bp case final-team beta

Running head: BP and the Deepwater Horizon Case 1

BP and the Deepwater Horizon Case

Chuong Q Nguyen

Leadership of Innovation and Change

MSM-6635

Dr. Tish Matuszek

Troy University

9/12/2015


Abstract

An analysis of the case British Petroleum (BP) and the Deepwater Horizon accident was

completed in order to determine the problem areas that prevented the organization from

operating as a safe and successful oil processing and manufacturing organization. The analysis

was completed utilizing various methods of evaluation. The 7-S Model, Weber’s Theory of

Organization Paradigm, Cawsey, Deszca, and Ingols (2016)-Readiness for Change Assessment,

and the Kotter 8-step change implementation plan. These analyses will signify internal and

external causes which prevented such success, review of the organization’s operations, execution

and delivery of policy and procedures. It will also review the current support systems to address,

implement, and indicate the benefit of change. By applying these models and methods we are

able to identify the areas of concerns and the scope of severity in which BP has been affected.

Once these problem areas were identified, recommendations were made to improve the

organizations objectives and procedures to ensure future interest, support, and operations of BP.

Introduction

On April 20th 2010, British Petroleum (BP) was responsible for and oil spill accident that

occurred in the Gulf of Mexico. This resulted in a negative effect on its global reputation for

safety and security, financial status and sustainability. After that accident, BP’s board of

executives realized that change for the organization was warranted in order to regain BP’s

operational status and function within the world. They also needed to improve their operation

standards of safety to prevent any further accident from happening in the future.

As a change agents being hired by BP, we will use our expertise in the field to help BP

formulate and implement the changes that are necessary to meet the organization’s goals for


improvement. Our approach to this problem will include analyzing all of BP’s factors, both

internal and external in order to allocate the need for change and assess organizational readiness

for change. Once these areas are assessed and reviewed we will suggest a formulation of change

models and methods that will assist BP to determine and a plan of implementation and keep it

safe, competitive and financially secure for the future.

External/Internal Analysis

A) External Analysis

Factors are the forces that drive change. For external analysis, we will address and analyze

the environmental factors that have affected BP since the Gulf of Mexico oil spill accident.

Environmental Pressures Opportunity Threat

Political/Legal - MMS issued permits to BP

for drilling on U.S. land or in

U.S. waters

-Pressure from environmental

activists and legal pressures from

OSHA and state courts on safety.

-Legally responsible for at least 17

injured, and 11 deaths from Gulf of

Mexico accident

-Safety Issue violations: BP has

caused 3 accidents since 2005, which

include: the explosion at BP’s Texas

City Refinery in March of 2005,

Alaskan Bay oil spill in March of

2006 and the Gulf of Mexico oil spill


in April, 2010

Social -Revolutionary, campaign for

environmental friendly fuel

can lead to new potential

market

-Social pressures (News and social

media)-about the impact of BP’s oil

spill

Economic -Price of gasoline has

increased since 2000, can lead

to more profitable economic

gain for drilling in deep and

ultra-deep water

-Increase in demand for oil

and gas in North America

-Higher cost for building deep water

drills compared to shallow water drill

-Higher insurance costs since

accident

-Legal payout required for

compensation and settlements

Technological -Improvement of drilling

technology leads to profitable

economic gain for drilling in

deep and ultra-deep water.

-New technology able to

create and develop new types

of energy

-High cost to obtain and complexity

of maintenance.

-Corrosion potential in pipeline

Ecological/Environmental -New oil wells

-Resource for development of

-Restrictions of environmental

regulation


new type of natural energy

and fuel.

-Legally responsible for spilling

205.8 million gallons of oil in to

Gulf of Mexico, destroying 1 entire

generation of ocean habitat

-Hurricane, other natural disasters

may affect the oil rig and production

in long term

Industry - New geographic territories

through alternative fuel and

energy opportunities.

-Competition from Shell and

Chevron

From the external analysis table above, we can see that the balance between opportunities

and threats from the external environment of BP has changed. These can increase and

become threats rather than opportunities. The increase in demand, new resources available,

the new technology innovation, socially and legally approved for drilling oil has provided the

opportunity for BP to improve their profit and reputation in the industry and market. After a

series of accidents since 2005, BP also has the threats of law suits and social pressures as

forces that also have a negative effect on BP.

b) Internal Analysis


Internal analysis is what is inside the organization of BP to drive change. The 7-S Model

was used to analyze the internal and external factors that affect BP and its operations. We chose

this model to identify components of the strength and weaknesses that exist internally.

