Brief Overview of the Major Accident of BP - Case Study Example

Case Study Table of Contents Introduction 3 Company Overview 4 A Brief Overview of the Major Accident of BP 4 A Brief Overview of BP’s Response towards the Accident 5 BP’s Response towards the Crisis through Press Release, Annual Report and Corporate Social Responsibility Report 8 Conclusion 11 References 12 Introduction Case studies of organisational crises have contributed significantly towards the advancement in management researches. Specifically, the several crises extended the understanding of organisational control; organisational regulatory relationships as well as organisational information processes. Eventually, these factors contribute towards the emergence of various crises (Breitsohl, 2009). The conception of crisis simply makes a sense of threat as well as destruction among others that carries a high level of risk and opportunity for further losses. The crisis affects the core organisation’s individuals such as managers, employees and customers among others (Seeger & et. al., 2003). An organisation can face any sort of crisis at anytime. Apart from the crisis, an organisation can also face various activities that lead to public controversies, accidents and scandals among others. It has been recognised that after the emergence of crisis in an organisation, the competitive environment intends to change the behaviour of the organisation along with the different parts of the organisation (Svedin, 2009). In the paper, the organisation BP Plc has been taken into consideration while identifying an important accidental issue that the organisation faced. Various aspects regarding the organisation’s response to this particular accident along with information releases such as press release among others and an application of accounting theory adopted by the organisation will also be taken in the discussion of this paper. Company Overview BP Plc is one of the world’s top three oil companies. From the beginning of this century i.e. year 2000, the market structure, profits and incomes have gradually increased into a significant level as compared with other leading oil companies. The products of BP dominate in about 100 countries and it has well recognised business operations in six continents. Moreover, BP is the largest producer of gas and oil products and the second largest marketer of gasoline among others. Along with these products, BP is also a major player in chemicals and solar power among others (Christiansen, 2002). A Brief Overview of the Major Accident of BP In the year 2010, BO Plc faced a major accident that is “Deepwater Horizon Accident” which was caused due to a gas release and a consequent explosion happened on the Deepwater Horizon oil rig particularly in Gulf of Mexico. The fire continued to spread rapidly before the rig sank and as a result the oil leaked continuously into the Gulf of Mexico before the oil containing well was closed and sealed (BP Plc, 2012). In this connection it can be identified that the accident involved a loss of control over the pressure in the well followed by the failure of a mechanism that acts as a specialised regulator which is designed to maintain the consistent conditions. After the initial outburst, the particular mechanism failed to seal the well and ultimately allowed the leak to occur. Many people died and several were injured due to this major accident (BP Plc., 2012). As a result of this major accident, the organisation apologised for the damages that affected the environment along with the livelihoods of the people and their communities. Moreover, the organisation took several responsibilities such as cleaning up the affected area, to reimburse those people who were affected by the impact of the accident and also to look after health, safety and welfare of the affected people. In lieu of this, the organisation committed in order to understand the causes, the impacts and the implications particularly of this “Deepwater Horizon Accident” and to learn along with act on lessons learnt from it (BP Plc, 2012). A Brief Overview of BP’s Response towards the Accident In the connection of the “Deepwater Horizon Accident”, the organisation initially responded by working with the experts from different industrial organisations to develop and implement efforts to stop the leak. After the accident, a specialised team was immediately formed to stop the leak at the source and to develop certain options to stop and recover the flow of oil. The organisation engaged several procedures in order to accelerate the containment of the leak to prevent the oil flow (BP Plc., 2012). In lieu of this, the organisation responded well towards the accident by compensating the people and the communities those who were affected due to the accident. BP was determined to respond swiftly and fairly towards the claims on behalf of the individuals and the government entities among others. The organisation also sought to execute a reasonable and easy claim practices aiming at distributing funds as early as possible (BP Plc., 2012). Moreover, the organisation also responded in relation with the accident that has occurred by making a commitment to maintain the cleanliness along with renovate the affected Gulf’s beaches and marshes. BP also worked in order to minimise the accident’s effect upon the environment by eliminating the oil offshore and also by executing various different strategies to protect the oil flow. These deliberate efforts ultimately reduced the amount of oil particularly in the environmental sensitive marsh areas. The employees of the organisation and other officials brought different experts from all parts of the business and from around the world in order to respond to the crisis (BP Plc, 2012). The organisation also responded in lieu of the accident by working towards encouraging the economic reinstatement throughout the Gulf Coast along with paying special emphasis upon the region’s most impacted industries such as tourism and seafood among others. With beach closures along with the closing of fishing waters in the Gulf of Mexico, the “Deepwater Horizon Accident” had a remarkable effect upon the economy of the Gulf Coast (BP Plc, 2012). Throughout the Gulf Coast, the organisation is providing various financial measures for the promotion of particularly tourism industry. In this regard, within the weeks of the accident, BP announced a sum of near about US$87 million towards the promotion of tourism industry and also enhanced the economic impact upon the region (BP Plc, 2012). Apart from the tourism industry, the organisation also laid emphasis upon promoting Gulf’s seafood by conducting and sponsoring seafood celebrations, fishing tournaments and