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SECTION 7F – WORKPLACE AND THE ENVIRONMENT
CASE 7.28 – EXXON AND ALASKA
Use PowerPoint Slide 293 to give a summary of the extent of damage done by the oil spill.
Answers and Key Discussion Items
1. Exxon’s attitude about the oil spill was very much criticized by government officials, local residents
and the media. Exxon did not recognize the magnitude of harm, was not appreciative of the urgency
2. Cutting back on staff and maintenance was a means of reducing costs. Over the short run, these
3. Exxon management also bears some moral responsibility for the spill. The cutbacks in staff caused
undue pressure on the crews. An error in operating the ship or in personal judgment (drinking) was
4. One of the purposes of ethical analysis is to be able to walk through the costs that can be anticipated,
based on models, historical precedent, risk, etc. Anticipating the risk in the case of an alcoholic
captain results in figures that would make the cost-cutting look foolish. Hazelwood bears some moral
5. The judge was outraged by the secret deal on punitive damages. Referred to as “high-low
agreements,” cases are settled outside the courtroom and the amount the plaintiff recovered is based
on the jury verdict. In effect, the determination in advance is a nullification of the jury verdict or an
increase, depending on who wins. In addition, the concern is that if the parties are not in the court
6. While the claim for insurance may be bona fide, the insurers can make more money in interest by
fighting the claim than they can by just paying it. However, the reality is that those making the claim
may truly be in need of the funds and unable to function as they wait for the claim payment. There
7. Exxon was punished sufficiently and there is the social issue concern of tort reform and excessive
damages. The ethical issue is whether plaintiffs demand too much in relation to actual injury.
Additional discussion points:
Following this accident, many oil firms began upgrading their ships with double-hull protection so that
an accident would pierce only one layer of the tanker and a spill would not automatically occur.
Exxon needs to base its decisions on long-term issues with respect to its operations as opposed to
The follow-up articles have cited Exxon’s conduct as a means for creating a public relations
Compare & Contrast
Herman Miller is a very proactive firm that seeks to have goodwill with the public and with its regulators. It
goes the extra mile, and Exxon’s philosophy at the time of the spill was one of doing as little as possible
CASE 7.29 – BIOFUELS AND HUNGER IN GUATEMALA
Answers and Key Discussion Items
1. The intention was to create a cleaner fuel supply. However, these decisions are not made in isolation.
By creating a demand for biofuels, the results were increased food prices, greater demand for land for
growing more food for fuel, and the impact on the poor in terms of food prices as well as on the
2. The reality is that focusing on biofuels and sustainability has resulted in increased poverty in those
countries where the growth and sale of crops has been redirected toward fuel. The demand has
3. Businesses have to make decisions when governments are shortsighted in their desire for companies
to come in and produce goods, farm products, etc. They can capitalize on the situation, but
4. The wages will soon have to match the cost of food, so the issue will not be one that a business can