Abstract Science Construction’s business is in planning, developing and building road projects. The major of its clients are municipalities, city governments, and other public sector entities. While the bankruptcy rates for these clients is very low, when economic downturns happen, their ability to pay in a timely fashion also suffers. This leads to businesses such as Science Construction needing to take on additional debt and to find creative methods in order to stay afloat during times of recession. Methods such as selling accounts receivables at discounted rates and taking larger lines of credit through banks and other lending institutions are some of the ways organizations can remain viable when their cash inflows have turned into a trickle. Science Construction is asking the Turkish Courts to postpone their bankruptcy proceedings for a year while they attempt to restructure. Through this, suggestions such as forcing shareholders to pay their debt to the organization, gaining credi
This paper discusses a case study about the Deepwater Horizon environmental disaster that
occurred in 2010. It will present a summary regarding the work culture and leadership that
existed at the time of the event within the British Petroleum organization, and how this directly
impacted the disaster happening. Additionally, it presents the issues that lead up to the disaster,
identifies stakeholders, and explores how radical change might be implemented within British
Petroleum if the same culture were present today.
Keywords: leadership style, radical, change
Background
British Petroleum (BP) is a multinational company based in the United Kingdom, as of
2018 the company had over seventy thousand employees, and total equity at over $101 billion
U.S. dollars. In April 2010, BP’s Macondo oil well located in the Gulf of Mexico blew out
causing the Deepwater Horizon rig to explode. The result was seventeen injured, eleven dead,
and one of the world’s worst environmental disasters that lasted over two and a half months.
Numerous attempts were made to cap the oil well, but all failed which allowed 171 million
gallons of oil to leak into the Gulf causing horrific damage to the wildlife, coastal communities,
and businesses that depended on the Gulf for their livelihoods.
Stakeholders
The stakeholders most affected by the Horizon Deepwater disaster are the injured and
dead employees, the environment, the Gulf of Mexico wildlife, coastal communities, coastal
businesses, the state of Louisiana, the state of Texas, the state of Mississippi, the state of Florida,
the fossil fuel industry, the economy, and British Petroleum employees.
Corporate Culture
Nine years later, history holds the dysfunctional leadership that was in control of BP
responsible for the weak response to the crisis. Corkindale (2010) states that then “CEO Tony
Hayward presided over an organizational culture that sanctioned extreme risk-taking, ignored
expert advice, overlooked warnings about safety issues and hid facts” (2010, para 4). This
incubated an organizational culture that was extremely flawed and influenced BP’s poor initial
response to the situation. Instead of owning their accountability, BP’s leadership chose to try and
spin to deflect blame. According to Corkindale (2010), in a crisis “leaders must recognize when a
crisis cannot be spun” (2010, para 5).
Examples of the toxic culture at BP can be found in a letter from the House Energy and
Commerce Committee to then BP CEO, Tony Hayward, that outlined findings at the time of the
disaster. (Moynihan, 2010). The findings state “the project was late and costing at least $500,000
a day in overruns; engineers were hurrying; they cut corners on the well design and safety
features and tests.”
Furthermore, according to an AP report, in an email, four days before the well exploded a
BP official wrote of an engineer’s recommendation to use 21 “centralizers”: “It will take 10
hours to install them. I do not like this.” Later that day, another official recognized the risks of
proceeding with only six centralizers but commented: “Who cares, it’s done, end of story, will
probably be fine.” (Moynihan, 2010, para 4). These findings speak volumes towards the
company’s attitude regarding change, if it cost time and money, they did not care for it. Another
issue is that in the late 1990s the asset federation model was put into practice and this allowed
each site manager (rig manager) to manage their “asset” autonomously. This also allowed each
manager to be compensated based on its performance (Ingersoll, Locke, & Reavis, 2012). This
created a culture where there was no incentive to share information among managers regarding
any risk management best practices. (Ingersoll, Locke, & Reavis, 2012).
The leadership style that would have benefitted instilling radical change within BP at this
time would have been a CEO that recognized versatility as a requirement in leading change.
Someone who was aware that acquiring information, strategizing, and sharing information were
the keys to planning out a pathway for ethical and functional work culture.
