Introduction
Glencore is a Switzerland-based company that ventures into commodity trading and mining. The company is facing an ethical tussle with the UK and the US governments over bribery deals that were done against West African and Southern American countries. In The Guardian’s issue dated June 21st, 2022, the magazine highlighted the case against Glencore for falling prey to bribery in its operations. The company had reportedly paid a lumpsum amount of money to officials in the countries where it conducted business so that they get preferential access to oil and other products with background checks. The management had conspired with employees, and the firm is risking a fine of not less than $1.1 billion after pleading guilty (Kollewe, 2022). The deal was undertaken in Equatorial Guinea, Cameroon, South Sudan, Nigeria, and others. The bottom line is that Glencore lacked ethical practices by involving itself in fraudulent deals meant to benefit the company at the cost of other competitors and citizens of the latter countries.
Five Recommendations that Glencore Can Apply to Enhance its Ethics
In a workplace, ethics are important since they show professionalism and prevent adverse liability. The competition from peers who offer similar services, such as Glencore, may have triggered the top management to accept the unfair deal that would sabotage the economic components of the company later (Kollewe, 2022). In this case, strong ethics may not have cost the company the way it is now. The reason is that ethics comes with integrity, a measure of transparency and accountability. Employees who do not trust each other may not be productive when compared to vice versa. Glencore may take time before they convince their customers about their ethical conduct, which means sales may go down due to that issue. Nevertheless, the company can buy a leaf from this report on the following recommendations meant to enhance business ethics.
Learn from Previous Mistakes
Unfortunately, the value of ethics is rarely realized unless a company gets into the sour reality of what happened regarding poor ethical conduct. As a result, one of the ways that a company must learn to uphold ethical conduct is by rectifying what went wrong and bringing another fresh concept to curl that from repeating (Bianca, 2019). Glencore had fallen into the trap of bribery and impunity, which led to the culmination of financial issues since the company ought to pay a fine and reinstate its image to the public.
Based on the case, the first step is learning from previous mistakes and acting accordingly. That means the firm can decide to involve oversight authorities who will track their moves in the oil and gas business in other countries. In this case, auditors must be engaged from different entities tasked with conducting a probe and suggesting any potential leakage that requires a complete overhaul. It is possible to have Glencore cease having corrupt leaders since the current society is woke of unfair deals (Young, 2022). There should be an anonymous reporting center that complainants can use to highlight any case that seems degrading business.
While learning from the previous mistake, the company will establish an outstanding culture that advocates for clear deals, enhancing its ethical picture. When it comes to globalization, it is clear that the phenomenon has affected all fields, including business. The change in the culture of doing business has come due to globalization. For that reason, the global innovation of methods that facilitate trading may create loopholes that corrupt people may use. For example, it is possible to manipulate the market in terms of prices to sabotage common trading factors such as affordability and distribution. Glencore should observe those issues and respond swiftly by allowing a wide array of collaborations with other entities to end corruption (Young, 2022). That can be undertaken from any part of the world because the world is interlinked, thanks to globalization. Sharing information is easy, and Glencore should take that advantage to prevent a similar saga.
Technology is a factor that can be important in controlling unethical behavior. There should be systems set parallel to conduct audits from separate points, all linked toward a central place. For example, Glencore’s avoidance of audit would have been detected from a given end, and that matter would have raised the alarm and prevented the deal from sealing. The company had reported that the transfer of money was meant to pay for processing business metrics in respective countries. If there had been a central system working from separate endpoints, that corrupt deal would not have occurred (Glencore, 2022). Glencore should adopt using technology and, in that case, there must be a collaborative base from tech giants who can have the linear transfer of formation from one place to another hence, detect any breach or red flag in business. It cannot go unsaid that technology enables better oversight over ethical practices between various parties. Monitoring any electronic activity is crucial for ending monetary conspiracies that may lead to a loss.
Create a Code of Practice on Ethics
It is expected that any business should work under a given code of practice. However, these matters have majorly been associated with other business components, overlooking the ethics issue. Glencore has a code of ethics, but there has been little following on whether or not the same is followed. First, in a natural environment, people are ignorant of responsibility for issues that do not concern them individually. As a result, a manager may be prompted to steal a misplaced item that appears useless to them (Bianca, 2019). Many physical elements probe one to be unethical. For instance, a workplace with financial incentives is likely to have unethical employees. The reason is that employees may work towards achieving a given target to benefit from promised monetary or non-monetary incentives. In this case, a person may strive to get to their limit by conspiring with clients on specific business moves meant to benefit the parties involved.
Glencore must monitor the environment in that it indulges its business and respond to potential cases of ethical misconduct. The oil and gas industry is a sensitive field with many interests from the government and private sector since fuel controls almost everything regarding contemporary human living. To prevent unethical happenings, a team should work to maintain quality assurance independently. Conflict of interest is another subject due to the natural environment whereby a party wants to benefit more than others in controlling resources (Bianca, 2019). For example, a move by Glencore to embrace global market penetration may tempt the top management to use backdoor means to secure the required material that controls their commodity trading. It is possible to find an individual working for government officials in a private entity, with their sole goal of sabotaging operations so that specific mutual parties may take control of the scrambled matter (Kouzes & Posner, 2017). For that reason, many cartels hide in giant companies to pull down the steps made towards effective handling of resources within the company.
