Management of British Petroleum - Research Proposal Example

Business Research Proposal (British Petroleum) Introduction to the problem One of the most challenging tasks for managers in firms worldwide has beenthe development of effective plans for facing the financial crisis. Moreover, the performance of a firm in the past does not seem to be an important criterion for predicting the ability of a firm to survive during the recession (Castro, 2010, 347). In fact, it has been proved that recession can destroy both the less productive and the powerful – in terms of their profitability - firms; the latter can be ‘destroyed by the recession during their infancy’ (Ouyang, 2009, 184). The statistics released on the performance of businesses during recession are not satisfactory; in fact, through a research made by Pearce et al. (2006) it has been revealed that ‘the number of businesses that have failed in the United States during each of the 10 recessions that have occurred since the end of World War II has been estimated to 500,000’ (Pearce et al., 2006, 201); it seems that it is quite difficult for firms to face a recession especially when they are not appropriately prepared – referring to their structure, their strategic plans and their resources. On the other hand, it has been proved that during a recession an aggressive strategic plan is more effective than a plan that aims only to support specific organizational departments. In fact, it is noted by Santoro et al. (2009) that ‘productivity-enhancing activities have a comparative advantage during recessions’ (Santoro et al., 2009, 435). Towards the same direction it is made clear by Pearce et al. (1997) that recession can threaten the survival of firms but the measures taken for the limitation of its effects on businesses are often inadequate – referring only to ‘cutbacks and retrenchment while other initiatives, like marketing, should be promoted’ (Pearce et al., 1997, 301). Current study focus on a particular organization, the British Petroleum (BP); emphasis is made on the plans that this firm has developed in order to face current recession (Seager, 2010); the effectiveness of these plans is also explored and evaluated. Therefore, the study’s aims and objectives are related with the exploration and analysis of the following issues: a) which are the main aspects of current recession, b) has BP proved to be ready to face the recession, c) which were the main strategic plans of BP towards the limitation of the effects of recession, d) did these plans achieve their targets and e) which are the advantages/ disadvantages of BP’s strategic options against the crisis if compared with those of its competitors. Literature review BP has managed to secure an important position in the global oil industry; the increase of shareholder value and the control of the market trends/ potentials (Stonham, 2000, 411) are key criteria for the firm’s strategic options. The customer base of BP includes both individuals and organizations; more specifically, the products of the firm – gasoline, petroleum and petrochemicals – are used both in daily human activities and the development of industrial tasks (see also corporate website). Organizations and authorities that are directly related with the state is also depended on petroleum and petrochemicals either directly, e.g. the military forces, or indirectly, e.g. administrative and judicial governmental departments. Current recession has also affected the performance of BP; this outcome can be characterized as expected. As noted above, BP is closely related with various human and organizational activities; the limitation of these activities leads to the limitation of consumption of the firm’s products – the decrease of the firm’s profitability reflects the buying power of individuals and organizations in a particular market (Hornby et al., 2001, Chaston, 2004). Traditionally, the policies chosen by managers in BP have been characterized by the emphasis given on the improvement of the relationship between the firm and its customers; it is in this context that the firm’s managers decided to increase the services provided to the customers, a scheme that is characterized as ‘improving the experience at the pump’ (Schmitt, 2003, 51). The application of this scheme started approximately at 2003; it is considered that this scheme has helped the firm to stabilize its position in the global market and even face more effectively current financial crisis. The response of the firm to current recession has different aspects; the merge with the competitors has been strongly supported by the firm’s managers but the measures towards the support of the firm’s customer base have been rather limited. Kaplan and Norton (2001) suggest the limitation of the ‘lifecycle costs for customers and the development of the relationships with targeted companies’ (Kaplan et al., 2001, 177); the above measures – if adopted by BP – could help the firm to stabilize its position in the market and increase its protection against current recession. On the other hand, the quality of the firm’s products is kept at high levels – actually, a high quality characterizes both the products and the customer services provided by the firm (Hitt et al., 2007, 150); this fact can be considered as an important tool for helping the