Kbr_Haliburton_Under_Fire

Halliburton Halliburton has been in existence since 1919 as an oil well cementing company, based in Houston, TX. In 1924, the company became incorporated and in 1948 made it onto the New York Stock Exchange. Focused on growth, acquisitions became the route for the company. Kellogg Brown and Root, (KBR), a well-known subsidiary of Halliburton, was acquired by merging two separate companies. Nowadays, the organization provides two major services from by means of its subsidiaries. Energy Services Group, provides technical products and services for oil and gas exploration and production” (MiloIIIIVII, 2010) and KBR, provides construction services focusing in the areas of specialization of “refineries, oil fields, pipelines, and chemical plants” (MiloIIIIVII, 2010). Management Planning Halliburton’s vision is to “lead the world in energy services, engineering and construction” (Halliburton, 2004). Hoping to attain this vision, Halliburton focuses on four key goals, technological leadership, operational excellence, innovative business relationships, and providing a dynamic workforce. To accomplish these goals, Halliburton provides employment in more than 100 countries, taking advantage of, fostering and building on the knowledge and skills and dynamics of their diverse workforce. However, because of the size of the organization, Halliburton is consistently working with various companies to achieve the goals and missions. Is this a “given” considering the scope of operations' However, due to questionable legal, ethical and social responsibility issues, Halliburton need to take extra precautions utilizing planning to prevent further negative attention. Legal Issues Halliburton sub-contracts with several companies in varying countries. Recently, Halliburton has been found guilty on bribery charges by the Securities Exchange Commission (SEC) with Nigerian government officials for violating the Foreign Corruption Practices Act (FCPA). Halliburton paid these officials $182 million dollars in exchange for four contracts worth $6 billion dollars. The result is that Halliburton will be forfeiting $177 million dollars. Halliburton and its subsidiary, KBR, “agreed to a permanent ban from violating anti-bribery and record-keeping provision of securities law“(Leone, 2009). The companies’ FCPA policies and procedures will review and inspect for compliance. Moving forward and coordinating with foreign countries for projects and contracts, Halliburton needs to ensure they are properly planning and analyzing before making decisions acting on those decisions to be sure they are in compliance with the FCPA so as to prevent any further court convictions resulting in hefty penalties. Ethical Issues Since the beginning of the war in Iraq to present day, Halliburton has negotiated and received several contracts to provide support and assistance to the United States Army totaling hundreds of billions of dollars. To contribute to this massive amount of income, Halliburton has been under suspicion of overcharging the government and its subcontractors. For example, the Pentagon auditors are questioning billing by Halliburton of $1.8 billion. Due to these accusations, Halliburton has to ensure they are properly maintaining their accounting records to stay in compliance with Generally Accepted Accounting Principles (GAAP) and properly report their earnings to their investors. In addition, Halliburton’s contracts should outline and specifically state the cost of their services and support in detail to prevent confusion for both the government and subsidiaries of Halliburton. Social Responsibility Due to Halliburton’s diverse projects for contracts and the hazards entailed within those contracts, safety is a main concern for their employees. As a result, proper planning, procedures and practices need to be in place for accidents as they may occur at any given time. Unfortunately, identification of every situation is not a possibility. Recently, an oil rig explosion occurred in the Gulf of Mexico killing 11 workers and “threatening the economy and environment in at least four U.S. states” (Business Wire, 2010). Halliburton continues to provide support to identify the causes that led to the explosion. Despite an organization with negative history and press during the last decade, it is pleasant knowing they still have values to uphold. Expressing these values is present during formulation and execution of their contracts. During the planning stage of a project, it is important to make sure they are identifying the most economical and financial means to complete their projects with safety being a top priority. Follow-up with any regularly scheduled maintenance and support as needed by the project requirements. Making decisions and using resources will benefit the organization and its investors, society and most importantly, the environment. This may take extra time and proper utilization of subject matter experts, but a positive return on investment monetarily and public relations results. Influencing Factors The three of many factors that influence Halliburton’s strategic, tactical, operational, and contingency planning are safety, environmental considerations, and workforce diversity. Halliburton carries a strong sense of responsibility to the communities in which they live and work. As a result, Halliburton has guiding principles of “standards that represent the minimum level of acceptable performance for Halliburton’s operations” (Halliburton, 2004). In addition, Halliburton will share their “best practices with customers and other contractors, require all subcontractors and supplies to meet their standards” (Halliburton, 2004). Using calculations established by the Environmental Protection Agency, (EPA), appropriate emissions of carbon dioxide, Halliburton has identified their total direct emissions affecting the environment and they continue looking into energy-efficient and saving approaches. With a diverse workforce, Halliburton believes it creates a “high-performing organization” (Halliburton, 2004) thereby making them a stronger competitor and employer. Conclusion Halliburton has more than 90 years experience in the oil and construction industries resulting in numerous contracts and revenue worth billions. Despite the organization’s longevity as a provider to the petroleum and energy industries, the company has experienced a depression due to the negative attitudes stemming from business practices with the U.S. government, its subsidiaries and other companies that have brought attention to their legal, ethical, and social responsibility practices. Despite the setback, Halliburton continues to focus their goals and achievements on improving how the organization functions, paying particular attention to the safety of their customers and employees, how to reduce their carbon footprint by seeking best practices and approaches in reducing carbon dioxide emissions and provide a diverse work environment “fostering the insights and vitality of many points of view” (Halliburton, 2004). References Business Wire. (2010). Halliburton Provides Cementing Facts Regarding Rig Incident. Retrieved from http://www.businesswire.com/portal/site/home/permalink/'ndmViewId=news_view&newsId=20100430005935&newsLang=en Gerth, J. (2002). . Cryptome.org. Retrieved from http://cryptome.org/dod-kbr.htm Halliburton. (2004). The Journey Continues. Retrieved from http://www.halliburton.com/public/about_us/pubsdata/hse/pdf/H03948_04.pdf Icmrindia.org. (2004). Halliburton 'Over Billing' Controversy. Retrieved from http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/BECG042.htm Leone, M. (2009). Halliburton, ITT Settle Bribery Charges. CFO.com. Retrieved from http://www.cfo.com/article.cfm/13103924/c_2984290/'f=archives Mayer Brown. (2009). FCPA Watch: KBR and Halliburton Agree to Pay US $402 Million Fine to Settle FCPA Charges in Nigerian Bribery Case. Retrieved from http://www.mayerbrown.com/publications/article.asp'id=6139&nid=6 MiloIIIIVII. (2010). Ethics at Halliburton & KBR. Retrieved from http://www.ethicsinbusiness.net/case-studies/halliburton-kbr/ Phinney, D. 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