Pathway from Fossil Fuels to Renewables
Radical change calls for five distinct stages and according to Ingersoll, Locke, & Reavis
(2012), they are planning, enabling, launching, catalyzing, and maintaining. Additionally, each
stage has its focus and a leadership style that works best with it. These characteristics are detailed
in the table below.
Table 1
Radical change stages
Note. Adapted from “BP and the Deepwater Horizon Disaster of 2010“, Ingersoll, Locke, &
Reavis (2012).
Assuming that the organizational culture at BP is still dysfunctional, implementing
radical change would require a reset from the top down with respect to culture. Having the
company move from fossil fuels to renewable energies would entail a planning phase to acquire
information on climate change and how the use of fossil fuels plays into it. It would mean
looking at how the employee structure at BP would be affected; possible job losses versus gains.
Gathering information on the possible economic gains from any switch.
In the enabling phase any initial plans that were developed during the planning phase
would be shared with employees. Requests for feedback on the plans would be sought out, with
the key of involving employees at the grassroots level. The launch would entail beginning the
steps of any transitions, ensuring that all are participating, having a regular check in and progress
process to see where all are at in the change. In the catalyzing phase the focus would be on the
people affected by the change. For example, are there opportunities being offered in the plan for
retraining into occupations for the renewable energy markets that BP would be going into? If so,
are employees being supported and encouraged to take the training?
In the maintaining phase, the focus would still be mostly on the people involved.
Ensuring that there is an “ongoing emphasis on input and involvement” (Ingersoll, Locke, &
Reavis, 2012, p. 12). At this stage of the process, progress is also still being gauged in a longterm
sense. Change maintenance is just that, maintaining a momentum over a long period of time
and keeping the people engaged with it.
References
Corkindale, G. (2010, June 28). Five Leadership Lessons from the BP Oil Spill.
Retrieved from https://hbr.org/2010/06/five-lessons-in-leadership-fro.
Ingersoll, C., Locke, R., & Reavis, C. (2012). BP and the Deepwater Horizon Disaster of
2010. Cambridge, MA. This work is licensed under the Creative Commons Attribution-
Noncommercial-No Derivative Works 3.0 Unported License. Retrieved from:
https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20Horizon
%20Locke.Review.pdf.
Moynihan, C. (2010, June 18). MercatorNet: Management attitudes behind the
Deepwater Horizon disaster suggest another problem the company needs to address. Retrieved
from https://www.mercatornet.com/articles/view/bps_creaky_ethical_machinery/.
occurred in 2010. It will present a summary regarding the work culture and leadership that
existed at the time of the event within the British Petroleum organization, and how this directly
impacted the disaster happening. Additionally, it presents the issues that lead up to the disaster,
identifies stakeholders, and explores how radical change might be implemented within British
Petroleum if the same culture were present today.
Keywords: leadership style, radical, change
Background
British Petroleum (BP) is a multinational company based in the United Kingdom, as of
2018 the company had over seventy thousand employees, and total equity at over $101 billion
U.S. dollars. In April 2010, BP’s Macondo oil well located in the Gulf of Mexico blew out
causing the Deepwater Horizon rig to explode. The result was seventeen injured, eleven dead,
and one of the world’s worst environmental disasters that lasted over two and a half months.
Numerous attempts were made to cap the oil well, but all failed which allowed 171 million
gallons of oil to leak into the Gulf causing horrific damage to the wildlife, coastal communities,
and businesses that depended on the Gulf for their livelihoods.
Stakeholders
The stakeholders most affected by the Horizon Deepwater disaster are the injured and
dead employees, the environment, the Gulf of Mexico wildlife, coastal communities, coastal
businesses, the state of Louisiana, the state of Texas, the state of Mississippi, the state of Florida,
the fossil fuel industry, the economy, and British Petroleum employees.
Corporate Culture
Nine years later, history holds the dysfunctional leadership that was in control of BP
responsible for the weak response to the crisis. Corkindale (2010) states that then “CEO Tony
Hayward presided over an organizational culture that sanctioned extreme risk-taking, ignored
expert advice, overlooked warnings about safety issues and hid facts” (2010, para 4). This
incubated an organizational culture that was extremely flawed and influenced BP’s poor initial
response to the situation. Instead of owning their accountability, BP’s leadership chose to try and
spin to deflect blame. According to Corkindale (2010), in a crisis “leaders must recognize when a
crisis cannot be spun” (2010, para 5).
