Former CEO, Sir John Browne’s 101 Strategy led the foundation for BP’s expansion, new acquisition, exploration and innovation. BP vey soon became the largest producer of oil and gas in the United States, very different from what it was before Browne taking over as the CEO (Reed & Fitzgerald, 2011). …
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Despite its immense growth and achievement, issues from leadership perspective are haunting this oil giant. In her article, Corkindale (2010) highlights that the major weakness of BP is its top leadership and points to mistakes made by BP. According to her, CEO, Tony Hayward, was solely responsible for the major oil spill that happened couple of years back. The attitudes and behaviors of senior most management team are believed to have caused this massacre. Organizations function based on strategic goals and objectives by following certain strategic values in the form of mission, vision and values (Ledlow & Coppola, 2011). While every organization sets its strategic objectives, makes strategic choices and directions, and links all tactical and operational strategies to the corporate strategies, leaders in critical positions must adhere to this principle. At BP, inappropriate governance and safety practices, and lack of ownership of its employees’ safety and hygiene emerged as a result of the major catastrophe. Moreover, Hayward is also accused of risky actions and investments; is accused of ignoring expert advice and overlooking warnings about safety issues and other facts (Corkindale, 2010). 6.1.2 Inappropriate business level strategic plans: Browne’s operating model comprised of six broad culture guidelines around people, openness, teamwork, simplicity, trust and empowerment. This model was introduced to make BP less bureaucratic and shift the command and control management to facilitated management through empowerment of middle management (Morrison, 2003). However, the catastrophes reported at BP could be the result of lack of knowledge and experience for middle management. Extreme empowerment to govern their individual units could have resulted in gaps or inappropriate safety and security management. Much before the recent BP Oil Spill, there have been other reported undesirable incidents that have caused loss to the community and environment, like the Texas City incident, few leakage incidents, blasts etc. The strategic drift in safety and operations were ignored by management. BP officials have been accused on many occasions of downplaying small erroneous operations and equipment, which had later caused larger blasts (Maresh & Williams, 2011). Moreover, BP’s cost cutting measures did not take into consideration its workers’ and environment’s safety, which is evident from BP’s corrosion-related history. Report from BP’s Congressional hearing (2006) indicates that these issues were repeatedly escalated to BP’s top management before the major catastrophe. This is an indication of lack of ownership and also lack of aligning business performance with broader organizational objectives. 6.1.3 Cultural issues: The top executives at BP acknowledge their responsibility to protect and preserve the environment. However, lack of ownership by the top management of governance measures have hitched BP’s growth because of inappropriate practices and the consequential catastrophes, thereby questioning trust of their stakeholders in BP’
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