Write an essay on Deepwater Horizon.
On the 20th of April 2010, an explosion and a huge fire were declared in the oil rig
Deepwater Horizon. This accident was considered as the largest maritime disaster oil spill in the US history because, aside from the death of eleven crews, its economic and environmental impacts were considerable.
Furthermore, the BP financial damages caused by this accident were particularly considerable. In the London Stock Exchange, the company shares loosed on June 25, 2010 nearly 7% and fell to its lowest level since 14 years, while 50% of the its market capitalization was lost on early July 2010.
The company’s reputation has also dramatically collapsed particularly in the U.S.A. Before the completion of sealing of the oil well, as the spill has progressed without a resolution, BP was awarded the grade the lowest grade E, in the Covalence multinationals reputation ranking. The PRWeek/OnePoll’s survey conducted about one month after the accident showed that the public feels that BP has not done enough to stop the leak. One year after the Deepwater Horizon oil spill, the ―l2th Annual Harris Interactive U.S. Reputation Quotient (RQ) Survey‖ revealed that BP was second from last with a score of 49.82 and that BP was still perceived by Americans as one of the companies with the worst corporate reputation (Harris Interactive,
2011).
BP was also facing, by mid-June 2010, remarkable calls for boycott of its products by a Facebook group called ―Boycott BP‖ and numbering about 640,000 fans. Also, a fake BP Twitter account calledwas made by an anonymous activist and started sending out messages about the Gulf oil spill to Twitter. By the end of May 2010,
had 190,035 followers while the BP account had only 18,
826 followers. At last, BP was facing thousands claims and lawsuits from many actors such as fishers, hotels, restaurants as well as NGOs like the Animal Welfare Institute (AWI) and other animal protection and conservation organizations.
To deal with the spill oil as well as the reputation and financial losses, BP mobilized substantial means and expended a great deal of effort, but crisis experts’ opinions differed on whether BP has successfully or unsuccessfully managed this crisis. However, many models and theories associated with crisis management can be used as a sound theoretical framework to assess BP crisis management of the Deepwater Horizon disaster.
Referring to the three-phase model, the most widely used model in the crisis management field, the purpose of this paper is to examine how BP managed the Deepwater Horizon spill oil. Such an investigation will help us to evaluate BP crisis management of this disaster, but will also give an empirical evidence to some ideas and propositions suggested by many crisis management researchers, not yet empirically validated or validated only through laboratory experiments.
Method
To assess how BP managed the Deepwater Horizon disaster, secondary data have been collected from various trustworthy sources, mainly newspapers, magazines, crisis experts’ blogs and BP sustainability annual reports.
The collected data was analyzed through Content Analysis by means of a grid drawn from our theoretical framework. The grid was compartmentalized mainly into three categories. The first one relates to the pre-crisis phase and was divided into three sub-categories named BP CSR and crisis history, BP crisis prevention and BP preparation to the crisis. The second category relates to the response and reputation repair and behavioral intentions. The third category relates to the post-crisis phase and lists all actions made by BP after the complete killing of the well.
Results
The results of our case study will take the form of a record of all actions made by BP before, during and after the disaster.
3.1 BP Management of the Pre-Crisis Phase
3.1.1 The BP CSR and Crisis History
Prior to the disaster, the social and environmental image of BP was paradoxical. The
company was sometimes perceived as an environmentally committed company and
sometimes as a polluting and irresponsible company. For several years, the group has specifically tried to differentiate itself from its competitors by displaying a greater environmental awareness. From 2000, the group adopted a new name (Beyond Petroleum instead of British Petroleum) and adopted a new green-white-and-yellow sunburst logo,
spending more than$ 200 million in an extensive advertising and public relations campaign.
Thanks to this, the BP brand awareness jumped from 4 % to 67 % between 2000 and 2007, the company image was considered as the most environmentally friendly image in
comparison with companies operating in the oil sector (according to a 2007 customer survey), has been praised many times a model of proactive and credible corporate social responsibility and its advertising and public relations campaign won the Gold Award from the American Marketing Association.
BP has also positioned its self as a company fighting the climate change by promoting the renewable energy activities (including biofuels, hydrogen, solar and wind power), and was ranked as the leader in a 2006 report analyzing the Climate Change Strategies of the top 100 global companies published by the Coalition for Environmentally Responsible Economies (CERES). BP was also among pioneer companies that begun to publish an annual sustainability and social responsibility report.
The BP CSR history has also a dark side. Indeed, the group was familiar with disasters and scandals and has a long history of safety negligence particularly in the United States (De Wolf and Mejri, 2013).
