Cultural Change at Texaco and Financial Crisis

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Root Problems and Their Symptoms

The Texaco Company faced a number of problems at the end of the 1990s. The most important and influential challenge was the opportunity to solve the questions of exclusion and discrimination of the minorities and women from the company’s workforce in such high status posts like management. Still, it was not the root problem.

Such problems like racism, unfair payment, and lack of ethics may be regarded as the negative outcomes of the root problem that was the financial crisis as a result of which the decrease in crude oil and natural gas prices reduced the revenue earned and had to do some changes like reduction of its employees (Trevino & Nelson, 2010).

To solve the problems and increase some workers’ chances to earn good more many unfair activities were taken: black employees were humiliated in oral forms and deprived of the same conditions which were available to their white colleagues; women could not get an access to high positions and did not have a chance to demonstrate their true potential; the minorities received very low salaries compared to their white counterparts.

Unresolved Issues

Although most of the problems got solved through the cultural change in the company, there are still some issues which remain to be unresolved. For example, the rate of employment and promotion of the minority employees are still very low despite of the slight improvement in their consideration for employment.

The minorities and women cannot get the desirable access to high positions and work under the conditions which allow them influence company’s decisions. The discrimination lawsuit that was well supported by the tapes was not discussed till the end; this is why it is considered as the most important public unresolved issue.

Roles of Key Players Such As Stakeholders, Consumers, Employees, Management, Shareholders, and the Community

The role of each participant is integral for the successful development of the whole company. For example, stakeholders usually give a kind of positive nod to all types of company’s improvement and development. Stakeholders are those people who encourage different industries be more confident in the chosen activities even if some uncertainties take place around.

A former top Texaco official was involved in disclosing the discrimination practices of the company through the talks which were recorded in the tapes disclosed to the media which made the problems known to the public. Bari- Ellen Roberts was an African-American former senior financial analyst in the company who played the role of exposing the dirty deals of Texaco and then became an ordinary consumer.

She published the book about the bad treatment to many black employees and about the way they suffered being the members of such cruel team. Most shareholders were also affected by the development of the events in the company. Such people like Carl Icahn who perform the function of a shareholder took care about their investments in the company due to the scandals.

It was a dilemma on whether to continue being part of the company or to quit. All shareholders were the contributors that made the necessity of cultural change real.

The management including the chief executive officer, Mr. Bijur, saw the danger it that could be solved due to the immediate change of the organization’s culture and the elimination of the discrimination practices. Employees had to show respect for each other to treat everyone equally without considering each other’s race and culture.

They did not want to lose their jobs and opportunities to earn good money, this is why they also want involve the representatives of the community to the process of the company’s cultural change where the representatives could influence recruitment of the minorities being hired (Trevino & Nelson, 2010).

Ethical Issues Involved

There are many ethical issues involved in Texaco; as a rule, all of them are based on treatment that is spread between the employees to each other. It is necessary to admit that the company’s cultural values concerning civil rights contradict considerably the American civil rights movement that advocates the compliance to ethical standards in workplaces without taking into consideration the question of race. T

his is why the required respect to mankind and obligatory justice and equality among the workers were not inherent to the company and it was not easy to predict the success of its existence.

Ethical System That Was At Work

The ethical system of the company Texaco was not the best option before the cultural change. The chosen system did not consider every individual to be equal but discriminated against cultural grounds. This is why it is possible to admit that that the only ethical system that worked was cultural relativism according to which the norms of moral based on one culture contradict the norms of moral of another culture.

Texaco Company made use of the ethical relativism system where certain principles or standards cannot be accepted at once and the organization has to work in accordance with the principles set by the majority as a result of which the minority suffers a lot.

Reference List

Trevino, K.L. & Nelson, A.K. (2010). Managing Business Ethics. 5 ed. New York: John Wiley and Sons.

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