Ashland Oil Case Analysis

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Relevant Facts

Ashland Oil Incorporated, the largest oil refiner in the country at the time of this case analysis, was faced with a great dilemma when one of the tanks constructed by the company itself, ruptured
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In 1975, it had received its first public reprimand, when the Security and Exchange Commission fined Ashland for making $717,000 in illegal political contributions. From 1979-1981, senior executives became divided over a series of questionable payments to Middle Eastern middlemen, some of whom were foreign government officials. This violated the Foreign Corrupt Practices Act, barring U.S. firms from bribing foreign officials. The former CEO was known as a wheeler and dealer with a loose deal making style that strained corporate resources.

A corporate structure in which its management's conduct is unethical will mirror its ethical structure accordingly. [2] The issues against Ashland concerning the spill are example of this. The company did not have a permit to construct the tank; the tank was constructed of old steal, and was tested through a shortcut method. These were all bad decisions that rang of cost cutting shortcuts and laziness. Although at this level, the management had little control over the actions of its employees, it was the trend of unethical conduct that creates a link between the
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Their negligence began with the construction of the tank and grew as the oil spill continued. The attempted to show no responsibility or blame for what had happened with the construction of the tank. Nor where they ready for an incident of this magnitude. The company showed malfeasance in dealing with the issues at hand and most of the issues could have been alleviated had they taken proper care in the construction of the failed tank.

Ashland Oil's response to the incident was very slow. The company's response indicated that it had governmental guidelines to respond to an incident of this nature, but none of its own standard operating procedures for crisis response. This crisis highlighted the company's lack of internal conduct and safety operating procedures for checks and balances of its industries. Furthermore, this incident showed a lack of policy and involvement by government agencies. These agencies should have taken active roles through continual inspections and verifications of the plants operations.

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