Flashcards in Class 17: Texaco and BP Deck (20)
On September 1996, Lundwall turns over tapes of "The Meeting" to lawyers for plaintiffs in Roberts v. Texaco. What did he admit?
- Agreed to destroy documents at the meeting
How did Texaco respond?
- Chairman publicly apologized
- Took six steps to reinforce company policy
What six steps did Texaco take to reinforce company policy in their response to the discrimination case?
1) Senior executives visited plants to apologize
2) Expansion of diversity training and re-emphasis on core value
3) Suspension of 2 current employees
4) Cessation of benefits to former employees Lundwall and Robert Ulrich
5) Launch of independent investigation
6) Bijur went on ABC's Nightline
What did Texaco do in the Roberts v. Texaco case?
- November 1996: settled for $176.1 million
What happened to Lundwall in the aftermath of the Roberts v. Texaco case?
- Acquitted even though he admitted to doc shredding
What filed the suit in Roberts et al v. Texaco?
- $520 million class action suit filed by minority workers
- Filed by 6 employees on behalf of almost 1,500 workers
What was alleged in Roberts et al v. Texaco?
- Suit alleged Texaco "fostered a racially hostile environment" and systematically discriminated with respect to promotions
How could the discrimination at Texaco have been prevented?
- Discipline in any cases found
- Factor into goals for managers
- Keep records for re-hires and promotions
- Publicize promotion of employees for merit (regardless of race)
Texaco. Is whistleblowing ethical?
- Condoning or encouraging whistleblowing may be counter to the norm in many cultures
- USA - we aren't raised to "snitch" on our friends or enemies
- If you're an executive at a company, you would benefit when whistleblowers come forward w/i the company so that questionable practices can be checked and unethical practices can be stopped
- Too costly to repair the damage after the problem becomes public
Texaco. Could a protected whistleblowing mechanism or conscientious ombudsman have helped in this case?
- If the company had encouraged whistleblowing and taken allegations seriously
What was the key weakness in BP's corporate culture?
Continuous disregard for safety practices
What were four key problems at BP?
1) Texas City refinery explosion
2) Alaska pipeline spill
3) Thunder Horse platform sinking
4) Gulf oil spill
What were BP's problems a result of?
Resulting in part from acquisition spree, cost-cutting culture
Was BP's corporate culture ethical?
- BP's executives pushed for aggressive cost-cutting w/ little regard for safety
- BP took too many risks
- BP grew too fast
- Had no emphasis on safety
In a company as progressive as Texaco, what permitted such discrimination to occur?
- Texaco's core values included dignity and respect, and policies included reporting wrongdoing to supervisors
- But that was not the real tone at the top. Talk the talk, but not walk the walk
- Hiring practices were also self-perpetuating
For an effective whistleblowing system, employees must be comfortable using the system. What are five elements of a good system?
What actions did Texaco take after settling the Roberts v. Texaco case?
- created equality and tolerance task force
- adopted company wide diversity programs
- considered nationwide job postings of senior positions
- monitored compliance with settlement terms
True or false.
A lack of ethical leadership and clarity about the importance of safety as a fundamental value of the company influenced BP's culture.
What are some factors that contributed to BP's poor culture?
1) Lack of ethical leadership
2) Quick growth created complex organization
3) Vision to be "first" in deep water drilling
4) Narrow focus on ST profits
5) Soft penalties or weak enforcement by EPA