related events among others. Moreover, the organisation also sought to operate with various different executives in the region in order to plan programs to test and to monitor the safety of seafood around the country (BP Plc, 2012). BP’s Response towards the Crisis through Press Release, Annual Report and Corporate Social Responsibility Report In a press release, on behalf of BP, it had been stated that they were launching a new nationwide television advertising operation in order to update different people along with their communities regarding the development that were being made to clean up and restore the Gulf Coast region from the awakening of the “Deepwater Horizon Accident”. The initial advertisement of the organisation coming as a strong effort upon the oil leak response and particularly the previous renovation projects of the organisation is planned to be taken forward (BP Plc., 2012). It has also been stated in the press release that the organisation made a deliberate commitment not only to restore the Gulf region but also to keep informing the different people and their communities regarding their implementation of various encouraging responses towards the accident. In addition, the organisation executed various campaigns featuring the employees’ commitment towards the different people regarding cleaning up of the affected region from the harmful effects of oil leak along with helping the Gulf Coast to recover from this major issue (BP Plc, 2012). In the annual report, following the Gulf of Mexico accident, BP responded with the establishment of the “Gulf Coast Restoration Organization” (GCRO) which is provided with dedicated resources in order to redefine, reinforce and also to control all the issues as a response to the accident (BP Plc, 2012). In the corporate social responsibility report, BP responded with the commitment of the claims which will be paid by the company towards the affected people and also intends to bring in changes in the management strategies in order to bounce back from the situation regarding any future accidents to occur (BP Plc, 2012). The outburst and dreadful loss of life at the “Deepwater Horizon” and subsequent events in the Gulf of Mexico have dominated the focus and work of the Board. In the year 2010, the Board executed their operations several times towards responding the events that happened in the Gulf of Mexico and subsequently in the financial markets as well (BP Plc, 2012). In connection with the accounting principles, during the year 2010 the Board of BP engaged few new management officials who together brought deep experience particularly regarding the global strategy, accounting audit processes along with the supervision and examination of organisational safety within the organisation (BP Plc, 2012). In this connection, the organisation was observed to implement the theory of ‘human resource accounting’ in order to respond the various threats from the accident that it faced. The concept of ‘human resource accounting’ allowed the management personnel’s to monitor and to manage effectively the use of human resources. In response to the accident, the organisation felt the need of appointing various management or technical personnel in order to monitor along with finding out the causes of the accident that the organisation faced (BP Plc, 2012). Conclusion It would not be wrong to suggest that BP laid a good establishment in their deliberate efforts in order to attain valuable objectives, but the deliberate efforts will be required in many areas for proper execution of pipeline operations if the ultimate goal is to be fulfilled. However, the organisation faced a major accident while executing its business but eventually it responded well towards the various serious affects resulting out from the accident that the organisation faced. Moreover, the organisation also used a method of accounting principle called ‘human resource accounting’ process in response towards the accidents that the organisation faced. The organisation felt the need of following this particular theory in order to find out the causes of the accidents and also to make crucial management decisions regarding developing, acquiring and distributing various human resources to attain the ultimate goal of business. References BP Plc, 2012. Deepwater Horizon Accident. Gulf of Mexico Restoration. [Online] Available at: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036575&contentId=7067541 [Accessed January 04, 2012}. BP Plc, 2012. Containing the Leak. Gulf of Mexico Restoration. [Online] Available at: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036583&contentId=7067603 [Accessed January 04, 2012]. BP Plc, 2012. Compensating the People and Communities Affected. Gulf of Mexico Restoration. [Online] Available at: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036584&contentId=7067605 [Accessed January 04, 2012]. BP Plc, 2012. Offshore and Onshore Clean-Up. Gulf of Mexico Restoration. [Online] Available at: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036585&contentId=7067606 [Accessed January 04, 2012]. BP Plc, 2012. Restoring the Economy. Gulf of Mexico Restoration. [Online] Available at: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036578&contentId=7067597 [Accessed January 04, 2012]. BP Plc, 2012. BP Updates Gulf Restoration Activity in New TV Ad. Gulf of Mexico Restoration. [Online] Available at: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7072749 [Accessed January 04, 2012]. BP Plc, 2012. Corporate Governance. Sustainability. [Online] Available at: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036184&contentId=7066896 [Accessed January 04, 2012]. BP Plc, 2012. Group Overview. Annual Report and Form 20-F 2010. [Online] Available at: http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/set_branch/STAGING/common_assets/downloads/pdf/BP_Annual_Report_and_Form_20F.pdf [Accessed January 05, 2012]. BP Plc, 2012. Board Performance Report. Corporate Governance. [Online] Available at: http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/set_branch/STAGING/common_assets/downloads/pdf/IC_CG10_board_performance_report_2010.pdf [Accessed January 05, 2012]. Breitsohl, H., 2009. Introduction. Organizational Crises and Reactions from a Legitimacy Perspective- Results from Two Multiple-case Studies. [Online] Available at: http://elpub.bib.uni-wuppertal.de/servlets/DerivateServlet/Derivate-1524/sdp09007.pdf [Accessed January 04, 2012]. Christiansen, A. C., 2002. Overview of BP and Its Operations in Key Countries and Regions. Beyond Petroleum: Can BP Deliver? [Online] Available at: http://fni.no/doc&pdf/FNI-R0602.pdf [Accessed January 04, 2012]. 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