Texaco Case Study

Texaco Case Study

The Most Important Ethical Concepts in the Reading

One of the most important ethical concepts in the reading is gender discrimination. Gender discrimination is the disadvantageous or unequal treatment of an individual or a group because of their gender (Jerryson, 2018). Several executives at Texaco assumed that Elizabeth Smith would not get a visa unless Kinnear was ready to adopt and marry her (Bagley, 2005). The assumption demonstrates gender discrimination against women in the company because the assumption was not supported by facts proving that Smith would be denied a visa to travel to the Middle East. In this case, the main cause of the discrimination is the senior executives’ stereotypes about how women are treated in the Middle East. Gender discrimination is also evident in how Smith was treated in the Middle East. She was directed to another room while Kinnear was directed to the front door. The second important ethical concept was racial discrimination. Racial discrimination is the exclusion or unfair treatment of a person or group because of their race. African American employees at Texaco were denied promotions despite being qualified, and a senior executive made some negative comments about them.

The third ethical concern was employee harassment. For instance, African American employees complained that a senior executive made racist comments, thus exposing them to discriminatory harassment. Discriminatory harassment is categorized into gender, racial, disability, religious, age, and sexual orientation harassment (Tseng, 2014). Discriminatory harassment is prohibited by law and may take various forms, including degrading treatment, insults, harassing emails, and slurs. In Texaco’s case, the discriminatory harassment was in the form of degrading treatment, expressed by being denied promotions and racist comments. Racial and gender discrimination at Texaco were addressed, creating a diversity and sensitivity program for all employees. The program included mandatory diversity training for all employees by helping them recognize their undesirable assumptions, learn how their conduct impacted others, and learn about the need for diversity in business. The company also strengthened diversity and inclusion by linking managers’ bonuses to their ability to meet targets for promoting and hiring women and minorities.

How These Different Ideas Contribute to a Successful Business

Racial and gender discrimination have a major impact on business success. One major impact is reduced employee morale, leading to reduced productivity. According to Das (2018), employee productivity is linked to organizational performance. Therefore, reduced productivity reduces overall organizational performance. The second impact of discrimination is reduced employee commitment because employees may feel undervalued. Employee commitment may also be reduced due to poor employee engagement. Racial and gender discrimination also exposes the organization to public scrutiny, leading to a poor reputation. A bad business reputation significantly reduces revenue and profit because customers and investors are unwilling to buy from or invest in such businesses. Public scrutiny also increases the likelihood of a lawsuit against the business. Lawsuits can be costly because they include litigation fees and damages that could impact the company’s revenues. For example, Texaco spent $176 million on the racial discrimination lawsuit. The costs included salary raises, cash payments, and implementing and designing new diversity programs (Bagley, 2005). Racial and gender discrimination can also increase employee turnover, leading to high operational costs due to the costs incurred in hiring and training new employees. For example, in Texaco’s case, the company had to suspend the executives who discriminated against employees to prevent a consumer boycott as the internal investigation was being conducted into the company’s equal opportunity and diversity policies and practices. The executives were later fired after they were found guilty of the accusations.

Diversity and inclusion are among the factors that contribute to a successful business. Diversity includes differences in race, gender, sex, experiences, socioeconomic background, religion, sexual orientation, education, ethnicity, gender identity, life experiences, and background. Conversely, inclusion includes giving everybody equal access to resources, education, opportunities, and other treatment based on their unique qualities. Globalization has led to a rapid increase in diverse workplaces, hence the need for businesses to understand how diversity and inclusion impact operations and success. According to Eddleston (2021), diversity and inclusion promote innovation by enabling people from different backgrounds to exchange opinions and ideas. Diversity and inclusion also bring together people with different skills that can be leveraged to increase innovation. Businesses can also attract more talent by embracing diversity and inclusion because people with different backgrounds have different skills and capabilities that can be used to achieve business success. Diversity and inclusion also help to retain employees.

Moreover, a diverse workplace exposes employees to different challenges, including discrimination and harassment. Therefore, businesses that ensure everyone is included in decision-making, problem-solving, and promotions retain employees by increasing employee morale and a sense of belonging. Another link between diversity and inclusion and business success is improving employee performance by improving every employee’s well-being (Eddleston, 2021). A diverse workplace presents various psychological issues for underrepresented groups. Therefore, embracing diversity and inclusion by ensuring that there are clear regulations on how diverse employees interact guarantees improved psychological well-being for all employees. Subsequently, psychological well-being contributes to improved employee productivity and commitment, leading to business success.

References

Bagley, C. E. (2005). Unleashing the Power of Human Capital Mastering the Legal Aspects of Business. In Winning legally: How to use the law to create value, marshal resources, and manage risk. Harvard Business Press.

Das, S. (2018). Impact of employee attitude on productivity and performance: A study on organizational citizenship behavior in iron and steel industry of India. Journal of Advanced Research in HR & Organizational Management, 05(04), 8-13. https://doi.org/10.24321/2454.3268.201803

Eddleston, K. (2021). Fostering diversity and inclusion can be good for business. Entrepreneur and Innovation Exchange. https://doi.org/10.32617/730-61cc7b2671e6a

Jerryson, M. (2018). The violence of gender discrimination. Oxford Scholarship Online. https://doi.org/10.1093/oso/9780190683566.003.0004

Tseng, L. (2014). Blowing the whistle on workplace sexual harassment. Equality, Diversity and Inclusion: An International Journal, 33(6), 510-522. https://doi.org/10.1108/edi-11-2013-0092

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Provide an analysis on Unleashing the Power of Human Capital: Mastering the Legal Aspects of Business and tie the information into the concepts you have learned in class.

Texaco Case Study

Instructions:

 Read and examine the document titled Unleashing the Power of Human Capital: Mastering the Legal Aspects of Business in the Readings and Resources section. Reviewing this document, consider how this information ties into the business concepts you have been learning in this course.