...dilemma facing BP is how to balance profit maximization and at the same time be responsible for the environment and society. Several events have affected BP in recent years but none has challenged the balance between profit and environment responsibility like the Gulf oil spill. This event, recognized as the worst oil spill in the History of the United States, occurred on April 20th of 2010 in the Gulf of Mexico and was characterized by an explosion following an integrity failure of a well and a consequent 87 day spill of oil into the sea (BP, 2010). Eleven people were killed in the explosion and it is estimated that almost 5 million barrels of crude oil dispersed into the Gulf Sea (The Ocean Portal Team, 2010). Tony Hayward, the CEO of BP at the time of the oil spill incident, downplayed the effects of the oil leak in the environment and society, stating, “The Gulf of Mexico is a very big ocean“ (Webb, 2010). Previous events had caused concerns among authorities on the possibility of BP not doing the appropriate maintenance of its old system of wells. In fact, in 2004 the company was fined for $1.2 million by state regulators (Barringer, 2006) and in 2006 for $2.4 million by the labor department also because of unsafe practices (Pulham, Hilaire, & Fenn, 2010). In addition, reports from a longtime employee stated that the company had received repeated warnings on the possible effects of cutbacks in maintenance and inspection routines (Barringer, 2006). It seems like BP had been struggling...
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...Ethics in the Workplace Case Study: BP Oil Spill On April 20, 2010 off the Gulf of Mexico, there was a blowout of the Macondo well which is owned by British Petroleum also known as BP. When the blowout took place it got immediate media attention because aspects of the event were known over the world. Within events transpiring it was discovered how limited the resources and reaction to the disaster was going to be. This paper will detail aspects of the event from symptoms of the problem, the root cause, important unresolved issues, roles of the organization’s key players and stakeholders, and explain the focus of specific ethical systems. Also discussed in this paper are relevant strategies and alternatives, the effect of globalization on the choice of preferred alternatives, the most valid alternative and resolution recommendations, and an example of a successful implementation of the solution. Symptoms of the Problem Natural disasters or any disaster of any kind is hard to manage just for the purpose that these is no real planning for the situation and there is no real way to say who is in charge when a disaster happens. Concerning the oil spill with British Petroleum (BP) symptoms for the situation was that there was a delayed response, the impact on the environment and the citizens, federal regulations were lax, and the recovery efforts were not adequate. According to Griggs (2011), OPA 90 is a federal statute that holds all the responsible parties in containment, clean-up...
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...BP OIL SPILL Under the Deepwater Horizon, an offshore drilling ring of British Petroleum (BP) caused an oil spill in the Gulf of Mexico. The incident occurred on April 20th 2010, where equipment failed and caused the explosion sinking the ring, and causing the death of 11 workers and more than 17 workers injured. The British based energy company also faced other problems at the site of the oil spill. More than 40 million gallons (estimated data) of oil spewed into the Gulf of Mexico. Oil spill in the Gulf of Mexico is a very serious threat for the wildlife as it causes water pollution. The oil spill effected many coastal areas in the US, like the Louisiana, Alabama, Mississippi and Florida. The oil spill disaster strongly damaged wildlife cycle in the Gulf of Mexico, and many species were thrown into extinction. Similarly, thousands of businesses were thrown into extinction. Many people has questioned the ethical decisions and core value system that BP used to cut corners with the accident; namely, the race to maximize profits at all costs. We are all aware that one of the main causes that let to the disaster were the result of bad decisions, in which a less expensive option (whether to run a test or use a particular kind casing pipe, for example) would save lives. There has been “zero dollars spent on research concerning how to handle oil spills for off-shore drilling by BP despite the company's NET profits - above and beyond all salaries, bonuses, or overhead costs- of...
