Shell oil is a global group of energy and petrochemicals companies with around 87000 employees in more than seventy countries and territories. The group was started by Marcus Samuel, a shopkeeper who was selling sea shells. In 1833, Marcus expanded his business into an importing and exporting business. At this time the business was run by brothers Marcus Samuel Junior and Sam. It was during a trip to Japan that Marcus became interested In the OLL exporting business then based In Baku, Russia (Bart, 2003). The company grew to global company that we have today.
The company’s mission statement Is “to enhance profitability through Innovative management strategies while ensuring cost effectiveness and harnessing creative Ideas. The shell oil ethical system can meet several classifications based on the Intended use and results. First, It Is an end driven ethical system, that Is, the shell personnel must act and do right always with the alma of certain goals. For Instance, under business communication, each personnel must observe communication standards with the aim of maintaining the reputation of shell (Australian Medical Association, 1965).
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Generally each action of any personnel is geared towards a certain goal, say, to maintain shell reputation, to provide proper communicate, to protect and safeguard shell’s property or to avoid any disciplinary or legal action against oneself. Secondly and lastly, the shell ethical system can be said to be duty based or deontological, that is, ethics are concerned with what people do, not with the consequences of their actions. Do the right thing and do it because it’s the right thing to do. Don’t do wrong things and avoid them because they are wrong.
For example, NY personnel must always act honesty, integrity and respect. This is not because there are punitive measures but because it is the right thing to do (Bart, 2003). This system ensures that the desired results under people and safety, fighting corruption, national and national and international trade, safeguarding information and assets and communications are met. Every ethical system has its reasons of existence. The code of ethics has uses to the organization as a whole. First, it’s useful for each and every employee of the company.
To start, the code of ethics prohibits inappropriate behavior. In shell’s code of ethics lying to management is against the communication ethic, fraud and embezzlement is against the fighting corruption ethic. Secondly, a code of ethics acts as a set of principles and rules to govern how employees operate. It helps them to make day to day decisions In choosing between right and wrong. In Dalton, they act as a reference of any penalties, sanctions or punitive measures taken after the violation of this ethics. For the management, the code of ethics has a lot of significance.
They are of great use when checking management accountability. Managers should exhibit honesty, transparency and Integrity In their dally roles (Bart, 2003). Moreover, they act as guldens to their management operations, namely: communication, safeguarding of Information and assets and fighting corruption. Also, the code of ethics helps the management in assessing the subordinates’ works, check whether the proper rules were followed, if there are any violations and if there are violations made what actions they take. The board of directors uses the code of ethics for various reasons.
First they state how the he board of directors should adhere to or avoid when dealing in securities and any financial interest works of or contracted awarded by Shell Company for avoidance of conflicts of interests. They also act as a guideline in setting the organization mission statement, goals and strategic objectives which are the mandates of the board of directors. The importance of the code of ethics to the organization as a whole is that the code is implemented in the mission or values statement. The statement provides companies with a compass to guide the organization through the business environment.
Codes of ethics offer an invaluable opportunity for responsible organizations to create a positive public identity for themselves which can lead to a more supportive political and regulatory environment and an increased level of public confidence and trust among important constituencies and stakeholders Also, the code of ethics helps in improving business relationships. Ethical values are designed to provide guidance when working with other companies and the general public. They dictate how the company handles contract negotiations, customer questions and feedback.
Maintenance of a code of ethics that meets its overall requirements year in year out there is a need to modify the code of ethics regularly. The reasons that may prompt modification are: one, growth of the company to international arena. Therefore a compromise with foreign ethical standards or upholding a single code in all countries is important. Two, changes in legislations and laws. All code of ethics must be congruent with the laws of the land. Some violations of the code of ethics are violation of law or regulation and can be punishable by law r government agency remedies (National Association of Real Estate Boards, 1963).
Therefore the ethical code should be in tandem with the law. As a new CEO I would encourage modification of the code of ethics to achieve its optimum results. I would involve all employees from all levels of an organization in the process of drafting and formalizing the new code of ethic, ensuring that all employees are on board with and committed to the standards. When dealing with code of ethics employees and managers react in many aspects. There may be a lot of resistance for employees to accept any change if in their perspective the code of ethics is infringing their rights.
This is as a result of the fact that many people fear change. Also resistance on part of managers occurs as a result of fear of facing difficulty in implementing the change (Bart, 2003). The resistance may be seen in terms of go slows and strikes. The organization culture may affect the implementation of the code of ethics. If it is the organization culture for managers to lead in any change, thus their adherence to new code of ethics makes it easier for employees to accept the change. The reporting culture also affects implementation.
Also the communication culture is of great importance in implementing change. The codes introduce consistency and standardization that are essential in complex organizations like shell oil (Terrine & Nelson, 2007). This is seen in decision making as for example the communication structure is well stipulated. Also significance on employees’ part is seen that is although shareholders generally come first, a code of ethics helps ensure that employees and consumers are treated fairly (Australian Medical Association, 1965).
Moreover, the code generates standardized policies and procedures which save valuable time in crisis situations as priorities are clearly laid out for members of the various guidelines to be followed by board of directors and all the employees of the company. The code generally emphasizes on proper and correct reporting and accountability on directors. On managers and employees people safety, fighting corruption, national and international trade, safeguarding of information and assets and communication are the main outlines of code (Bart, 2003).