Glencore must invest in ethics by allowing its management to develop it through all employees who form part of the natural environment in any business entity. A person working on a given set of ethical codes shall be careful not to act carelessly. They might face legal charges for actions taken concerning issues within the business environment (Kouzes & Posner, 2017). Engagement sessions are required within workplaces meant to uphold the company’s vision and values as one way of combating unethical behavior. Promoting ethics through leveraging the natural environment is easy since it will involve the controllers of the firms which operate under given business terms.
Training
Employees who have tips on what to do regarding ethical conduct have a chance to prevent the vice from happening. Regarding training, Glencore must involve people with technical power and expertise on issues that face organizations day by day. Training must be done to the staff, suppliers, and consumer communities through sensitization programs and investors. When an employee is enlightened about the consequences of ethical misconduct, they will be able to report it before it escalates further. In that way, Glencore’s chances of having leaders who have corrupt minds will be low since they will be critical not to be revealed by their junior staff, who are aware of the activities underway (Glencore, 2022). Employees should be trained to measure ethical competence at Glencore by rating it and the potential areas that may lead to a risky outcome. By engaging workers, the company shall know the points to rectify.
The company should also offer training to the public through programs meant to inform people about what is happening in the oil sector. The reason why training people to oversee various components of energy is that the participants understand how vital the products are to their daily life. If Glencore could have included public sensitization programs as part of the corporate social responsibility (CSR), the manipulation of oil prices would have caused economic mayhem, and bar shipping ports from falling prey to the impunity deals (Young, 2022). Employees and the public form part of the natural environment important to enterprises. Thus, Glencore must consider this recommendation since it will be a starting point toward fighting corrupt minds in the firm.
Change Institutionalization in Processes in Business
Glencore needs to have major changes in how it conducts its business globally. There is a need to include a diverse-centric framework centered on transforming the company for sustainable business. That means leaders must set the tone from their positions about what is required in the business procedures. For example, teamwork must be adopted when running sensitive tasks within the company, such as payment of invoices and transactions that are done virtually (Bianca, 2019). Due to the technology factor, change can be imposed by having modern ways of sharing information on different platforms about what ought to be done.
Additionally, through the online learning materials, the company’s top management might decide to apply the tips provided by intelligent minds about changing the business environment to fit ethical standards. For example, the board of directors at Glencore must have a non-interested party when it comes to the company’s shares (Bianca, 2019). Through this aspect, the person shall be true to the company on behalf of all other stakeholders, increasing the probability of having transparent processes within the company.
Most of the time, deals that involve money are approved by top management. Regarding that, the top executive must develop the habit of sharing the company’s information, such as cash flows, by posting them in daily prints that can be accessed online or in hand copy. From the issues Glencore faced, the solution can be brought about by changing the way matters are undertaken concerning leadership (Young, 2022). However, changes come at a cost. The company must be aware of the dragging force that might ensue during the journey and work towards accomplishing the key goal; ethical standardization in its operations.
Complying with International Business Laws
Commercial transactions that involve the movement of goods and services between different nations must be done while adhering to international business laws and regulations. If Glencore followed the ethics of global enterprising, the current costs would not be there. One of the regulations suggests that a private or public body shall do business designed to reduce poverty by creating opportunities for the host countries and providing sustainable business (Kouzes & Posner, 2017). By indulging in predetermined bidding in the oil business, Glencore contributed to the deterioration of the state of affairs regarding the economy of the victim countries. There was no protection of the social fabric which later would mean adverse living standards for the people. Due to that, Glencore must follow various metrics to monitor its international business deals.
First must be plea agreements with Glencore and the Department of Justice in the US to have an appointment of independent compliance for not less than three years. Within that time range, Glencore shall be assessed and monitored on whether or not its business move conforms to international standards, more so concerning creating a sustainable business environment in the host countries (Kouzes & Posner, 2017). That is where the globalization matter will feature since it will be evaluated from different ends across the world where the US and UK shall be involved significantly as well as Switzerland authorities. Any employee who is found in the lanes of wrongdoing shall be dealt with according to international business law. Therefore, Glencore must embrace this report if it wants to succeed in enhancing ethics.
Conclusion
Glencore was involved in corrupt deals that profited the company from its oil and gas business in Nigeria, Cameroon, South Sudan, and other nations. The company is on the verge of reinstating ethical behavior that will erase its current poor reputation regarding its business practices. One of the recommendations this report has given is correcting the previous mistakes by complying with ethical standards within its operations by embracing all segments that encourage integrity and transparency. Additionally, the company should create and follow a code of practice on ethics whereby all employees, including the top administration, shall be held accountable if they breach any component within their working paraphernalia. Technology can be useful in reaching ethical value standards by incorporating digital systems that run parallel while performing audits, more so where money is involved. Glencore ought o train its staff on the need to embrace full responsibility for ethics. Employees form part of the natural environment, and hence, breakthroughs shall be possible on that matter. The other recommendation is to have global compliance with international business laws. Adhering to global business prevents chances of lowering the economic value of countries where the business is conducted. This report serves as a focal point towards curling unethical behavior; thus, Glencore can utilize it for the same reason.
References
Bianca, A. (2019). Ways to improve an organization’s ethical climate. Small Business – Chron.com.
Glencore. (2022). Glencore reaches coordinated resolutions with US, UK, and Brazilian authorities. Glencore.
Kollewe, J. (2022). Glencore pleads guilty to bribery related to African oil operations. The Guardian.
Kouzes, J., & Posner, B. (2017). The leadership challenge (6th ed.). Routledge.
Young, C. (2022). How business ethics can accommodate disruptive innovation without devolving into Calvinball. Business Ethics Journal Review, 9(5), 14-20.