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... Abstract The following paper will describe recent events that occurred with a British Petroleum owned offshore oilrig known as “Deepwater Horizon”. In addition the paper will also discuss various safety issues, concerns, and repeated violations that have occurred resulting in an environmental disaster that impacts the Gulf of Mexico of which the long term effects will not be known for generations to come. British Petroleum Deepwater Horizon On April 10, 2010 the offshore drilling rig, operated by the world’s sixth largest oil producer British Petroleum, erupted in flames. The result of this disaster caused “170 million gallons of crude oil to spill into the waters of the Gulf of Mexico” ("NRDC.org", 2011, p. 4), killing 11 people, and creating what could be the largest ecological disaster of the 21st century. This disaster is considered by many to be the largest oil spill ever to occur. Clean up efforts are still ongoing after almost two years. British Petroleum (BP) has spent billions of dollars in cleanup cost, restitution and community development; however the greater effects on the environment will not be determined for many years to come. The direct cause of this disaster has been identified as mechanical failure of a blowout preventer located at the base of the well directly above the site entry on the bottom of the sea floor. When this mechanical valve failed, it cause as large plum of highly flammable gas to erupt from the oil well and ignite. After an explosion...
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...Working Paper The BP Oil Spill as a Cultural Anomaly? Institutional Context, Conflict and Change Andrew J. Hoffman Stephen M. Ross School of Business University of Michigan P. Devereaux Jennings University of Alberta Ross School of Business Working Paper Working Paper No. 1151 October 2010 This work cannot be used without the author's permission. This paper can be downloaded without charge from the Social Sciences Research Network Electronic Paper Collection: http://ssrn.com/abstract=1706096 UNIVERSITY OF MICHIGAN The BP Oil Spill as a Cultural Anomaly? Institutional Context, Conflict and Change Andrew J. Hoffman University of Michigan 701 Tappan Street, R4472 Ann Arbor, MI 48109 ajhoff@umich.edu 734.763.9455 and P. Devereaux Jennings University of Alberta Edmonton, Alberta T6G 2R6 CANADA dj1@ualberta.ca 780.492.3998 Forthcoming in the Journal of Management Inquiry October 2010 The authors would like thank Marvin Washington and one anonymous reviewer from the Journal of Management Inquiry for helpful feedback and encouragement in the writing of this article. 1 ABSTRACT This paper argues that the BP Oil Spill is, potentially, a “cultural anomaly” for institutional changes in environmental management and fossil fuel production. The problem as defined by the spill’s context, the potential solutions provided by the competing logics in that context, and the selection of problem-solution...
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...Running Head: BP OIL SPILL (2010) BP Oil Spill (2010) kemy Emesih Southern New Hampshire University Abstract In researching this topic, the organizational roles, structures and behaviors at various levels of employee hierarchy and how they played into one of the biggest crisis in the United States – BP oil spill 2010 was examined. Also looked at, was the dysfunction within the organization and if the cleanup had led to a better organizational structure, culture, communication, leadership and behavior. What are irredeemably forsaken are reputation and trust that can lead to a company folding up if it is not built on a good Organizational structure, culture, personality, communication, decision making and ethics. Some research questions were asked and used to answer some of these issues. What were the behavioral approach as it pertained to leadership? How did leadership influence, change or manage people? Did it inspire a vision, put people first and act decisively when there were issues? Etc. As stated above, this research paper specifically looks at BP Organizational structure and communication, culture, leadership and behavior as a whole and provides some solutions that could better help, prevent or avoid future crisis. BP Oil Spill 2010 Introduction In every company or organization, there is a structure and there are rules and regulations...
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...company in the world because of its international markets activities is considered as a multinational Oil company Headquartered in London and as a largest producer of oil and gas in the North of America. (BP) The company has huge market impact, which gives it notable trading performance in the global energy industry. (BP). Their structure is set up through two main operating segments, Upstream and Downstream, in which BP finds, develops and produces vital sources of energy, turning them into products that we need. BP also buys and sells at each stage of the hydrocarbon value chain which is a series of processes to transform hydrocarbons from a basic natural resource into the complex fuels and materials which our modern world depends on. They also have stake in renewable energy that include biofuels and wind. The products and services they provide customers with vary form fuel for transportation, energy for heat and light, all way to lubricants to keep engines running, and the petrochemicals products used to make everyday items as different as paints, clothes and packaging (BP). The first of two key factors that can and have affected the success of BP is one we all probably have heard of the Deepwater Horizon Oil Spill in the Gulf of Mexico in 2010. According National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling report it was the largest offshore oil spill in US history. This...
