British Petroleum Public Limited Company - Essay Example

Social Performance of organization Introduction The development of the British petroleum known by its initial BP plc was based on the demand for supply of the oil and gas. The organization is a multinational oil and gas company with its headquarters in London. It is among the top-ten companies dealing with oil and gas across the globe. In fact, the company has been dealing with all areas of the gas industry including exploration, production refinery and marketing of the gas product (Hollensen, 2007, p. 23). It is over one century old dating from 1909 with a turn-over of the company being the production of around 3.3 million barrels per day with the reserves being 17 billion barrels of oil. The focus of the company has been restricted in the production and supply of oil related products and services. However, the company has been faced with several environmental challenges including the famous oil spills in the sea (Okbor, 2001, p. 23). The spillage caused the death over fifteen workers in the process. In spite of the challenges posed, the company does not have challenge with the volume of oil and gas produced but has been facing competition from other market related factors and companies. Environmental issues affecting the company The major issue affecting BP is the failure to address major spillage catastrophe such as the 2010 Deepwater Horizon spill. The spillage is a major environmental safety incident that affected the performance of the company. It led to negative publicity, which in turn affected the organization through suits such as the case of the company against the employees. During the hearing, the company pleaded guilty to 11 counts of felony and manslaughter. In addition, they pleaded guilty of two misdemeanors and one felony count for providing wrong information to the congress. Environmental safety is an issue that has affected the company negatively owing to the 2010 incident which created a negative perception. The pleading guilty of the company affected its public image and led to serious challenges in conducting business. In fact, the company spent a lot of money on fines and penalties which totaled to $4.5 billion in fines and penalty (Crane & Matten, 2007, p. 14). The amount is the largest in the company history. Despite the conclusion of certain cases, there is still challenge on the pending cases which are scheduled to end this year. In overall, the organization faces damages of close to 17.6 billion in the trial. The Deepwater incident of 2010 is a major catastrophe for the company in terms of business and the public image. The focus of the world today is on the protection of environment especially the marine life which is under immense threat from pollution. Therefore, the 2010 incident dented the credibility of the company and forced the company to use large amounts of cash in the clean-up process in order to salvage the dented image. Environmental protection is a major issue in the development process and expansion of the company. Since the incident, the government has been tough on the company by enforcing all the necessary legislation including the development of new standards to be met by the organization. Environmental protection is a vital aspect for the company especially when dealing with the past experience and the challenges it posed for the company (Roeck, Maon, & Lejeune, 2013, p. 86). The current challenge is overcoming the image created by the 2010 incident and developing a new approach in dealing with oil spills especially of similar magnitude. The Deepwater incidence of 2010 brought out changes in the company with the focus shifting from production. The damages arising from the incidence led to the sale of company’s asset in order to off-set the penalties. In addition, there were changes in the management structure with the Bod Dudley being replaced by Tony Hayward as the company CEO. The divestment program also facilitated the sale of the 38 billion worth of the non-core assets. The major factor contributing to the decision made was the Deepwater horizon spill. Environmental issues are complex in the modern world because it affects directly the performance of the company including the development of the new business links and contracts. As witnessed in the incident in 2010, it is evident that the company needs to address the various factors originating from the violation of the set environmental policy (Hollensen, 2007, p. 125). The protection of environment is a significant catch for organizations especially when addressing the issue of profitability. Corporate social responsibilities have been used to address the challenge faced by the different companies in the world. However, the major challenge with companies is associated with the failure to address issues effectively. For BP, the major challenge was the environmental protection issues. Corporate responsibility of any institution involves the development of several issues including handling the environment as a vital aspect. In fact, the development of the environmental protection plans can instigate growth of the organization regardless of the focus of the environment. Therefore, it is vital for organization to focus on the development of effective environmental programs that will facilitate growth of the company while giving something to the community (Okbor, 2001, p. 54). The failure of BP to uphold the vital aspect of corporate responsibility led to serious challenge for the business. Involvement of the organization in social issues has been highly doubted after the 2010 incident which has dented it potential as business partner or a leader in business organization. In fact, the company is facing a crisis since the incident that led to media outburst and negative publicity. Improvement of the business performance In order to improve the performance of the organization, the issue of negative image must be addressed by the stakeholders and the engagement of the organization actively on corporate issues. The creation of positive public relations is vital after the 2010 incident. As a leader the focus will be involving the stake holder in environmental protection and improvement issues because it is the area of concern after the 2010 incident. In fact, funds should be set aside to deal with environment issues affecting the nation and create a positive image about the company in the long term (Okbor, 2001, p. 23). The creation of a positive image in the long term will lessen the burden associated with the 2010 environmental safety failure. Consequently, the stakeholders should focus on the youth, women and the elderly. The focus on the youth will increase awareness and sensitization within the youth while also addressing the challenge of negative publicity which is affecting the economic performance of the company. The major stake corporate stakeholders to be engaged in the process are the environmental protection organizations, which will improve the ratings of the organization based on its involvement in the environmental protection issues. In fact, the challenge of environmental safety and policy can be addressed by the stakeholders associated with issues of environmental protection (Roeck, Maon, & Lejeune, 2013, p. 12). The involvement of the environmental organizations in the stakeholders group will increase the potential of success by offering avenues for the protection of environment while also addressing the challenge of negative publicity. The main issue of concern for the organization is negative publicity faced because of the degradation of the environment (Crane & Matten, 2007, p. 3). The involvement of the youth in the process will improve public awareness of the focus of the company especially when addressing corporate responsibility and development of new perception about the company. In fact, involvement of the youth in environmental and safety issues will expedite faster recovery of the organization in the market. the challenge of the may be on the number of youths or youth groups to be engaged in the process especially when addressing the challenge of environment and new corporate policy developed to cater for the challenges posed (Crane & Matten, 2007, p. 63). Environmental responsibility should be the focus of the organization. Through solving the issues of environment, the organization can be able to address the challenge faced in profitability and business expansion. Conclusion The challenges facing stakeholders is the evaluation of the amount of involvement of the organization in corporate affairs that will not affect their budgets significantly. However, the corporate social responsibility can be used effectively; the company can be able to address the various issues directly by focusing on the global image (Roeck, Maon, & Lejeune, 2013, p. 63). It helps in the product promotion and acceptance in the society. In fact, it facilitates the development of better customer relationship with the company. Reference Crane, A., & Matten, D. (2007). Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford: Oxford University Press. Hollensen, S. (2007). Global Marketing: A Decision-Oriented Approach. London: Prentice Hall. Okbor, J. (2001). Critical theory and the Hegemony of Corporate culture. Journal of organizational change management, 590-602. Roeck, K. D., Maon, F., & Lejeune, C. (2013, May 15). Taking Up the Challenge of Corporate Branding: An Integrative Framework. European Management Review, 10(3), 137–151. Retrieved November 10, 2013, from http://onlinelibrary.wiley.com/doi/10.1111/emre.12010/abstract Read More