The Management of Operations - Coursework Example

Disaster Management Student’s Name Institutional Affiliation Disaster Management Disasters are an occurrence that may affect any organization or institution or nation. Some of these disasters are mild while some have devastating effects to the organization, the environment and the natural ecosystem. The magnitude and the aftermath of the disaster significantly inform the extent of the damage resulting from the disaster. Also, the efforts put in lessening the effects of the disaster can alter the damage pattern or decrease the negative manifestation of the disaster. Such efforts are dependent on the efficacy of the management or leadership team to strategize and timely implement effective interventions targeting the control of damage and prevention of further damage or losses resulting from a disastrous incident. The efforts can be governmental, institutional or organizational or an integration of the inputs from the various leaders or managerial segments. The efforts include creation of policies or implementation of programs aimed at decreasing the vulnerability to the effects of the disaster, minimization of property and life losses, environmental protection and enhancement of inter-organizational coordination during such disastrous events (McEntire & Dawson, 2007). Leaders are, therefore, tasked with prevention of disasters and restoring normalcy after a disaster. In this essay, one of a disastrous event that occurred in the last 15 years, Deepwater Horizon Oil Spill (DH oil spill), shall be discussed including literature regarding the disaster, the challenges that faced the Oil rig and other leaders affiliated to the disaster and the leadership lessons learnt from disaster. Summary of the Event Transocean Triton Asset Leasing were the owners of DH oil drilling rig but had leased the rig to British Petroleum (BP) (Occupational Safety and Health Administration [OSHA], 2011). The rig, constructed by Hyundai Heavy Industries in 2001 had been designed with the capacity to work in waters with a depth of up to 2400 metres and a 9100 metres maximum drilling depth (British Petroleum, 2010). The rig was drilling at the Macondo well in the Gulf of Mexico when it exploded on 22nd of April 2010 sinking and causing massive spillage of oil and killing an estimated 11 people and injuring approximately 17 people (OSHA, 2011; Graham et al., 2012). Its cause is said to be a blowout preventer that failed to activate when crude oil was leaking to inform containment measures. The spill is now considered the most devastating oil spill to ever occur in the US history initially leaking an estimated 1000 crude oil barrels per day (OSHA, 2011). The state of Louisiana declared a state of emergency following the magnitude of the spill and the then looming threat to the natural resources of the State. It took about 87 days before the leak was capped off allowing about 3.19 million of oil barrels into the Gulf (Graham et al., 2012). The underlying causes of the spill were attributed to the harsh conditions under which the rig operated with some negligence in considering every possible risk that the exercise was facing (Graham et al., 2012). Literature on the Event The Marianas rig was the initially used rig to drill the Macondo well in October 2009 but the rig operated by BP was, however, damaged by Hurrican Ida stoping the drilling until the Deepwater Horizon rig replaced it allowing the resumption of drilling on the February of 2010 (Bratspies, 2011). BP was leased the DH rig by Transocean at an estimated cost of $500000 per day with BP having approximated it to cost them $96 million to complete the drilling of the well for 51 days. However, the drilling took longer than anticipated and by the day the accident happened, the drilling was behind schedule by about six weeks with a budget overshoot of about $58 million (Bratspies, 2011; Kurtz, 2013). The cost overruns, pressure to meet its target and overdue time is presumed to have led BP to make inappropriate decisions regarding some of the technical and rationale requirements of the drilling process (Bratspies, 2011). Four days before the accident, one of the BP staff and a consultant oilfield service provider tasked with overseeing the drilling work had suggested the tripling of stabilizers numbers in the well due to a possible risk of severe flow of gas. This required changes in design that would have required an additional 10 hrs that did not augur well with the team leader of BP. The recommendation was, therefore, overruled by the team leader allowing the completion of the well exempting the addition of more stabilizers (Boesch, 2012; Bratspies, 2011). Well cementing was finished just a few hours before the disaster. The cementing was also another area where BP demonstrated oversight in safety and quality of their work as they had sent back a Schlumberger crew initially called to carry out and assess the cement bond log examination (Bratspies, 2011), The resulted in BP forgoing the test in addition to allowing the company to save itself about $128,000 that was to be paid for the test to be carried out (Flournoy, 2011; Sylves & Comfort, 2012; Bratspies, 2011). Transocean was also implicated to have directly contributed to the disaster. It was identified that safety systems and warning systems initially established to enable early detection of leaking gases and preclude an imminent explosion had been inactivated by Transocean. The company is believed to have done the inactivation to avoid false alarms waking up workers. Also, an