Image Crisis at British Petroleum

Topics: Business ethics, Management, Ethics Pages: 16 (4990 words) Published: November 25, 2009
More packaging than substance ?


Corporate image symbolises the values an organisation stands for. Organizations can create it to define themselves or get branded due to their actions. Therefore, its more important to have a the right image that reflect an organization’s commitment to quality, excellence and its constructive role in the society. British Petroleum (BP) is a major enterprise to redefine its core values in the light of its ethical considerations. It is an example of antagonism between its core business and it’s core values. Since years it has been subject of criticism more than any other oil producer for failing to deliver on its commitments of environmental protection, ethical business model and health / safety procedures. A series of accidents have also undermined BP’s credibility of going green and the range of disparity between its business values and business practices is anyones guess. In order to assess the extent to which BP has been successful, we will equate its position with respect to the extrinsic factors like industry macro-drivers, strategy implementation, crisis management and intrinsic factors such as size, capital, costs, technology and location. It is the change of dynamics between these extrinsic and intrinsic factors that decides the amount of resources that can be allocated to bring about any change.

We will also aim to explore how BP is affected by dynamics of a business sector on which its customers are rather dependent and shareholders who are looking for the return on their investment. The kind of leverage BP has to sideline its ethical commitments and favor profit generation. There are unexploited oil reserves in this highly profitable industry and switching to alternative energy solutions cannot viably offset current technologies brought about by years of research and billiols in investment. How does BP plan to manage this change across the company and time of implementation is debatable.

“Bp’s internal culture is characterized by intense pressure to keep the costs down and budgeting always took precedence over routine maintenance and occasionally over safety.”

- Forbes

The business ethics that are followed in this sector are questionable and BP is no exception. Seemingly the company has protocols setup for operation but due to the rapid expansion of the oil industry, these have to be adapted to the local conditions that leads to complacency and rearrangement of ethical priorities. This results in a business mechanism where the core values does not filter down to the grass root level. The ethics of any organization is comprised of the individuals representing it. Customizing ethics with respect to the operating environment increases heterogeneity in values which is not permissible.

“the values are real, but they haven’t been aligned with our business practice in the field...a scream at our level is, if anything, a whisper at their level.”
- anonymous BP executive quoted by Fortune magazine

There are challenges faced by BP as well to bring about changes. Change in technology is relatively easier than to bring change in attitude. Being continuously under the scrutiny of environmental agencies like green peace and WWF it is hard for the company to invest into alternative energy considering the profit it is making from the existing operations. Moreover, it is understandable that BP is a business concern that generates profit and not a charity, therefore it would be unfair to ask it for a paradigm shift in its policies and operations. It has made mistakes and hopefully learnt from it, there is actually no intention of reinventing the wheel. Therefore, the aim of this article is analyse the success BP has had since it was rebranded and whether its actions are in line with its green strategy or result of a covert master plan.

Overview of the study:

In this study we aim justify if...

References: Agle, B. R., Mitchell, R. K., and Sonnenfeld, J. A. 1999. “Who matters to CEOs? An investigation of stakeholder attributes and salience, corporate performance, and CEO values.” Academy of Management Journal 42:507–25.
Beder, S. (2002), 'bp: Beyond Petroleum? ' in Battling Big Business: Countering greenwash, infiltration and other forms of corporate bullying, edited by Eveline Lubbers, Green Books, Devon, UK, pp. 26-32.
Berman, S. L., Wicks, A. C., Kotha, S., and Jones, T. M. 1999. “Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance.” Academy of Management Journal 42:488–506.
Burton, B., (1999), "Oil companies defend apartheid role", Mining Monitor, Mineral Policy Institute, Volume 4 Number 1, March 1999, page 10.
Burton, B., (1998) "Oil & mining companies silent on apartheid role", Mining Monitor, Mineral Policy Institute, Volume 3 No 4, page 3.
Buysse K, Verbeke A. 2003. Proactive environmental strategies: a stakeholder management perspective. Strategic Management Journal 24(5): 453 – 470.
Caulkin, S., and Black, M. 1994. “The new corporate crusade: A wider social and economic role is now expected of the corporate sector.” Management Today, October, 56–60.
Clarkson, M. B. E. 1995. “A stakeholder framework for analyzing and evaluating corporate social performance.” Academy of Management Review 20:65–91.
Collins, J., (1994), Is business ethics an oxymoron?, Business Horizons, Greenwich, Vol 37, Iss 5, Pg 1,8
Coombs, W
Donaldson, T., and Preston, L. E. 1995. “The stakeholder theory of the corporation: Concepts, evidence, and implications.” Academy of Management Review 20:65–91.
Fink, Steven. Crisis Management: Planning for the Inevitable. Authors Guild Backprint Edition. 1986, 2002.
Freeman, R. E. 1984. Strategic Management: A Stakeholder Approach. Marshfield, MA: Pitman.
Harvey B, Schaefer A. 2001. Managing relationships with environmental stakeholders: a study of U.K. water and electricity utilities. Journal of Business Ethics 30: 243 – 260.
Henriques I, Sadorsky P. 1999. The relationship between environmental commitment and managerial perception of stakeholder importance. Academy of Management Journal 42: 87 – 99.
Hoffman A. 1996. A strategic response to investor activism. Sloan Management Review 37(2): 51 – 65.
Jossc. (2008). BP wins coveted 'Emerald Paintbrush ' award for worst greenwash of 2008. Available: Last accessed 28 Jun 2009.
Lerbinger, O. (1997). The crisis manager: Facing risk and responsibility. Erlbaum.
Mccalister, T (2003) BP panel warns of risk to human rights in Indonesia, Available: Last accessed 3rd July, 2009
Mitroff, Ian I., Pauchant, Thierry, C
Mufson, S. and Eilperin, J. (2006). For BP, a Pair of Repairs. Available: Last accessed 28 Jun 2009.
Ruch, J (2002) INDUSTRY RUNS ENVIRONMENTAL AGENCY, EMPLOYEES SAY, Available: Last accessed 3rd July, 2009
Seeger, M
Shaw, G., (2005), Business Crisis and Continuity Management, Federal Emergency Management Agency Higher Education Project, chapter 5, Pg 2,3.
Yarrow, J (2009) BP Suffers Losses On Alternative Energy, Available: Last accessed 28 June, 2009.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • British Petroleum Essay
  • Essay on Ethical Issues and British Petroleum
  • British Petroleum Essay
  • British Petroleum Essay
  • British Petroleum Essay
  • British Petroleum Essay
  • british petroleum Essay
  • British Petroleum Essay

Become a StudyMode Member

Sign Up - It's Free
Beauty and the Beast (1946) 720p BRRip 700MB | HomeShop All 556 resultsarrow-right | Haunted HDTV