Free Essay: The Case of BP and the 2010 Deepwater Horizon Disaster

Effective leadership is established through the formulation and implementation of a strategic framework that provides proactive solutions when an organization experiences situational challenges. The situational crisis, such as the Deepwater Horizon Disaster, which occurred on the 20th of April 2010, is a perfect example to illustrate the impacts of having poor leadership within a company or an organization. The Deepwater crisis was declared a national disaster after leading to the death of 11 crews and considerable environmental and economic impacts, and financial damages to the BP company stock market exchange in London. The extent of damage caused by the severe accident was based on reaction and strategically managed approaches spearheaded by the company's leadership and management team. The lack of proper and proficient leadership that can establish proactive action against the Deepwater Horizon Disaster ruined BP company's reputation it had developed and accumulated over a long time. Effective leadership should be able to influence members and the entire human resource team by directing and guiding them on how to achieve the primary goals and objectives of an organization. The contingency theory defines effective leadership as a system that can match and adhere to current and emerging situations affecting an organization. The occurrence and extent of damage caused by the Deepwater Horizon disaster in 2010, clearly demonstrated how poor leadership correlates significantly to the nature and type of disaster occurrence within, or by the company (Goldenberg, 2010). Therefore, the purpose of this essay is to investigate the comments and responses made by Tony Hayward, the CEO of BP at the time of the Deepwater Horizon Disaster that occurred in 2010 in the Gulf of Mexico.

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BP Case Analysis and Discussion

When making a critical analysis of the BP disaster, it is evident that the leadership and crisis management team failed to establish proactive strategies to manage the crisis, which occurred in three phases. When evaluating BP's environmental policy concerning crisis prevention measures was just a greenwashing approach to diverge public attention. The CEO provided misleading information regarding the quantity of oil leaked into the well. Still, not an item of priority to BP as a result of lack of an emergency plan and leadership management was not appropriately prepared for such kind of disastrous situations and failure to come up with competent strategic measures to avoid the subsequent crisis. To make it worse, a few days before the occurrence of the Deepwater Horizon disaster, BP neglected some of the crucial warnings regarding safety measures on seas. Even after the event of the crisis, the initial response taken by BP was not sufficient enough to address and control the situation. According to the answer provided by the CEO, when being interviewed by the BBC was clumsy regarding suitable and comprehensive preventive and control strategies(Kanter,2010). The actions taken by the company was ineffective, tried blaming the third parties rather than developing concrete decision and responsibility to address the situation at hand to express their leadership effectiveness and deep concern to victims. Besides, the company aggravated its reputations by delaying to provide critical information and refusing to cooperate and coordinate with societal stakeholders such as media to real damages caused by the catastrophic situation.

Tony Hayward announced that the company management had renounced fossil fuel as an action to escalate climate emergency. The purpose of taking this action was to prevent global warming and reduce pollution. The company management also reported that they had taken the step to stop the spillage of 200,000 gallons of oil every day(Rushe,2020). The second initiative action to prevent spillage of oil into water sources was to cement and seal the leaking pipes

The response provided by Tony Hayward pointed out that there is no enough competent strategy to manage the crisis within a short period. The initial response taken by the company administration was the main reason behind the distraction of BP's reputation. The CEO took more than four days to realize that its well was leaking oil into water sources. As a leader, it is vital to remain informed and make daily observational analyses of the company's production to make sure everything is working accordingly and make any necessary adjustments needed (Leadership Central, 2019). Since Tony Hayward, the former CEO of the BP company was not able to establish how the company was operating, thus the leadership of the company remains in question as a result of a lack of well elaborate procedural measures. Besides, when the crisis, the administration, and disaster management of BP company had intentionally underestimated the level and extent of the oil spillage, which was estimated to be 1,000 barrels only, which is equivalent to 159,000 liters as daily spewing into the Mexican Gulf (Kanter,2010). The company later revised the oil estimation document and gave a new estimation claiming that oil spillage was around 5, 000 barrels equivalent to 795,000 liters (Kanter,2010). The provision of contracting information every time the BP CEO was interviewed by an investigative media group demonstrates how the leadership and management of the company were in crisis without question. When the independent scientist evaluated the amount of oil spillage, which was estimated to be around 60,000 barrels equivalent to 9540,000 liters, which ten times more than the estimated amount communicated by the BP administration, it clearly showed that the company leadership was not trustworthy and lack of credibility.