integral system in the blowout preventer control panel had been intentionally bypassed by Transocean (Bratspies, 2011; Hoffman & Jennings, 2011). The bypassed system is believed to have had the potential to preclude the occurrence of the explosion by annihilating the sources of sparks resulting from gas entry into the drill stack. Furthermore, there was a recognised infraction on the blowout preventer by a Transocean engineer, a signal that went unattended to (Flournoy, 2011; Bratspies, 2011). Tests done a few hours to the accident to determine whether there was any leaking oil or gas into the well showed that the well was improperly sealed. The test, negative pressure test, was, nevertheless, run for three consecutive times with the results indicating the same risk. However, the responsible BP team doubted the results all through and were greatly bend on finding a result agreeable to the team and not necessarily factual. Therefore, when a fourth test was done giving results indicating proper well sealing, the team relied on this finding ignoring the other three contradictory findings. The reliability on the fourth findings after the test can also be attributed to a lack of standard set of procedures for carrying out the tests or results interpretation (Bratspies, 2011). A prerogative of the lessee company to properly certify the efficacy of the blowout preventer appears not to have been adhered to by BP when using the DH drilling rig (Graham et al., 2012). The flaw was compounded by the Mineral Management Service's [MMS]; an agency tasked with overseeing offshore growth, lack of establishment of set protocols for testing or ascertaining the capacity of blowout preventers (Graham et al., 2012). In addition, MMS did not consider the enactment of rules requiring the use of additional devices to enhance safety and allow detection of oil leaks and remotely control blowout preventer’s activation (Bratspies, 2011). BP and Transocean, evidently, had overlooked the significance of technical findings and advice given to them with the former more interested in cutting down costs more than ensuring the safety of the whole operation. The lack of preparedness for the disaster by BP is evident in the duration it took to contain the spill. Besides, the regulatory flaws that knowingly or unknowingly promoted offshore drilling under less stringent regulatory frameworks were precipitants of the disaster (Mills & Koliba, 2015). The company had no identifiable contingency plan in case of an unexpected inability to control the well. This was also an admission form the company's former CEO Tony Hayward. These were issues that MMS should have identified and acted on in addition to placing strict measures to BP on failure to adhere to prescribed standards. However, MMS has been criticized for colluding with oil drilling companies while overlooking the essential aspects of safety in the course of the drilling (Kurtz, 2013). MMS had been previously accused of ethical violations, getting gifts from companies' representatives, inefficient and unsatisfactory record keeping, and inadequate safety enforcement. Investigations done after the spill showed blanket agreements between MMS and oil drilling companies including BP that allowed BP to neglect to perform salient tests to cut costs and perform their operations at a faster rate (Kurtz, 2013). Several incidents of equipment failure and safety violations with the potential to result in fines and even shutdown of the oil drilling operation by BP were ignored by MMS. The regulatory role played by MMS may have been compromised by its dual role as both a regulator and royalty payments collector on behalf of the federal government (Kurtz, 2013; OSHA, 2011). The implementation of the regulator role of MMS required the maintenance of integrity safety measures on the drilling rig and compliance of the company doing the drilling on the prescribed safety measures. On the contrary, strict implementation of the regulatory measures could limit oil extraction in the offshore and lower the royalty payments made to the Treasury (Kurtz, 2013). The double compromising roles are suggested to have lowered the integrity of MMS as a regulatory agency and allowed unsafe oil drilling practices by BP in the Gulf. This was spearheaded by the then CEO of the company who exhibited less safety interest and more cost-cutting mentality. Hundreds of pending maintenance activities and a culture of negligence ignoring the replacement or rectification of inoperable warning systems were unearthed through a post-spill investigation. Action regarding the failed systems and those requiring maintenance were said to have been delayed while prioritizing drilling related activities (Kurtz, 2013). BP leaders clearly drove the message of prioritizing timely drilling activity over safety, a message that was integrated and implemented by the technical staff on board the drilling rig. BP leaders were, consequently, accused of intentionally employing actions that could save time and cost at the expense of safety. Furthermore, the rig management team from Transocean had not established sufficient measures to ensure emergency training and prespill safety while exhibiting laxity in their leadership (Mejri & De Wolf, 2013a). Communication breakdown was also noted before the spill with emails from partners not on board the DH rig not been read or received. In addition, there were no measures designed to ensure delivery of messages conveyed across partner members (Kurtz, 2013). After the spill, the various partners and companies involved