Ushering Strategic Change in British Petroleum: A Necessity for Revival

British Petroleum (BP) needs to bring about strategic change to alleviate the degree of risks associated with past business practices that caused environmental damage and hazards to workers. The Company must usher changes in its future business practices and operations, investing in renewable energy and supporting ethics and processes that comply with rules, laws, and regulations. Strategic change is essential for BP as it needs to adapt to changes occurring in the business sphere, internal and external development factors, and stakeholder demands. The change will enable BP to regain its competitive edge, rebuild its market reputation, and enhance its corporate responsibility performance.

Running head: CASE STUDY 1
CASE STUDY: BP’s STRATEGIC CHANGE INITIATIVE
Student’s Name:
Institution’s Name:
Course Title:
Date of Submission:

CASE STUDY 2
Introduction
Change 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, operation, etc, 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 obtain
competitive 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 Background
British 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, and
packaging (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 STUDY 3
is 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 on
the 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.
The Need of Implementation of Strategic Change to Impact Positively on the
Environmental and Leadership Policies
Since 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 requirement
of indulging in the formulation of an innovative environmental policy should have been given
a 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. The Company did pledge millions for an open
investigation into the spill and for researching in better ways about the tracking of oil spills

CASE STUDY 4
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 bring 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 duties to 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
measures has also been felt by the Company’s management. It should also be noted that the

CASE STUDY 5
management has also understood that enhancing leadership in deepwater drilling is the need
of the hour and for bringing such enhancements more training and development programs
should be introduced and implemented. It must be noted that “Enhancing leadership in
deepwater drilling procedures will certainly effect in more well organized procedures,
improved safety, superior job satisfaction, and minimized cost over the long term, pledging
the capability to supply energy profitability and safely far into the future” (Karatay, 2013).
BP’s negligence of the safety measures and risk mitigation strategies resulted in the oil
spillage, and this time the management must ensure that such mistakes are not repeated again.
Moreover, being non-compliant with laws of the land, BP’s management did put the
Company’s future at stake during the process of hiding the facts and truths from the
government and the internal and external stakeholders. This time the Company must indulge
in the implementation of a leadership style that would ensure compliance and would make
sure that the Company is running towards an ethical direction in terms of business operations.
Why strategic change is important for BP is due to the fact that it is time for the management
to establish a leadership regime that would ensure that the organization is transparent to its
stakeholders and the Company is working towards building and achieving stakeholders’ trust
and faith. The leadership would ensure that owing to the implementation of the change
process the management of the Company would be able to engage the stakeholders in the
process of building organizational sustainability and securing competitive advantage.
Moreover, as Senge has pointed out (as cited in Karatay, 2013) “BP needs to develop
significant change management strategies to gain competitive advantage to deal with the
challenging external and internal market pressures.”
Implementation of Strategic Change Management
Before discussing about how BP should implement the process of strategic change
and manage the same it is needed to know what change management actually is. Change

CASE STUDY 6
management “is a generic process applicable to all kinds of organizations, which uses
knowledge and skills to bring about substantial organizational change to improve
effectiveness and efficiency” (Karatay, 2013). Moreover, it should be noted that “Change
may be required due to an outdated organizational structure, poor responsiveness to clients,
technological change, a merger, or an appropriate organizational culture (Karatay, 2013).
Change management is a concept that has received much attention from both the practitioner
and scholar communities across the globe. It must be noted that change, being the only
constant in the sphere of organizational growth and development, must be managed in a
proper manner to enjoy its effectiveness and benefits. Today, the leadership and the
management both must join hand in hand in the process of contributing to the development of
a proper change management process and system that would help an organization in ushering
those strategic changes that are needed to secure competitive advantages (Augustine, 1995).
It should be taken into account that strategic change management, in particular, is a well-
planned process. It is a process of managing change in a way which can be deemed
structured, thoughtful and ordered, having goals and objectives that align with organizational
goals and objectives, and mission and vision.
Lessons Learnt from the Review about the Management of Change
There are different reasons for bringing change into the operation and management
sphere of BP. Changes like customs change, business process engineering, empowerment and
total quality, branding, reputation are often the reason of change in many organizations and
for BP it is due to enhancing the reputation and brand image of the Company that BP’s
management should think about bringing strategic change for revival. BP had the need to
change because it had bitter experience of controversies regarding past business practices that
eventually caused environmental damage and it has to bring about change to alleviate the
degree of risks of hazards to workers. BP has to opt for ushering strategic change to ensure

