Analyzing Sustainable Management Futures for British Petroleum (BP)

This report provides an in-depth analysis of sustainable management practices within British Petroleum (BP). It begins by addressing the ethical implications of the oil spill disaster, examining it through the lens of the theory of justice and the right theory of ethics. The report explores how BP's actions impact stakeholders and the environment, and how ethical frameworks can be applied to address such issues. Furthermore, the report delves into the challenges of supply chain management, particularly focusing on the impact of regulations and the need for robust monitoring and supplier relationships. The report highlights BP's strategies to mitigate risks and maintain supply continuity, emphasizing the importance of stakeholder interests and sustainable practices. Finally, the report provides a comprehensive overview of the ethical dilemmas and operational challenges faced by BP, offering insights into how the company can improve its sustainable management approach.

Sustainable management futures

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Ethical issue as oil spill disaster ......................................................................................................3
The theory of justice....................................................................................................................3
Right theory of ethics...................................................................................................................5
CHALLENGE OF SUPPLY ..........................................................................................................6
CONCLUSION..............................................................................................................................10
REFERENCE.................................................................................................................................11
2

INTRODUCTION
Sustainable management future is the most imperative aspect wherein management of
corporation need to ensure that all resources are utilized optimally. It assists corporation to
determine long run growth and success in the marketplace (De George, 2011). Sustainable
management future enables management to make use of limited resources effectively and
determine future growth of firm with increased rate of return. It facilitates to cater need of
different stakeholders who are directly or indirectly engaged with company. This is the most
imperative aspect to determine long run growth with increased customer base. It is also
connected with corporate social responsibilities thereby company can ensure smooth flow of
production in the marketplace. This contribute towards increasing flow of production and meet
expectations of different stakeholders in an effectual manner. This is because stakeholders affect
business of any organization to a great extent as they ensure inclusion of their views and ideas in
the decision making process of corporation.
Present report is based on British Petroleum which is one of the world's seven
supermajor oil and gas companies. Further, it is the sixth largest energy company by market
capitalization. This operates across different areas of the world with vertical integration in
exploration, production, distribution and marketing. Along with that power generation, trading
and refining are also included. Furthermore, report covers ethical issues faced by corporation. In
addition to this, ethical theories have been applied at workplace which affect performance of
corporation. Similarly, critical analysis has been done for an activity of corporation in form the
perspective of two different stakeholders.
Furthermore, theories of ethical issues and related issues have been explained one by one.
It facilitates to describe overall issues which create hurdles in the long run growth of
organization. It has been observed that stakeholders of BP have been facilitating direct
monitoring in operational processes which in turn leads the business to include several new
aspects in operations management. In addition to this, two stakeholders general community and
shareholders are selected. Accordingly theories have been specified. In addition to this, two
issues related to ethics and organization problem has been identified. Under this, ethical issue as
oil spill disaster and challenge of supply are considered which has direct impact on the
performance of company. In this regard focus has been laid on ethical issues of corporation so as
3

to address the same in an effectual manner. It enables corporation to bring improvement in the
future performance and meet expectation of customers in the same manner. Apart from this,
discussion of this issues shed light on negative aspect of organization through which
management can bring improvement by selecting the appropriate measures. It also proves to be
effective in creating competitive edge in the marketplace. Therefore, both issues are explained
with propose justification as well as its its impact on overall performance of British Petroleum.
At last, discussion and findings have been stated clearly thereby valid conclusion can drawn
from the collected information. Apart from this, this section also highlight the actions which
could be or taken by the corporation at present time.
ETHICAL ISSUE AS OIL SPILL DISASTER
It is the foremost issue which create barriers in the long run success of the firm. It is
because of oil spill disaster, the Gulf of Mexico oil spill. Here, the sea floor oil well flowed for
near about 87 days till the time it was capped. It was the largest accidental marine oil spill in the
history which affected petroleum industry to a great extent. It is estimated that it was 8% to 31%
larger larger in volume than previously occurred incident. However during this incident total 4.9
million barrels released from the well (Velasquez and Velazquez, 2012). It was great loss
of both corporation as well as environment. This has not only affected reputation of the firm but
US tourism industry was also highly affected. In this regards following theories are explained-
The theory of justice
The theory of justice is based on two approach such as justice as fairness. Here it is
considered that justice is the prime focus for the corporation and management should identify the
problems which are being faced by society. For example, employees who worked for British
Petroleum lost their existing during their work (Brookes, Altinay and Ringham, 2014). However,
they were not aware of such kind of incident. It was found that during oil spill disaster 11 people
were missing. Similarly, marine life was highly affected because infant dolphins dying at six
times the normal rate and rest of the marine life continued to die. At this juncture, it is very
important for management of British Petroleum to ensure fair justice with affected parties or
employees. It is because these parties take risk on the basis of mutually exclusive terms so that
corporation will provide job security to them. However, these issues affected majority of society
people like employees of tourism industry, people connected with sea water and consider it as
4