The Deepwater Horizon was not in fact the unique BP accident. The first known accident happened in December 1965 and caused the death of thirteen crew when the BP oil rig Sea Gem collapsed while it was being moved. On March 23, 2005, fifteen workers have been killed and more than 170 others have been injured when the BP’s refinery exploded and caught fire in Texas City. The company was subject to lawsuits from the victims’ families and
was charged with criminal violations of federal environmental laws. One year later, an oil spill in Alaska caused extensive pipeline corrosion. The company also paid about $ 20 million as environmental fines.
Furthermore, BP was many times cited as the worst or among the worst companies operating in USA because of some environmental and/or social impacts of its activities. BP was cited in
1991 by the Environmental Protection Agency (EPA) as the most polluting company in the US based on its toxic release data. It was also considered by CorpWatch as one of the ten worst corporations of 2000 (Mokhiber and Weissman, 2001). Mother Jones Magazine, an investigative journal, named BP as one of the ten worst corporations in both 2001 and 2005 based on its environmental and human rights records. In 2004, The Texas Public Interest Research Group reported that the company was number one in accidents in USA since 3,565 accidents occurred in its U.S. chemical plants and refineries between the period 1990 and
2004, making. Elder (2005) said that BP’s operations have the worst safety records of any oil company operating in USA.
BP is also considered as one of the biggest spenders on lobbying among companies of the oil and gas industry. Also, BP was suspected to spent about $625 million between 2004 and 2010 just to represent its interests in Washington and nearly $16 million in 2009 to lobby to block attempts to regulate stricter safety by the US Congress.
3.1.2 Crisis Prevention
Succession of BP accidents demonstrates that the group was never concerned with prevention and safety. Almost all the investigations reports following the BP disasters revealed that the company had almost no prevention system and neglected security/safety warnings.
After the 2005 explosion at the BP’s Texas City refinery, the Occupational Safety and Health Administration fined BP a record of $87 million for neglecting to correct safety violations. Only a year later, BP was fined $20 million in criminal penalties after prosecutors said the company had neglected corroding pipelines that caused the Alaskan BP oil spill.
The Congressional Investigations on energy and commerce following the Deepwater horizon Spill revealed that BP had no contingency plans for catastrophic loss of well control and that BP lacked planning, oversight, testing and maintenance of blowout preventer which failure allowed a large volume of gas to overwhelm the rig and caused the explosion. The preliminary BPs internal investigations realized one month after the Gulf oil spill also revealed that several warning signs of trouble were ignored and pointed to a series of equipment failures.
In addition, some experts and journalists claimed that BP made a series of money-saving shortcuts in days before the accident, which dramatically increased the danger of a blowout and that, worse still, the company neglected security standards on continuing to drill in spite of warnings of gas leak.
It should be particularly noted that, while BP is considered and awarded as an environmental responsible company, the French social rating agency Vigeo reviewed, before the accident, the BP rating. The company was considered as the worst energy company in terms of preventing and controlling of pollution accident risks. On the basis of this criterion, Vigeo scored BP before the accident 26/100 (below the industry average which is equal to 31/100), while the leader Repsol collected a score of 61/100 (Ben Seddik, 2010).
At last, crisis management experts said that failures of BP prevention and control system was expected because of the budget cuts since the year 2009 (particularly the alternative energy budget) imposed by the former BP CEO, who also shut down BP alternative energy headquarters in London and accepted the resignation of its clean energy boss.
3.1.3 Preparation to the Crisis
It is clear that BP was not prepared to deal with such an accident. Besides, Former BP CEO Tony Hayward admitted in his interview to Money Program on BBC 2 that BP’s contingency plans were inadequate‖, that BP was not prepared‖ for the Gulf oil disaster and was making it up day to day‖ in the early stages. Tony Hayward also admitted that BP was not prepared to deal with the intense media scrutiny over the Gulf oil disaster‖ and that he felt he was demonized and vilified‖. Nearly one month after the disaster, the Wall Street Journal reported that Hayward admitted that the oil giant had not the technology available to stop the leak. He also said in hindsight, it was probably true that BP should have done more to prepare for such an emergency‖.
In addition, the investigations conducted by Congressional committee on energy and commerce concluded that BP was not prepared for a catastrophic loss of well control.
Nevertheless, BP has successfully established strong relations with some NGOs thanks to its considerable donations that reached prior the crisis nearly $10 million in cash over the years. For example, the BP donations to the Conservation International which reached $2 million over the years allowing to the company to be BP partner on a number of projects. Also, the Nature Conservancy listed BP as one of its business partners and even gave it a seat on its International Leadership Council but unfortunately after the Deepwater Horizon disaster, some of its members begun to questioning about this partnership and called to review it.
