In fact, media reports stressed the chaotic nature of the situation, and both BP and the federal government were under intense scrutiny and criticism for the handling of the crisis. BP, he insisted, should be spending its money on repaying the victims of the spill. Svanberg then held a press conference during which he apologized for the accident.
Shortly after, Hayward removed himself from day-to-day oversight of the disaster and put an American, Robert Dudley, in charge. BP, it turned out, was not unfamiliar with oil-related disasters. In , at its Johnson City, Tex. In , a BP oil pipeline ruptured and spilled more than , gallons of oil into Prudhoe Bay in Alaska. With such a track record, BP is receiving very little compassion from its critics.
Oil continued to flow from the damaged wellhead, and estimates of the actual amount of oil being lost grew exponentially from 1, barrels a day, when the crisis began, to as many as 60, barrels a day, at this writing. For its part, BP continued its advertising to try to reassure the public that it was not only sorry for the situation but was also committed to making it right, no matter the cost. How would BP recapture its business momentum in the light of a catastrophe of this scope? As this case study unfolded, Briefings asked four crisis and risk management experts to weigh in.
Rear Adm. So I am very sensitive to the BP role in this situation. We had a long-term problem, which required coordinated, joint solutions with many player agents in the mix. When I speak on crisis leadership, one of the points I make is that it is what you do between the crises that really counts. You have to look at lessons learned, imagine the risk you are dealing with, strategize, plan, exercise and train. BP, for example, was not new to catastrophic events. In addition, executives need to identify the players who are going to be in place when a crisis happens.
There is a whole range of advisers you will be depending on, and they have to be identified in advance.
Every company in the universe ought to be learning from this crisis. Once a crisis is under control, corporate leadership must focus with laser intensity on what was learned and what will be done differently in the future.
Let me tell you how hard that is. It is as hard to be really self-critical as it was to deal with the crisis in the first place. But as a leader, you have to have the fortitude to do it. There is no book to read for the next time. Another key lesson: Values matter. All the lawyers will tell you to do things right, but you want to do the right thing.
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The right thing is to be open and share. A CEO sets the course and tone about what are the important values. You are taking care of people, being transparent, open, honest, sharing facts, acting when you can, communicating. Those are critical things you have to do. Also, you must communicate. BP has been reactive and defensive. Both the administration and BP are to blame for not communicating clearly what is going on.
Crisis Management Case Study: BP Oil Spill | The PR Code
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The probability of the blowout is probably higher than 1e-6, as they have occurred in the past and mitigation options for oil spills have been of historically limited effectiveness. Its quite possible the financial reward of the Deepwater Horizon well was worth the risk of the company going bankrupt and being bought up by its competitors.
The real problem with low probability-high consequence events is demonstrating the costly engineering solutions are cost effective and not simply a wast of money, as there is generally very little hard data to support implementation. That is a real issue with this area of decision making. Dear Gareth, Thank you for your comment, but allow me to clarify a couple points. I can hardly see how a scenario with such a heavy ethics and human loading could be considered as a good bet, or rewarding enough. Such a plan set in action reduces the public relations damages by showing that your on top of things.
By deploying counter measures against the oil spil right away you could have prefented a lot of the damage. Emergency procedure, crisis management and risk management should always go hand in hand. From what I have read in the media of course I have no access to the original documents , emergency plans for that operation were miserable boiler plate solutions, written by people who did not even care to know that sea lions are estinct in that area since some ice age ago…so emergency plans were poor, crisis management has been poor, risk management we have already dealt with….
Sorru for the late reply, but I have been very busy dealing with decision making support for some of our clients. Saved your blog. Thank you for expressing. Absolutely really worth the time clear of our reports.
Thank you for this wonderful report. It was very helpful to me and to the one who read this page.
You truly is a genius writer! Or BP. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Giuliano De Mio says:. June 11, at am. Simon Cooke says:. Peter Whalen says:. June 11, at pm.
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