Two Pressing Issues Pressing BP Plc and the Recommended Solutions - Assignment Example

TWO PRESSING ISSUES PRESSING BP PLC AND THE RECOMMENDED SOLUTIONS Management Issues Analysis Questionone: Two most-pressing issues facing BP plc. BP has been faced with multiple issues since its inception. The most recent of these issues is public issue management and poor public accountability. These two issues have their history in the mishap that has befallen BP in time in managing the calamities that have faced the organization. Majority of the calamities including the oil spill disasters over history have been reported to be preventable from occurring and concerning the harm, they cause the organization. Public issue management Many experts agree with the fact that the public flogging that BP has received might have been prevented if BP followed the appropriate crisis management practices. The reason that BP has been on the receiving end of this public flogging and consequently bad public reputation is that the disasters that have befallen BP can no longer be said to be a matter of bad luck. The deep-water spill in 2010, for example, was only one in five that had occurred even after subsequent chief executive officers assured the public of their priority in ensuring public safety. In 2005, for example, a spill in Texas City killed 15 and injured an excess of 180 people. About one year after this event, about 200,000 gallons were spilt at Alaska. According to the United States Occupation Safety and Health Administration (OSHA), of the 761 “flagrant and willful” violation that it issued to refineries, BP was responsible for almost 760 of these issues. Poor public accountability Around 2007, the then CEO, Browne, was forced to leave the organization after personal misconduct. The replacing CEO came in with big expectations and raised the hope of the public through committing to ensure the safety of the public from organizational operations. Three years later, a major preventable disaster followed. With his leadership, BP cut down 75000 jobs saving operation costs by a tune of four billion dollars. If these figures and trend are to be relied on, it is clear that what BP has expressed and what their core focus has been being not related. From the face value, they appear to be concerned about the safety of the public while in their business operation cost cutting is the agenda. The reason that accountability is a crucial issue in the management of BP is that even after the disasters that BP has had to deal with, the voice of the management appeared to be heard by the public, but its impact remained to be seen. Due to the historical nature of the spills over time and the reactions of the management, the public has lost confidence in the ability of the company to be truly held responsible. That implies that management of BP has displayed failure to express contrition and built up confidence in the ability of the organization to deal with the present issues and prepare for the future with measures that can build up the trust of the public. Question two: management of these problems and recommendations Public issue management Public issue management as a planning process ought to be strategic and with the aim of identifying emerging issues and trends that influence the objectives and goals of the organization. Identification of the issues accurately, the planning and the response to the issues should be done without deviation if the evaluation of the success in the mitigation of the issues is to be relied on. In the case of BP, unless there are structures that can allow for the accurate identification of the issues that are currently facing the organization concerning public relation, the remainder of the process will not yield the desired outcome. In the truest sense of the term, issue management requires that external issues that affect internal operations of the business are addressed (Grunig, 2013, pg. 78). The solution for this long-term problem of public issue management can better be based on the philosophy of Professor Charles Handy. In the argument of professor Handy, it is not a “how” that matters but the “why” in resolving long issues. A look at the reasons for the occurrences of the problem in the first place is against major problem-solving techniques in use currently. It is because this philosophy avoids hyperbole and quick fixes as it addresses the cause of the problem. Perhaps objective examination with some questions concerning this issue in BP will illuminate the problem. Who in BP is supposed to be blamed for the spill, for example? Is it the management of BP for focusing on cost cutting and success strategies? Is it the contractors who have to alter operating procedures because of the increasing pressure to meet the demands of the governing board? Is it the government that has allowed the continued existence of BP by simply suing and fining the company, even after all the calamities caused by its operation? Is it the public that has continued to pressure BP due to the insatiable need and desire for the petrochemical products of BP? Is it the investors demand higher returns for their money within a short duration? According to the theory of professor Handy, blaming and simply looking at one entity instead of the whole seems to be the issue that has made BP have this public issue for persistently long time after addressing it countless times(Handy, 1996, pg. 69). Given that issue management is a process, look into the stages will provide clarity for a solution. These stages include: Changing with the public expectations Issue management cannot be a static process. In the occurrence of an issue within or without the organization that alters the public perception, it is up to the organization to align itself with the new-public expectations. Failure to conform to the new expectation prolongs the time taken tom solve the issue in the public sight and turn smears the image of the firm. In the case of BP, past occurrences have left the public