Diagnostic Model: 7-S

-Structure: Functional structure, the organizational structure is divided in managerial layers

with a matrix structure. This is centralized, but is becoming more flat in structure by removing a

specific amount of management layers.

-Systems: Information and IT system are very important to the support of BP’s competitive

advantage and business strategy, such as exploration and production. BP has always invested to

improve their systems in these areas.

-Style: Management style is considered as achievement oriented leadership in which the goals

are highly set and the employees do their best to meet these high performance levels. Employees

are given autonomy to perform their work quicker and smoother.

-Staff: More than 92,000 employees worldwide from diverse backgrounds. The staff is well

trained and new employees are required to go through a probation period to fit with the

achievement oriented employment style of BP.

-Skills: Specify in technology and innovation in the product.

-Strategy: Global mindset, aim is for filling competitive gaps by increasing oil production,

developing a manufacturing portfolio, investing in technology to support the business strategy.

-Shared value: Always seeking for innovation, safety is a priority


7-S Factors Strength Weakness

Structure -Functional Structure, highly

specialized in each department

which the focus is on

efficiency and effectiveness

-Each department has the

authority in its own decision

making.

-Simply structured, fast

managerial decision making

-Highly dependent on

performance outcomes only to

assess the overall performance

of the organization and

employees

Systems -IT system for exploration has

been through 3 innovative

upgrades since the early

1990’s.

-Information system is

strongly aligned and supports

the organizational strategy

-High costs to develop and

maintain

Style -High autonomy

-Achievement oriented

management lead success

-Excessive authority over

decision making for

employees and operations

Staff -Diverse and high

performance-oriented staff

-Cut costs through downsizing

might lead to the loss of talent

and decrease morale

Skills -Highly competitive skill in -Low skill to maintain safety


industry for exploration,

product innovation and

production

system with oil rig operations

Strategy -Efficiency and performance

focused strategy

-Clear priorities, actively

managing a quality portfolio

and employing distinctive

capabilities

-Focused on high value

upstream assets and advanced

in technology

-Global approach, extends to

worldwide market and closes

the competitive gap

-Sacrifices safety to save cost.

- Dangerous changes in

operation to align with change

in strategy

Shared Values

Shared Values Continued

-Develop a strong foundation

to make BP a safer, more

trusted and valuable company

-Excellent in project delivery

-Powerful partnerships

-Advanced Technology and

innovation

-Poor Implementation of value

in regards to safety


Organizational functions Strength Weakness

Management -Strong achievement oriented

leadership.

-Strong brand management

lead beyond petroleum slogan

-Lack of communication for

safety issue.

Marketing -Big brand name, well

recognition, many segments,

types and brands of product.

-Lost focus on some segment,

such as coffee and clean fuel.

-Bag reputation for safety.

Accounting/Finance -Still profitable even after

many oil spill accidents since

2005.

-Massive payouts for

penalties, fines, and assistance

to damaged areas.

Information systems -Strong information system

that align with business

strategy

-High cost to develop and

maintain

Research and development -Strong staff

-Build relationship with Ford

to build hydrogen cars.

-Lack of perspective for safety

in the process, caused accident

Through Internal analysis, we can see that BP has a strong organizational structure,

strategy and culture that strongly develop throughout history since 1909. For internal analysis,

BP has more strength than weakness in most of the factors. Their strength in organizational

function are so strong, and their effective operation are so success that it made BP still profitable

and survive even after a series of serious accidents with lots of pay out for legal, social and


environment penalty. The main weakness of BP is their ineffective safety management, which

cause them lots of trouble. Those weaknesses come from lack of safety communication and

implementation, lack of investment for safety operation and trade safety for profit and

achievement.

Formulation: The Need for Change

Throughout our analysis process, we can conclude that the need for change of BP is a

crucial matter. For internal, there is a red alert about their safety system that caused a huge

disaster that can’t be ignored no more. BP has done a very great job in their operation and

business which made them so success and profitable in worldwide market. They also have done

great job in innovation and always aim higher but they have been very terrible at learning from

the past mistake such as the safety issue. For external, the legal and social have a strong pressure

on BP which results in a bad image of BP in customer’s eye. If there are no changes are made,

BP’s image and reputation will be badly suffered even more in stock holder’s mind, which will

make them lose all the support from social and legal, lose market share to competitor and go

bankrupted.

