Alex Angelov

Thomas Huggins
Malgorzata Glowa-Willemse
Clarice Da Silva
Pawel Rogalewski

Introduction

Definition of power & politics

Whos to blame and how it happened?

US Government response to the crisis

Stakeholders and media involvement

BP reaction during the crisis

Managing post crisis change effectively &

recommendations
Conclusion

Oil Spill disaster on 20th April 2010, Deepwater

Horizon exploded after a blowout and sank two days
later, killing 11 people and leaving many injured.
The oil spill flowed for three months till July 15.
It was a biggest hit for BP and its public relations,
and as a direct effect reduced its share prices
drastically.
The oil spill in the Gulf of Mexico not only resulted
in an environmental disaster of enormous scale, but
it ignited antagonism toward BPs brand identity.
Deepwater Horizon was not the first disaster linked
to the BP brand, but the oil spill in the gulf is
unprecedented in its explicitness.

Obamas continuing efforts to reverse

public opinion against BP has more
reasons.
If Obama will blame the other involved
companies from irresponsibility instead of
BP, it will never be so much discussed
topic and nobody will force BP to pay for
cleaning up of the coast.

Power concerns the capacity of individuals to

exert their will over others.
Political behaviour is the practical domain of
power in action, worked out through the use of
techniques of influence and other(more or less
extreme) tactics. (Buchanan and Huczynski)
Power is the ability to get things done the way
one wants them to be done(Pfeffer 1992).

Lack of ethics, lack of regulation, corruption, hypocrisy, personal

gain greed, complacency
BP with its controversial health & safety record
Minerals Management Service
- dysfunctional, riddled with conflicts of interest and
unprofessional behaviour but still collects about $10 billion a year
(Savage 2008)
Halliburton- associated with Dick Cheney (Hoffman & Jennings
2011 p.5)
Transocean- has a history of accidents:
- a Scotsman killed aboard a drilling rig (BBC News 2002)
- Bourbon Dolphin supply boat sank off the coast of Scotland
killing 8 people (Offshore Shipping 2008)
- two people were killed on Transocean vessels in 2008 (Smith &
Casselman 2010)
- Deepwater Horizon drilling explosion in 2010 killing 11
people

The Interior Department Mineral Management

Service
BP Congress and environmental groups complain
about BPs lack of readiness to handle the spill but
are overlooking some key facts:
Statistical models last updated 2004
Not tested sufficiently to use in deep water
Deepwater Horizon 35,050ft vertical depth (largest
drilled well in history) (King and Johnson 2010)
Theres enough responsibility to go around, and all
parties should be willing to accept it, Obama said.
"That includes, by the way, the federal
government.(Johnston and Brower 2010)

(King and Johnson 2010)

The U.S government were not prepared and

were also too slow to respond to the crisis
Obama claims to be on top of things from the
beginning

I take responsibility. It is my job to make sure

that everything is done to shut this thing
down. Barack Obama (May 27th)

(The Economist 2010)

Government officials need to think carefully

before taking actions
Suspending the BP quarterly dividend for
shareholders (Angered many people)

1.

2.

3.

Make sure that statistical oil spill data

models from the Minerals Management
Service used are up to date and accurate.
Make sure you know all your stakeholders
and their needs before taking drastic
actions.
Make sure that oil companies drilling have
oil containment equipment ready.

Consumers used social networks, such as

Facebook and Twitter to start boycotting
and commenting on BP. Group BP boycott
on Facebook had over 181,600 members
and Twitter BP Global PR had over 75,800
followers (Business Insurance 2011)

Varsvarovsky and Brugha described

stakeholders as actors who have interest in
the issue under consideration, who are
affected by the issue, or who because of
their position have or could have an
active or passive influence on the decisionmaking and implementation process.
Possession of resources related to
perception of action (Zaleznik, 1970)

BP and its employees

Transocean Ltd who leased the rig to BP

Halliburton who was in charge on cementing

and testing the wellhead
Engineering firms and the regulators
Gulf States community (who suffered greatly
after the spill)
High status players United States and
Britain, and associated national level
agencies (Hoffman and Jennings 2011)

As a result of the tragedy and negative

exposure of companys name in the world,
its market value has dropped 40 per cent
since April 2010 in all aspects, financial,
political, reputation and image (BBC News
2011)
BP sent the wrong message saying that the
company would pay only what would be
appropriate for "legitimate legal claims".

Mr Bernstein said. It's clear that BP didn't

have a crisis response plan in place before this
happened, even though this is something that
is predictable in their line of work and that is
inexcusable. (Business Insurance 2010)
Benoit argued that doesnt matter what
happened. It is not important whether the firm
in fact is responsible for the offensive act, but
whether it is thought to be responsible for act
by the relevant audience. (Benoit 1995)

Our goal of no accidents, no harm to people

and no damage to the environment is
fundamental to BPs activities, stated the
companys Sustainability Review 2009. We
work to achieve this through consistent
management processes, on-going training
programmes, rigorous risk management and a
culture of continuous improvement. It added
that creating a safe and healthy working
environment is essential for our success. Since
1999, injury rates and spills have reduced by
approximately 75%. (bp.com)

2005- A Texas City refinery explosion- 15 people

dead, more than 170 injured (Mauer & Tinsley
2010)
2006-2008- series of accidents in Texas City, 3
people dead (Bower 2010)
2009- North Sea helicopter accident (Byers
2009)
2010- DEEP WATER HORIZON WELL EXPLOSION11 people dead and an environmental disaster
(Hoffman and Jennings 2011 p.1)

The Exxon Valdez disaster of 1989 caused

10.8 million gallons of oil to be released
into the Prince William Sound, a figure
which when compared to the current Gulf
situation, seems relatively minor.
The company paid 2.5 billion USD
towards clean up efforts, 1.1 billion USD
in settlement costs and a 5 billion USD.
(Business Insurance 2011)

Media outlets may criticize BP for their failure

in handling the crisis expeditiously and
cutting corners to save on cost, but what
company hasn't cut corners to save on
business expenses?
Addressing public concerns, Obama described
the growing spill as an assault on the shores
and citizens of the Gulf region (Business
Insurance 2011)

BP has gone on record assuming responsibility

for the oil spill.
BP decided to create a $20 billion response fund
to alleviate the pressure caused by the spill.
On the surface, BP and the U.S. government
seemed to be working together in order to
correct the situation.

Managing issues

Planning and prevention

Managing the crisis

Post-crisis

Crises expose dysfunctional organizational

cultures
Leaders must recognize when a crisis can't
be spun
Leaders need to work together rather than
scoring points or deflecting blame
Leaders are there to serve their companies,
people and communities
True leadership exists beyond title and office
elected leaders should remember this.

In order for any company to execute

successfully, the right people have to be involved
with the right decisions. BP provides a
devastating example of what can happen when
this isnt the case. Obviously, this lesson is even
more critical when there is as much at stake as
there was in the BP disaster.
But really for any company trying to gain footing
in a constantly changing business environment
and tough economy, empowering the right
people to make the right decisions can be the
difference between landing that next great
customer or account or not.

BP received much of the blame for this disaster, and that

blame resulted in the need to re-build, reputation,
strategy and confidence
Leading up to and after the oil spill BP violated almost all
the guidelines of effective execution, including lacking an
effective structure and lacking clear accountability.
These gaps created another problem for them: In the
critical stages following the spill, BP was unable to get
input from those who had the knowledge and experience
to make the best decisions about how to handle it.
Whats more, BP failed to empower people to use their
best judgment and take appropriate action.

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