their earning. In this regard, these parties have right to get justice after occurrence of oil spill
disaster (A.O. Santos and Svensson, 2013).
The justice as the core concept of theory consists of two main principles such as liberty
and equality. Here, first principle of liberty state that employees or citizen of country a placed
with fair conditions. Thus he or his family member can claim for the damages caused by the
corporation. All stakeholders engaged with corporation has right to gather information for their
own well being. It is because is directly engaged with different stakeholders who contribute
towards determining long run success of the firm with increased rate of return.
The second principle is of equality that further segregated into fair equality of
opportunity and different principle. Under this, all people of society has equity right to get good
job and do their business wherever they are interested (BP Sustainability Report, 2014).
But here British Petroleum created barriers for many of the people by creating such kind of oil
spill disaster. It decreased profitability of tourism industry. On the other hand, difference
principle is applicable on those who own inborn qualities. The same way, corporation recruit
skilled and experienced workforce who can effectively contribute in the direction of growth and
succes (Chiware, 2010). This way level of motivation as well as satisfaction among
employees can boosted.
Furthermore, justice theory depicts that corporation should be ensure that there is
consistency of justice with every one who is directly or indirectly engaged with it. It facilitates to
resolve ethical issues of corporation (Dettwiler, Lindelöf and Löfsten, 2006). This theory
also provide to be effective for management of British Petroleum to retain workforce for longer
time span. It enables management to create goodwill of the firm in the marketplace with high
rate of return. Furthermore, justice theory generate productive behavior at workplace and
support. Apart from this, corporation need to ensure that all stakeholder's needs are satisfied in
an effectual manner. It leads to deliver good quality of services to large number of buyers and
create competitive edge of the firm. The aspect of justice is appropriate in term of determining
long run success of the company in the marketplace (Corporate Responsibility, 2013).
Right theory of ethics
This the foremost theory of ethics wherein management of British Petroleum can easily
cope up with changing scenario. This is because emphasis is laid on several methods to resolve
5

the ethical issues which are being faced by British Petroleum. Here, there are two types of human
rights such as positive and negative (Dressler, 2012). The positive right generally focuses on
management to provide good quality of products and services to others. It assists corporation to
work with integrity and meet expectations of employees in an effectual manner. It is because
employees are treated with respect and provided opportunities to perform better. This in turn
company need to support employees and customers both and accordingly bring modifications in
the current business environment.
On the other hand, negative rights are those through which employees are forced to do
certain task. It imposes obligations on people to stop them from interrupting with other people's
freedom action. It leads to create sound environment at workplace by which personnel can pay
attention on work allotted to them. Furthermore it depicts that all employees have right to take
legal action in case corporation is not behaving in an appropriate manner. Furthermore, company
set the ethical standards in accordance with policies and government (Murthy, 2012). Owing
to this, current scenario shows that right theory must exist at workplace thereby all personnel can
work with integrity. It is also helpful to resolve the ethical issues which are taking place just
because of negative impact of firm on environment. With this, corporation consider right of each
individual who are directly or indirectly engaged with firm. It can also be said that all employees
need to focus upon their right and accordingly they can ensure their own well being at
workplace. It is another foremost aspect for determining long run success of the firm.
Furthermore, right theory depicts that all personnel involved in the business have right to
free consent, free speech and freedom of conscience. Similarly, management of British
Petroleum need to consider this aspect and provide opportunity for employees to incorporate
their views in decision making process. It facilitates to create competitive edge and met
expectations of all related practices (Pollard and Hotho, 2006). In addition to this, right
theory is the effective aspect thereby management can easily resolve ethical issues like oil spill
disaster.
CHALLENGE OF SUPPLY
Supply chain management is termed as most important element in the context of oil
production and distribution company. In this regard, British petroleum has addressed several
issues associated with the supply chain management that have great impact on different
6

