BP’s general strategy
Oil companies were the worst performing brands in the world market. There was no brand in the oil industry that had created positive perception in the public. During the late 1990’s BP has decided to change this perception for their brand. The main idea was to create a symbolic capital for BP. The definition of symbolic capital is given by (Bourdieu, 1974/1977 sited in Holt & McNulty,2008,p.76) as “ the resources by which authority and credibility are established amongst employees, peers, customers, regulators and other organizational constituents through the capability to articulate legitimate judgments and actions from a specific institutional position”. This could be a powerful tool in certain conditions. The CEO was John Browne at that period. He was also member of Intel Company and he had influenced with the perception of Intel brand in the market. He had wanted to position BP as it’s been done for Intel. Browne made a declaration about the relation between greenhouse gases and climate change in Stanford University in 1997. That was a big change of strategy for the oil market and for BP. An oil company was making a big shift in the market and joining the fight against the climate change as stated by Sachs (2012, p.38) From that point, company had positioned itself as an environmental company as well as an oil company. That was a revolutionary change for the company. His service to the board of Intel Company might help him to take this radical decision according to Sachs. The company was using the positive perception of ‘being British’. Now time has changed and company has needed a new way of perception in the public. There are three stages for a change as stated by (Lewin,1951 sited in Weick & Quinn, 1999). These are unfreeze, transition and freeze again. Browne had started to unfreeze the existing patterns both in BP and both in the market. This was a start of a big change. This would change all the market and BP paradigms.
BP was the first company who had acknowledged the public and the market about the environmental policies. This became an advantage and disadvantage at the same time. It had received a lot of support for being the pioneer in that sense. But also, received a lot of complaints from the public as well. As discussed by (Bahree, 2001), BP became the significant in criticism by the environmentalists.
Although BP has an environmental strategy as explained above, their safety procedures and regulations were still missing. The CEO of Elements Investment Manager said that, BP had been pinned with around 760 safety violations when other competitors have only tents of violations as stated by Ashton(2010). There were safety issue problems in the company, but these problems or lack of regulations were never considered as a major issue. Browne was a leader of not only BP but for all the Oil & Gas market. His moves were monitored and duplicated by other players most of the time. For example, during the Davos meeting in early 1998, Texaco CEO’s climate thinking has changed with the influence of BP. The Amoco transaction of Browne, has triggered the Exxon and Mobil’s multi billion dollar negotiation. The Arco deal of Browne, has triggered the Chevron and Texaco negotiations.
After the Browne, Hayward became the CEO. He was an employee of BP for a long time. Therefore all the existing strategies of Browne were with him. As stated by Reed (2007) the new CEO Hayward had two major issues to fix. One of the issues was the expansion strategy of the company and the other one was the safety issue. Hayward has sent a memo to all the employees about the safety regulations on May 1st. This was a sign that, Hayward would be following the Browne’s path. As discussed by Weick & Quinn (1999,p.361), he was seeing the company from inside. Therefore most of his perception was parallel with the ex-CEO. The general understanding inside the company was BP is the best brand in the market. The consumers...
References: Ashton, M. (2010), ‘Tree-Hugger’, investment Strategy, 19 August, p.16-18, (Accessed : 18 April 2013)
Helfat, C. and Peteraf, M. (2003), “The dynamic resource-based view: capability lifecycles”, Strategic Management Journal, Vol. 24, pp. 997-1010(Accessed: 22 April 2013).
Holt, R. & McNulty, T. (2008) ‘Securing the license to act: a foundational capability’, Journal of Strategy and Management, 1 (1): 72-92(Accessed: 12 April 2013).
Rowlands, I.H. (2000), ‘Beauty and the beast? BP’s and Exxon’s positions on global climate change’, Environment and Planning C:Government and Policy, vol(18),p.339-354, (Accessed:19 April 2013).
Sachs, J., (2012),’The marketing monster’, The Conference Board Review, fall (Accessed: 15 April 2013).
Tsoukas, H. (1999) ‘David and Goliath in the risk society: making sense of the conflict between Shell and Greenpeace in the North Sea’, Organization, 6 (3): 499-528(Accessed : 18 April 2013).
Winter, S. (2003), “Understanding dynamic capabilities”, Strategic Management Journal, Vol. 24, pp. S991-5 (Accessed: 13 April 2013).
Please join StudyMode to read the full document