The BP oil leak, “Deepwater Horizon oil spill,” was the foulest in history, lasting about ninety days in the Gulf of Mexico in 2010. Its consequences are still felt after the oil was stopped from being released into the environment (Kanso et al., 2020). There have been other reportedly large oil spills in the prior, such as the Ixtoc oil disaster in Mexico in 1979-1980, which leaked around 30,000 gallons of oil daily and lasted a few months. However, the BP oil spill ranks as the most devastating in the history of the petroleum industry (Kanso et al., 2020). An explosion occurred in its immediate aftermath, aboard the Deepwater Horizon on April 20, 2010 (Kanso et al., 2020). After various choices, the seep out was finally stopped by sealing the gushing borehole.
Numerous factors have been blamed for the BP oil disaster. Negligence of both the management and the workers was the actual problem that led to the still. Because BP was attempting to complete the project according to the original plans, corporate engineers used a sequence of compromises that ran against the industry’s best practices for drilling oil wells (Kanso et al., 2020). For example, firm engineers employed inefficient enclosure responsive design. They skipped routine safety procedures such as periodic testing for backflow and other problems. These deliberate decisions to undermine safety rules and practices suggest that the company’s negligence was the primary cause of the accident. The oil spill led to various losses including the death of eleven oil business employees and the injury of seventeen others. Before the leak was effectively contained, scientists estimated that over 50,0000 barrels of oil were being spilled into the environment per day. The environmental issue resulted in significant losses.
Recount of the Incident
A natural gas explosion smashed through a concrete slab, sealing the opening for future use. According to documents published by Wikileaks, a similar tragedy occurred in the Persian Gulf in 2008 on a BP managed drill. Both cylinders were weak to withstand the pressure since they were composed of a cement mixture that used nitrogen to speed up the curing process. The gas was released by a major breach and traveled up the Horizon rig’s pipe to the surface, where it burst, killing 11 workforces and wounding 17 (Pallardy, 2021). The rig later flipped and sank, shattering the pipe through which natural gas and oil were pumped to counteract an upwards pull. The oil began to pour into the Gulf of Mexico without any pushback.
The Environmental Costs
The accident wreaked havoc on the area’s marine and wildlife habitats. In addition, profits in the tourism and recreation businesses in the area have decreased. Some impacts of the BP oil spill, like those of the Exxon Valdez oil stumble, will still be felt in the coming years. The tragedy jeopardized the normal processes of eight national parks in the United States. After consuming the petroleum, which damaged their systems, most animals died. Oil-coated birds’ feathers hampered their capacity to control body heat, sea turtles were plastered in oil, and lifeless and dying profound corals were discovered a few kilometers from the drilling rig well as implications of the accident (Konsa et al., 2020). Furthermore, hazardous compounds from the crude and surfactant have been found to cause health problems in those who live near the disaster site (Pallardy, 2021). According to scientists, the calamity will result in an uneven food web, diminished fish and wildlife populations, and a fall in recreational activities in the long run.
Dimensions of Global Leadership
The autonomous management system of the company entailed decision-making without involving the workers, which resulted in a poor management challenge faced by the management. When the management makes decisions without involving its workers, there are high chances of the administration making wrong decisions. For instance, the management monitored the oil spill poorly. At the same time, the engineers concentrated on repairing the leaking oil valves, and the managers only concentrated on building the company’s reputation, which led to the oil spill that claimed the lives of various staff. Executives, lawmakers, and financiers failed to respect the law in their hurry to expand large businesses, create jobs, and earn shareholder profits. They failed to remember that real leaders must serve as long-term custodians of their businesses. Therefore, the incident indicates the company’s management system was poor, and the workers never worked together to attain the company goals.
Aspects of Global Motivation and Global Team-Management
The oil spill was the top global management and motivation aspect of the company. For instance, the company persisted in activating its rig blowout preventer since a safe mechanism had failed to plug the tubes via which the oil was being sucked due to malfunctions. Keeping the lives of people and animals safe was the primary motivation that pushed BP towards creating containment domes over the significant leaks in broken risers. The tubes were defected by the ice matrix gas molecule generated by cold water and natural gas interactions (Pallardy, 2021). After various attempts of deploying numerous solutions, the company poured mud to control oil flow. Inspired people persist in completing a project until they attain their goal.