CASE STUDY 7
that its future business practices and operations would be environment-friendly and the
Company must ensure such environment-friendly practices through investments in renewable
energy and support of ethics and to processes that would make the Company more compliant
with rules, laws and regulations. British Petroleum now has to usher strategic change to make
sure that it is a Company that is looking beyond profit-making and looking forward to
enhance its corporate responsibility performance in a sustainable manner. Strategic change is
needed in BP because it has to adapt to changes that are occurring in the business sphere in
which the Company operates. There is need for change because there are internal and
external development factors to be met in a thorough manner. It must be noted that the ill-
reputation that BP has gained through the oil spillage incident in the past has actually made
the competition stiffer than the past and now the Company has to share and gain competitive
advantage over its competitors because now it is time for BP to learn to change to meet the
stakeholders’ demands in a more thorough manner. The strategic change is essential for PB
because it needs to adapt to the changes and it has to transform itself into a greener company
that is more concerned with corporate social responsibility (CSR) than only profit-making.
The change is needed for the management of BP to evaluate and understand what exactly is
needed by the stakeholders and how such needs can be actually met. A PESTEL analysis if
BP is needed to understand why strategic change has become so much essential for the
Company. From the perspective of political needs if judged, it can be seen that BP needs to
bring about change to become more complaints with government policies, taxation policies,
foreign trade regulations and social welfare policies. From the economic perspective it can be
seen that the Company needs to enhance its business cycles, GNP trends, and it has to
compensate for the losses it has accrued through the event of oil spillage. From the socio-
cultural perspective it has been observed that BP needs to bring about change after analyzing
the demands and likes and dislikes of the stakeholders. The external stakeholders must be

CASE STUDY 8
appeased and the internal stakeholders must be conveyed that the Company has been on the
verge of changing into a greener and more environment-friendly Company. From the
technological perspective, when judged, it can be seen that BP is in need of implementing
innovations to develop its business operations. And to develop innovative business
operations, it is imperative to bring about strategic changes to the organization. From the
environmental perspective it should be said that the Company needs to usher the strategic
changes in order to ensure that it complies with the laws that uphold and promote the ‘go-
green’ movement. The Company needs to be more environment-friendly in its approach
towards dealing with the business operations that are likely to have impact on the surrounding
environment and ecology. The spillage did cost dearly to the ecology and to the marine
environment and moreover, it did affect the business of BP worldwide. Hence, considering
the need of rebuilding its market reputation and regaining its market hold, BP now needs to
usher changes in environmental policies. Finally, when judged from the legal perspective it
can be found that BP needs to usher strategic changes to overcome the legislative constraints
that it had to face due to the spillage. The Company has to be more compliant with health and
safety legislations and this would overcome the barriers to the Company’s initiatives in
establishing joint ventures or collaborations with other companies within the industry.
Conclusion
It has to be understood that change is the primary constant in the business spheres. To
adapt to the ever-changing needs of the environment, of the society, of the economy and of
the legislations, BP has to encourage and implement the process of strategic change. It has to
usher and manage strategic change to regain its reputation and market hold. The Company
has already incurred loss due to getting involved in the spillage disaster, and now it is high
time for BP to ensure proper implementation of change policies that would help the Company
in regaining the competitive edge that it had lost. In this respect it should be noted that

CASE STUDY 9
change can be of many types, including strategic, operation, etc, 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. Since 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. This report discussed about the management of strategic
change that should be ushered in the realm of British Petroleum in order to obtain
competitive advantage. How the Company has been in need of introducing has been
discussed along with the need for managing such strategic change in both the short- and long-
run.

CASE STUDY 10
References
Augustine, N.R. (1995). Managing the Crisis You Tried to Prevent. Crisis Management.
Harvard Business Review. Retrieved February 13, 2018, from
https://hbr.org/1995/11/managing-the-crisis-you-tried-to-prevent
BP Global (2018). BP at a glance. Retrieved February 12, 2018, from
https://www.bp.com/en/global/corporate/what-we-do/bp-at-a-glance.html
BP Gulf Coast Disaster and Recovery (n.d.). Retrieved February 13, 2018, from
http://www.cengage.com/resource_uploads/downloads/053846738X_246856.docx
Ebinger, C.K. (2016). 6 years from the BP Deepwater Horizon oil spill: What we’ve learned,
and what we shouldn’t misunderstand. Retrieved February 13, 2018, from
https://www.brookings.edu/blog/planetpolicy/2016/04/20/6-years-from-the-bp-
deepwater-horizon-oil-spill-what-weve-learned-and-what-we-shouldnt-
misunderstand/
Elkind, P., Whitford, D., & Burke, D. (2011). BP: ‘An accident waiting to happen’. Fortune.
Retrieved February 13, 2018, from http://fortune.com/2011/01/24/bp-an-accident-
waiting-to-happen/
Encyclopaedia Britannica (2018). BP PLC. Retrieved February 13, 2018, from
https://www.britannica.com/topic/BP-PLC
Karatay, M.O. (2013). What Change Management Strategies Can Be Undertaken By British
Petroleum after Undertaking Strategic Analysis to Help Them Gain Competitive
Advantage. Retrieved February 12, 2018, from
https://era.library.ualberta.ca/files/d791sg676/Thesis_Karatay.pdf

CASE STUDY 11
The Ocean Portal Team (2017). Gulf Oil Spill. Retrieved February 13, 2018, from
http://ocean.si.edu/gulf-oil-spill