Formulation: Readiness for Change

Through this analysis, we can conclude that BP’s readiness for change is high because:

-BP has gone through many changes in history in structure, strategy and innovation which

led to many positive success experiences.

-BP has a flexibility and adaptability organizational culture, and always seeks for innovation

to be better.


-BP’s staff has a strong sense of leadership, performance oriented and high commitment to

the organization and has access to the resources available and needed for change.

-BP has enough resources and finances available the need for change.

Environmental Pressures Opportunity ThreatPolitical ThreatSocial ThreatEconomic ThreatTechnological OpportunityEcological/Environmental ThreatIndustry Threat

With the climate surrounding the Deep Water Horizon, there are a number of external

threats that could affect BP as opposed to external opportunities. These threats and opportunities

will lay the foundation for the future of BP going forward, and offshore drilling as a whole.

The oil spill is a definitive political threat. In the political realm, perception is reality,

and at this point the reality is that BP played a major role in a preventable oil spill that can

potentially do major damage to the environment. As a result, the president of the United States

banned new off shore drilling for the time being, and the governor of California has made the

same decision for their off shore drilling. For the politicians that oppose the operations in which

BP plays a major role, the oil spill has empowered them and given them a new voice. The safest

place for politicians, who support BP operations, is either a place of silence or condemnation,

considering the political climate.

While the political climate is tense, there is hope for BP moving forward. With the

Internet and twenty-four hour news coverage, a front page story only lasts a week in the mind of


the average consumer. Over time, offshore drilling will commence as political pressure subsides,

and public opinion will soften as the missteps are corrected.

The social and economic impact of the oil spill accident is just as much a threat as the

political threat. The spill occurred in the peak of spawning season for many species, which may

affect commercial seafood harvests in the immediate future, and long term. Vacationers in the

gulf have been deterred by the effect of oil hitting the shores, greatly affecting the travel

industry. Socially, the maintenance troubles before the spill, and the looming health concerns

after, do not bode well for BP. There is an expectation of social accountability for the 17

workers who were injured, and the 11 employees that were killed in the explosion on the oil rig.

The individuals and their families who are impacted by the oil rig operational failure will want

their concerns addressed, along with a commitment to improving the environment where BP

does business.

Technologically, the oil spill presents an opportunity for BP. With every setback, an

opportunity presents itself, and since the situation in the Gulf cannot get much worse, the only

way is upward. The opportunity can be realized in the cleanup initiative, improvements to

current oilrigs, and the technological advancements that will be implemented in the future.

Although the spill was a disaster, the opportunity to invest in technological improvements in

order to offset looming threats is significant.

The oil spill may possibly be the biggest threat of all that are listed here. It will take

years for the ecosystem to recover from the BP explosion in the gulf. For contrast, even twenty-

five years after the Exxon Valdez spill in Alaska occurred, clams, mussels, and killer whales are

still considered “recovering,” from the effects, and the Pacific herring population, commercially


harvested before the spill, is showing few signs of recovery. (Four Years into the Gulf Oil

Disaster, 2014) The impact of the oil spill in the gulf cannot be understated; this is why a

tangible commitment to the ecological restoration of the Gulf is important. Restoration is an

ongoing process, expressed in the decisions made to right the wrongs, and cooperation with those

who may oppose offshore drilling in order to find a common ground and move forward with

future operations.

In the short term, the industry will suffer because of the oil spill in the gulf. Investors

may feel that there is instability and uncertainty in the sector, and sell their stake in the company

to move to what they perceive as safer investments in the long term. The BP explosion is a

threat for the industry because of the lack of clarity, direction, and security for those who invest

in the sector. The long term depends on the response from BP and the industry as a whole. The

oil spill reinforces the argument for alternative energy sources that are renewable and safer than

offshore. Industries like solar and wind power will benefit from the oil spill, while offshore

drilling will be perceived as risky and a detriment.

Reduction in levels of management also reduced cautions in making critical decisions.

BP had been in the market for nearly a century at the time of the Deepwater Horizon Disaster of

2010. BP’s management over the years made business decisions that allowed the company to

recover from near bankruptcy in 1992. A substantial improvement of performance was seen

during the mid-90s. BP willingness to make changes allowed continues improvement in

company’s production and went on to become one of the six largest non-state owned companies

in the world. Leadership replaced personnel in key management positions to ensure top

management was on cue with company’s goal. Levels of management were removed to allow


quicker managerial decisions. Onsite asset managers were allowed to make decisions for

obtaining performance targets.