firm exit the crisis without severe losses. In any case, the recession negatively affected the firm’s performance – the press in UK highlights the delays caused in the performance of BP because of the recession (BBC News, 2009, Bloomberg, 2009, Outsourcing Aid, 2009, Reuters, 2010, Telegraph, 2010, The Guardian Online, 2010 and the Mail Online, 2010). Research design The research strategy used in this study will be exploratory and evaluative; more specifically, the policies used by the firm in order to survive during the recession will be identified using two different sources: studies that focus on the specific firm and a survey. In this context, the first part of the research will include the literature review; the use of the specific research method is based on the views of Burney et al. (2009) and Saunders (2009); in this part of the study the following material will be used: studies and reports that refer to BP but also to the current recession, statistics from governmental and non-governmental organizations and information published through the corporate website – including the firm’s financial reports for the years 2005 onwards – the examination of the firm’s performance prior to the crisis is essential in order to understand its response to the recession. The second part of the research will include the collection of empirical data; this target will be achieved through a survey based on a questionnaire – a sample of which is included in the Appendix section; the use of this research method has been based on the views of Jackson, 2008, Groves et al., 2009 and Krishnaswamy et al., 2009. the survey will address the firm’s employees in UK; the questionnaire will be distributed online – through the e-mail – and will be gathered through the same path; a series of suggested answers will follow each question in the questionnaire used in the survey – participants are asked to choose among the suggested answers. Participants will be chosen using just one criterion: their participation in the firm’s activities – there will be no use of criteria like gender, age and so on for choosing the persons that will be asked to participate in the survey. The data – once gathered – will be critically analyzed using also the views (studies) included in the literature review section; graphs will be used for the representation of the findings of the survey; using the graphs and the literature – the main findings of which will be included in the literature discussion section – the findings of the study will be presented and explained to the client. Practical and ethical issues Delays could possible appear during the development of the study; these delays could be related with the following practical problems: a) difficulties in accessing the resources, b) lack of resources on one or more issues that have been set under examination in current study and c) the participants may fail to meet the deadline set for the return of the completed questionnaire. On the other hand, the conduction of the survey could lead to an ethical problem: could employees of BP be asked to state their view in regard to their firm’s strategic choices? However, it could be noted that the study does not aim to criticize the overall performance of BP; it rather aims to present the responses of BP to the current financial crisis and evaluate the effectiveness of the strategic choices made exclusively in relation with the specific challenge. In this context, no ethical obstacle exists for the employees of BP to participate in the survey. Plan and timetable of activities The various phases of this study will be developed as follows: a) The research on existing material – literature review will be the first phase of this study – will require 7 days; during this period the questionnaire will be sent to the firm’s employees; b) In the second week the findings of the literature will be analyzed and incorporated in the study – 14 days in total up to this phase c) At the end of the second week the questionnaire will be returned and the analysis of data will start – this phase will take 10 days. d) About 6 more days will be required for completing the discussion and conclusion- recommendations parts of the study. An overall period of 30 days is expected to be required – as explained above – for the development of this study Appendix: Data collection instrument Questionnaire 1. Which is your view on the effects of current recession on businesses in UK? a. They are going to last for a while b. Most firms will not be able to survive c. Employees’ benefits have been limited d. The intervention of the government is required 2. Are firms in the oil industry more ready to face the recession? Yes No 3. Which is the potential advantage of your firm - compared to its competitors – in the context of current financial crisis? a. Continuous innovation b. Strategic alliances c. Effective leadership d. The governmental support e. The support of the public 4. Has your employment status been affected by the recession? Yes No 5. Which has been the most important effect of the recession on your employment status? a. Compensation has been reduced by 5% b. Certain advantages for employees have been eliminated c. The stress in the workplace has been increased d. The productivity of employees has been decreased 6. Would you be willing to