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...The BP oil spill has become widely accepted as the worst manmade environmental calamity in US history. The disaster wasn’t a catastrophe solely because of the extent of harm it caused the environment, but also because of the lack of concern and benevolence BP (primarily their CEO Tony Hayward) showed towards most stakeholders. This paper will give an account of many of the primary errors that were committed by BP. Also, specific dates will be used as a timeline in order to emphasize BP’s lack of concern and ability to act in a legal and ethical manner during the crisis. On April 20, 2010, a Deepwater Horizon drilling rig exploded in the Gulf of Mexico, killing 11 workers and causing the worst environmental disaster in US history (BBC News, 2010). Although there were obvious concerns for the environment, many of these worries were eased when the US Coast Guard announced that they were confident that there was no oil leaking from the well; which was located nearly a mile below the ocean’s surface. Given the depth and location at which BP was working, it would seem illogical not to have a crisis management plan in place. Unfortunately for BP, the company never acknowledged any real risk of a Deepwater oil spill. Thus, BP did not appear to have any related response plan in place. As they previously sought to expand Deepwater oil exploration, along with the rest of the oil industry, BP categorized a Deepwater spill as decidedly unlikely and claimed that if such a spill occurred...
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...analysis and strategic recommendations of BP After oil spill disaster in USA Table of content: Introduction 3 Executive Summary 3 Approaches 3 Background of BP 3 BP in USA 3 PESTEL analysis of BP in USA 4 Political Environment 4 Economic Environment 5 Socio-cultural Environment 6 Technological Environment 7 Legal Environment 7 Environmental Analysis 8 Summary 8 SWOT Analysis of BP 8 Strengths 9 Weaknesses 9 Opportunities 10 Threats 11 Summary 11 Strategic Recommendations 11 Porter’s Generic Competitive Strategy 11 Ansoff Model 12 Conclusion: 13 References & Bibliography: 15 Appendix: 17 Introduction: As the global business environment is turbulent and dynamic every business organisation should adopt their strategy with the changing business conditions and conduct external and internal analysis on regular basis to cope up with the changing environment. This paper will analyse the overall situation of BP in USA after the Gulf of Mexico oil disaster. The oil spill creates a new condition for their operation in USA and requires considerable and serious change in the strategic decision making and positioning of the company. Executive Summary: This paper will start with a brief background of BP. A PESTEL analysis will be carried...
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...Virtue ethics is the method of analysis that examines a moral issue from an iconic and virtuous person’s perspective(). Two examples of virtuous people include people like Gandhi or the Dalai Lama. For this paper, the 14th Dalai Lama’s perspective will be taken to analyze the moral issue. To reiterate, the moral issue in question that will be examined is: should the design engineers be blamed for the BP Oil Spill? There are only two answers to this question: engineers should be held responsible and accountable, or engineers should not be held responsible and accountable. The 14th Dalai Lama, Tenzin Gyatso, was known to advocate for animal welfare (). He is quoted as saying “We have to change the way people think about animals. I encourage...
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...CRISIS COMMUNICATION The BP Oil Spill Abstract: The subject of my critique is regarding the analysis of British Petroleum's public relations strategy and its portrayal in the media during the 'Deepwater Horizon' oil spill that occurred on April 20, 2010. The author is anonymous and has laid out the importance of good communication during major crises. He gives examples of the Johnson & Johnson Tylenol product tampering and the Exxon Valdez oil spill and then compares them with the BP Oil Spill. He points out well the inadequacies of the BP's public relations team and how scholars address the importance of understanding media relations, framing and the public emotional response. The author has presented many examples of scholars' thoughts but according to me falls short of discussions and the perception of the public, their emotions and the manner in which they (the public ) could be affected during such huge crises and thus the importance of public relationsof organizations from the normal public perspective. The public who invests in such organizations shouldn't feel that they are being fooled/cheated. Further during his research the author has presented the importance of pre-crisis phase and how to analyze each crisis situation. The Critique: In the point of 'Public perception, framing and media relations' the author focuses on audience-centered perspective in crisis situations. Here I personally acknowledge the point made by Jim and Pang which explains that understanding...
