British Petroleum (BP) is a giant oil and gas multinational company that offers a wide variety of petroleum products and services around the globe. Due to the nature of the company’s business, critics of the safety and protection of world communities and the environment have emerged from different spheres of the globe.
This situation has left no alternative other than initiating environmentally and socially friendly programs in an attempt to control the effects of its oil and gas activities by ensuring that its production is sustainable. In the last ten years, BP has shown its concern to the society and the environmental conservation by actively participating in Social Corporate Responsibility (SCR) activities in many of its operational localities.
Nevertheless, despite BP’s involvement in SCR activities, there is continued controversy over the overall effects of the activities of such a giant multinational and the long-term impacts that can befall the society and the environment. This essay explores the social performance of BP by focusing on its role in SCR enterprises to protect society and the environment against the devastating effects of oil and gas activities.
The Nature, Structure, and Types of BP Products and Services
BP offers a variety of oil and gas products to its customers, both in local, regional, and international markets. The company has invested in a series of functions such as exploration, extraction, refining, energy production, distribution, and marketing in an attempt to exploit natural fossil fuel reserves that occur in distinctive global places underneath the earth’s surface (Matejek & Gossling, 2014).
BP also offers diverse services that range from processing and transport to storage services around the world. The wide range of BP merchandise comprises fuels, provision of power for heating and lighting, motor oil, bearing greases, industrial coolants and lubricants, and gas, among other oil and gas products.
Several key factors, such as globalization and technology that occur in the external business environment, have had a profound influence on the accomplishment of BP’s goals and objectives. Veil, Sellnow, and Wickline (2014) confirm that the operations of BP have gone beyond local and regional markets in England to other geographic locations across continents.
Investment in foreign markets has influenced the success of the company in a variety of ways as the company extends its capital, merchandize, and oil and gas technologies across national frontiers. Globalization has led to liberalization, free trade, and general connectivity of BP’s markets that have, in turn, resulted in an increasingly high demand for its products and services. This situation has elevated the firm’s financial performance, particularly during the last decade (Veil et al., 2013).
Secondly, changes in technology have greatly shaped the nature of oil and gas activities due to innovativeness and demand for quality and efficiency. The company has also initiated expensive technological projects to improve disaster preparedness in case of accidents such as oil spills and fires (Lawrence & Weber, 2014).
BP plc Salient Stakeholders
Legal authorities, shareholders, and BP’s workforce form the most salient stakeholders who have a significant influence on the firm’s oil and gas interventions. At the outset, legal authorities have a greater say on BP’s operations around the world. In spite of possessing knowledge about the economic benefits that accompany BP’s operations, government legislation has played a pivotal role in determining the nature and extent of BP’s activities as governments protect the wellbeing of flora and fauna. BP has deployed an extensive and diverse workforce of over 90,000 employees over its 80 worldwide geographic locations (Verschoor, 2014).
To maintain effective communication, BP has established extensive and capital-intensive intranet services across the operational areas. Apart from customers and other stakeholders, employees form part of the company’s internal and external audiences. Next, the multinational company has many local and global shareholders who shape its business. As immediate owners of the business, BP has employed some specialists who form part of the workforce to evaluate the company’s operations and/or write annual reports that enable shareholders to gather adequate information about the progress of their business and ways in which they can assist in formulating future business decisions (Flammer, 2013).
Ways in which Primary Stakeholder can influence BP’s Financial Performance
The aforementioned salient stakeholders have a profound influence on the overall financial performance of the oil and gas multinationals. Primarily, the legal authorities bear the most important permission for international multinationals to conduct businesses in their own country. Secondly, Veil et al. (2013) reveal that legal authorities have shaped the nature of activities conducted by the company differently depending on the strictness of their legislation pertaining to gas and oil businesses.
Particularly, environmental laws have incredibly slowed the growth of the business in some countries as leaders negotiate on the social and environmental implications of investing in environmentally sensitive ventures. Other countries such as Kuwait, Russia, Iraq, and Qatar have completely restricted BP’s operations in their territories since the major players in the oil and gas industry belong to the states.
Thirdly, Flammer (2013) reveals that the ownership of BP spreads out amongst diverse shareholders in different places of the world who have a direct or indirect influence on the company’s financial performance through monitoring and control of the activities of the oil and gas. Fourthly, BP workers hold a pivotal position in the determination of the company’s financial performance. BP’s employees influence its profits by their ambitions to realize their individual goals that affect the overall organizational goals and objectives (Lawrence & Weber, 2014). Lastly, employees influence the performance of the organization through the formulation of pertinent decisions that enhance the execution of short-term action plans.
Controversial Corporate Social Responsibility Concern Associated with BP plc
The effects of BP’s oil and gas operations on the society and the environment have become global controversial CSR concerns. According to Greiner et al. (2013), oil and gas interventions have adverse effects on the health of plants, human beings, and other animals. Greiner et al. (2013) provide an example of the health effects of benzene exposure on children due to BP oil and gas operations in Texas. Scientists have proven that the effects of oil and gas exploration, the use of such products, and associated activities have tremendous destructive effects on both the environment and social structures.
As a result, BP’s oil and gas interventions have engineered contentious discussions that pertain to the safety of world societies and the environment. With the uprising levels of global warming, the company has received major criticism due to a change in climate patterns in most parts of the world. According to Greiner et al. (2013), monitoring and evaluation by the UK Offshore Operators Association (UKOOA) has forced BP to integrate CSR initiatives into its oil and gas interventions to promote social and environmental conservation through approaches that lower the percentage of toxic gases in the atmosphere and other pollutants in the physical environment.
