BP and How it Can Impact on Essay

  • Length: 15 pages
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  • Subject: Business - Management
  • Type: Essay
  • Paper: #82404581

Excerpt from Essay :

BP and how it can impact on the performanve of the firm

In the recent times, a number of people have opposed the strategies that have been developed by BP. The major strategies that have been opposed by individuals is that of stoping the case regarding oil spill in the gulf of mexico.Operational strategy and effectiveness are vital for superior performance which is usually the main aim of all enterprises and organizations. A firm may perform better than its rivals only if the organization is capable of establishing a difference it is capable of preserving. The firms have to deliver higher values to its customers. Besides, the organizations should be capable of creating comparable values at very low costs. Delivering higher values enables companies to charge higher unit prices. Similarly, very great efficiency and effectiveness will result into very low unit costs. Operational effectiveness (OE) implies performing same activities more than the rivals are performing these activities. Operational effectiveness entails efficiency. However, it is not limited to efficiency. It may be used to refer to the practices allowing companies to utilize better its inputs through the reduction of defects in their products and services or coming up with improved products quickly. Variances in the effectiveness of organizations in organizations are pervasive. A number of firms are capable of getting more from their inputs as compared to other firms since they minimize or in some cases avoid wasted efforts, apply advanced technology, employees are motivated, or the firms may have higher insight into administering specific activities. Such variances in operational efficiency are a significant source of variances in the profitability among competing organizations since they have direct effects on comparative cost positions and differentiation levels. The strategy of BP will influence its customers. This is because it has been opposed by a number of people including its customers. The organization should look into ways of ensuring that the amicable ways are used in the provision of solutions to the problem. Only then will the organization be in a position to retain its customers. Effective and efficient strategy entails taking into consideration how the organization may experience improved performance. BP is not capable of experiencing improved and enhanced performance from the strategy that has been opposed by a number of stakeholders. The improvement of operational effectiveness and efficiency is a vital management process.

The Deepwater Horizon oil spill and the subsequent BP strategies

The Deepwater Horizon oil drilling rig that caused an environmental disaster on the 20th of April 2010 resulted in both economic as well as environmental damages to several states of the U.S. that lie along the Gulf Coast. BP received several criticisms from the public as a result of its role in the oil spill disaster. This prompted BP to come up with quick strategies aimed a repairing its damaged image and reputation. The strategies employed by BP were centered on the description of whatever they were doing as corrective measures as well as the moves for compensating the victims. Their strategies however never included the shifting of blame to the partner company or the admittance of blame to the responsibility of the oil spill. In this study we employ the work of Benoit in Image Repair to analyze the contents sourced from press releases by BP just after the Deepwater Horizon spill. The difficulty in applying this theoretical model in capturing of the level of nuances of the responses is also indicated. The initial attempts by BP to do repairs cannot be said to be successful. The initial pressure from the public and state resulted in the establishment of a repair fund worth $20 billion. The outcome of this did not mean that a suitable strategy was already in place. Harlow et al. (2010) pointed out that a lot of time is needed so as to determine the total impact of the BP oil incident at the Deepwater Horizon. The impact on public relations is still being evaluated. Harlow et al. (2010) indicated that only the passage of time would allow the company to fully and comprehensively reestablish the good public image that it earlier enjoyed. A review of literature indicates that two main things took place as part of BP's initial response to the disaster. The company mainly focused its efforts on two mains strategies. These were to come up with a description on how the problem precipitated and then how to effectively compensate the victims. The second thing is that BP executed this at the expense of several other strategies. As an example, the company never concentrated its efforts to blame shifting activities; neither did they admit blame on themselves. It is worth noting that even though BP did not initiate a full blown strategy for blame shifting the other company (Transocean), the initial press releases had a little effort in that direction. Some of the significant moves made by BP included the acceptance of responsibility for the stoppage of the ensuing damage as well as the compensation of the victims. Harlow et al. (2010) points out that it is very difficult for BP to accept responsibility without having some sort of admission of fault or certain level of responsibility. There are certain legal arguments for fault admittance; the damages were however accepted by BP when it set up a $20 billion fund for compensation. The fact that British petroleum had already accepted responsibility for the cleaning up of the oil spill as well as the compensation of the victims meant that they were already in an effort to repair their damage public relations with a strategy that was somehow focused on the idea of mortification. Avery et al.(2010) suggested the need of coming up with a theoretical critique of the moves that were initiated to address the problems associated with the spill. With the application of Benoit's framework, it is a little bit difficult to outline what BP did to resolve the issues at hand.

Image repair Theory and strategic planning

Image repair theory (IRT) has evolved over time from the time it was suggested by William Benoit (Benoit,1995; Benoit & Hanczor, 1994). Strategic planning is important to scholars and practitioners alike. Grunig & Grunig (2000) pointed out that the processes as well as attitudes of strategic planning are the ones that vary. Evidence suggests that strategic planning in any given organization can range in its applications from the one used to integrate all the functions within the organization to the ones that are used by a manager to correct a single organizational function. Extant literature suggests the application of strategic planning to the field of public relations does exist (Austin & Pinkleton, 2006; Smudde, 2000). Very little literature however is focused on the subject of image repairs for companies in crises such as BP (Gonzalez-Herrero & Pratt, 1995, Mitroff, Harrington, & Gai,1996). The public perception of litigation too is also not covered in most literature as pointed out by Lukaszewski (1995).

The reasoning behind strategic planning

In this section we evaluate the need for strategic planning and how IRT it can be employed in process of crisis planning, evaluation as well as communication by companies such as BP.

According to Axson (2003) strategic planning is a detailed process that is very necessary for virtually any organization. Strategic planning is a top-down process since it begins from the top through the vision which is articulated by the CEO to be realized by the organization. The necessary components for an organization to realize its strategic plan must be transferrable to each and every one of the functional units in the firm. The operational plans for the public relations department must support the overall strategic plan of the entire organization. There exists eleven components of strategic planning and ITR should be applied to about 7 of them.

These components are necessary for the process of image repair. They include; analysis of the opportunity, audiences involved, key messages, the objectives, the strategies, application of tactics, the critical success factors (CSFs),the leading indicators, appropriate timing, budget as well as the evaluation.

The irony in the BP's strategy

The BP oil spill situation is regarded by others as a failure that was more than just a mere breach environmental law as well as the improper functioning of environmental agencies that are charged with overseeing the deepwater drilling activities, corporate governance, corporate social responsibility and corporate law (Cherry and Sneirson,2011). The elements of corporate governance, corporate social responsibility and corporate law can also be blamed for the disaster. The oil spill indicated certain strategic questions on corporate governance as well as public perception of the company. The tragic oil explosion as well as the subsequent oil spill revealed a deep corporate culture at British petroleum that was notorious of consistently neglecting the safety of the workers as well as the laid down corporate standards. Cherry and Sneirson (2011) pointed out that BP had a very dismal record on employee and public safety. This therefore lead to several accidents that…

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