Nicolo Pignatelli and Gulf Italian

02/24/2009 16:05

 1-      What should Pignatelli do? What should you do and why?

His ethical dilemmas are operating 50 % of the capacity of the refinery or shutting down the refinery. Pignatelli has to avoid the ethical lapses because his decision will affect individuals and his company’s policy. He needs to approach this situation by the social responsibility perspective because a kind of his approach to the problem will affect the society too. Pignatelli should consider managerial ethic for solving his ethical dilemma. Pignatelli has to go straight to the government and try to gain the authorization from the government, however, it take several months or years to obtain the  government authorizations, but without getting that authorizations he will not able to operate the full capacity of the refinery. In addition, he has to share the information with his partners, inform them about the situation he has with the government, and get their opinion. Inform the shareholders and stockholders about refinery’s situation. He need to shutting down the refinery because it has low cost than if he start operating with half capacity; after he get the permissions and opened the refinery with full capacity after few months he will be able to restitution the money he lost during this time.

If he approaches the situation with the efficiency perspective, for maximize the profit of the company, he could pay $1 million to the “consultant” who had “debottlenecked” problem like this before. Consultant is able to fix the problem quickly, the Pignatelli are able to open the refinery and operated with full capacity and start making money from the refinery, and the shareholder will be happy because they are able to reach to their profit quickly. In my opinion, this is wrong because the money his is giving to the consultant he is responsible for all his acts. He is responsible for the money consultant uses for giving the bribe, which is illegal. Pignatelli need to approach his situation legally, and in his approach, he needs to add the society factor too.

If I were in the Pignatelli’s situation, I would try to talk with the government authority, and put on the table the permission to build an oil refinery with a capacity of 6 million tons and all documents, evidence of how much it cost to build the refinery and document for how environment friendly the refinery is.  In addition, inform the authority about affect on economy, money and jobs loses, and how much it will cost if the opening of the refinery delays for countries economy and society. In addition I will show the documents which if the refinery operates 50 % of its capacity or shutting down, how much will the country need to pay to import the material from other counties, which refinery are able to prepare with lower cost.  In the other hand, I convince them with operating refinery with full capacity how many job will be created and how much this refinery will help the economy of the country and welfare of the society and convince them with evidences with obtaining this authorization faster how much the economy will grow faster. In addition, I try to convince my partner to understand the situation and ask them for their opinion, help, and patient.  Inform the stockholder and shareholder about the situation and inform them about the money lost of  company and update them with the steps I am taking and I will ask them to be patient and share with them the document and evidence that how much it will beneficial for stockholders and shareholders if the refinery operate with full capacity.  I do this because organization has responsibility to his partners, shareholders, stockholders and society, with legal steps, I will increase the value of the stocks in the market and the benefit of my shareholder and stockholders.

2-      Pignatelli seems to be learned in the direction of hiring a consultant who might use part of the money for bribes. If Pignatelli does not pay the bribe directly, does this absolve him of responsibility?

Pignatelli with hiring a consultant are responsible for his acts, because the consultant acting as behalf of Pignatelli and his organization, because the final decision maker is the top manager and he need to think and act ethically. This is the Pignatelli’s ethical dilemma and he need to be careful about the decision which he making, and with his decision may be he put his companies reputation in danger. He is responsible for all his acts and decisions that consultant makes. If consultant does the illegal steps in his approach for solving this situation, the Pignatelli will be partner for consultant illegal act.

3-      Bribes are illegal in Italy. Even if bribes are common practice there does this justify paying them?

Paying bribes in any situation is illegal and prohibited. It is against the law to pay the bribe to authority to do the job that they will not suppose to do. Paying the bribe and finishing the job lead the other organization and the individual to do so and everyone will find the way to pay the bribe and get their job done illegally. Organizations have responsibility for the society and they have to follow the laws and solve their problem legally they need to follow the list of ethical behavior for holding their reputation in their society. However, doing the job legally takes longer and cost them money from the pocket, but they will gain the respect of the society and their stockholders.

4-      Does Pignatelli have a responsibility to Italian citizens to build an environmentally friendly refinery above and beyond what the law requires? Is it appropriate for Gulf to spend this extra money and essentially take it away from shareholders?

It is appropriate for Gulf to spend this extra money because it is their responsibility to their society. It is universal approach, which they need to choose of actions that can apply to all people under all situations, environment issues related to everyone. Because, with this approach they are using the “strategic corporate social responsibility perspective”, which help them to focus on social areas, where there is the highest possibility of creating shared value for the business and society as a whole. Gulf spends the shareholders money, but instead company will gain the higher societies respect and reputation, and company will gain the higher value for their stocks in stock market too.

5-      How would you feel if you were a lower-level employee in the company and learned that Pignatelli intended to pay bribes to get things “debottlenecked”? What would you ethical obligations be? Should you ignore the situation or confront Pignatelli? Should you inform your direct boss or go to media?

Lower-level employee has to be whistle-blower and disclose illegal or unethical conduct of other employees to the boss. In this situation, the lower –level employee has to report the situation of Pignatelli directly to boss. With ignoring or confronting the situation, lower-level employee is helping the Pignatelli to continue his illegal and unethical approaches to the problems and the lower –level employee is become the Pignatelli’s partner in illegal issues.

In addition, if I were the lower-level employee in that company I go straight to the boss and if the boss ignores my report I will go the media and inform the society about their illegal and unethical respond to their problems.


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