accept a stricter organizational plan – including the limitation of employment benefits - under the pressure of the recession? Yes No 7. Do you think that existing organizational plans had to change in order for the firm to face the crisis more effectively? Yes No 8. Which would be your proposal to the firm’s managers – referring to the organizational changes required in order to minimize the effects of recession on the organization. a. Employee benefits should not be reduced b. Emphasis should be based on the further expansion of the firm – entrance in new markets c. Innovative practices would be included in various phases of the production d. Strategic alliances would be further developed e. The organization would seek for the government’s support 9. Can you identify specific failures in the firm’s strategic decisions during the crisis? a. The lack of effective mechanisms to check the effects of the crisis on the various organizational activities b. The response to the crisis has been rather slow c. The strategic plans of the firm against the crisis should have been designed in advance – no adequate preparation before the appearance of the crisis 10. Do you think that the firm will be able to survive in the long term? Yes No Appendix: References A. Books Adamson, A., Sorrell, M., 2007. BrandSimple: How the Best Brands Keep It Simple and Succeed. Palgrave Macmillan Burney, D., White, T., 2009. Research Methods. Cengage Learning Chaston, I., 2004. Knowledge-based marketing: the twenty-first century competitive edge. SAGE Groves, R., Fowler, F., Couper, M., 2009. Survey Methodology. John Wiley and Sons Hitt, M., Ireland, D., Hoskisson, R., 2007. Strategic management: competitiveness and globalization. Cengage Learning Hornby, W., Gammie, R., Wall, S., 2001. Business economics. Pearson Education Jackson, S., 2008. Research Methods and Statistics: A Critical Thinking Approach. Cengage Learning Kaplan, R., Norton, D., 2001. The strategy-focused organization: how balanced scorecard companies thrive in the new business environment. Harvard Business Press Kerr, J., 2006. The best practices enterprise: a guide to achieving sustainable world-class performance. J. Ross Publishing Krishnaswamy, K., Sivakumar, A., 2009. Management Research Methodology: Integration of Methods and Techniques. Pearson Education India Moyer, C., Guigan, J., Kretlow, W., 2009. Contemporary Financial Management. Cengage Learning, 2009 Saunders, M., Lewis, P., Thornhill, A., 2009. Research Methods for Business Students. Pearson Education Schmitt, B., 2003. Customer experience management: a revolutionary approach to connecting with your customers. John Wiley and Sons B. Journals Castro, V., 2010. The duration of economic expansions and recessions: More than duration dependence. Journal of Macroeconomics, Volume 32, Issue 1, pp. 347-365 Ouyang, M., 2009. The scarring effect of recessions. Journal of Monetary Economics, Volume 56, Issue 2, pp. 184-199 Pearce, J., Michael, S. 2006. Strategies to prevent economic recessions from causing business failure. Business Horizons, Volume 49, Issue 3, pp. 201-209 Pearce, J., Michael, S., 1997. Marketing strategies that make entrepreneurial firms recession-resistant. Journal of Business Venturing, Volume 12, Issue 4, pp. 301-314 Santoro, E., Gaffeo, E., 2009. Business failures, macroeconomic risk and the effect of recessions on long-run growth: A panel cointegration approach. Journal of Economics and Business, Volume 61, Issue 6, pp. 435-452 Stonham, P., 2000. BP Amoco: integrating competitive and financial strategy. Part one: strategic planning in the oil industry. European Management Journal, Volume 18, Issue 4, pp. 411-419 C. Online sources BBC News, 23 January 2009. UK in recession as economy slides, [internet], available at http://news.bbc.co.uk/2/hi/business/7846266.stm Bloomberg, 3 February 2009. BP, Dow Chemical Post Losses as Recession Cuts Demand (Update2), [internet], available at http://www.bloomberg.com/apps/news?pid=20601085&sid=aMdzXEnvVBk8&refer=europe Outsourcing Aid, 27 August 2009. BP and IBM strikes outsourcing deal for 5 years, [internet], available at http://www.outsourcingaid.com/blog/bp-and-ibm-strikes-outsourcing-deal-for-5-years/2009/08 Reuters, 2 March 2010. BP Plc, [internet], available at http://www.reuters.com/finance/stocks/overview?symbol=BP.L Reuters, 14 February 2010. BP in talks over $1.2 billion Canadian oil sands deal: report, [internet], available at http://www.reuters.com/article/idUSTRE61D1BA20100214 Telegraph, 3 March 2010, Recession, [internet], available at http://www.telegraph.co.uk/finance/financetopics/recession/ The Guardian Online (2010). UK scrapes out of recession but growth figure disappoints City. (Online). 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(2007) Management and organisational behaviour. Pearson Education Porter, M.E., Millar, V.E., 1985, ‘How Information gives you competitive advantage’, Harvard Business Review, July-August Westphal, J.D., Zajac, E.J. (1998) ‘The Symbolic Management of Stockholders: Corporate Governance Reforms and Shareholders Reactions’, Administrative Science Quarterly, Volume 43, Issue 1, pp. 127-141 White, M. (2004) Inward Investment, Firm Embeddedness and Place – An Assessment of Ireland’s Multinational Software Sector, Volume 11, Issue 3, pp. 243-260 Read More