in the drilling were more intendant on deflecting blame from themselves and laying it on others more than responding to the disaster. In particular, BP appeared to insulate itself from taking full responsibility for the disaster thereby enhancing unity breakdown during a time when the united strategies to tame the spilling oil were to be prioritised (De Wolf & Mejri, 2013b). Lack of proper crisis communication and unity compounded the difficulty in the initial containment of the disaster. Key Challenges to Leadership and Response to the Challenges BP leadership faced challenges regarding the development of managerial effectiveness. The leaders were supposed to ensure that the drilling process was done within the right time at the estimated initial cost. However, they had not considered the extraordinary situation they found themselves in where they were running out of schedule and working under a lot of pressure. Under the growing pressure, BP leaders resorted to making decisions that tended to prioritise faster completion of the drilling activity over the safety of the whole process (De Wolf & Mejri, 2013). Their ineffective managerial decision was part of what precipitated the disaster. BP leaders were also faced with the challenge of inspiring others which they failed at implementing. Through their acts of omitting the adherence of special safety instructions and recommendations form technical experts, they left the technical team with no option but to do as was expected from their leaders creating a culture of negligence among the technical staff working at the company (Flournoy, 2011; Bratspies, 2011). This is exemplified in their decision not take up the recommendation to multiply the number of stabilizers in the well to contain an anticipated severe flow of oil or gas. Unavailability of ready contingency measures after a disaster also affected the BP leaders. The spill caught BP leaders off-guard leading to prolonged attempts at capping the leak. It is also asserted that the company was ill-prepared for the disaster (Mejri & De Wolf, 2013a). Instead of implementing measures geared at containing and repairing the damage caused, the company resorted to public campaigns aimed at absolving themselves from much blame and restoring their image (De Wolf & Mejri, 2013b). This was at the expense of ongoing damage to the environment, lifestyle and economy (Cleveland, 2013). In addition, federal and State leaders were also said to have been unprepared for such a mile-deep oil spillage and discharge (Sylves & Comfort, 2012). MMS had been working on the assumption of no probability of experiencing a disaster in offshore drilling, a misinformed assumption. Nevertheless, BP constructed an equipment that managed to stop oil discharge even though it was after almost three months (Luchenco et al., 2012; Bratspies, 2011). The company used a dispersant to aid in clearing the oil from the water body in the Gulf and save the lives of marine creatures. Deep water drilling in the Gulf was stopped through a US presidential moratorium until the cause and safety of such procedures are ascertained (Bratspies, 2011). The CEO of BP was changed with the one who favoured profit making over safety exiting and giving room for one who is expected to inspire the BP team and lead it while prioritizing safety in its operations (De Wolf & Mejri, 2013b). Due to the initial ineffectiveness of leaders at BP, the operation to contain the flowing oil took a longer time, 87 days, allowing huge volumes of oil to spill into the water mass with the potential to cause damage to marine lifestyle, pose transportation challenges, and halting commercial activities such as fishing in the Gulf (Mcnamara, Morris & Mayer, 2014). Lessons Leaned One of the lessons learned from the disaster is the significance of the role of safety in deep water oil drilling operation. The leaders at BP neglected the safety recommendations and cut costs at the expense of safety measures that culminated into the catastrophic oil spill. Secondly, regulatory agencies also need to be stringent with their oversight role to ensure adherence to prescribed standards of operations unlike what was experienced in MMS. Lastly, Emergency contingency measures should always be in place in anticipation of any event bordering on drilling procedures, and they should be timely activated and implemented. Conclusion In the management of operations in any given field, adherence to safety prescribed safety standards is a prerequisite for prevention of disasters. Negligence and safety flaws are hugely implicated in the causation of most catastrophic man-made disasters such as the DH oil spill experienced in the US. Availability of contingency plans to contain the damages resulting from a disaster should be emphasised and such plans should be routinely re-evaluated and updated for effective and timely management of disasters. References Boesch, D. (2012). Deep-water drilling remains a risky business. Nature, 484, 289. Bratspies, R.M. (2011). A regulatory wake-up call: Lessons from BP's deepwater horizon disaster. Environmental Law Journal, 5, 1-60. British Petroleum. (2010). 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Regulation and Governance, 9, 77-91. Occupational Safety And Health Administration. (2011). Deep water Horizon oil spill: OSHA's role in the response. New York: Department of Labour US. Sylves, R.T. & Comfort, L.K. (2012). The Exxon Valdez and BP Deepwater horizon oil spills: Reducing risk in socio-technical systems. American Behavioural Scientist, 56(1), 76-103. Read More