BP Environmental Analysis
Porter’s 5 forces play significant roles in evaluating BP’s profitability. These forces include intimidations from new participants, supplier power, customer negotiating power, substitution pressures, and rivalry (Bruijl, 2018). BP is one of the industry’s leader, but oil sector attracts new entrants with high profits. However, the entry level is too high, thus mitigating the threat. In addition, BP uses its dominant position to negotiate better terms for itself. It only works with suppliers, as the consumer of oil are the only real determinants of its global price. Substitutes are actively developed in pursuit of sustainability, but they are unlikely to replace oil in the near future. It is the threat of competition that is most significant, since mistakes by BP leave room for its numerous competitors.
SWOT Analysis: S&W
BP’s principal assets are its well-known brand and substantial financial resources. It is the world’s third-largest energy firm and is known for producing high-quality petroleum products. Furthermore, its solid financial position allows it to introduce new goods, research alternative energy, and grow into new areas, with total operational cash flow estimated to be $30 billion in 2014. Nevertheless, the company’s abundant history of disasters has undermined the public trust in it. Being associated with the problems in management, strategic planning, and crisis decision-making, these weakness have the potential to undermine BP’s position in the long term.
In terms of opportunities, BP can explore the domain of alternative fuel research. Being one of the largest oil companies, it cannot ignore this global pursuit, and it is better to be a part of it, rather than a victim of progress. The overall attention to sustainable initiatives is important for the company’s future position, especially considering its history of spills and disasters. Next, despite BP’s global presence, it still has new areas to explore in the near future and expand its network. However, if BP fails to follow the alternative fuel trend, its competition may succeed, leaving the company on the margins of the developing industry. The same can be said about the environmental concerns, as the growing awareness of sustainability issues can damage BP’s performance and public trust. If new crises occur, the problems will only deteriorate.
The alternatives to the actual solution proposed by BP’s management vary in terms of the timeline. Training the on-site personnel for better emergency performance is important, and it could have prevented some of the fallout. In a similar fashion, the management of the company, including on-site supervisors need to be trained to behave in such situations. More specifically, there should have been a clear action plan from the initial identification of the hazard to the ultimate evacuation if prevention measures fail. However, these measures require thorough prior planning and cannot be implemented in retrospect. Once the situation passed the point of no-return, a viable alternative would be to requires the help of other companies and governments., but it would undermine the reputation of BP.
In light of what had actually happened in the Gulf, BP’s decision-makers chose variant four, which consists of maintaining the course of the project despite concerns. The management pressured its workers into the scheduled completion of all procedures, which resulted in negligence and the ultimate disaster. In this scenario, it was possible to make the required adjustments to the project by modifying its timeline. Clearly, had the responsible units had time to analyze the scope of the problem and propose their solutions, the leak and explosion could have been prevented. If time was a non-negotiable matter, it could be possible to increase the funding of the project to attract more workers and resources. However, this variable appears to be less important than time and thorough analysis of the situation.
At the same time, another solution exists that could potentially meet the needs faced by BP. More specifically, it consist of creating a situation, in which there is a continuous dialogue between employees and managers. Each side has specific experience in regard to such situations, through which they assess the actual action plan. However, their perspectives are limited on their own, making it necessary to utilize their joint expertise to make truly informed decisions. Evidently, this plan requires a certain level of additional training, exploring the corresponding competencies of both managers and employees.
Within this scenario, BP’s management was driven by its pursuit of success. However, there is a line between subjective success and the actual one. BP relied on the subjectivity, perceiving success as completing the oil rig as scheduled despite the problems. It is possible that it was seen as a step toward the next stage of success, which is the actual desirable outcome that should have been envisaged since the beginning. The works should have been completed not on time but in due manner. The fear of losses that hastened the construction ultimately resulted in even higher losses, both economic and human ones. Therefore, it is safe to assume that BP has failed to achieve success.
