When a person thinks of BP they image a green gas station and gas pumps. But BP has over 100 years of history behind it. BP was formally known as British Petroleum and the Anglo-Persian Oil Company. It was founded in 1908 by William D’Arcy, a rich British man who invested all his savings in his quest for oil in the Middle East. At the time BP was committed to protect the environment and took necessary steps to research areas where they would likely be drilling for oil to minimize habitat disruption and protect the area.
But as competition in the area heightened, and shares of the company were sold, and mergers started to occur, their promise and commitment to their shareholders would come under question. BP’s reputation suffered because of their lack of performance, ethical problems, and their lack of innovation and sustainability. While BP has taken steps in the right direction to fix its reputation it is far from being done. This paper will show that to fix the company’s reputation they will need to enforce their new ethics policy from the top down and build shareholder trust again.
They will need to invest more in their sustainability by creating new innovative ideas, committing more money for research and current programs, as well as the creation of new policies and procedures so the mistakes of the past will not also become their future. Problem Identification Stage BP is one of the most recognizable businesses out there today with its bright green logo “BP” seen at gas stations all over the world. With over 100 years of success in the business it has grown from next to nothing in 908 when it was founded by William D’Arcy to the huge company that it is today. However in recent times the company has suffered several setbacks from unethical misconduct due to poor environmental stewardship and mismanagement. While BP has taken responsibility for its future by investing in its sustainability development, it has not done enough, and it has not fully addressed it ethical misconduct either, until these issues are addressed and solved BP’s image can not be completely restored.
Relevant Facts 1. Poor leadership or Internal Forces-management made poor decisions. Much of the leadership was lacking in ethical issues/training and did not make good decisions. 2. Reputation-suffered because of ethical misconduct, poor decisions, alleged misconduct, and mismanagement. 3. Social Responsibility-environmental concerns, unlawful and humanitarian. 4. Ethical Misconduct-lack of ethics code, sustainability, dishonesty, safety and quality issues.
Root Problem and Problem Components
While BP has made many changes to improve their image and rebuild their trust with shareholders they still face many challenges. While they have taken the necessary steps to research and put in place a new Ethics Policy, and made sure that it is read by all employees, no where does it state how they will enforce it and who will employees report suspected problems to. In addition, while they have invested in sustainability and diversified their innovations and research, they have not invested enough to show that they are truly committed.
Another contributing factor in BPs reputation decline was poor leadership. Decisions were made by top management to ignore laws and regulations regarding the safety of the environment as well as the safety of the people. Management was lacking in ethics training and issues. Generating Alternatives 1. Do nothing-the problems have been solved. 2. Leadership-Ethics evaluation, problem solving abilities, values that will extend out to all stockholders and integrity.
3.Promote sustainability by extending investment in research, cleaner energy, and in environmental programs. 4. Form Ethics policy committee to deal with training and enforcement. Evaluating Alternatives 1. Doing nothing will not make the problems go away, but will likely lead to more problems in the future. 2. Leadership-While the current leader or CEO of the company has taken the company in the right direction, it would be wise to make sure that he/she has the necessary ethical training and integrity to continue the company’s movement in that direction.
3.Promote sustainability- Investing more money in these areas would certainly help with the stockholders but it would not solve all their issues. 4. Form an Ethics Committee for enforcement of policies and overseer of employees. This would solve most of their problems; employees from top to bottom would be more ethical and have more integrity if they knew they were being watched and that policies would be enforced. Chosen Alternative The problem that stands out above the others is the lack of an Ethics Committee to enforce the Ethics code put forth by the company.
With an Ethics Committee to enforce policy everyone from the top executives on down to the last employees will know what is expected of them and what will happen to them if they do something against policy. This will strengthen the position of CEO giving the company an ethical leader who will take a stand on ethical issues with integrity, making sure that procedures for safety and health, for the environment, people, and all the stakeholders are taken into consideration.
In addition to the Ethics Committee that will enhance their reputation BP should also consider investing more money into their sustainability program extending their commitment to wind, solar, biofuels, and carbon sequestration and storage. Furthermore an extension of their distribution of Carbon Footprint Toolkits to include other countries would also enhance their reputation with stockholders.