Ethical Leadership in a Global Context: Saudi Aramco Case Study Report

This report examines the crucial role of ethics in leadership and decision-making, using Saudi Aramco as a case study. It explores an ethical dilemma faced by the company due to its environmental impact, highlighting the conflict between profitability and global responsibility. The report analyzes the positive and negative impacts of incorporating ethics into decision-making, including brand image and potential limitations. It also discusses the leader's reaction to challenges like resistance to change and lack of confidence among employees. The conclusion emphasizes the importance of ethical leadership in achieving organizational objectives and addressing critical situations.

Global Ethics on Leadership Decision-
Making
1

INTRODUCTION
Ethics plays essential role in leadership and decision making process. With the help of
appropriate morale and values a leader can motivate his/her team members to perform well for
achieving the objectives of organisation. Along with this, while decision making process it is
essential for the leaders and manager to consider global ethics. The decisions and strategies of the
company should be appropriate for local and global level as well.
For the present file, Saudi Aramco, a company of Saudi Arab is taken into the consideration.
The file includes ethical dilemma, its impact on global level and reaction of leader towards various
challenges.
TASK 1
An ethical dilemma that Saudi Aramco could confront
Saudi Armaco is one of the world's largest oil company which has world's single
hydrocarbon network, the Master Gas System. The organisation is working well and getting large
amount of profitability. Along with this, the leaders, managers and employees of firm are talented,
skilled and experienced who give their best for its success and progress. Among these positive
factors, there is a ethical dilemma which Saudi Armaco can face in upcoming futur (Saudia
Aramco, Energy is opportunity. 2015)e. As it is an oil firm, so due to the formation of various gases,
oils there causes huge air and water pollution which is not good for global and local level. It is
essential for the company to create various gases and oils for its profitability and progress. But the
pollution causing due to this firm is harmful for the people and global environment. It can develop
various health problems or disorders due to impure water and air. It is a situation of ethical dilemma
for the organisation as if it thinks about the global environment than it will not able to work
properly and effectively. On the other hand, it is responsibility of the firm to take care of its diverse
customers and nation (Kouzes and Posner, 2006).
Government of the various countries like UK, middle East are giving priorities to the clean
and safe environment. It helps in maintaining safe and secure atmosphere which also reduces
number of different harmful diseases. Saudi Armaco needs to take care of this policy while taking
decisions for the growth and new strategies. The company is providing economic and social harm to
the society which can reduce the fuel and gas availability in the future. Company should take
appropriate decisions while focusing on the future needs and conditions as well (Theiss, 2012).
Impact of organisation's value on ethical decision making
Saudi Armaco needs to consider its values and ethics while decision making process. It
2

impacts positively on both local and global level. These impacts are as follows:
Taking decisions by including ethics and values will help in improving the present situation
of the environment. It will reduce the percentage of water and air pollution. Along with this, proper
decisions will help in minimising the health problems which are occurring to the surrounding
people due to impure air and water. It is true that, addition of ethics and values to the decision
making will create ethical challenges for the manager and leaders. The manner in which decisions
are taken by the companies represents the values and interests of that company and its employees. It
can negatively affect the growth of the organisation as values and morale will create limitations and
restrictions (King and Nesbit, 2015). There are chances of reduction in profitability, sales, working
efficiency, performance, etc. But it will create a good brand image among the customers of global
level. Along with this, company will gain competitive advantages due to international recognition
(Schein, 2010).
On the other hand, use of ethical approach while decision-making process will help in
minimising the chances of oil and gas reduction in the future. It is responsibility of the company to
think about next generation and their situations while extracting oil from the land. It is not always
about getting leading position and international recognition, sometimes it about social welfare. With
respect to this, Saudi Armaco needs to talk appropriate decisions (Saudia Aramco, Energy is
opportunity. 2015).
Reaction towards the various challenges that Saudi Armaco could face.
If I was the leader of Saudi Armaco than the different challenges that could be faced by me
and my reaction towards them have been listed below such as:
 Resistance to change: For taking ethical decisions, company needs to make changes into its
working environment. There are chances that employees resist to these changes. It was my
responsibility to help my team members in accepting changes (Beinecke and Spencer,
2007).
 Managing internal working: Ethics and values changed the working style and process of the
employees and I face problem in convincing them to accept new working style.
 Lack of confidence- Cited firm when tries to implement the changes, few employees loss
their confidence level because they were habitual and familiar with old working styles and at
the time of change they were lack. In this situation I motivate them and also provide training
to employees so that they can easily cope up with the changes (Saudia Aramco, Energy is
opportunity. 2015).
 Managing coordination- At the time of implementing the changes at working environment,
employees was not effectively coordinating with each other. At this time I was facing the
3

issues to convince the employees to effectively coordinate with each other so that effective
decisions can be made (Cravens, 2014).
CONCLUSION
With the help of present research report it is explored that in every organisation ethics plays
a vital role in decision making process and leadership. In order to take effective decisions and to
attain the objectives, effective leaders are essentially requires at workplace. It also evaluates that
various types of challenges which are faced by the leaders and his responds towards the critical
situations.
4

REFERENCES
Kouzes, J.M. and Posner, B.Z., 2006. The leadership challenge. 3. John Wiley & Sons.
Theiss, D., 2012. LibGuides. MG4940: Business Leadership Strategy, Policy, Ethics. Works Cite.
Beinecke, R. and Spencer. J., 2007. International Leadership Competencies and Issues.
International Journal of Leadership in Public Services, The. 3(3). pp.4-14.
Cravens, X. C., 2014. The cross-cultural validity of the Learning-Centered Leadership framework
and its assessment instrument for principals. Journal of Educational Administration. 521(1). pp.2–3
King , E. and Nesbit, P., 2015. Collusion with denial: leadership development and its evaluation.
Sage. 34 ( 2), pp.134 – 152.
Schein, E.H., 2010. Organizational culture and leadership. 2. John Wiley & Sons.
Saudia Aramco. 2015. [Online]. Available through:<http://www.saudiaramco.com/en/home.html>.
[Accessed on 12th April 2016].
5

REFERENCES
Books and Journals
Online
6