The aim of this report is to present a picture of (British Petroleum) BP's business ethics and its relations with public. BP is one of the leading multinational companies, which has turned into a worldwide energy group. BP employs over 80,000 employees and has expanded in over 100 countries. This report confers the ethical issues experienced by BP and thus analyzes the relative significance of these issues. It also includes the ways in which BP is presently tackling them. Also, this report also makes valuable recommendations so that BP can regain its reputation and confidence in the public.
On 20th April, 2010, BP confronted the most dangerous accident of fire explosion on the BP Deepwater Horizon rig in the Gulf of Mexico. This oil disaster had taken place near the delta river of Mississippi due to a oil gusher in deep-sea floor built by the huge blast of the Deepwater Horizon platform. It was considered as the most effective and efficient semi-submersible drilling rigs in the Gulf of Mexico (Arora, and Lodhia, 2017). This rig was owned and controlled by Transocean. BP also leased and empowered the supervisors aboard the rig and became the owner of Macondo oil well by owning 65% shares of it. The well got damaged in the fire blast and started leaking oil into the Gulf of Mexico. It has been observed that Macondo well was filled with more than one hundred ten million barrels of oil. Also, it was over 13000 feet under the sea level.
The oil was released from the well into the Gulf for around 87 days till the well was cemented to cease the oil flow. However, the damage had already taken place at that point of time. It had been estimated that over four million barrels of oil was discharged into the Gulf. The flow of oil was consisting of water, and nearby shorelines also along with it. In order to find out the actual reason of the oil explosion, a federal joint task force was carried out (De Wolf, and Mejri, 2013). They found out that although BP, Transocean, and Halliburton, the contractor used to stick down the damaged well, and shared the accountability for the explosion and subsequent harm, but the ultimately BP was considered to be responsible for the crisis.
As a result of the blast, more than fifty thousand barrels of oil used to spill each day of the crisis, that is, from 10th July, 2010 to 15th July, 2010. The workers failed to cap the well and were unable to stop the oil flow. This oil flow caused a serious damage to the ecosystem and local surroundings. Moreover, this crude oil also flowed into the marshes, and beaches of some states of America such as Louisiana, Alabama, and Mississippi. Considering the incident, BP oil spill was declared as the national disaster by the government of USA. Around 15 workers were killed in the explosion and 170 workers died. In 2011, an announcement was made by BP to sell the refinery because of its compensation and remedial efforts after the explosion (Kayes, and Yoon, 2016). Finally, in 2013, the Texas City refinery was sold out to Marathon Petroleum Corporation.
In order to address the issue of concern and exhibit the response of the company to the accident, the management of BP took some reasonably crucial decisions. In this view, the company made use of various sources of media and public relations. Formation of an effective team also took place to positively handle the crisis, but due to some major failures, it failed to perform the job. The communication system of the company was not good enough and was mishandled by the management. It negatively affected the company’s strategies and responses, and also harmed its public image.
Also, BP recruited around 2500 workers for organizing and conducting cleaning efforts in Alabama, Louisiana, and Florida. Consequently, the effectiveness with which BP dealt with the accident was appreciated among the public. A large number of people were called upon by the company to collect and safeguard the shoreline from pollution and damage. However, since BP did not abide by the principles of crisis management, it failed to handle the Deepwater Horizon explosion in an successful manner.
In order to prepare and tackle the crisis situation, some essential guidelines and principles were laid out. The aim was to anticipate the uncertainties, design and implement a crisis communication plan, train workforce, and appointing only one spokesperson. The need of one more spokesperson was required only when the crisis affect the general public.
After being confronted by a number of crisis and scandals, it was unable to design a good plan in place. Moreover, Tony Hayward, the official spokesperson of BP, became to be media incompetent (Peres et al., 2016). Because of him, all the efforts of BP regarding the creation of social wellbeing were not given much attention. The verbal blunders made by Hayward in the public made the public to appoint Bob Dudley as the new spokesperson of BP. Later, he was also elected as the president of BP’s Gulf Coast Restoration Organization.
According to the stakeholders’ theory, the stakeholders of a company are those persons whose actions and conduct affect its working and reputation. The responsibilities of stakeholders are not limited only to owning and directing the company, but also include behaving ethically and staying concerned with the decisions affecting the society and the ecosystem (Gullet et al., 2016). In context of BP’s crisis of oil spill, the first stakeholders directly affected by the Deepwater Horizon Oil spill. During the burst, around 126 people were on the platform while 115 were emptied.