How BP should Address Social and Environmental Conservation Issues
The plan presented below suggests numerous steps that I can deploy to force BP to address social and environmental issues. The plan summarizes a framework that I can use as a key stakeholder to identify members to form a strong coalition that has the capacity to challenge BP to embrace eco-friendly production means.
Founding a Core Group
The foundation of a coalition depends on the selection of potential coalition stakeholders who can win the abilities of the followers to understand the structure and mission of the coalition. Thus, it is important to consider the incorporation of influential members who should comprise salient stakeholders and professionals from all the industrial spheres of BP (Lawrence & Weber, 2014).
Disclosure of Expectations
After the foundation of the core group, it will be necessary to unveil the expectations of the coalition by clearly defining the coalition’s membership and mission. This stage requires the coalition leader to explain the purpose of the coalition and the expected action strategies.
The strength of the coalition is highly dependent on the activity of the members. Therefore, follow up meetings will facilitate the evaluation of the participation and interest of the members for the success of the coalition. This step also helps elucidate any need for additional or replacement of the existing members (Flammer, 2013).
The primary reason for having a diverse staff is to form a holistic coalition that will handle almost every issue arising from BP’s oil and gas activities. The inclusion of professionals such as socialists and environmentalists will assist the coalition in identifying the salient concerns that threaten the society and the environment (Lawrence & Weber, 2014).
Influential analysts and policymakers will also play an important role in determining the extent of destruction from BP’s interventions and the nature of policies that can enhance the alleviation of such tremendous effects. The selected coalition group should also comprise influential society leaders who will win the support of the civil society as a backup towards challenging BP to initiate eco-friendly production activities to save the society and the environment. Ultimately, there is a need to develop robust communication channels to enhance the thoughtful conceptualization of the coalition’s targets.
Potential Challenges of Forming a Coalition
Founding a vigorous coalition is a process that may encounter outrageous challenges that daunt the attempts to accomplish the coalition’s mission and goals. Primarily, coalition members develop a tendency of getting distracted from individual non-coalition activities that weaken the focus of the organization on specific goals. In addition, professionals and elite groups such as politicians, local entrepreneurs, and scholars may dominate the coalition.
This caliber of coalition stakeholders may develop competition for the power of leadership and forget or neglect the importance of integrating the most affected stakeholders by BP oil and gas interventions. Despite the presence of society leaders, such a coalition may develop poor links to the stakeholder communities, a situation that results in inconsistent coalition-follower relationships. Finally, insufficient funds are perhaps an obvious obstacle to many coalition startups. The risk of abandoning plans becomes increasingly high when the coalition has inadequate sources of financing its activities (Verschoor, 2014).
Significant Steps that I will take to overcome the Identified Coalition Challenges
- Effective leadership is the first step towards the foundation and progression of a successful coalition. The leader of the coalition should ensure the appropriation of the organization’s resources by aligning the usage of resources with the responsibilities of every active member.
- The leader should develop a good organizational capacity by maintaining effective communication channels between the various stakeholders of the coalition (Verschoor, 2014). This strategy creates operational efficiency whilst saving time to accommodate many coalition activities.
- There should be equality. The leader of the coalition should present members with the opportunity to exercise free will as they seek identity in the coalition. Equality creates a democratic environment where members freely express knowledge and ideas.
- The coalition should maintain adequate funds to sustain its operations. The stakeholders’ ideas should never be underestimated. Implementation of potential ideas inspires the coalition members to become more creative and innovative (Verschoor, 2014).
- Finally, there should be a promotion of cooperation, collaboration, and coordination during the performance of coalition activities to diminish competition amongst members.
The essay has reviewed the activities of BP against its ability to integrate CSR initiatives in its gas and oil interventions in various parts of the globe. Despite the fact that the company has made visible efforts to deal with the menace of its activities, the world continues to beckon for socially and environmentally friendly holistic approaches. The concentration of toxic gases has surpassed the permissible levels. This situation continues to worsen the state of the atmosphere.
Hence, it has elevated the overall global warming effect. In addition, the limited capacity to handle oil spills due to ship accidents and pipeline leakages has become a menace to marine and terrestrial environments. Consequently, international organizations and legislators should encourage nations within which BP undertakes its activities to form coalitions to challenge the company to develop sustainable business frameworks to save the world from adverse effects such as global warming and destruction of marine and terrestrial ecosystems.
Flammer, C. (2013). Corporate Social Responsibility and Shareholder Reaction: The Environmental Awareness of Investors. Academy of Management Journal, 56(3), 758-81. Web.
Greiner, A.L., Lagasse, L.P., Neff, R.A., Love, D.C., Chase, R., Sokol, N., & Smith, K.C. (2013). Health Effects of Benzene Exposure among Children Following a Flaring Incident at the British Petroleum Refinery in Texas City. American Journal of Public Health, 103(7), 1198-1206. Web.
Lawrence, A. T., & Weber, J. (2014). Business & society: Stakeholders, ethics, public policy. New York, NY: McGraw-Hill Irwin. Web.
Matejek, S., & Gossling, T. (2014). Beyond Legitimacy: A Case Study in BP’s ‘Green Lashing’. Journal of Business Ethics, 120(4), 571-84. Web.
Veil, S.R., Sellnow, T.L., & Wickline, M.C. (2013). British Petroleum: An Egregious Violation of the Ethic of First and Second Things. Business and Society Review, 118(3), 361. Web.
Verschoor, C.C. (2014). Does BP still mean ‘big polluter’? Strategic Finance, 95(7), 16. Web.