Decentralization of levels of management allowed onsite managers to make decisions for

their site to performance targets. Pay of employees at each site was tied to production of the site.

There wasn’t much incentive for onsite managers to share lessoned learned in performance

practices and risk management. The company’s structure caused unintentional competition

between sights. Management’s vision focused on improving performance but placed minimum

emphasis on safety.

Formulation: Culture and Implications

BP’s brand was held globally as one of the leaders in the oil to be environmentally

friendly. BP’s tag line was changed from British Petroleum to Beyond Petroleum to represent

company’s commitment. However, the company’s brand took a hit after disaster incidents in the

mid-2000s. Management actually did emphasize personal safety but misinterpreted a decrease in

personal injuries as acceptable performance process safety. Maintenance and safety measures

overlooked or minimized to reduce production cost.

BP is a large and profitable company that got there with focus and direction of

accounting/finance. Management utilized finances to acquire rights to drill for oil in high

producing areas. Finances were also effectively utilized for acquisition of contractors to support

production. In the long term, BP finances were significantly impacted by fines, penalties,

payouts for damages after safety disasters.

Management’s outsourcing of information technology (IT) allowed a reduction in

operating cost. The acquisition also allows company access to more flexible high quality


resources. BP doesn’t have to bear full cost of continuous IT upgrades. A draw back to

outsourcing of IT is that requirements for specific system functional have to be provided to an

outside agency.

Research and development is utilized within BP to improve performance and determine

high oil producing areas. Research revealed that deep water drilling for oil produces more than

shallow water. It was also revealed that deep water drilling posed more safety issues and higher

cost. Management made determination from research results that potential increase in profits

was worth the effort. Again, management failed to place as much emphasis on safety as in

performance.

(Weber, 2015)

Routines


Managers at the individual drill sites were given authority and responsibility to make

critical decisions for performance goals for local employees. Decentralization decision making

allowed quicker utilization of resources to be competitive in the industry. Levels of management

were reduced to alleviate redundancy in decisions for processes utilized for oil production.

Decentralization of some critical decisions for production at drill sites had negative

results. There was minimum central management to ensure all sites followed the same safety

guidelines and risk management.

Stories

There were several safety incidents at drill sites where managers made questionable

decisions with trade-offs for production verses safety and risk management. Incidents at Texas

and Alaska worksites caused loss of numerous lives, injuries, and financial losses. Organization

responded with appointing someone in position to write an investigative report on tragedies.

Findings revealed reductions of maintenance and safety measures at work sites were utilized to

lower production costs.

Symbols

BP refocused its business structure to focus on growth. Also, in 2001 BP renamed its

tagline and officially changed name to “Beyond Petroleum” in effort to show commitment to

world energy with environmental protection.

Power structures


Top leaders placed emphasis on making profits. Performance management was also

geared towards providing incentives to employees in the form of compensation tied to

production of individual work sites.

Organizational structures

Each worksite had asset managers that were given authority and responsibility for making

critical decision for product at their site. Layers of management were reduced which also

decreased

Controls

Organization’s management structure allowed managers at each work site to make

critical decisions for meeting production goals. Asset managers made decisions in order to meet

performance goal with trade-offs for safety, time, and risk management for meeting performance

targets.

BP’s top leadership made structure changes to various levels of management which

influenced an organizational culture that improved performance at the expense of caution and

safety. The tying of employee’s pay at individual drilling site’s to the sites overall performance

became an incentive for employees to overlook safety risks. Onsite managers sought to meet

performance targets at the cost of safety risks.

Decentralization of decision making reduced review and control of critical decisions

regarding processes used at drilling sites. However, decisions are made with the goal of


receiving incentives and profits. Safety risks and hazards were overlooked or determined

minimum when compared to potential profits. Decisions have resulted in several costly disasters

for BP.

