Report On Management Of Strategic Change Of British Petroleum
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Added on 2019-09-25
Report On Management Of Strategic Change Of British Petroleum
Added on 2019-09-25
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CASE STUDY1CASE STUDY: BP’s STRATEGIC CHANGE INITIATIVEStudent’s Name:Institution’s Name:Course Title:Date of Submission:
CASE STUDY2IntroductionChange is quite natural in the context of organizational management. It has been proven again and again that change is the primary constant in the sphere of organizational management. In this respect it should be noted that change can be of many types, including strategic and operation, but whatever might be the genre of change, it must be noted that it should be managed strategically in a way in which it aligns with the goals and objectives of the organization in a thorough manner. This report is going to discuss about the management of strategic change that should be ushered in the realm of British Petroleum in order to obtaincompetitive advantage. How the Company has been in need of introducing change should be discussed along with the need for managing such strategic change in both the short- and long-run. Company BackgroundBritish Petroleum (BP), an energy company, is one of the world’s leading oil and gas companies, having its headquarters at London, UK. The Company provide customers with fuel for transportation, energy for heat and light, lubricants for keeping engines moving, and petrochemical products that are used for making everyday items including paints, clothes, andpackaging (BP Global, 2018). The Company operates in more than seventy countries worldwide and it finds and produces oil and gas on land and offshore (BP Global, 2018). The Company also manufactures and markets fuels and raw materials that are used in the making thousands of everyday products ranging from mobile phones to food packaging (BP Global, 2018). About seventy five thousand BP people work day and night to serve millions of customers who are in need of energy in different forms and due to the reach and incredible human resources that BP has emerged as a Company among very few companies that are equipped with innovation and technologies to deliver light, heat and mobility on a scale that
CASE STUDY3is global in nature (Encyclopaedia Britannica, 2018). But despite of having such a reputation, BP is also known to the world for its ill-repute in respect of its aversion in preventing mishaps like oil spillage while drilling (The Ocean Portal Team, 2017). British Petroleum oil spill in the Mexico Gulf is still considered to be the largest and worst oil spill accident in the history of petroleum industry and it is the ill-reputation gained from such event that has forced the Company to bring about strategic changes and manage the same to keep its hold onthe market. The oil spill of 2010 killed eleven people and injured seventeen people and in addition it severely affected the marine life in the Gulf of Mexico causing marine environmental damage and ecological imbalance, which, in turn, affected lives of millions(Amadeo, 2018).The Need of Implementation of Strategic Change to Impact Positively on the Environmental and Leadership PoliciesSince the incident of oil spillage, the management of BP is faced with several legal, social, and economic challenges. Though the spillage disaster had been gradually tamed and brought under control, the Company is still trying to revive from its drastic downfall that occurred (as is still impacting) since 2010 (Ebinger, 2016). To gain the competitive edge, BP must now indulge in bringing some strategic changes that would help the Company’s management in keeping its hold over the global market. On BP’s risk register the requirementof indulging in the formulation of an innovative environmental policy should have been givena high priority and that is one primary reason why the Company is eyeing at ushering and managing some specific strategic changes. Though considered on a cost-benefit basis, the management strategy of BP should now be changed in order to bring about sustainability and to regain the lost market reputation. The costs to rectify the grim outcomes of the spillage did involve the Company in the process of spending billions in trying to contain the spill and this did put the Company in utter financial trouble(Grush, 2015). The Company did pledge
CASE STUDY4millions for an open investigation into the spill and for researching in better ways about the tracking of oil spills with innovative technologies. The disaster did cost BP a reduction in market value and it contributed to the rapid reduction in its share prices. Such events eventually have become the reasons of stakeholders’ dissatisfaction and the degree of such dissatisfaction has made the Company more vulnerable to organizational change. Moreover, the litigations brought against the Company by different types of stakeholders have also forced the management of the Company to think about bringing strategic changes to address the problems and to formulate a better environmental policy. It should be noted that being a public corporation, BP has the responsibility and ethical obligation to fulfil some major dutiesto both internal and external stakeholders and to the society as a whole. This is needed on the part of the Company to regain its lost reputation and trust on the part of stakeholders. It must be noted that investigation reports revealed that BP did not give much importance to employee safety and to job safety related issues (Elkind, Whitford & Burke, 2011). This caused the disaster and triggered the related losses. It was revealed through investigation reports that the Company tried to cover up the extent of damage by refraining from providing relevant data and information to the government and to the public. Furthermore, the Company’s wrong policies affected the marine environment in a thorough manner and this further triggered the need of ushering strategic changes in BP’s operational policies too. It must be noted that in order to avoid future disasters the Company’s management has to bring about strategic changes in leadership policies too. The management of the Company has understood by now that though deep drilling is already ingrained with some potential risks, a strong leadership is required to keep the risks at bay. Lack of proper leadership also contributed greatly to the disaster that put the reputation and market position of the Company at stake for both the short- and long-term (“BP Gulf Coast Disaster and Recovery”, n.d.). The need of good leadership in terms of providing training on safety
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