Examples of the toxic culture at BP can be found in a letter from the House Energy and
Commerce Committee to then BP CEO, Tony Hayward, that outlined findings at the time of the
disaster. (Moynihan, 2010). The findings state “the project was late and costing at least $500,000
a day in overruns; engineers were hurrying; they cut corners on the well design and safety
features and tests.”
Furthermore, according to an AP report, in an email, four days before the well exploded a
BP official wrote of an engineer’s recommendation to use 21 “centralizers”: “It will take 10
hours to install them. I do not like this.” Later that day, another official recognized the risks of
proceeding with only six centralizers but commented: “Who cares, it’s done, end of story, will
probably be fine.” (Moynihan, 2010, para 4). These findings speak volumes towards the
company’s attitude regarding change, if it cost time and money, they did not care for it. Another
issue is that in the late 1990s the asset federation model was put into practice and this allowed
each site manager (rig manager) to manage their “asset” autonomously. This also allowed each
manager to be compensated based on its performance (Ingersoll, Locke, & Reavis, 2012). This
created a culture where there was no incentive to share information among managers regarding
any risk management best practices. (Ingersoll, Locke, & Reavis, 2012).
The leadership style that would have benefitted instilling radical change within BP at this
time would have been a CEO that recognized versatility as a requirement in leading change.
Someone who was aware that acquiring information, strategizing, and sharing information were
the keys to planning out a pathway for ethical and functional work culture.
Pathway from Fossil Fuels to Renewables
Radical change calls for five distinct stages and according to Ingersoll, Locke, & Reavis
(2012), they are planning, enabling, launching, catalyzing, and maintaining. Additionally, each
stage has its focus and a leadership style that works best with it. These characteristics are detailed
in the table below.
Table 1
Radical change stages
Note. Adapted from “BP and the Deepwater Horizon Disaster of 2010“, Ingersoll, Locke, &
Reavis (2012).
Assuming that the organizational culture at BP is still dysfunctional, implementing
radical change would require a reset from the top down with respect to culture. Having the
company move from fossil fuels to renewable energies would entail a planning phase to acquire
information on climate change and how the use of fossil fuels plays into it. It would mean
looking at how the employee structure at BP would be affected; possible job losses versus gains.
Gathering information on the possible economic gains from any switch.
In the enabling phase any initial plans that were developed during the planning phase
would be shared with employees. Requests for feedback on the plans would be sought out, with
the key of involving employees at the grassroots level. The launch would entail beginning the
steps of any transitions, ensuring that all are participating, having a regular check in and progress
process to see where all are at in the change. In the catalyzing phase the focus would be on the
people affected by the change. For example, are there opportunities being offered in the plan for
retraining into occupations for the renewable energy markets that BP would be going into? If so,
are employees being supported and encouraged to take the training?
In the maintaining phase, the focus would still be mostly on the people involved.
Ensuring that there is an “ongoing emphasis on input and involvement” (Ingersoll, Locke, &
Reavis, 2012, p. 12). At this stage of the process, progress is also still being gauged in a longterm
sense. Change maintenance is just that, maintaining a momentum over a long period of time
and keeping the people engaged with it.
References
Corkindale, G. (2010, June 28). Five Leadership Lessons from the BP Oil Spill.
Retrieved from https://hbr.org/2010/06/five-lessons-in-leadership-fro.
Ingersoll, C., Locke, R., & Reavis, C. (2012). BP and the Deepwater Horizon Disaster of
2010. Cambridge, MA. This work is licensed under the Creative Commons Attribution-
Noncommercial-No Derivative Works 3.0 Unported License. Retrieved from:
https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20Horizon
%20Locke.Review.pdf.
Moynihan, C. (2010, June 18). MercatorNet: Management attitudes behind the
Deepwater Horizon disaster suggest another problem the company needs to address. Retrieved
from https://www.mercatornet.com/articles/view/bps_creaky_ethical_machinery/.
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