Strengths WeaknessesRoutines Management onsite made

decisions for processes to meet performance targets

No central management in place to ensure all sites follow the same safety guidelines and risk management

Stories Reports including details that management didn’t place emphasis on risk management and safety.Leadership showed minimum commitment to process safety

Symbols Oil refinery and drilling are massive projects that involve many workers and specialists faced with challenges.More oil produced means high productivity and improved performance which tied to employee compensation

Power structures Leadership sees high oil production as profitable

Onsite managers have no incentive to share best practices and risk management

Organizational structures Each onsite manager manages independently and compensated for performance

Controls No independent risk management review of onsite process decisions and inappropriate chain of review for onsite critical process decisions


Changes that BP’s leadership made to management structure developed a culture of

ensuring improved performance at the expense of caution and safety. The tying of employee’s

pay at individual drilling site’s to the sites overall performance became an incentive for

employees to overlook safety risks. Onsite managers sought to meet performance targets at the

cost of safety risks.

Leadership’s change to layers of management created a structure that allowed decisions

to be made quickly. Decentralization of decision making reduced review and control of critical

decisions regarding processes used at drilling sites. BP’s culture developed into one which

decisions are made throughout the organization to improve performance and meet target.

However, decisions are made with the goal of receiving incentives and profits. Safety risks and

hazards were overlooked or determined minimum when compared to potential profits. Decisions

have resulted in several costly disasters for BP.

Formulation: Rate the Organization’s Readiness for Change

Readiness Dimensions Readiness ScorePrevious Change Experiences

1. Has the organization had generally positive experiences with change

Score +1

2. Has the organization had recent failure experience with change?

Score -1

3. What is the mood of the organization: upbeat and positive

Score -1

4. What is the mood of the organization: negative and cynical

Score +1

5. Does the organization appear to be resting on its laurels? Score +1Executive Support

6. Are senior managers directly involved in sponsoring the change?

Score +2

7. Is there a clear picture of the future? Score +18. Is executive success dependent on the change occurring? Score +29. Has management ever demonstrated a lack of support? Score +1

Credible Leadership and Change Champions


10. Are senior leaders in the organization trusted? Score +111. Are senior leaders able to credibly show others how to

achieve their collective goals?Score +1

12. Is the organization able to attract and retain capable and respected change champions?

Score +2

13. Are middle managers able to effectively link senior managers with the rest of the organization?

Score +1

14. Are senior leaders likely to view the proposed change as generally appropriate for the organization?

Score +1

15. Will the proposed change be viewed as needed by the senior leaders?

Score +1

Openness to Change16. Doe the organization have scanning mechanisms to

monitor the environment?Score +1

17. Is there a culture of scanning and paying attention to those scans?

Score +1

18. Does the organization have the ability to focus on root causes and recognize interdependencies both inside and outside the organization’s boundaries?

Score +1

19. Does “turf” protection exist in the organization? Score +120. Are the senior managers hidebound or locked into the

use of past strategies, approaches, and solutions?Score -1

Readiness Dimensions Readiness Score21. Are employees able to constructively voice their

concerns or support?Score -1

22. Is conflict dealt with openly, with a focus on resolution? Score +123. Is conflict suppressed and smoothed over? Score -124. Does the organization have a culture that is innovative

and encourages innovative activities?Score +1

25. Does the organization have communications channels that work effectively in all directions?

Score -1

26. Will the proposed change be viewed as generally appropriate for the organization by those not in senior leadership roles?

Score +1

27. Will the proposed change be viewed as needed by those not in senior leadership roles?

Score +1

28. Do those who will be affected believe they have the energy needed to undertake the change?

Score +1

29. Do those who will be affected believe there will be access to sufficient resources to support the change?

Score +1

Rewards for Change30. Does the reward system value innovation and change? Score +131. Does the reward system focus exclusively on short-term? Score +132. Are people censured for attempting change and failing? Score +1


Measures for Change and Accountability

33. Are there good measures available for assessing the need for change and tracking progress?

Score +1

34. Does the organization attend to the data that it collects? Score +135. Does the organization measure and evaluate customer? Score +136. Is the organization able to carefully steward resources

and successfully meet predetermined deadlines?Score +1

The scores can range from -10 to +35 33The purpose of this tool is to raise awareness concerning readiness for change and is not meant to be used as a research tool.If the organization scores below 10, it is not likely ready for change and change will be very difficult.The higher the score, the more ready the organization is for change. Use the scores to focus your attention on areas that need strengthening in order to improve readiness.Change is never “simple,” but when organizational factors supportive of change are in place, the task of change agent is manageable.

