MNGT2005: Leadership and Ethics Analysis of BP Oil Spill Crisis

This report provides an in-depth analysis of the BP oil spill, examining the critical role of leadership and ethics in the context of the disaster. It begins with an introduction and background of the oil spill, highlighting the explosion on the Deepwater Horizon oil rig and its devastating consequences. The report then delves into responsible leadership theory, organizational culture, and their relation to the crisis. It discusses the failures of Tony Hayward's leadership, the weak organizational culture within BP, and the importance of ethical decision-making. The report concludes with recommendations for BP's leaders, emphasizing the need for a paradigm shift in work safety practices, diversification strategies, and the adoption of effective leadership theories. The report underscores the significance of responsible leadership in fostering a positive work culture and improving business operations, offering valuable insights for students of leadership and ethics.

Running head: LEADERSHIP AND ETHICS
LEADERSHIP AND ETHICS
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction................................................................................................................................2
Background of BP oil spill.........................................................................................................2
Responsible leadership theory....................................................................................................3
Organization culture of BP Oil Company..................................................................................3
Relation of responsible leadership theory to the crisis...............................................................3
Recommendation........................................................................................................................4
Conclusion..................................................................................................................................4
References..................................................................................................................................5

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Introduction
The purpose of this assignment is to provide an overview on the significance of
leadership theory and ethics in British Petroleum (BP) regarding its oil spill disaster. The
study mainly focuses on the relation of responsible leadership theory to this crisis.
Responsible leadership theory is a new leadership theory that transcends traditional
subordinate – dyadic leader relationship and also concentrates on full range view of the
stakeholder – leader relationship that can properly deal with new challenges from each
sectors of society (Boaks & Levine 2015). The recommendations for the solutions regarding
this crisis are also given in this study.
Background of BP oil spill
The BP oil spill also known as Deepwater Horizon oil spill is one of the biggest
industrial disaster that started in the Gulf of Mexico in the year 2010. It is considered as the
biggest marine oil spill that occurred in the history of petroleum sector. The main cause of
this discharge was huge explosion on BP’s Deepwater Horizon oil rig in Gulf of Mexico
(Leifer et al., 2012). This massive explosion resulted in numerous deaths and release of
several crude oil barrels into the Gulf. Not only this, this disaster also reduced biodiversity
closest to this spill, extensively damaged marine, fishing and wildlife habitats as reported by
few researchers. This oil spill brought considerable pressure on the enterprise not only
combat its effect during drilling but also manage negative publicity in the market. Apart from
this, this also disrupted the financial performance of BP and thus led to decline in profit
margin and stock price. Some of the owners of BP gasoline station also reported the brand
value of the company declined after this crisis. Owing to this adverse impact on the company,
the CEO of BP Tony Hayward resigned from his post.

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Responsible leadership theory
Responsible leadership theory is mainly the integration of corporate social
responsibility and leadership ethics that aims to be responsible for the stakeholders and
enterprise. By & Burnes (2013) opines that leadership ethics is the vital requirement of the
responsible leadership that need leaders follow certain ethical principles to make proper
ethical decisions and act ethically. Moreover, corporate social responsibility is an external
need of responsible leadership theory that requires the leaders to widen their view regarding
leaders- stakeholder and leader- follower relationship. However, responsible leaders inspire
others to act ethically towards impacting positive change through accomplishment of
common target.
Organization culture of BP Oil Company
Organizational culture has the potential to increase workers job satisfaction and
enterprise performance. Recent evidences reflect that BP had weak organizational culture
during that period, which in turn adversely affected its employees. Few researcher have also
found out that BP do not have safety work culture and thus negatively affects the employee’s
job performance. However, the management of the company should adopt changes
throughout each aspect in the company which are guided by safety focus.
Relation of responsible leadership theory to the crisis
BP oil spill reflects the failure of Tony Hayward leadership theory. This is because
the actions taken by Tony Hayward during this crisis was not at all responsive (Pearce,
Wassenaar & Manz 2014). As a result of which the company faced several problems and
huge loss during that period. The CEO of BP did not became successful in demonstrating his
leadership capabilities and thus it adversely affected the company stock price. In this
situation, a company required a responsible leader who can engender confidence among the

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employees and inspire them to act ethically. Tony Hayward was not a responsible leader as
he did not present the actual situation to all stakeholders and took an attempt to reduce the
extent of issue. As a result, it adversely affected the financial performance of the company
(Voegtlin, Patzer & Scherer 2012).
Recommendation
The recommendations are provided to the leaders of the BP Company so that they adopt
effective leadership style and acts towards sustainable practices. These are given below-
 The leaders of BP is required to have paradigm shift in their mental framework about
practicing work safety. The company is required to be highly stringent towards
maintaining performance parameters in matching GRI guidelines
 The leaders of BP should utilize diversification strategy for continuing to respond to
environmental challenges.
 The leaders of BP must adopt effective leadership practices and theory for improving
the work culture of this enterprise.
Conclusion
Integration of proper leadership theory is vital for the leaders of an enterprise to
improve work culture and business operations. Proper enterprise culture enhances values,
beliefs and norms which connect all employees of the enterprise. The BP leaders must adopt
responsible leadership theory as it can help the managers to implement better enterprise
cultures. Moreover, this leadership theory can also help employees to work ethically and
improve the performance of BP.

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References
Boaks, J., & Levine, M. P. (Eds.). (2015). Leadership and Ethics. Bloomsbury Publishing.
By, R. T., & Burnes, B. (Eds.). (2013). Organizational change, leadership and ethics:
Leading organizations towards sustainability. Routledge.
Leifer, I., Lehr, W. J., Simecek-Beatty, D., Bradley, E., Clark, R., Dennison, P., ... & Reif, M.
(2012). State of the art satellite and airborne marine oil spill remote sensing:
Application to the BP Deepwater Horizon oil spill. Remote Sensing of Environment,
124, 185-209.
Pearce, C. L., Wassenaar, C. L., & Manz, C. C. (2014). Is shared leadership the key to
responsible leadership?. Academy of Management Perspectives, 28(3), 275-288.
Voegtlin, C., Patzer, M., & Scherer, A. G. (2012). Responsible leadership in global business:
A new approach to leadership and its multi-level outcomes. Journal of Business
Ethics, 105(1), 1-16.