management ethics

management ethics

While most managers are not dishonest, a majority think that management judgments cannot be ethnically neutral and moral management is, therefore, not tenable in the present corporate world. It is for this reason that both immoral and amoral management is a continuous bane of the administration profession since it poses as a pragmatic or innocent philosophy. Both forms of administration do not factor moral judgments into the actions, decisions, and behaviors of managers because of the belief that either management motives should only focus on organization’s gains or business activity exists outside the realm to which ethical considerations apply (Carroll, Brown, & Buchholtz, 2017). Contrary to these views, management should, in addition to remaining positive and productive, conform to the highest principles of moral behavior or professional ethics of conduct and treat all stakeholders justly and fairly. Central to this discussion, this paper will analyze the management ethics, both established formal policy and unwritten codes, of Saudi Aramco.

Saudi Aramco is a Saudi Arabian national petroleum and natural gas company represented in the three primary world energy markets of North America, Asia, and Europe (Saudi Arabian Oil Co., 2020). The company’s administration is anchored by its corporate values of excellence and sound ethics to deliver value for the company, partners, customers, and the communities in which it operates. Saudi Aramco’s staff is held accountable for their actions when meeting corporate goals. All objectives outlined by the president have to be met while orienting toward the law and observing the highest professional standards of conduct. The company deems its purposes of profitability, ethics, and legality as both necessary and desirable and holds its administrators responsible for succeeding within the precepts of fairness, respect for rights, and justice. The organization’s integrity is founded on the ethical standards of its managers in their everyday actions. Besides treating all persons with fairness and respect, supervisors are expected to embrace diversity and differences.

To ensure that all business decisions are founded on objective criteria, the company has an ethics and compliance hotline that provides a safe and confidential venue for all stakeholders to report instances of fraud, irregularities, or unethical conduct. To maintain an ethical workplace and encourage a candid, open culture, employees are prohibited from discriminating or retaliating against anyone helping with an investigation or speaking up about maladministration (Saudi Arabian Oil Co., 2020).

Saudi Aramco strives to be a good corporate citizen and a positive influence wherever it is conducting its business by complying with all applicable laws and regulations. Managers are required to demonstrate, as a minimum, a commitment to uphold the standards of working hours, pay, health, safety, and other employment conditions in all the countries the company operates. Additionally, they must meet all competition laws that apply to the organization. Executives are restricted from entering into a contract with either formal or informal competitors concerning prices, business partners, customers, distribution, and territories. It is in connection to fair competition laws that administrators are also restricted from promoting corruption by giving bribes or receiving kickbacks (Saudi Arabian Oil Co., 2020). While offering or accepting meals, gifts, and entertainment are routine in many regions of the world where Saudi Aramco has its operations, the company’s staff are only to partake in the culture if it is legal and consistent with customary business practices. They are also only to make contributions to those charities that would not be viewed as improper payment or a bribe.

Managers at the company are required to avoid situations where their personal interests may be at odds with the organization’s business. It does not allow its executives to have any stake in a firm that competes with Saudi Aram, does business with it, or seeks to business with it or any of its vendors, clients, contractors, and subcontractors. The firm’s administrators are also forbidden from acting as independent consultants, having a position in, or taking part in undertakings of any of its suppliers, customers, contractors, and subcontractors. They are also prohibited from taking advantage of the company’s information, property, or opportunities for personal gain. This prohibition includes selling company assets or giving them away to be used by unauthorized persons. Moreover, they are not to use agents to act on behalf of the company if the organization cannot lawfully do the action itself. Saudi Aramco is stern on any deviancies by managers related to using third parties for purposes outside legitimate business dealings and which would cause embarrassment to the company if publicly disclosed. Saudi Aramco’s operating strategy of moral development extends to suppliers who must meet policies on labor practices, ethical sourcing, environment issues, corruption, health and safety standards, conflicts of interest, as well as monitoring and compliance (Saudi Arabian Oil Co., 2020). The company takes stern action against directors who enter into any agreement with suppliers or any other third parties that do not comply with these conditions.

Saudi Aramco is committed to its stakeholders and as part of its commitment to being a responsible steward of its assets, the company’s directors are expected to be honest and accurate regarding finances, safety, human resources, time, and all other business records. Saudi Aram’s takes very seriously its responsibility to comply with all customs, export controls, anti-boycott laws, economic sanctions, as well as trade compliance laws related to technology, products, information, and software. Its leaders are severely punished for failing to abide by the trade control law that apply to the parties and countries the company engages with or inaccurately classifying, labeling, and valuing imports and exports. There are various company laws prohibiting insider trading: trading stocks together with other securities founded on material information that is not known to the investing public. Administrators are not to use data that is valuable to investors to make decisions about whether to sell, buy, or hold stock or any other security. They are also not to provide material information that is not publicly known to others including their relatives and friends. In general, administrators are forbidden from falsifying reports, violating any of the company’s policies, committing fraud, or any other irregularities (Saudi Arabian Oil Co., Partnering With Us: Auditor Hotline).

The idea of an oil and gas corporation making a positive contribution to climate challenge is a contradiction to many people. However, Saudi Aramco has utilized its position and unique qualification as a world-leading energy company to make real contributions to the global solution. The company’s efforts at dealing with climate change are supported by its guidelines of conducting business and are tangible expressions of its management ethos. One way the organization’s administration has met the challenge of meeting the globe’s energy needs while controlling emissions is by enforcing abatement processes such as natural sinks that absorb greenhouse gases. Saudi Aramco has also reduced its well-to-refinery carbon intensity for every barrel of oil it produces. A study in 2018 by Nature Energy revealed that the company has one of the least greenhouse gas emissions of all crude oil grades entering the Chinese market, counting even local production. The company has been capable of producing low carbon intensity crude oil owing to its practices of flare minimization, reservoir management, and well completion. Its operating strategy of moral management guided its decision to use such creative and innovative technologies as mobility geo-steering, peripheral water flooding, and multilateral wells to reduce greenhouse gas emission during oil production and processing (Saudi Arabian Oil Co., 2020). In addition to minimizing greenhouse emissions, the company has been careful to protect and preserve the natural environment of the Kingdom’s environmental zones. Saudi Aramco’s managerial team has been active to enhance biodiversity in the Arabian Gulf that is currently been threatened by climate change. The company has established stable and permanent artificial reef structures along the Arabian Gulf to improve the biodiversity of reef organisms and fish populations.

Saudi Aramco is proof that an organization can pursue profits without disregarding law and sound ethics: a company can be successful within the confines of legal obedience and ethical standards. Even while striving to operate at a moral level above what the law requires, the petroleum and natural gas company is the most profitable organization in the world and one of the largest revenue earners. Its management ethics are entrenched within its corporate culture and guide a suite of codes, policies, and guidelines regarding how staff should execute the firm’s business strategy and treat all stakeholders. Saudi Aramco’s current and future successes are enabled by the ethical behavior of its staff and the integrity of the corporation. Despite the complex, incredibly diverse and fast-paced nature of its work environment, the organization understands that every leading company must, in addition to adhering to its core values, exhibit consistent moral management.