BP Company: Social Performance of Organizations

Introduction

BP Plc. is among the largest perpendicularly incorporated Oil and Gas Companies globally. This is based on market capitalization and reserves. The essential operations include the exploration and production of gas and crude oil. It also engages in marketing and trading off in natural gas, electricity and liquid petroleum gas. The company is driven by the urge to drive future performance. Consequently, it invests heavily in research and development. The strong research and development abilities allow the company to achieve competitive advantage over competitors. The company founders and successors have always ensured the maintenance of technological edge over market competitors. These attributes allow the company to remain ahead of industrial trends.

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Nature of organization and products

The company is structured to deliver energy to consumers in all parts of the world. The organizational structure of the company allows it to find, explore and develop vital sources of energy. Given that the company is considering the large workforce, it is able to turn the resources into marketable products required by diverse consumers.

Essentially, the company is the largest oil producer. It is the second leading producer of gas. Further, it is the largest producer of hydrocarbons in the United Kingdom. In North America, it is the leading producer of oil and gas. BP’s overriding market position presents it with noteworthy trading power in the world oil industry. The company has a wide range of products.

BP Marine Lubricants is among the leading supplier of lubricants in the marine industry globally. The company sells these products to diverse types of marine vessels. These include bulkers, container ships, dredgers and voyage ships. It supplies marine products in more than 850 ports globally. The company is also among the leading blenders and marketers of biofuels. Additionally, BP has created a huge brand image for the last one century it has been in operation across the world. Among the brands that are globally renowned and have consumer confidence include BP, Castrol, Arco, Aral and Amoco. Through its R&D, the company has generated innovative passenger vehicle engine oil. The oil offers 2.4 percent fuel saving. There is also advanced transmission oil for armored and military vehicles. The oil has a capacity of 1.5 fuel saving. In reflecting the technological advancement of the company, it has developed the turbine oil for the new Boeing 787 Dreamliner.

External environment affecting success

The business environment is increasingly competitive. Irrespective of the efforts made by an organization to make profits, existing and emerging organizations present stiff competition especially in the oil and gas industry. There are many local and international financially-endowed companies in this industry. The companies influence the price of oil and gas. These companies are highly innovative and often disrupt the market with fuel saving efficiency that attracts new customers. Companies such as Shell use distinctive brand image strategies that keep other companies guessing. In such effort, Shell ensures that it has reputable relationships with the media, environmental groups and the public.

Three salient stakeholders based on roles and relationships

In essence, stakeholders encompass not only the individuals and groups who are affected or affect the activities of an organization. They also include the groups without whose support the firm would collapse. Irrespective of the dependence on the company or whoever is offended by its activities, BP seeks to encourage the success or seek to block the company’s strategies as stakeholders utilize diverse avenues to attain their interests. This is usually at the expense of the organization (Hunter, 2013).

Environmental groups are the leading stakeholders in BP CSR. The groups became deeply interested in the affairs of the company upon the Gulf of Mexico spill in 2010. These groups have been playing a central role in ensuring that the company restores the Gulf to its initial state. However, cleaning four million barrels of oil is not easy. Consequently, these environmental groups have continuous interest in the environmental CSR part of the company. The groups are not likely to relent on this in the near future considering that such a disaster may happen again. Further, there are other environmental responsibilities that the company ought to commit to as long as it remains in business. These groups include Greenpeace and WWF.

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The consumers are also key BP stakeholders. Essentially, the financial performance of any organization is determined by the customer. When the customers decide to trade with a competitor your business automatically collapses. The global BP customers are the backbone of the company. Upon the spill at the Gulf of Mexico, the company customers have shifted to other companies with positive publicity. The management has been directing significant effort towards reconstructing shareholder value. In 2013, the company’s stock value had plummeted by 35 percent compared to the pre-spill company performance. The consumers had taken notice of the company’s reluctance on its CSR. Many opted to trade with the company’s competitors as no consumer would want to be associated with a rogue partner.

The media is another powerful stakeholder in the activities of BP. When the Gulf spill occurred the media played a central role in informing the public about the reality of the company’s CSR. The media displayed the company in a negative way. Besides, the media was a powerful tool in ensuring that the company performed its responsibility in cleaning the spillage. It collaborated with environmental groups to hammer the company. In fact, it influenced the company’s global customers. The media is significant in creating public perception of any organization (Koopmans, 2004).

How the stakeholders may impact on the corporation’s monetary performance

Corporate stakeholders are modernly at liberty to use the stakeholder media. They frame the news of interest to the public. Companies gain positive publicity when the news are positive and vice versa. This tends to have impacts on the financial performance of the company.

With the availability of social media platforms, the stakeholders can use these platforms to hold global discussions regarding a company. Typically, the subjects of discussion are detrimental to the image of a company and consequently the performance of a company.

The stakeholders may also use social psychology to influence the performance of a company. The stakeholders may create the impression that a company with bad reputation should not perform financially. The customers will be suspicious of positive performance of a company. This is the attribution theory that individuals use to perceive an organization as dubious (Zagenczyk, 2004).

The stakeholders have the liberty to sue a company whenever they feel that CSR is not being executed accordingly. Court injunctions may be placed on a company to perform its CSR duties thus consequently impacting on the performance.