3.2 BP Management of the Response Phase
After the Deepwater Horizon blowout, BP has mobilized equipment and resources and has made significant efforts to stem the oil spill and to completely kill the well.
During five months, BP engineers tried a number of techniques to slow or to stop the oil leaking but all these attempts failed. BP engineers firstly attempted to close the blowout preventer valves on April 28. On May 8, they tried to cover the well with a containment box, and they tried the Top Kill technique on May 26 to close the well. They successfully stopped the flow of oil on July 15, and completely killed the well on September 19, 2010.
However, while the BP engineers were fighting for plugging the leaking well, BP managers continued fighting for repairing the company reputation and the public perception that BP is not enough competent to manage this crisis. As recommended by Coombs (2007b), we separated this response phase into two phases: the initial response and the reputation repair and behavioral intentions.
BP entirely failed to manage the initial response of the disaster and committed many flagrant mistakes. First, BP was accused of being slow to acknowledge the problem initially and of did not respond quickly enough. The company took four days to realize that the well itself was leaking. The company was also slow to express concern, compassion and full apology to victims which are most immediately affected by the spill.
Second, when the accident occurs, BP has intentionally underestimated the extent of the spill. The company estimated that only 1,000 barrels (159 000 litres) were actually daily spewing into the Gulf, but quickly revised it upward to 5,000 barrels (795 000 litres). Actually, by the end of June, some scientists evaluated the daily oil leak at 60.000 barrels (9540000 litres).
Third, the BP former CEO Tony Hayward — as the company spokesman, made a series of mistakes while communicating about the crisis. Indeed, instead of expressing its compassion towards the victims, the former CEO initially took to lightly and even minimized its severity considering that its environmental impact would likely be very modest and that it is relatively tiny in comparison with the big size of the ocean. As a consequence, Tony Hayward has become the most hated man in the United States and was replaced by Bob Dudley on October 2010.
Fourth, BP tried (by all the means) to limit or delay the flow of information to the public. The access to planes carrying media were refused and sometimes forbidden to many media reporters and the few reporters that were allowed to access, were accompanied by a BP representative. The company also included in workers contracts a clause prohibiting them and their deckhands from making news releases, marketing presentation or any other public statement.
Fifth, BP was suspected of covering up the oil by trucking in sand. The company denied the events and argued that at no time has clean sand been used to cover or bury oil or oiled sand and storms that have passed through the area have deposited sand on the beach and eroded it again exposing oil buried by sediments brought in by the weather.
Nevertheless, it is noteworthy that BP successfully used its official website (BP.com), to regularly provide information to the public about the clean-up efforts of the oil spill as well as the efforts to compensate victims of the disaster.
3.2.2 Reputation Repair and Behavioral Intentions
In this phase, a company have normally to repair the reputation, to reduce negative affect and to prevent negative behavioral intentions.
To repair reputation damages, BP launched immediately after the accident, a vast public relations campaign. BP began running apologetic BP ads in early June, showing Hayward apologizing for the disaster and taking full responsibility for cleaning up the spill in the Gulf. The company also launched a print ads campaign in US newspapers like The New York Times, the Wall Street Journal, USA Today and The Washington Post. This ads campaign was widely criticized by many stakeholders and even by the President Barack OBAMA, who considered that the money should have been spent on clean-up efforts and on compensating victims.
BP was also very present in the major social networks (Facebook, Twitter, YouTube and Flicker) and spent nearly $l Million a month between Google AdWords and YouTube advertising and purchase a number of search terms in order to direct internet users’ search queries about the Gulf oil spill to the BP site where clean-up efforts are exposed.
In order to reassure its primary stakeholders that it consider of high priority (shareholders, investors as well as other partners particularly in Russia and Azerbaijan), BPs former CEO flew to Mideast early July as the BP stock hit its lowest point since the mid-1990s and after the BP decision of selling assets. During these visits, the BPs former CEO held talks with sovereign wealth funds in Abu Dhabi, Kuwait and Qatar, as well as in Singapore, in order to find a partner who might help BP to avoid the threat of a hostile takeover offer from its closest competitors. As expected, these visits reassured many BP and generated some enthusiasm in the market for BP shares.
To remedy the loss of reputation due to the BP spokesperson failures, the company announced on July 27, that it would change its CEO Tony Hayward in October 2010, by the American CEO Robert Dudley. According to some experts, such a decision would certainly please a lot of Americans and contribute to repair the BP image.