stakeholders of business. While managing supply chain management, the management of BP is
mainly considering the specific interests and needs of different stakeholders such as consumers
and suppliers. In this regard, the public authorities of different countries are imposing different
kinds of restrictions and regulation associated with the production and supply chain management
that has direct impact on the cost of crude oil production and its impact over profitability and
interest of suppliers (BP details supply chain response to oil spill, 2012). It has
created huge impact on market supply of different oil products that have created direct impact
over the cost and pricing the goods. Therefore, consumers have to pay extra money for different
oil products due to increase in the cost of supply chain management.
For lowering the impact of different issues associated with supply chain management
such as oil leakage and other disasters, the management of BP has developed an appropriate team
that makes efforts to develop various strategies to maintain continuity in supply of oil products.
In this context, the the management of BP is trying to increase the monitoring of high risky
suppliers (Winter and Knemeyer, 2013). Therefore, BP has raised the safety and quality
standards. This approach has been found very effective in order to lower the restriction of public
authorities. In addition to existing monitoring processes such as internal audits, third-party
verification and executive visits, BP is trying to introduce some new safety performance that
provides significant assistance in 70 categories for suppliers performing high-risk activities
(Galpin, Whitttington and Bell 2015).
Apart from that work collaboratively with suppliers has been found very approach for
establishment of long term relationship with different supplier. This approach enables BP for
taking appropriate business decisions to achieve better performance. This tactic provide
significant assistance for maintaining the continuity in supply different elements of oil in market
By applying this approach, the management of BP is getting significant success for
accomplishment of specific needs of consumers (De George, 2011).
In this context, The company’s plans also include reducing agency staff in critical
procurement and supply chain management roles, with the aim of bringing expertise that will
boost capacity and capability across the company. By following wide range of safety and
operational risk considerations, BP is focused on assuring quality of supply to avoid an
operational interruption with the help of local and diverse suppliers. By using a team of experts,
7

the management of BP is able to optimize the cost of different kinds of oil gants that would
provide significant benefits to consumers (Lenssen, Dentchev and Roger, 2014).
For managing an interrupted supply of crude and other energy products, BP engages with
governments on many fronts. By developing relationship with public authorities, BP is able to
maintain dialogue with all relevant government agencies, ministries and regulatory departments
at every stage of our presence in a country. This approach is termed as most important aspect of
business management through which business entity will be able to establish financial
transparency, security and human rights and control carbon emission while handling supply
chain. This element creates significant impact on efficiency of supply chain management and
perception of consumers.
In the context of consumers. BP serve about 8 million customers each day. In this
regards, the business entity tires to understand consumer expectations and to deliver quality
products to our customers throughout our retail network. For assessment of perception of
consumers about different business operation such as supply chain, pricing and quality, more
than 55,000 consumers in over 16 countries have participated in our global tracking research
program that have been conducted in 2014 for the answering questions ranging from how they
rate BP on customer satisfaction in relation to its competitors (Ian Yeoman and et. al., 2015). As
per the views of consumers, the management of BP has tired to improve supply chain
management for facilitation of best quality products and services. This assessment of different
aspects of supply chain has determined that British Petroleum which is one of the leading
petroleum firm of world is providing wide range of transitioning program to suppliers and
contractor as per the requirement of sustainability management futures that have significant
impact on efficiency of supply management of oil products along with satisfaction of consumers.
British Petroleum has been facing issues related to supply of refinery products; further
several challenges have been affecting the interest of stakeholders in adverse manner. The major
issues have been arising in supplying of refinery products to other suppliers and this has been
hampering the interest of stakeholders. Apart from this, having such issues in management
impacts business capability and value of products is also getting impacted. British Petroleum.
Being UK’s largest petroleum company, it is essential for the business to maintain stakeholder’s
interest so that all the operations can be managed in adequate manner (Murthy, 2012). The
8