(Cawsey, T. F., Deszca, G., & Ingols, C., 2016)

A score of +33 on the Organization’s Readiness for Change indicates BP is ready for

change. The relatively high score also indicates that management and employees at levels should

be receptive to change for process improvements. Recent costly disasters have increased

awareness for the need of change to ensure effective safety and risk management. It will be

critical for top management to emphasize importance of change through effective

communication. Management’s effective implementation of change will reinforce it to become

part of organization’s culture (Kreitner & Kinicki, 2013).

Formulation:Recommendations

Team Beta recommends that BP make significant changes in order to improve their

company reputation, performance, responsibility, and sustainability. The second-order change

which involves making a change that is definite and permanent is the best choice for BP. This


will add a fresh perspective on how things should be assessed and identify what changes need to

occur to bring the company back to what it once was before in regards to be an oil industry

leader.

This will be a permanent change. In order to make this change team Beta will need to

identify the system components and areas for the entire company. Once this identification is

completed it will be necessary to assign a leader for each area or assignment to determine what

the problems are, what changes need to be implemented and what is the best way to do it that

improves and links each system into a whole.

When this system is repaired and a new mission and value is determined then the leaders

must embrace this and lead the employees by instilling the importance of implementing these

goals into daily job duties and expectations. This will require policy and procedure updates and

changes to reflect the new BP operational standards as well as training internally and external

promotion of those changes to the consumer.

This promotion will reshape the thoughts and feelings of the consumer opinions of BP

and through consistent and safe operations a restoral of faith and support will eventually began to

bring BP back into a competitive position within the oil industry.

Formulation: Primary Recommendations for the Change

1. Leadership Reorganization-Placement of leaders that have experience and will

promote the value and mission of the reformed BP.

2. Definitive Responsibilities of leaders-Specific clarification of role responsibilities

and providing specific permissions for decision making on what role they are in.

3. Definitive Policy and Procedures for employees to follow


4. Rewards for meeting safety and quality expectations for all employees or

contractors instead of rewards based on production

5. Improved safety and hand on procedure training

6. Set pay for specific skill levels and job requirements that are competitive to attract

experienced and dependable employees

7. All systems operate as an entire unit and keep outsourcing to a minimum to

promote a familial environment and dedication of employees.

Implementation: Image of Change Management

The type of change that BP will go through is to overhaul or re-create itself. This

involves restructuring and improving specific systems or departments in order to respond to a

significant crisis like the one that led to a tragic accident that caused damage to BP and its

operations. The main purpose of this change is to improve BP’s internal safety performance

system in order to prevent any further accident and align BP’s strategic plan with its safety value.

For this change, we will need to reevaluate the core values of BP, which are innovation and

safety. Furthermore, we will examine and restructure their operation which includes technology,

human resources, performance management and system that relate to oil drilling function.

Although this change of BP is a big change it is attainable. And since BP is a large organization,

we suggest making this change at a continuous or incremental pace. In order to do that, a plan of

steps and deadlines will be utilized as well as change leaders to manage and measure each stage

of change process and make modifications as needed to ensure the success and sustainability of

the change.


First, in designing and early stage of the change project, we will use interactive control

system, which include analyzing step that sense environmental impact that crucial to BP’s

strategic and to support and strengthen the need for change. Then we will use boundary control

system to classify the change management and system that most suitable and within BP’s

boundary of condition.

Secondly, in the middle of the change project, we will use diagnostic and steering

controls to set out a plan with goals, milestone achievements, activity schedules and tracking

systems to monitor the project’s progress and provide feedback or solutions if any problems

should occur. Furthermore, we will use a belief control system to frame out change activities that

align with BP’s culture and core beliefs in order to motivate employees and minimize the

resistance to change of BP’s staff.

Lastly, at the end of change project, we will measure the outcomes of change, what was

accomplished, what was beneficial and not beneficial about the change for BP. We will record

what we learned from the change and what was involved with the change in order to prepare for

any future change initiatives we may be involved in.

In conclusion, BP is a large international company with a complex structure. In order for

a successful change to happen it needs to be to done step by step in order to ensure the expected

outcome of the change that will benefit BP and its employees. In order to accomplish this, a

control system will be needed during all phases of the change project in order to assess, measure

and to track those steps in order to ensure that they are on the right track as planned.

Implementation: Resistance to Change


Recipients of change may be apprehensive to adapt to the changes that will come as a

result of the oil spill. A plan has been put together to alleviate concerns and provide direction for

stakeholders during this shift in the environment.