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...Case Study Paper/Presentation: You will be assigned a case study from the book. You are to read the case, answer the questions at the end as your “paper”. Prepare a summary of what the case was about and how you answered all the questions and turn that summary into a speech. The presentation should be no more than 10 minutes. Please use visuals and a power point for your presentation. The Issue The Deepwater Horizon oil spill was an oil spill that began in April 20, 2010 in the Gulf of Mexico on the BP-operated Macondo Prospect, considered the largest accidental marine oil spill in the history of the petroleum industry. It claimed 11 lives when the oil rig exploded and spilled 4.9 million barrels or 210 million US gal of oil for 87 days. It was finally capped on September 19, 2010. Numerous investigations explored the causes of the explosion and record-setting spill. Notably, the U.S. government's September 2011 report pointed to defective cement on the well, faulting mostly BP, but also rig operator Transocean and contractor Halliburton. Earlier in 2011, a White House commission likewise blamed BP and its partners for a series of cost-cutting decisions and an insufficient safety system, but also concluded that the spill resulted from "systemic" root causes and "absent significant reform in both industry practices and government policies, might well recur". In November 2012, BP and the United States Department of Justice settled federal criminal charges with BP pleading guilty...
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...A CRITICAL ANALYSIS OF THE BP OIL SPILL RESPONSE AND PREPAREDNESS PLAN FOR THE DEEP HORIZON – WHY DID IT FAIL? Toni Josina Elfrieda Beukes* May 2012† ABSTRACT: Based on events that unfolded in the U.S. in the weeks and subsequently months of the Macondo well blow-out, it is clear that neither industry nor government was equipped to deal with a spill the scale and complexity of the Deepwater Horizon disaster. As one of its key recommendations to President Obama for addressing the causes and consequences of the spill, the National Commission on the BP Deepwater Horizon Oil Spill in its final report, stated the need for “strengthening oil spill response, planning and capacity”. Industry best practice dictates that quickness and accuracy are key requirements for effective oil spill response and preparedness planning (OSRPP); yet it took nearly three months to seal the Macondo well. This paper is accordingly concerned with the reasons for the apparent failure of the BP oil spill response plan. This failure will be considered in light of current international environmental regulations on OSRPP and applicable United States legislation, whilst assessing the BP oil spill response plan’s compliance therewith. The study will also consider some theory in the development of OSRPP by looking specifically at risk assessment tools and applying key criteria to the BP oil spill response plan to determine its adequacy and appropriateness for its operations in the GOM. What...
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...Ethical Responsibility with Oil Companies Lisa Dauwen National American University Abstract There are processes that oil companies need to go through to make sure that they are operating ethically. They include protecting the environment, researching alternative sustainable energies, and making sure that they are allowing for economic growth. This paper will look at 3 oil companies that are familiar to the United States. The paper will also look at the recent Gulf of Mexico oil spill and look at any ethical concerns. It will discuss how an oil company can follow corporate social responsibility (CSR) tools to lessen their environmental footprint. Ethical Responsibility with Oil Companies All companies in the world have the responsibility to operate in a manner that follows the laws of the government. All of these companies also have a social responsibility to follow ethical laws. Along with all the other types of companies, oil companies have the social responsibilities to protect the environment, to research sustainable energies, to safely explore and produce in new areas, and they also have responsibility of fostering economic growth. It is important for oil companies, perhaps more important than other companies, to hold up to these social responsibilities because if they don’t find new ways to produce energy, future generations could run out. There has been much talk in the last few months regarding oil companies and if they are being ethical when making decisions...
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...A Costly Mistake Bus 311 Beth Garcia April 23 2012 Introduction- Thesis statement In April 2010 British Petroleum (BP) had its worst nightmare come true; the Deepwater Horizon drilling rig exploded. Gushing million and millions of barrels of oil into the ocean becoming the largest oil spill in history. Effecting animal life and small business for years to come; someone had to be responsible, someone had to pay. Throughout this paper we will explore BP’s legal options, the administrative agencies involved, the ethical dilemma they face in the coming future, and the issues between their business and the environment Topic Sentence: BP has a huge problem on their hands and its only getting bigger. Initially the underwater explosion and oil spill was thought to be a small problem, but once the continually had failure after failure to stop the leak BP knew there were in for a catrostophic event. I. What Laws did BP break if any? A. Was it more of an ethical issue? B. Tort Law 1. Negligent torts Topic Sentence: Administrative agencies “affect nearly every individual, business, firm, and organization in the country”, and BP is no exception. II. Administrative Law/agencies A. Functions of administrative agencies B. Administrative agencies roll in BP’s incident Topic Sentence: Business and the Environment, sometimes they can work in harmony but most of the times that’s not the case. IV. Business and the Environment? A. Major federal legislation...
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