been drafted to fix MMS in the wake of BP oil spill, how would you have applied the approaches to “Managing Ethical Behavior” discussed in the text? On which of these approaches would you have focused the most time and energy? Is it likely that you’d have been successful? Why or why not?

The BP oil spill affected not only the organization but also the economic agents. As discussed earlier the economic agents comprise of different entities from our society. Investigations had identified a number of management shortcomings, ethical lapses among personnel, and conflicts of interest at MMS. It is observed that oil spill, was the saturation point of MMS management irregularities. The first issue that I would take up as manger would be examining the existing code of ethics and follow those codes in the most ethical manner which in turn would make my co-workers and subordinates follow it with highest level of integrity. As a top executive I would raise ethical consideration to be more prominent in corporate decision making. I would make it a point to collect all the relevant facts comprising of all the investigators reports. It is observed that most of the discrepancies related to MMS are related to ethical issues. Accepting gifts, sexual favors, manipulating contract bids and use of drugs are immoral in any situation. Giving justification for such acts is not acceptable. Firing such employees would be the first task, secondly I would appoint new prominent officials and make them aware of the company policies and work as a team in order to resolve all related issues. Distributive, procedural, interpersonal and informational justice would be the foundation on which the organization will improvise on. Along with the above changes I would incorporate the steps taken by Interior Department Secretary Ken Salazar to split the agency into three parts: one to award drilling permits, one to collect the royalties that energy companies pay to the government, and one to carry out safety inspections and enforce environmental rules (Garber, 2010). By blending both ethical and organizational change and with my managerial skills I would be successful in bringing back MMS as a reformed organization.

1. According to Earthjustice, a nonprofit environmental law firm, the BP disaster happened because “manager weren’t managing, oil companies and regulators were colluding, and high risk was acceptable risk,”* Obviously, problems like those that led up to the BP spill can be extremely complex. In light of this fact, what, in your opinion, should be the primary responsibilities of managers at regulatory agencies such as MMS? Of Managers at oil companies such as BP.

MMS is a government agency and BP is a private organization.  The work culture of both these organizations are different. MMS is the lead regulatory authority for leasing activity related to offshore oil and gas recovery (Hogue, 2010). The two main difficulties faced by MMS was dealing with the issues of leasing and royalty collection. As a manager of a regulatory agency the primary responsibility is to formulate and adhere to the ethical policies and codes. It is observed that the top managers of MMS failed to follow ethical conduct, for instance the BP deal was approved over a phone call. The officials did not find it important to follow the procedural requirements. If MMS officials had collected all the facts relating to the oil drilling in Gulf of Mexico, they would have realized the pros and cons, but they were only concerned with the personal favors that they were receiving and this in turn led to a series of events affecting both humans and environment. On the other hand BP officials are equally responsible for creating such unfavorable situations. MMS failed to implement direct and indirect regulations on BP, whereas BP officials with their personal contacts and lobbying were successful in obtaining the contract. This shows that BP officials knew what they wanted and thought the best approach was to not comply with the norms of ethical conduct. In order to avoid such situations BP must train their mangers to act righteously. Prior to offering any favors to organizations like MMS, they must realize that although profit motive is a primary concern the concept of ethical standards has gained a lot of importance in present times and when not complied with, it destroys both the organizations reputation and credibility.