1. Acknowledge the impact of the Situation

One of the biggest contributors to the resistance of change is the fear of the unknown.

Senior leadership will be visible and take responsibility, while expressing that the unknown has

already occurred with the oil spill, as well as the intent to set things right.

2. Create a Strategic Message

BP plans to continue its operations in the Gulf of Mexico, the resistance to change will

come from those who may not fully understand what BP is trying to accomplish. Without a

strategic method, BP does not control what society associates with the company. The company

will need to create a strategic message that conveys why BP exists, and what the company is

accomplishing with their operations in the Gulf.

3. Convey a proper understanding

A vision is worthless if it does not resonate at all levels. The vision after the oil spill will

need to be one that projects confidence in BP’s ability to drill safely, efficiently, and in a manner

that is valuable to all stakeholders. By engaging the organization’s that are affected by the oil

spill short term and long term. The dialog with stakeholders will allow BP to address concerns

that may be overlooked, and it gives the stakeholders a voice to be heard. Recipients of change


are more willing to follow when they know their ideas and feelings have value and are respected

by the forces of change.

4. Give a timeline

The lack of structure contributes to the fear of the unknown. Stakeholders want to know

that their concerns are being addressed, and providing details of when those concerns will be

resolved can lessen the resistance to change. By providing milestones, and when they will be

reached provide feedback and reinforce the remaining timeline.

5. Communication

There is no better way to alleviate the fear of change than to simply communicate. There

are many forms of communication, and BP will utilize all of the channels that are available.

Communication can occur via town hall meetings, social media, publications, and most

importantly communication by action. The crux of any plan to alleviate the resistance to change

will need to center on conveying a strong message in order to maintain control of the change

process. This is the final step in this list, but it is not the final step for the change. The approach

must be that communication is an enduring and ongoing process that can always be improved.

Implementation: Lessons Learned

BP and the Deepwater Horizon Case can be linked to an organizational culture that

developed within the company. Top management’s lack of emphasis placed on safety concerns

and risk management became the norm for processes used at individual drill sites.


Organizational culture drives employee attitudes, performance, and organizational effectiveness

(Kreitner and Kinicki, 2013). Top management decisions in conducting business that were made

involving trade-offs for profit, safety, and risks resonated down throughout the organization.

BP used aspects of decentralized management with giving decision making authority for

meeting performance goals. Decentralized decision making occurred with middle and lower

level managers making important decisions (Kreitner and Kinicki, 2013). Decentralization came

about with change in upper management. Levels of management were removed to allow quicker

decision making. The change was effective in its objective to increase pace of business

decisions. However, business experts warn against extreme centralization or decentralization

(Kreitner and Kinicki, 2013). Some critical business processes and decisions should remain

under authority and responsibility of a centralized management.

Decisions and processes that were being made by management at individual drill sites fell

into that critical category. Risks and safety concerns that are involved with the oil production

industry require central oversight. Employee compensation tied to asset performance and overall

site performance also proved to be a negative for the BP organization. Performance management

is used to ensure employees’ work efforts are in-line with organization’s business goals (Noe,

Hollenbeck, Gerhart, and Wright, 2015). Performance management practice resulted in an

incentive for asset managers at individual oil well drill sites to make trade-off decisions in

regards to safety and risk.

BP’s business decisions that resulted in disasters claimed lives, caused injuries, decreased

profits, and damaged reputation. However, BP can recover in time with appropriate actions by

top management. Structure of the organization should be reevaluated to ensure a centralized


management is in place to control of processes being used at all drill sites. Performance

management can be adjusted and incentive provided for employees to utilize safe practices.

Management can redirect emphasis from production to safety and risk management. BP remains

a profitable brand. The BP organization can produce efforts to show society its commitment to

be environmentally conscious in its business processes.

Implementation-Using Kotter 8-Step Plan

By utilizing Kotter’s 8-Step Plan, BP can improve the changes needed for continued

successful operations. Below is an established timeline for BP to follow in order to implement

and maintain a successful organizational change.