The Coast Guard called off the rescue operation after a few days investigation up to 5200 miles. He stated that the realistic expectations of survival had gone away. Around eleven people were assumed killed crew members. Another key stakeholder was the ecosystem, Gulf fishing industry, and tourist driven businesses and societies. Since the whole Gulf of Mexico’s natural environment was severely destroyed during the crisis, the stakeholders of BP were required to adopt an effective public relation management system (Kwok et al., 2017). On the other hand, the shareholders of BP, who were concerned with their financial investments in the company, were also upset. Apart from the environment, the inhabitants who were heavily dependent on the Gulf of Mexico to earn their livelihood were also badly affected, especially in the states of Louisiana, Mississippi, and Alabama.
On the basis of above discussions, it can be concluded that BP has emerged as an acronym for environmental pollution and ethics. This report has provided the major ethical dilemmas faced by the company. BP’s codes of conulfduct were failed to incorporate the objectives of not harming to people and the environment. Above analysis reveals that the company has proved to be unethical in its practices and lacked in maintaining good public relations by being liable for the huge oil explosion in Gulf Mexico in USA.
In order to protect BP's corporate image and maintain confidence and credibility of the stakeholders, the company should value ethics and values ahead of financial interests. It should focus in recovering the oil spill, and instead of spending on TV advertising they should support the fishermen along with small businesses in the Gulf that is going through a hard time because of the oil spill (Hester et al., 2016). Also, the company should rebuild a strong infrastructure around the deep sea oil wells so as to reduce potential leaks. An investment should be made in the provision of emergency response team to guard the walls surrounding the oil well. The team should consist of highly trained and strong workforce.
In addition to this, the CEO of BP should be sincere in their regrets, and try to maintain composure in order to avoid any sort of miscommunication in the public. BP should act more down to earth and investigate the ways in which oil spill can have impact on the lives of the society and wildlife, and thus try their best in avoiding the situation and helping victims (Beyer et al., 2016). Also, the company can design and publish the disaster websites before the disaster takes place. A close watch should be put on the vulnerable regions of America, which are likely to be affected by such hazards.
Arora, M.P. and Lodhia, S., ( 2017) The BP Gulf of Mexico oil spill: Exploring the link between social and environmental disclosures and reputation risk management. Journal of Cleaner Production, 140, pp.1287-1297.
Beyer, J., Trannum, H.C., Bakke, T., Hodson, P.V. and Collier, T.K., (2016) Environmental effects of the Deepwater Horizon oil spill: a review. Marine Pollution Bulletin, 110(1), pp.28-51.
De Wolf, D. and Mejri, M., (2013) ‘Crisis communication failures: The BP case study’, International Journal of Advances in Management and Economics, 2(2), pp.48-56.
Gullett, B.K., Hays, M.D., Tabor, D. and Vander Wal, R., (2016) Characterization of the particulate emissions from the BP Deepwater Horizon surface oil burns. Marine pollution bulletin, 107(1), pp.216-223.
Hester, M.W., Willis, J.M., Rouhani, S., Steinhoff, M.A. and Baker, M.C., (2016) Impacts of the Deepwater Horizon oil spill on the salt marsh vegetation of Louisiana. Environmental Pollution, 216, pp.361-370.
Kayes, D.C. and Yoon, J., (2016) ‘The breakdown and rebuilding of learning during organizational crisis, disaster, and failure’, Organizational Dynamics, 45(2), pp.71-79.
Kwok, R.K., Engel, L.S., Miller, A.K., Blair, A., Curry, M.D. and Jackson, W.B., (2017) The GuLF STUDY: a prospective study of persons involved in the Deepwater Horizon oil spill response and clean-up. Environmental Health Perspectives, 125(4), p.570.
Peres, L.C., Trapido, E., Rung, A.L., Harrington, D.J., Oral, E., Fang, Z., Fontham, E. and Peters, E.S., (2016) The deepwater Horizon Oil spill and physical health among adult women in Southern Louisiana: The women and their children’s health (WaTCH) study. Environmental health perspectives, 124(8), p.1208.
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