With the intention to decode the operations of businesses and their consequences, various accounting theories have been brought into use.For instance, the positive accounting theory emphasises the Ex Enteagreement between the two parties…
For instance, the positive accounting theory, also known as agency theory, emphasises the Ex Ente (before the event) agreement between the two parties, i.e. an agency and the agent. Notably, this particular theory accounts for the costs to be incurred by the agency, as a consequence to the failure of the agent to perform the delegated authority efficiently (Watts & Zimmerman, 1990). Correspondingly, the behavioural accounting theory argues that key decision makers of an organisation can add value to the company. Delivering the key decision makers of the company with such significance, the assumptions taken in the behavioural accounting theory intends to make the behavioural effects of the decision makers within an organisation, substantially transparent to the company stakeholders (Gillenkirch & Arnold, n.d.). Again, the Critical Accounting Theory (CAT) is concerned with the social customs and practices, which tend to ignite a change within conceptual, institutional and practical dimensions of accounting theories. Thus, arguing on the basis of the change drivers, the theory aims to justify the strategies needed to be taken by a business so as to avoid strategic failure (Tilling & Tilt, 2002). Emphasising these theories of accounting, the study aims at evaluating the incident of BP oil spill in the Mexican Gulf in the year 2010. 2. The Case 2.1. Case Study As reported in the company annual report, BP had to suffer a considerable loss and inhibited market reputation owing to the oil spill that occurred in the Gulf of Mexico, in 2010. The spill was caused due to explosion and the subsequent fire in the semi-submersible rig of its Deepwater Horizon plant. In the massacre, a total of 17 people on the vessel were injured apart from which, 11 people had died as the consequence of the blast. Following the explosion and the sinking of the vessel, the oil kept spilling in the gulf for around 87 days, causing severe negative impacts to the marine life and the entire biological cycle within and surrounding the horizon (BP Annual Report and Form 20-F, 2010). This indicates towards a poor agency relationship of the company with its stakeholders as per the positive accounting theory (Watts & Zimmerman, 1990). As per the report, Transocean Holdings LLC and BP plc were accountable for the oil spill in the Deepwater Horizon rig, as the former was the architecture of the well and the latter operated as the agency responsible to keep continuous check and control on the leak risks to the well, which implies to the assumptions of the critical accounting theory of effective decision making in response to the identified issue, confirming change in its organisational policy behaviour and structural orientation (BP Annual Report and Form 20-F, 2010; Tilling & Tilt, 2002). 2.2. Data As mentioned in its annual report, in July 2010, BP settled various agreements to sell the upstream assets in the US, Canada along with Egypt to Apache Corporations. This divestment was required for BP, as it was capable to increase the target for divestment to US$ 10 billion, which further assisted the company to suffice the GCCF claims at a greater ease. Similarly, in October 2010, BP again formed an agreement with its partner Hess Corporation for the sale of 20% interest that BP used to hold in Tubular Bells followed by the selling of its interest in Pan American Energy to Bridas Corporations and in a number of operational matured oil and gas fields in the UK to obtain liquid assets, which were further used by the company to suffice the claims made in lieu of the oil spill in the Gulf of Mexico (BP Annual Report ...
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The spill had immediate ramifications and even greater long term ramifications. It resulted in the death of at least eleven crew members. In addition, thousands of fishermen were left without fishing ground and thousand of fish and other living organism in the sea were killed (Biello, 2010).
Due to the development in the field of science and technology, the world nations are less concerned about preservation of nature. On the other side, conservation leads to unrestricted exploitation of renewable and non-renewable natural resources. The Environmental disaster in Gulf of Mexico is one of the greatest manmade disasters.
The politicians are also in support of the expansion of the drilling area to increase production of oil in order to curb the energy crisis in the country whereas Bob Keefe is more concerned of the effects to humanity and the aquatic life that would come about as a result of conducting this exercise.
This can be attributed to the fact in 2007 the western and central Mexican gulf gave contributed to 14% of the United State’s natural gas and 25% of the country’s oil in federal leases. Ever since the industry was started in the 1940s, it has grown steadily as more capitalists have invested and developed it.
Conclusion and Recommendations 8 References 9 Appendix 11 1. Introduction The performance of industries in the global market is commonly based on their ability to keep their profitability at standard levels in the long term. In highly turbulent periods, like the current one, the ability of industries to support national economies is usually decreased.
British Petroleum Oil Spill, 2010 Student Name Instructor’s Name Course University Date of Submission Table of Contents 1. Introduction 1.1 Discussion of concepts and theories used to analyze the case 2. The case 2.1 Context Background information about the case 2.2 Data Description of corporate disclosure vehicles chosen for analysis 2.3 Methodology Discussion of the categories of analysis used to analyze the corporate texts 3.
The air pollutants were made up of hydrocarbon fumes, for example, naphthalene, toluene, and benzene, and smoke. On the other hand, the water pollutants were made up of the oil which leaked out of the rig and the extinct creatures which trashed the Gulf after the oil spill.
Introduction Business reputation is a very important aspect in today’s competitive world. Some of the most successful businesses are the ones that have been able to uphold their first impression, the impression that made it stand out among others. The reputation of any business is enhanced by many factors, among which include communication and a sound crisis management (Abratt, 1989).
The future expectations with respect to demand and supply for oil will influence prices. Supply and demand are balanced by responses to the current price movements where complexity in the evolution of underlying expectations is likely to influence prices in the
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