supply chain challenge was the near and offshore response to British Petroleum; however this
has been recorded due to increased wastage in resources. Operational risks are also increasing
which affects the quality aspects and this further increases the overall costs of the business
activities.
The oil and natural gas supply chain can be complicated and sometimes it affects the
associated products and services. British Petroleum has been using all the organizational
resources in adequate manner since they are scare in nature. Furthermore, the prices of crude oil
and petrol has been increasing which in turn affects internal operations of British Petroleum
(Kolk and Buuse, 2012). Government has been imposing several duties and taxes on supply of
oil and petrol; thus this affects operations of BP and as a result, the business entity is unable to
meet the current needs of business suppliers. At the same time, the increased amount of subsides
leads the business to consider economies of scale. This subsequent issue has been hampering the
profitability aspect of British Petroleum. Supply of products affects the business on higher extent
and this also changes the way of manufacturing plants in the same concern.
One of the weaknesses of a supply chain aspects is that British Petroleum is likely to act
in its best interest to optimize its profit. The goal of satiating the ultimate needs of customers is
easily lost and opportunities that could arise from other suppliers could also be lost at the same
time. Since the goal of supply chain management is to provide maximum customer service at the
lowest possible cost, it has also been advocated that the supply chain be managed as an
integrated and coordinated system (Nomura and Abe, 2010). This could further reduce
costs by eliminating unnecessary use of materials.
DISCUSSION AND CONCLUSION
On the basis of above assessment, it can concluded that success of business entity is
greatly depending on sustainability management of various business operations that have direct
impact on productivity and efficiency of business entity. This report has addressed that different
ethical issues such as oil disaster and challenge of supply are creating huge impact on
management of various business operations. The considerations of different business operations
associated with safety of environment and supply chain management provides significant
assistance in handling of different stakeholders. British Airways has been experiencing issues
related to environmental imbalance due to the activities involved in it. Thus, having all such
9

issues affects the shareholders and this simultaneously also impacts community. Apparently,
community always support those organizations that sees the best interest for the society by
managing their business activities. Thus, both right theory and justice theory play significant role
in promoting ethical conduct of business and meet expectations of employees who are working
for British Petroleum. This proves to be effective for optimum utilization of limited resources so
as to reduce cost of production. Thus, ethical aspect need to be considered by focusing on needs
and prospects of parties involved with British Petroleum corporation in an effectual manner.
Here, appropriate compensation to environment and general community can be given.
Likewise, right theory defines the work areas for the company so that management can follow
the same guideline for sustainable management future. In this regard, several activities of
corporate social responsibilities are formed through which company can be able to address issues
of customers as well as general community. In addition to this, management must ensure that
management need to incorporate with changing scenario. By this way corporation can be able to
resolve ethical issues which are being faced by general community. British Petroleum needs to
work with integrity, commitment and truth so as to ensure well being of customers as well as
employees. Thus, it is the prime responsibility of management of British Petroleum to save life
of those experienced man power which contributed towards success of their organization. In this
regard corporation should pay attention on justice which is the right of normal human being
where it is the operating
The main challenge facing in the oil and gas industry is not the availability of oil and gas
resources; but it is more related to reserves in production and delivering the final products to
consumers at the minimum cost possible. Likewise, other business, British Petroleum also
desires to manage all the operations in minimum costs; thus to perform the same facet, it is
essential for the company to consider use of different systems in operations (Hernández, 2012).
The business has been showing great concern towards safety and security aspects so as to protect
the environment. More concern of business towards environmental aspects helps British
Petroleum to acquire assistance from the community and this further can enhance the brand value
of the business. However, improper supply of the products is another issue raising from
unavailability of raw materials; thus this also impacts the shareholders as it restrains their profit
margin.
10

