Operations Management - BP - Case Study Example

Operations Management Name Institution Problem Statement BP, the leader in deep-water oil drilling efforts, did trigger one of the worst environmental disasters in the history of America following the gas release and subsequent explosion on the Deep-water Horizon oilrig on April 20, 2010. It is essential to note that BP was leasing the oilrig from the Swiss Company, Transocean while operating on the Macondo exploration. The explosion did lead to the death of 11 employees or workers while injuring 17 others. Similarly, the explosion led to the dumping of approximately 205 million gallons of oil into the Gulf of Mexico. Furthermore, it is valuable to demonstrate the fact that BP has a history of misconduct. This encounter was not the first time BP had been involved in the generation or triggering of an environmental crisis. For instance, on March 23, 2005, BP’s oil refinery in Texas City did explore following the encounter between the hydrocarbon vapors and an ignition source. The explosion did kill 15 workers while causing injuries to 170 others. In the course of 2011, the BP did make a substantive announcement on the essence of selling the refinery because of its compensation and remedial efforts following the Deep-water Horizon explosion. There are substantive similarities between the BP Deep-water Horizon oil spill and the Exxon Valdez oil tanker sill, which did occur on March 24, 1989, leading to dumping of 11 million gallons of oil into the waters. In spite of the similarity in the results of the two encounters, there were diverse reactions to the accidents. It is ideal to demonstrate the desire for effect PR in any crisis situation because of the influence of the environmental crisis in jeopardizing the Mexico’s ecosystem. On the other hand, the residents of the states such as of Mississippi, Alabama, Florida, and Louisiana relying on the Gulf of Mexico in making a living did experience the implications of the environmental crisis. Data Analysis In this context, it is essential to determine or establish the cause and effect of the identified issues. It is crucial to determine the cause of the problem to come up with the most effective solution to the issue. In this aspect, the section explores resources, people, and processes as the causes of the issue or environmental crisis. One of the potential causes of the issue was the adoption of poor design by the company or corporation limiting its achievement of the goals and targets at the end of each fiscal period. Evidently, BP chose the long-strong casing for the concrete surrounding the Macondo well. Similarly, it is ideal to highlight the role and influence or implication of Halliburton regarding the centralizers. According to the recent case illustrations, Halliburton did destroy substantive evidence showing the dangers of using six centralizers rather than 16 centralizers. In this context, Halliburton engineer did disagree on the number of centralizers the BP engineer did demand on safety. Moreover, it is ideal to assess the choice of the cement composition at Macondo. The construction practice did adopt and implement the nitrogen foam cement, which was not stable following the outcomes of test failures from Halliburton. According to BP, there were ineffective communication practices regarding the test failures, thus, inappropriate conceptualization and dissemination of such information. In spite of his disagreement with the BP’s perception of communication, the construction did use the cement predicted to fail in the course of sealing the well. Finally, the evaluation of success by the engineers did contribute to the explosion. In the course of assessing the stakeholders, it is valuable to incorporate the stakeholder theory. According to this theoretical perspective, stakeholders of the company are not just the direct owners, but also any person, entity, and group that a corporation is benefiting or experiencing the burden by its actions or policies. The first stakeholders in this incident include the workers on the oilrig. The explosion of the rig had 126 people on the platform with only 115 employers having the opportunity to evacuate the platform. Following the three days of search, the encounter did identify the deaths of 11 workers with substantive injuries. Apart from the workers, the situation did have diverse stakeholders such as the environment, the fishing industry, and tourist-dependent businesses and communities. Conclusively, it is possible to categorize these stakeholders as tourists, workers, business entities, anglers, environment, oil industry, media, government, and environmental activists. The number of stakeholders and casualties demonstrate the fact that the explosion was the largest environmental crisis in the history of America. Key Decision Criteria i. To maintain a corporate image, as well as customer satisfaction ii. Employee morale, safety, and eventual turnover iii. Minimization of the environmental impact consistent with the mission and strategy of the company iv. Increase the sales volume, market share, and return on investment v. Minimize the implications of the issue among the stakeholders while protecting the image of the firm Alternatives Analysis There are diverse alternatives in achieving goals and targets by the corporation. One of the most appropriate mechanisms is the pre-event planning. This relates to integration of approaches before the crisis concerning the exploitation of the environmental strategy. The environmental strategy needs to incorporate the culture of safety concerning the emergency plan. The approach provides the platform for the institution to deal with diverse crises by BP. Based on the objectives; the approach will play a critical role in the protection of the corporate image. Similarly, the environmental strategy or pre-event planning will be ideal in minimization of the environmental influences, thus, promotion of the mission and vision of the company. In the second instance, it is possible to consider integration and exploitation of the financial strategies in reducing the implications of the situation. Following the explosion, BP sought to adopt or set up a $20 billion fund with the intention of covering the costs of claims from residents affected by the oil spill, thus, consideration of the stakeholders. Similarly, the BP sought to set up a $500 million Research Initiative for the Gulf of Mexico as a 10-year-strategic plan. The BP had the obligation to engage in supplying $50 million per year with the intention of funding the research on the environmental implications of the Deep-water Horizon explosion. The research sought to explore the influences of the explosion on the human health. Additionally, BP did agree to engage in donating collective revenue from the oil from the Macondo well to facilitate Restoration of Gulf Coast. The strategy is essential in the recovery of the oil fund for the wildlife under the assistance by National Fish and Wildlife Foundation. In the third instance, it is essential to engage in the adoption and implementation of the communication strategies. The approach did enable BP to create four websites to the four states experience enormous implications from the Deep-water Horizon oil explosion. These entities did include Mississippi, Florida, Alabama, and Louisiana. The communication strategy did also incorporate placement of advertisements in diverse newspapers and television channels with the intention of demonstrating BP slogan to apologize for the explosion. The approach did enable the company to convince the target audiences on the tendency to make it right. It is also ideal to demonstrate and highlight the role and influence of BP in the creation of social media platforms such as Twitter, Facebook, and Flickr to facilitate communication of the commitment of the company to clean up the mess. The platforms did enable the community members to interact and comment on the environmental condition, thus, the opportunity to assess diverse avenues in pursuit of effectiveness and efficiency in handling the issue. Recommendations In the course of seeking a solid plan for the management of the crisis, BP should consider adoption and implementation of the built infrastructure to facilitate absorption of potential leaks, which led to the explosion. Similarly, BP should consider investing the creation of the emergency of response team with the intention of patrolling the walls surrounding the oil well. The team will incorporate highly trained personnel to enable the institution to achieve goals and targets. Social media communication is ideal for marketing and advertising campaigns. Nevertheless, the approach is not effective or efficient in the crisis management. The institution should engage in the creation of a disaster websites prior to the occurrence of the disaster; thus, the platform to concentrate on areas with enormous implications on the aforementioned stakeholders. From the above illustration, the institution should focus on incorporating the aforementioned strategies, thus, the ability to adopt and implement a comprehensive strategy to deal with the crisis. The comprehensive approach will incorporate financial, environmental, and communication strategy. Read More