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USE THIS LINK FOR THE ASSIGNMENT · Explain how the philosophy of Milton Friedman might have played a role in BP management's decisions leading up to the disaster. · Explain how use of the triple bottom line (TBL) framework theory and CSR could have led BP to make different decisions and avoid the disaster. What would have been the corporate considerations and decision making process? BE DETAILED AND THOUROUGH

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The Deepwater Horizon oil spill of 2010 was one of the most catastrophic environmental disasters in recent history, resulting in massive ecological damage, economic loss, and loss of human life. Analyzing the managerial decisions and corporate philosophies guiding BP before the disaster reveals important insights into how corporate values, leadership perspectives, and ethical considerations influence risk management and safety protocols. Two primary frameworks—Milton Friedman’s shareholder-centric philosophy and the triple bottom line (TBL) approach combined with Corporate Social Responsibility (CSR)—offer contrasting perspectives on corporate decision-making processes. Understanding these frameworks helps elucidate why BP may have prioritized short-term financial gains over environmental and safety concerns, and how adopting more holistic approaches could have potentially prevented the catastrophe.

Milton Friedman’s Philosophy and Its Role in BP’s Decisions

Milton Friedman, a renowned economist and proponent of free-market capitalism, argued that a firm's primary responsibility is to maximize shareholder value within the bounds of the law and ethical custom (Friedman, 1970). This philosophy emphasizes profit maximization as the core objective of corporate management, often leading to decisions that favor cost-cutting, efficiency, and short-term financial performance over other considerations such as environmental protection or employee safety. In the context of BP and the Deepwater Horizon disaster, this shareholder-centric approach might have influenced managerial decisions that underestimated or ignored safety measures in pursuit of profitability.

BP's decision to cut costs on safety equipment and maintenance, despite the potential risks involved, could be viewed through this lens. Management under Friedman’s philosophy might have believed that as long as these decisions complied with legal standards and contributed to shareholder returns, they were justified. Such an approach encourages a focus on immediate financial gains without sufficiently accounting for long-term environmental and safety liabilities, which may ultimately lead to catastrophic outcomes. Notably, BP’s alleged cost-cutting measures prior to the spill, including infrequent safety checks and inadequate risk assessments, align with Friedman’s idea that corporate managers prioritize shareholder interests, sometimes at the expense of environmental and safety considerations.

The Role of the Triple Bottom Line and CSR in Guiding Ethical and Sustainable Decisions

The triple bottom line (TBL) framework expands corporate responsibility beyond financial profit to encompass social and environmental considerations (Elkington, 1997). This approach advocates for a balanced view of business performance, emphasizing people, planet, and profit. Similarly, Corporate Social Responsibility (CSR) emphasizes a company's obligation to act ethically and contribute positively to society while conducting profitable operations. Both frameworks promote integrating sustainability and ethical practices into core business strategies, which could have significantly altered BP’s decision-making prior to the disaster.

If BP had adopted the TBL and CSR principles, safety, environmental integrity, and community impacts would have been central to their operational decisions. For instance, thorough risk assessments reflecting environmental and community stakes should have been mandatory, and safety protocols reinforced as part of corporate responsibility. These frameworks highlight the importance of stakeholder engagement, including regulators, local communities, environmental groups, and employees, ensuring that their concerns influence operational decisions. This holistic view encourages managers to balance short-term economic benefits with long-term social and environmental sustainability, thus reducing the incentives to cut corners or neglect safety in pursuit of higher profits.

Corporate Considerations and Decision-Making Processes Under TBL and CSR

Implementing TBL and CSR within BP would have involved establishing decision-making processes that emphasize stakeholder interests and sustainability metrics alongside financial performance. Corporate considerations would include comprehensive risk management strategies that incorporate environmental and social risk assessments, regular audits, and safety compliance checks. Decision-making would have required stakeholder consultations, transparent reporting, and accountability measures to ensure management remains committed to sustainable practices.

The process would include joint oversight by sustainability and safety committees that evaluate proposals based on their environmental, social, and economic impacts. Long-term planning and scenario analysis would be integral to anticipate potential environmental hazards associated with deepwater drilling. These practices foster organizational accountability and promote a culture of safety and environmental stewardship. Meanwhile, incentive structures—such as executive bonuses—would be aligned with sustainability goals, encouraging management to prioritize safety and environmental responsibility rather than solely short-term financial results.

Conclusion

The BP Deepwater Horizon disaster exemplifies how a singular focus on maximizing shareholder value, as exemplified by Milton Friedman’s philosophy, can lead to neglecting critical safety and environmental considerations. By contrast, adopting the triple bottom line and CSR frameworks could have guided BP to make more ethically and environmentally sound decisions, potentially preventing the catastrophe. Integrating social and environmental concerns into corporate governance encourages comprehensive risk assessments, stakeholder engagement, and long-term sustainability. Ultimately, a shift toward such holistic approaches fosters corporate responsibility, reduces risks, and promotes resilient operational practices that safeguard both the environment and human life.

References

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