It can also be said that management of British Petroleum need to compensate for the
losses occurred by it. For example, expenses can be incurred to save marine life. Similarly,
organization arranged for clean up activities and tried to give positive response to environment.
Apart from this, company also tried to blowout preventer valves on the wellhead with different
techniques so as to reduce its further impact on marine life. Ultimately they sealed the well in
order to protect the marine life and maintain the growth of tourism industry of US (Singer and
et. al. 2008.).
11

REFERENCE
Journals and Books
Brookes, M., Altinay, L. and Ringham, K., 2014. Successful implementation of responsible
business practice. Worldwide Oil and gas extraction. 6(1). pp.4-9.
De George, R. T., 2011. Business ethics. Pearson Education India.
Velasquez, M. G. and Velazquez, M. 2012. Business ethics: Concepts and
cases. Upper Saddle River, NJ: Prentice Hall.
A.O. M., Santos, D. and Svensson, G., 2013. Indicators of sustainable
business practices: Woolworths in South Africa. Supply Chain
Management: An International Journal. 18(1). pp.104 – 108.
Chiware, E., 2010 Positioning the technological university library in higher
education and human resources development in Africa. Library
Management. 31(6). pp.391 -403.
Dettwiler, P, Lindelöf, P. and Löfsten, H., 2006. Business environment and
property management issues: A study of growth firms in Sweden.
Journal of Corporate Real Estate. 8(3). pp.120 – 133.
Dressler, G., 2012. The Global Strategic Revolution - Third Millennium
Strategic Culture Change Management: The Perspective of the
Enforcement of Negotiated Strategic Solutions Worldwide. GRIN Verlag.
Murthy, V., 2012. Integrating corporate sustainability and strategy for
business performance. World Journal of Entrepreneurship, Management
and Sustainable Development. 8(1). pp.5 – 17.
Pollard, D. and Hotho, S. 2006. Crises, scenarios and the strategic
management process. Management Decision. 44(6). pp.721–736.
Singer, D. and et. al. 2008. Management innovation and cultural adaptivity in
international online banking. Management Research News. 31(4).
pp.258-272.\
Winter, M. and Knemeyer, M., 2013. Exploring the integration of
sustainability and supply chain management: Current state and
12

opportunities for future inquiry. International Journal of Physical
Distribution & Logistics Management. 43(1). pp.18 – 38.
Galpin, T., Whitttington, J. L. and Bell, G., 2015. Is your sustainability strategy
sustainable? Creating a culture of sustainability. Corporate Governance.
15(1). pp.1 – 17.
Lenssen, J., Dentchev, N. A. and Roger, L., 2014. Sustainability, risk management and
governance: towards an integrative approach. Corporate Governance. 14(5). pp.670 – 684.
Ian Yeoman, I. And et. al., 2015. 2050: New Zealand's sustainable future. Journal of Tourism
Futures. 1(2). pp.117 – 130.
Murthy, P. V., 2012 Integrating corporate sustainability and strategy for business performance.
World Journal of Entrepreneurship, Management and Sustainable Development. 8(1) .pp.5
– 17.
Kolk, A. and Buuse, D., 2012. In search of viable business models for development: sustainable
energy in developing countries. Corporate Governance: The international journal of
business in society. 12(4) .pp.551 – 567.
Hernández, J., 2012. Sustainable cultural and heritage tourism in regional development of
Southern Jalisco. World Journal of Entrepreneurship, Management and Sustainable
Development. 8(2/3). pp.146 – 161.
Nomura, K. And Abe, O., 2010. Higher education for sustainable development
in Japan: policy and progress. International Journal of Sustainability in
Higher Education. 11(2) .pp.120 – 129.
Online
Corporate Responsibility. 2013. [Online]. Available through: <
http://www.axa.com/en/responsibility/>. [Accessed on 14th Nov. 2015].
BP details supply chain response to oil spill. 2012. [Online]. Available
through: <http://www.supplymanagement.com/news/2012/bp-details-
supply-chain-response-to-oil-spill>. [Accessed on 14th Nov. 2015].
BP Sustainability Report. 2014. [Online]. Available through:
<http://www.bp.com/content/dam/bp/pdf/sustainability/group-reports/
Sustainability_Report_2014.pdf>. [Accessed on 14th Nov. 2015].
13

14