The BP Oil Spill

The BP Oil Spill Crisis

The BP oil spill crisis that happened in 2010 is considered as one of the largest disasters to take place in the history of the oil industry. BP Company incurred a huge loss when the firm was sued over the disaster (de Wolf, 2013).

Damage to the Environment

Although the BP Company successfully managed to stop the spill by killing the well by September 19th the same year, its reputation was ruined due to the fact that the crisis had caused considerable damages to the environment. In a bid to respond to the crisis, BP leadership outlined image repair strategies such as improving the security standards and introducing a working contingency plan (Johansson, 2017).

Public Relations Campaign

In order to reduce the negative effect and prevent further negative behavioral intentions from the consumers, the BP management team launched a vast public relations campaign that was focused on running apologetic advertisements. The Company’s CEO Hayward publicly apologized to the people for the catastrophe and admitted that the Company would take full responsibility for restoring the Gulf region to its initial state. The spill caused the firm’s stock to hit its lowest point since the mid-1990s (de Wolf, 2013).

Partnership and Compensation

Thus, in a bid to assure its primary shareholders and investors that their investment was safe, BP’s leadership invited its previous CEO who held discussions with independent wealth companies in leading oil producing countries such as Qatar and Kuwait for the purpose of finding a strong partner (Johansson, 2017). The partnership was intended to avoid the possible hostile buyout offer from its closest opponents. Moreover, in order to further repair the image of the organization, BP announced that it would offer a $20 billion claims fund which would be paid in three and a half years. Furthermore, the Company announced that it would offer $52 million to state and federal health firms to sponsor outreach programs across the affected region.

Recovery and Reforms

The crisis led to the Company’s leadership to carefully review its operations to prevent such catastrophes from taking place in the future and restoring its image.

Safety and Risk Management

The management team introduced a Safety and Operational Risk department which has its specialists entrenched in the firm’s operating sectors such as refineries. The specialists report directly to the organization’s CEO who has been given the power to mediate in almost all aspects of the firm’s activities (Johansson, 2017). Moreover, BP’s leadership reviewed its risk management system and further restructured its business activities (Johansson, 2017). The Company divided its business activities into production, survey, and improvements with the centralization of the drilling activities into one organization.

Employee Alignment and Technological Adoption

In addition, BP’s leadership has focused on connecting its workers to personal behaviors and the firm’s code of conduct which would align the staffs based on their performance. Also, BP has reconsidered how it relates with workers and further repositioned itself with the current technology in order to meet the modern-day energy need safely and in a responsible manner (de Wolf, 2013).

Improving Relations and Market Analysis

Furthermore, BP’s leadership initiated a review procedure into its methods of managing the relationship between partners and other non-operated joint venture operators. In a bid to support the affected communities, BP settled lawsuits brought against them from individuals and organizations. Lastly, in order to identify trends in public and stakeholders’ opinions and assess their likelihood of negatively impacting the firm’s image, BP introduced a specialist market intelligence search engine system (Johansson, 2017).

References

de Wolf, D. (2013). Crisis management: Lessons learnt from the BP Deepwater Horizon Spill       Oil. Business Management and Strategy, 4(1), 69-90.

Johansson, M. (2017). Crisis strategies in BP’s Deepwater Horizon response: An image repair        and situational crisis communication study.