Key Players in Decision Making
In the discussed scenario, the decision-making process was completed on several levels. The problem stemmed from the fact that Tier 1 was disconnected from the rest of the pyramid. The actual contingency plan would have never been approved by global oil regulators or local governments. The on-site management was pressured by their supervisors, leaving workers without a chance to voice their justified concerns. Changing the timeline of the construction to analyze the problem and make adjustments is the only solution that would fit most of the stakeholders. However, it did not satisfy the first tier who insisted on following a different plan, which, in turn, would have been unacceptable for others, had they been involved.
Employees as a part of decision-making process
In the case of BP, the incident became the product of authority division. This principle implies that managers remain loyal to their own judgement, and the role of an employee is limited to executing the order. For the situation to change profoundly, employees need to be included in the decision-making framework. By doing so, they bridge the colossal gap between managerial perspective and reality. Employees add a practical dimension to the discussion, fueled by their expertise and experience in the field. Otherwise, this barrier prevents companies from forming a synergy of informed, evidence-based decision-making. Employee inclusion does not undermine the image of the managers but simply enhances their perspective, allowing them to consider more variables.
Keys to effective decision-making for BP
As can be inferred from the previous information, the key to BP’s prosperity and avoiding similar incidents lies in an effective decision-making model. In its current state, this model is focused on the managerial perspective of the subject matter, whereas reciprocity is the key. Employee expertise is a valuable component of the overall firm knowledge, making it necessary to form the synergy of management and employees. This way, the multi-tier paradigm identified earlier will work as intended, providing a variety of opinions and making the final decision closer to being objective. In the end, mutual empowerment will be attained, providing sustained benefits for the entirety of the company.
The mutual engagement of management and workers into the decision-making framework of the company is the optimal path toward the prevention of such major problems in the future. The aforementioned synergy of managerial expertise and workers’ practical experience. It is imperative to organize a well-functioning platform for the efficient knowledge exchange. Within its framework, managers’ plans and workers’ input will become combined in an informed decision. Of course, not all workers are capable of making this input by default, which is why efficient training is another key requirements. Similar opportunities will be provided to the management in order to make sure that their competencies align with the actual operating environment. Unlike other attempts, this plan is aimed at transforming the decision-making paradigm as a whole, rather than making pointed amendments.
The implementation strategy includes examining the actual operational environment of the company, using key analysis mechanisms, such as SWOT and Porter’s five forces on a more profound level. This will help to identify the most topical concerns faced by BP in terms of its current structure, strategy, and decision-making. Then, training opportunities will be provided to the employees and managers of the company in order to support their competency growth. Following this step, the launch of an effective knowledge exchange mechanism becomes entirely possible. The dialogue will result in positive, informed decision that can be applied to the company’s plans. Their effectiveness will then be evaluated, providing valuable data for possible format adjustments.
Review of the plan
The entirety of the situation exhibited a highly deficient action plan. First of all, the overall management of the project lacked strategic planning and attention to details, which resulted in a massive disaster in the Gulf. Furthermore, when the situation escalated beyond the initial hazards, the management of the disaster was significantly below par. With the lack of supervision and rapport between employees and leaders, certain workers allowed themselves to demonstrate negligence, as well. Thus, there is a strong need for better training opportunities, through which workers and managers can enhance their competencies and work together in a unity.
Overall, BP represents a massive corporation with considerable financial support that may be leveraged to enlarge its invention capacity and global influence by participating in alternative energy research. According to the environmental analysis, the company occupies a relatively steady position within its industry that is, however, threatened by a history of mistakes. Poor management is a variable that can and should be eliminated to prevent such failures in the future. To support that, the company is to train both its managers and employees to form an effective leader-follower dialogue platform. This way, informed decision-making will be guided by expertise, skill, and experience, helping BP find optimal solutions.
Bruijl, G. H. T. (2018). The relevance of Porter’s five forces in today’s innovative and changing business environment. Available at SSRN 3192207. Web.
Kanso, A. M., Nelson, R. A., & Kitchen, P. J. (2020). BP and the Deepwater Horizon oil spill: A case study of how company management employed public relations to restore a damaged brand. Journal of Marketing Communications, 26(7), 703-731. Web.
Pallardy, R. (2021). Deepwater Horizon oil spill. Encyclopaedia Britannica Inc., Web.