The consumers are powerful in influencing the performance of a company. When the relationship with consumers is good companies tend gain and the reverse is also true.

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Controversial corporate social responsibility concerns associated with BP

Corporate Social Responsibility (CSR) is a concept that has been in existence for over half a century. In the recent years, it has been gaining prominence considering the wide-ranging issues that have emerged in the political circles (Schäfer, 2005). These issues have forced organizations to adopt diverse ways to respond to the mounting pressure for firms to be socially responsible. These ostensible voluntary CSR initiatives include environmental management systems, improvement of occupational health and safety, social aspects such as support for community development as well as dialogue with stakeholders (Broomhill, 2007).

BP has in the recent years been at the center of different controversies regarding the company’s commitment to corporate social responsibility. The major CSR issue that the company has had to contend with is the Gulf Spill. Four years since the explosion in a rig in Mexico the ecosystem is still to return to its initial state. The claim by the company in its annual reports about taking all measures in ensuring environmental sustainability proved hot-air. The oil continued to gush in millions of barrels. The company eventually capped the rig after four months. This had the impact of eliminating the confidence of the stakeholders about the company’s commitment to CSR in view of sustainable environment. The perception is that the company cleaned the spillage upon capping the rig not founded on the fact that it was keen on CSR but due to the fact that it had to perform such an activity.

Although the company has in the recent years been making effort in meeting its CSR, it has been accused of using the concept as a business strategy designed to avoid the risks inherent in completely ignoring the impacts of its operations with dire consequences from the public, its customers and stakeholders. Other quarters accuse the company of implementing CSR in promoting innovations that profit the company interests. In 2010, the company CEO vowed that BP was ready to reconstruct confidence after the appalling disaster. Among the pledges was that the company would make regular reports on the state of the company’s efforts to pursue its CSR. In 2012, the company sponsored tourism television campaigns to the area. These adverts were viewed as business strategies by the company to advance its interests as opposed to reporting the true position of the company’s CSR commitment. The company releases limited and selected reports. In fact, the Health Safety Environment in the official releases does not include any information. There are only sixteen posts on its Gulf of Mexico response page of the company’s website.

Plan to form stakeholder coalition to force BP address the chosen concerns

In order to form a substantial stakeholder coalition, the first step is to identify the problem and be well versed with it. Secondly, identify the prospective members. Third, create an effective communication network with the prospective members. Fourth, ensure that they are aware of the issue to be pursued. Fifth, once agreed allocate the responsibility of each stakeholder.

Identifying partners

In identifying the coalition members, first establish the roles previously played by the stakeholders. Second, establish the relation between them and the target company (in this case BP). Third, identify the objectives of each stakeholder to avoid contrast of interest. In this case, Greenpeace, WWF and the media fraternities that are concerned with CSR issues are apt coalition members. These prospective members have played vital role in environmental issues. In fact, majority of them are looking for coalition partners. Having a common interest, the objective of the coalition will be achieved considering the previous success of each of these partners (Jones, 1995).

Fostering collaboration

The method to utilize to foster collaboration among various target groups is to ensure that all the partners are interested in the issue. Every coalition member will be allocated a duty to perform without undue interference from other members. Frequent consultations will be fundamental in creating rapport among partners.

Challenges

As the manager of the dominant shareholder set, there are encounters that I might encounter towards inspiring the shareholders to formulate an alliance to realize the set aims. The media is likely to read mischief in the proposal. It may assume that I am being used by the company to ensure positive publicity once it has yielded to our demands. The consumers are likely to resist joining the coalition as they have other options where they may get the same product without feeling the impact of BP continuing to refuse to meet its CSR due to naivety about environmental issues. Considering that I am the leader of an environmental group, other similar groups may have the notion that my group wants to have a coalition to gain the bargaining power and consequently exploit the company financially.

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Overcoming challenges

In order to overcome these challenges, it is essential to be explicit about the mission of the proposed coalition. Further, it will be necessary to clearly demonstrate the connection between their individual interests and the overall outcome of a formidable coalition. This entails demonstrating where each of the groups has failed in achieving the objectives of individual groups. It will also be imperative to create a picture of the benefits of having the coalition with a common agenda.

Conclusion

BP has been facing substantial issues in its organizational performance. The failure of the company to address CSR effectively has been detrimental to its financial performance. The company has a negative public image that requires to be addressed. Since the company does not appear concerned about this to a large extent despite the financial endowment, forming a coalition will be appropriate to ensure it meets its CSRs.

References

Broomhill, R. (2007). Corporate social responsibility: Key issues and debates. Dustan Paper, 1(1), 1-59. Web.

Hunter, M. (2013). The agenda-setting power of stakeholders’ media. University of California, 56(1), 24-49. Web.

Jones, R. (1995). Stakeholder mismatching: A theoretical problem in empirical research on corporate social performance. International Journal of Organizational Analysis, 3(1), 229–267. Web.

Koopmans, R. (2004). Movements and media: Selection processes and evolutionary dynamics in the public sphere. Theory and Society, 33(4), 367-391. Web.

Schäfer, H. (2005). International corporate social responsibility rating systems. Journal of Corporate Citizenship. 20(1), 107-120. Web.

Zagenczyk, T. (2004). Using social psychology to explain stakeholder reactions to an organization’s social performance. Business and Society Review, 109(1), 97-101. Web.

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