1. Sense of Urgency-A huge dinner will be held and all of those who are involved either by

appointment, employment, or contract are invited to attend. At this “launch” dinner

everyone will be introduced to the new and improved British Petroleum (BP) by the

CEO. This will provide a way to demonstrate the changes that must take place to

improve the operations of BP. This will occur the 1st week: 10/02/2015

2. Building and Guiding Coalition-Through election or appointment each area listed above

will have a champion to represent changes to each area/group. This will provide a direct

link and contact to improve communications throughout the organization. This will

occur during the 2nd week: 10/09/2015

3. Form a Strategic Vision and Initiative-Champions and managers meet and discuss the

new guidelines and policies and procedures for each area or factor involved in the

organizational changes. This will allow for any questions or concerns or issues that


aren’t addressed to be discussed and solved prior to training implementation. This will

occur during the 3rd week 10/09/2015 to 10/16/2015.

4. Enlist a Volunteer Army-Champions and managers will meet and identify those

individuals wanting change and invites them to assist others in understanding and

embracing the changes to minimize resistance. This will be completed during the 4th

week by 10/16/2015 to 10/23/15.

5. Enable Actions by Removing Barriers-Champions and managers will identify areas of

concern or issues with the implementation of the change. Identify those who are resistive

and determine whether or not they are beneficial to the organization. This will be

completed during week 5 and completed by 10/30/2015.

6. Generate Short Term Wins-All involved to recognize, acknowledge, and reward those

involved in the changes and the positive effects on the organization. To begin and be

completed in the 6th week with 11/06/2015 deadline.

7. Sustain Acceleration- Champions and managers to continue meeting weekly and training

as needed to address goals and make changes to reach goals and objectives to improve

BP operations. To be completed by 11/20/2015.

8. Institute Change-All parties involved to follow new guidelines, policy and procedures to

improve the organizational goals of presenting and preserving successful operations of

BP in the future. Change completed and in place by 12/01/2015.

Step Date Action Group(s) Champion Deadline Completed/Verified

1-Sense of Urgency 10/02/2015 Change Dinner held for board, director, staff and contractors

All CEO 10/02/2015 CEO

2-Building a Guiding Coalition

10/09/2015 Champions selected by each group via

All Managers 10/09/2015 Champions/Managers/CEO


election or appointment to lead each participant area

3-Form a Strategic Vision and Initiatives

10/16/2015 Champions-Meet and Discuss Goals and Objectives for Changes to improve BP Operations

Champions 1 from each participant area

10/16/2015 Champions/Managers/CEO

4-Enlist a Volunteer Army

10/23/2015 Champions-to identify those individuals who are ready for change and train on goals and objectives

All 1 from each participant area

10/23/2015 Champions/Managers

5-Enable Actions By Removing Barriers

10/30/2015 Identify those resistance to change and address concerns and/or determine whether the individual is beneficial to organization

All 1 from each participant area

10/30/2015 Champions and other proactive participants and Managers/CEO

6-Generate Short-term Wins

11/06/2015 Recognize and reward those who are actively working on change

All All 11/06/2015 Champions/Managers/CEO

7-Sustain Acceleration 11/20/2015 Continue meeting weekly and training as needed to address goals and make changes to reach goals and objectives

Champions Champions 11/20/2015 Champions/Managers/ CEO

8-Institute Change 12/01/2015 All new guidelines, policy and procedures achieved and in place for BP

All All 12/01/2015 All Participants

Conclusion

The BP disaster of 2010 made a significant impact on the world as we knew it. This

explosion injured and killed employees and contractors as well as the oil that spilled

uncontrollably for months while the “leaders” of BP argued about what to do about it. The end

result, millions of gallons of oil spilled into our waters causing damage to the ecosystem, the

economy in regards to business and clean up, and the opinion and impression of how BP and


possibly other oil companies had no regard for the safety of the world and was more worried

about generating revenue and income, no matter what the cost of all.

After the well was finally capped and the damaging effects were able to be fully assessed

the end result was not favorable for BP. Although they made several attempts in regards to

paying fines, clean up, settling legal claims, and rebuilding the reputation those lasting effects on

the environment and business lingered on. This caused BP to continue to have decreased

revenue causing them to come close to bankruptcy and to this day they do not have the revenue

they need even though they have made continued efforts to support green initiatives their greedy

decisions in the past continue to over shadow consumer opinion and support of the company.

Through change BP has the opportunity to improve its safe production, employee

retention, leadership within itself and throughout the oil industry. This will increase its revenue

and rebuild its future to look at the long term rewards versus a short term return in regards of

revenue and sustainability against future challenges and competitors.


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