wondering if in fact BP ever knew that the expectations of the public relative to how they handle disaster have changed. The Political stage Failure for the issue to be handled in the first stage means that it becomes political. At this level, national politics focuses on the issue. However, is not new to the past events of BP. All the previous occurrences have stirred up political involvement. At this level, it is the role of the management and leadership of the organization to join the politics, influence the course of the public debate, and therefore influence public policy. This way the organization can remain within the requirements of the policy to be made. In 2010, for example, when the CEO was called to appear before the congress, after his testimony, the public image of the organization was worse than before the testimony. The reason was that his testimony appeared to deny guilt. The outcome would have been positive if in his testimony, the company and its management appeared to be working with the government for a solution. The Legislative stage At this stage, if the internal politics from the above stage facilitated the organization to align itself with the debated public policy, the organization has less damage to deal with as it is more prepared for the policy. With the failure of the above stage like in the case of BP, the organization is left trying to use other means to fight against the public and other stakeholders for return of public confidence. The Litigation stage This stage is never friendly to the firm and its stakeholders. Fines cost and compensations, tiresome legal proceedings waste and further destroy the image of the company. In the case of BP, since the past has shown that the company always gets to this level, many investors pullback, and the cost per share of the company falls drastically as they avoid losses and association. In the event that the organization fights the stakeholders and the government in the process of issue management, it receives heavy penalties and less pity (Buchholz, 1986, pg. 34). Poor public accountability Even though leadership may not amount to a set of competencies that leaders acquire over time, the moral fiber and character during crisis should prevail. The apt communication from the leadership displays of character and appropriate risk management by the leadership of the day that assures the public of the accountability of the firm. If the leadership can step up and deal with the culture of the organization, then accountability can be adequately assured. A look at the front web page of BP clearly tells the reader about the position that the average person whose environment is put at risk daily by the operation of the organization. In the commitment section, for example, BP promises relentless safety focus as a priority. Nevertheless, with the acclaimed capability and the upstream and downstream management that BP claims to uphold, the question of why BP has failed to be accountable remains relevant. Professor Charles Handy expressed four main organizational cultures that can also be borrowed for the resolution of the accountability issue at BP. These, he listed as the task culture, the role culture, power culture and support or person culture. A look at the BP governance principles reveals that the organization is more inclined to the power culture. The board of governance is the center of authority, and its main goal is to see the main goal of BP achieved. This main goal of BP remains to maximize long-term shareholder value. The reason accountability of the management especially to the public has remained a challenge is that the very culture that assures the public in times of calamity of their unwavering support fails to sustain the promise (Handy, 1993). A culture shift is highly recommended for BP management. With a firm as big as BP, size works against the power culture that appears to be in place. The variables that ought to be controlled are too many for the board of governance. Professor Charles Handy says that in such cultures, performance of the organization is judged based on the results, and little attention is paid on the means. This is the main repetitive issue that has caused the above-mentioned issues for BP. Though BP is also good with the role culture, this culture has a fallback as position is more desired within this culture. This is the reason those formerly in management made fair promises, but lived out few of the promises on safety of the public. BP should adopt a role culture. This means that the planning, allocation and strategy to be undertaken will be done relatively to the project to be undertaken. In this regard, the assessment of risk will be done in different projects separately and the policies and measures to curb and deal with the risks in the event of occurrences are done independent of prior policies. This means that for every project undertaken, the management of BP will not merely assure the public of the safety and the accountability of the project due to certain laid down procedures, but rather does more. Assessment, planning, implementation and evaluation of the procedures and measures to prevent and mitigate disasters will be done per project and suitable for the public within the circle of influence. It is clear that the above-mentioned problems are related, and attempt to solve one will not bear fruit if it is not accompanied by the other. It is prudent that the strategies employed in dealing with public issue management inculcate a culture that will boost the confidence of the public in the accountability of the organization to the public. References Buchholz, R.A., 1986. Business environment and public policy: implications for management and strategy formulation. Prentice-Hall. Grunig, J.E., 2013. Excellence in public relations and communication management. Routledge. Handy, C., 1993. Understanding organizations. Penguin UK. Handy, C.B., 1996. Beyond certainty: The changing worlds of organizations. Harvard Business Press. Read More