Based on BP's management response and adherence to the Deepwater Horizon Disaster, the CEO failed to mobilize its equipment and channel the necessary resources to contain the damages caused by the crisis. Regardless of BP administration's claim that they have deployed engineers to stem the oil spillage over the sea contributed to no success for five months trial. They tried several techniques to contain the situation by closing the blowout preventers outlet valves, covering the well with multiple containment safety boxes, and application of top kill technique to seal the well. Regardless of the efforts demonstrated to restore the conditions, there was still a loophole in terms of coordination and communication alongside the demonstration of social responsibility by the BP management and leadership body.

Also, Mr. Tony Hayward, being a central company spokesperson, committed a series of plunders and mistakes when briefing the public about the Deepwater Horizon crisis. He failed to express his compassion on behalf of the company towards the affected individual and parties. Instead, they took the situation lightly and underrated its severity. A good leader needs to be compassionate and considerate in every condition and should always remain as the embrace of the company keeping in mind what he or she communicates to the domain public does not contradict what is on the ground (Leadership central, 2019). As stated earlier, the leader always needs to stay alert and informed about the company's activities to safeguard the company's reputation. Leaders should not take their position as default responsibility but action and principle oriented by conducting every industrial process in respective of company guidelines and the law of the land. Besides, BP company was also associated with a critical scandal related to the crisis by being suspected of making a cover-up of the oil by trucking in the sand. Based on the BP crisis, at least four significant lessons regarding the effects of ineffective leadership can be drawn from the situation.

Lessons and Personal Views

First, stable connection and coordination between corporate social responsibility and crisis management play a critical role when an organization faces a significant dilemma. The BP case study indicates how an organization should embrace, and kind of principle framework should initiate for social and environmental responsibilities and need to contemplate their reliable for any situational crisis that occurs as a result of poor leadership strategies. Leaders always need to do things right to establish an excellent historical background of an organization by making sure the company's reputation are maintained and reinforced by reminding its administration through the formulation of outstanding and reliable policies that act guidelines. The test of good leadership is always manifested during the crisis period by the nature and type of action taken to prevent ad control of a disastrous event. According to Woods (2019), Hayward's failure to officiate required leadership skills to put the company into the right impact on how the company will be perceived in the face of the general public. It is noteworthy that BP company had tried a lot to create a legitimacy and trustworthy image before the crisis. Still, it failed to preserve it during the crisis as a result of a lack of integrity and trustworthiness of its discourse. It, therefore, validates the danger of BP's greenwashing approach and manipulative speech. It is not essential to remember that corporate social responsibility aims, among other things, other than protecting the interest of all shareholders. Therefore, crisis prevention and preparation against disaster should be considered as the primary goal and social responsibility of the BP company, which should have been executed by leadership accordingly without blaming third parties. Generally, if the BP had set up or established crisis management and prevention policy framework and implemented it subsequently during the occurrence of the Deepwater Horizon disaster. The former CEO had put social responsibility into consideration, and the extent of damage caused by accident could have been minimal by being managed and controlled at an early stage, leading to low distraction and contamination of the natural environment. Disasters are often unpredictable, and therefore, it is the primary responsibility of a company such as BP to put in place a strategic framework and display necessary actions when a crisis occurs by acting and responding to it immediately.

The second lesson drawn from the crisis relates to the need for having an initial proactive response when a disaster occurs. The company CEO and its leadership administration were neither quick nor had a consistent and precise dynamic solution. The entire administration failed to manage and establish a swift and necessary response to the crisis phase, which impacted the company negatively through remarkable integrity and reputation forfeiture. Like many organizations, the leadership management of BP company seemed to have ignored the role and remarkable implication of effective communication during the first phase of disaster management. According to Kanter (2010). more than 80% of disaster and crisis prevention and management consist of a lack of effective communication network coordination with relevant stakeholders of which much of the disaster does not lie on its reality, but mere perceptions. It demonstrates the initial response taken by BP company during the accident by not coordinating and collaborating with the media to provide exact and real information concerning the Deepwater Horizon crisis. The initial communication framework of the BP company primarily focused on legal or legislative concerns alone.