BP Oil Management - Assignment Example

BP Oil Management Styles Management involves planning, coordinating, staffing and controlling functions. It is the top decision-making center in an organization (Daft, 2014). Success and creation of effective teams characterize successful management strategies. The management strategies of an organization change according to the level of competition and the available resources. The paper aims to analyze the history and structure of BP Oil to help understand the role of management functions in corporate success and strategies. Effective management has a habit of performing exhaustive analysis before any decisions are made. BP Oil is among the top six major oil and gas corporations in the world. They are currently involved in massive explorations in different parts of the world. The company is a British multinational corporation with headquarters in London. The analysis of the history of BP Plc. reveals that the company’s management strategy has not changed much over the years. The origin of BP is traced to 1908 when a group of British geologists discovered oil in Iran. The company has a reputation for partaking in highly risky ventures. It was officially called the British Petroleum in 1954 (BP, n.d.). The willingness to take on risky ventures has yielded both positive and negative returns. The positive return is the increase in revenue earned while the negative effects are the public relation problems caused by many oils spills. The company management was based on the establishment of structures that divided the company into top, mid-level and lower level management. BP has always used the system management style, which ensures a proper division of the business to facilitate the flow of orders and functions. The orders came from top management to the middle level and lower level expected to implement them. Top management formulates strategies and the overall goals. The middle-level management can plan and control resources to ensure the overall strategic goals are met. The lower level management are involved in implementing the plans that have been made by middle-level management. Currently, BP Systems management style has been enhanced by the addition of sustainable management. The 2010 Oil Spill played a significant role in pushing BP to adopt sustainable management, which aims at protecting the environment. Sustainable management is meant to ensure BP prevents further environmental damage. It also improves the public image of the company. The company’s current strategy is guided by clear priorities, quality portfolio, and distinctive capabilities. Clear priorities include environmentally friendly activities, safety performance, and operational efficiency. Quality portfolio entails the development of exploration activities and enhanced focus on upstream projects. BP is also managed in a manner that allows the development of high-quality upstream businesses. Distinctive capabilities entail implementation of advanced technology manned by a quality workforce to achieve goals and objectives. BP Organization Structure The size of BP means that the company has very many executives that are stationed in different locations. However, the top management team is the Board of Directors and the Executive Team. The Board of Directors is made of 13 members, which includes the Chief Executive Officer. The CEO gives performance reports to the board of directors. The board formulates strategy and authorizes key decisions by the executive team. BP uses both functional structure and divisional structure. The functional structure explains the division of different departments, which are headed by the members of the executive team. For example, there is the Chief Financial Officer, who heads the finance department (BP, n.d.). The divisional structure is used because of the global nature of BP operations. The company has divided its locations into America, Europe, Asia and Africa. The divisions report to different members who then report to the specific members of the executive team. It can also be described as hierarchical because of the flow of power that comes with different ranks. The functional structure ensures specific types of duties are delegated to the relevant departments (Daft, 2014). For example, matters pertaining to finance are delegated to the finance department. The finance department has a hierarchical structure that allows the manager to assign duties, and the trend goes on. Michael Schmidt – CEO BP Europa Michael Schmidt is the Chairman of the Board of Management of BP Europa. The main responsibility of Mr. Schmidt is to ensure BP Europa is functioning well. He is involved in planning and development of ways to improve BP Europa (BP Europa SE, n.d.). The CEO is involved strategy development, implementation, human resource development and all the other issues associated with BP Europa. The CEO coordinates activities that are aimed at encouraging communication between different departments (BP Europa SE, n.d.). For example, the CEO can control the situation by ordering the Finance Department to authorize money for the procurement department. As the leader of the Board of Management, Michael Schmidt chairs the Board of Management. He guides the discussion on effective management strategies for BP Europa. He reports to the BP Executive on the situation at BP Europa. Decision Making in BP BP Plc. gives priority to good governance, which is emphasized the assignment of clear roles and responsibilities (BP, n.d.). The decision-making process is guided by the flow of power in the organization and relevant departments. The Board of Directors authorizes the decisions that touch on the activities of the whole company and its subsidiaries. BP has improved flexibility in decision-making by creating management boards for each region. The management boards make decisions that touch on their respective regions. The CEO of the different regions report to the Executive Team, which reports to the Board of Directors. Decision-making in departments is guided by the organization structure. The employees are allowed to make decisions that should get authorization from the immediate manager. The system has been implemented to make sure all decisions made are according to the governing principles of the organization. BP can improve its decision-making process by introducing flexibility in the process (Ahlstrom & Bruton, 2010). Employees should be allowed to make quick decisions depending on urgency. Creating flexible teams that can guide decisions on certain issues reduces the workload for managers (Daft, 2014). It reduces the time that can be taken to make a single decision. The involvement of employees from all levels in decision-making encourages teamwork and fosters quality decision-making (Hamid, 2013). References Ahlstrom, D., & Bruton, G. D. (2010). International Management: Strategy and Culture in the Emerging World. Australia: South-Western Cengage Learning. BP. (n.d.). Board and The Executive Team. Retrieved from BP: http://www.bp.com/en/global/corporate/about-bp/company-information/board-and-executive-management.html BP Europa SE. (n.d.). Michael Schmidt - Chief Executive Officer. Retrieved from BP: http://www.bp.com/en/bp-europa-se/the-management-of-bp-europa-se/michael-schmidt.html BP. (n.d.). Governance. Retrieved from BP: http://www.bp.com/en/global/corporate/about-bp/company-information/board-and-executive-management/governance.html BP. (n.d.). Our History. Retrieved from BP: http://www.bp.com/en/global/corporate/about-bp/our-history.html BP Plc SWOT Analysis. (2015). BP, PLC SWOT Analysis, 1-10. Daft, R. L. (2014). Management (11th ed.). Mason, OH: South-Western Cengage Learning. Hamid, J. (2013). Strategic Human Resource Management and Performance: The Universalistic Approach--Case of Tunisia. Journal of Business Studies Quarterly, 5(2), 184-201. Read More