Case Study Example

Section III (A) The situational analysis 5. Differing Values With continued scrutiny from various users of BP products on the quality of their products, the company was under immense pressure to ensure that its quality control process would actually provided a competitive advantage to the company in terms of sourcing for high quality supplies. This is because their competitors were way ahead of them in regards to their sourcing operations, which was actually cost effective and contributed to quality production.

Therefore, BP through its international procurement office was forced to change its values in that besides solely focusing on acquiring cheap supplies they had to lay a great emphasis on the quality and compliance of the supplies. This change in value differed with the values of the company’s suppliers in the Asian market whose key value was on reducing cost rather than improving quality of supplies. However, through the international procurement office in China, BP was not going to relent on the values of discipline operation procedures, quality control and assurance of sourced products.

Therefore, for suppliers to continue to maintain their business relation with BP they had to align their values with BP’s new values. 6. Ethical issues Key ethical issue: the principal ethical issue in the case study was the fact that BP aimed at improving the quality of its products by ensuring that the initial inputs or supplies adhered to high quality standards. This ethics was meant to ensure that BP products were safe for use and that customers’ machinery were well-protected and maintained.

Relevant ethical theory: the apparent ethics theory that BP applied in this present case study is the Kantianism theory since its new acts of focusing on the quality of supplies is basically motivated by the desire to adhere to international principle of quality products of which its main competitors had already adopted. Alternative ethical theory: however, in order not to impose quality standards that suppliers would not be able to meet it would have been better if BP applied the contact theory, which emphasizes on making agreements with all players in regards to the quality standards that should be adhered to.

Therefore, an ethical practice in the case study would have been in regards to the agreements between the key stakeholders. 7. Cognitive Biases The decision by Dr. Zeb Feng to introduce new quality requirements was a result of two forms of cognitive biases that include the bandwagon effect and the projection bias. The bandwagon effect on the decision taken by Dr. Feng was evident on the fact that he was introducing new quality standards since other companies were doing the same. More in particular, De Luca had earlier reiterated that their competitors were ahead of them in their sourcing operations and they were even achieving lower costs. Dr. Fend also applied the projection bias because of the fact that his decision was entirely based on the assumption that other oil and mining companies have redefined their sourcing operations in order to ensure that the inputs procured by the company adhere to the highest quality standards. 8. Sustainable Organizations Under this course, sustainable organizations are described as organizations that are capable of using their own capacity to maintain their programs, operations, and ensure the longevity of the business organization.

Moreover, sustainable organizations ensure that the rate of consumption of raw materials is relatively lower. The key decisions that were made to ensure BP becomes a sustainable organization include ensuring quality control and assurance of sourced products, and development of remediation and contingency plans. It is highly likely that these decisions increased the achievement of the organization’s long-term objectives, which was to ensure that the machineries and other inputs delivered to BP met the highest standards that will aid in developing quality products.

In addition, BP had the objective of ensuring that there were plans in place to deal with risks that could arise during their mining and processing stages. The achievements of these long-terms objectives aid in making BP a sustainable organization since the company is assured that the machineries and other inputs it has acquired will ensure that is operations are not affected by break downs and if this happens then the remediation and contingency would ensure the affected operations resume immediately. 9. Unexamined presuppositions An unexamined presupposition taken up by BP is the fact that it is stressing on quality for their suppliers whilst still thinking about lower costs of supplies.

In real sense, they fail to consider the fact that traditionally a high quality supply-item is usually more expensive since a lot of work and superior resources are used in the production of the supply-item. This presupposition by BP will negatively affect the suppliers of the company since they will be expected to adhere to the new quality standards whilst delivering the supplies at the same or even at a discounted price level. The other unexamined presupposition in the decision that was adopted in the case is the fact that most suppliers could possibly not have the knowledge of quality production since they have mainly been focusing on cost reduction.

This would be disadvantageous to the suppliers because of the fact they will have to learn on how to develop quality products rather than focusing purely on reducing costs. Section III (B) Organizational Analysis This section discusses the effects of the decisions that were made in the BP case study. 1. Effectiveness, efficiency, and efficacy a) Necessary Actions It was necessary to think about the quality of supplies that BP has been receiving from the Asian emerging markets. Secondly, it was necessary to thinking about the proper co-ordination and management of the procurement process through a centralized process that will ensure uniform application of standards and a stronger bargaining power over the suppliers.

The actions undertaken were further necessary because of the fact that they would have lead to a sustainable organization, which is capable of reducing loss associated with faulty machineries or inputs, which could require regular repairs or replacement whilst stalling the mining, processes, and even the distribution process taking place at the various branch locations of the organization. b) Outcome of actions The international procurement office in China was able to bring the organization closer to their key suppliers within the region and therefore, it was possible for effective coordination on the improvement of the quality of supplies that were being delivered to the company.

Moreover, creating a new emphasis on quality of inputs ensured that the company was only dealing with high quality supply items that were able to reduce its overall running cost because of reduced cost on repair, and replacement. Moreover, the establishment of the international procurement office in China enabled the company to even source for additional supply items in the region revered for loss cost of doing business. 2. Risks a) Initial optimal risk Risk was at an optimal level when Dr.

Feng was devising the action plan for quality control. This is because there was an impending burden at that time, which was ever increasing as a result of the quality control that had been imposed on BP’s global operations. Moreover, quality and compliance have been in the recent past suffered since Chinese suppliers largely focused on reducing cost rather than improving quality. Additionally, there was initial optimal risk since the company’s competitors were already developing a competitive advantage in their sourcing operations, which enabled them to reduce cost. b) Later optimal risk The risk was not at an optima level for BP after the implementation of the actions plans that had been devised by Dr. Feng. In fact, the level of risks was reduced since the company was not likely to experience stalled operations because of failed machineries or supply inputs.