Following a meeting with the President Barack OBAMA, BP announced that an agreement was reached to create a $20 billion claims fund over the next three and a half years on the following basis: BP will initially make payments of $3 billion in Q3 of 2010 and $2 billion in Q4 of 2010. These will be followed by a payment of $1.25 billion per quarter until a total of
$20 billion has been paid in (BP, 2010 b). In addition, BP announced on August 17, that it would provide $52 million to federal and state health organizations to fund behavioral health support and outreach programs across the US Gulf Coast region.
At last, BP tricked many photos (through photoshop tools) and posted them on its Web site as news photos from the Gulf oil spill response effort. A few days later, being widely denounced and criticized by communication experts as well as the public opinion, BP officially acknowledged the facts and promised to stop this practice.
3.3 BP Management of the Post-Crisis Phase
In the Deepwater Horizon case, the post-crisis phase began once the well was completely killed on September 19, 2010. However, due to the considerable damages caused by the accident, this recovery phase is expected to continue for several years. Ever since, many decisions and actions were made.
To cover the costs, BP decided to divest assets with a total value of $ 38 billion between 2010 and the end of 2013. Until the end of March 2012, BP had sold $ 23 billion of assets. Since early July 2010, BP has sold $7 billion assets (in the Permian Basin, Canada and Egypt) to the firm Apache. In 2011, BP sold its Wytch Farm terminal fields to Perenco for $ 610 million. On March 2012, BP agreed to sell for $ 400 million to oil and gas company Perenco a number of platforms off the coast of Yorkshire and a terminal at Dimlington.
A few days before killing the well, BP published its own investigations report into the incident. BP claimed that its engineers, contractor Halliburton and rig operator Transocean share the blame for the complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces that caused the accident. Its former CEO said that there was a lack of rigor and quality of oversight of contractors‖, that a series of complex events, rather than a single mistake or failure‖ led to the accident and that it would be surprising if the industry does not look afresh at the relationship with contractors‖. This BP internal report was widely criticized by experts who considered that it does nothing more than spread the blame, as well as by BP partners Transocean and Halliburton. Transocean responded by describing the report as self-serving while Halliburton said that the BP report contained substantial errors.
On the other hand, BP has successfully convinced its three other partners on the well (Anadarko, Mitsui and Co. Ltd. and Weatherford International Ltd.) to settle its claims related to the Deepwater Horizon disaster. Anadarko agreed to pay BP $4 billion (less than the $6.1 billion that BP had claimed), Mitsui agreed to pay $1.06 billion (less than the $2.14 billion that BP had billed it for its alleged share of clean-up costs) and Weatherford International Ltd. announced that it would provide $75 million to BP to contribute to the Gulf Coast recovery fund.
BP also launched lawsuit against Halliburton, Transocean and Cameron and is seeking at least $40 billion from them. BP considers that maintenance by Transocean was inadequate as was their safety and training protocols, that Halliburton was responsible for cementing or sealing off the well and that Cameron International Corp was responsible for designing and maintaining the blow-out preventer which failed to contain the oil spill.
Nearly one year after the accident, BP published its first sustainability report after the disaster. At the beginning, in the CEO letter, the Chairman Bob Dudley acknowledged that the company was sorry for what happened, promised improvements and stated that safety has become their number one priority. Besides, the chairman used nine times the word safe which demonstrates the importance of the issue safety for the new BP.
the report does not say how the disaster happened and how much damage was actually done to the environment, the economy and the people. It mainly described how BP is changing. The company said it is forming a Safety and Operational Risk function that has its own expert staff embedded in BP’s operating units (including exploration projects and refineries) report directly to the company’s incoming chief executive officer and that has authority to intervene in all aspects of BP’s technical activities.
As for the other changes, the company stated that it has reviewed its Risk management system, has reorganized its upstream business into three divisions — exploration, developments and production — with a centralization of the drilling wells activity into a single organization, has connected the individual values/behaviors and the BP code of conduct, has aligned employee performance and reward with the performance management system, has reviewed how it works with contractors and other industry partners, has repositioned the technology to meet the 2lst-century energy demand safely and responsibly and has lastly initiated a review into its approach to the management of relationships with significant non-operated joint venture operators and partners (BP, 2010 a).
