Management

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Chapter 4 : The Ethical and Social Environment
The Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal- including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct. The department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service (MMS), which collected the royalties paid by companies to extract oil and gas from the public lands. Newspaper also cited Devaney’s depiction of MMS as a “ dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch. Devaney’s revelation of a “ culture of substance abuse and promiscuity” in the service’s royalty-in-kind program. MMS, which also regulated offshore oil-drilling activities, received a plan for drilling in the Gulf of Mexico submitted by the petroleum giant BP, which assured the agency that environmental damage from any spill. The company’s worst-case scenario predicted spillage of 1500 to 4600 barrels, and escaping oil, according to BP, would dissipate before reaching land. Critics of the Interior Department were quick to point out that the oil and gas industry had spent $169 million to lobby government officials in 2009- $15.9 of it by BP. Secretary Salazar dissolved MMS. Responsibility for offshore drilling is now in the hands of the Bureau of Ocean Management, and the rest of MMS’s former functions have been delegated to other agencies.

Case Questions:
1. Managerial ethics are the standards of behavior that guide individual managers in their work. One of the factor that lead ethical failing of MMS is the relationship of the firm to the employee. Employers are organizations and the employment relationship creates a variety of legal and moral long-term obligations on both sides. Many aspects of this...
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