This first post-Deepwater Horizon CSR report was considered by many experts as a purely greenwashing and was then widely criticized. In fact, BP said it couldn’t include the Gulf spill, because there has been no accurate determination of its size and refused to list any figures from the accident. The company argued that no accurate determination can be made or reported until further information is collected and the analysis, such as the condition of the blowout preventer, is completed and that we have not included any emissions from the Deepwater Horizon incident and the response effort due to our reluctance to report data that have such a high degree of uncertainty‖. In addition, the report showed that 2010 had the lowest spillage by comparing BP’s oil spill levels for 2006, 2008, and 2010 (1.7 million
litters in 2010, as opposed to 2.2 and 3.4 million in the earlier years).
As for supporting the communities affected by the disaster, BP accepted to settle lawsuits (for
$7.8 billion) brought against the company by businesses and individuals and to pay about to them. The estimated compensation includes provisions for $2.3 billion to bolster the region’s seafood industry and $105 million to improve available health care in the impacted communities. BP also agreed to provide periodic medical consultations for the next 21 years for those with spill-related health complaints. Experts recalled that Exxon Mobil agreed to pay damages to settle the Alaska spill oil twenty years later and considered that this agreement is for BP a significant step to support the affected communities and to repair its reputation damages.
Most recently, BP began through workshops with its influential stakeholders around the world (in London, Washington DC, New Orleans and Rio de Janeiro), to initiate a dialogue to find out what they expect from BP’s sustainability reporting. More than 40 stakeholders (including representatives of non-governmental organizations and community groups as well as academics, policymakers and investors) took part in these workshops which aimed to give BP a clear brief about what stakeholders want to know about its culture, plans, policies,
processes and performance. The company already included a summary of the workshops findings in its 2011 sustainability report.
Lastly, BP has used a specialist market intelligence search engine to identify trends in public and stakeholder opinion about BP and to evaluate their potential to affect the company’s reputation. A meta-analysis was also provided of all the recent stakeholder research and dialogue BP had carried out or commissioned.
Discussion
The analysis of BP crisis management of the Deepwater Horizon disaster shows mainly that there are many failures at managing the three phases of a crisis.
Through the analysis of BP environmental strategy before the crisis occurs, it turned out that it was just a Greenwashing, that safety was not a priority to BP, to the point that it has never envisaged an emergency plan, was not sufficiently prepared to such a catastrophic situation and did not make enough efforts to avoid crises. Worse still, only few days before the accident, BP neglected serious warnings and even cut corners on Deepwater Horizon safety.
When the crisis occurred, the BP initial response totally failed. The company was too slow, tried to blame third parties and abdicated responsibility while it would express concern for the victims and take its responsibility and reassure all the stakeholders. BP even aggravated its reputation damages when it censured or delayed the information flow and refused to cooperate with the media.
Even after the crisis, BP continues to conceal important information about the real damages of the spill oil, disseminated only information that can contribute to repair its reputation and continues to blame its partners. Besides, through the succession of accidents and scandals, it seems that BP has never believed that it could learn from such crisis.
In the light of this case study, at least four lessons can be learnt. The first lesson refers to the strong connection between CSR and crisis management. This BP case study is in fact a strong reminder that companies should nowadays sincerely embrace the principles of social and environmental responsibility and have to consider themselves responsible for more than bottom-line results. Crisis management literature showed that in time of crisis, CSR acted as a company insurance policy (Klein and Dawar, 2004) and that the company’s history has an instrumental effect on how it will be perceived when a crisis occurs (Maresh and Williams,2010). It is noteworthy that prior to the crisis, BP had tried to build up an image of legitimacy and trustworthiness, but this does not help it during the disaster. This is due mainly to the lack of credibility of its discourse. This consequently demonstrates the dangers of the greenwashing strategy and the propagandist discourse. Carrying a continuous speech of socially responsible company increases, apparently, stakeholders’ expectations in times of crisis, and this in turn generates more pressures on it.
In addition, it must be kept in mind that CSR aims, among other things, to protect the interests of all the stakeholders. Preventing and being prepared for a crisis should then be viewed as part of the company social responsibility.
If BP had set up a prevention and crisis management system and if BP and its former CEO were well prepared to manage such event, this crisis could have been avoided or would have been resolved sooner or at least damages would have been greatly reduced. Crises are in fact, often unpredictable, so it is important to establish a crisis prevention system to reduce the likelihood of, and anticipate the occurrence of a risk and acts as quickly and as efficiently as possible in case of occurrence of a crisis.
The second lesson relates to the importance of initial response when a crisis occurs.
In this phase, BP was neither quick, nor accurate and consistent. BP failed then to manage the initial response phase which caused to the company a remarkable reputation loss.
As many companies, BP seems to ignore that communication during the first hours of a crisis can have remarkable implications for the image of a company and a brand (Dawar and Pillutla, 2000), that almost 80% of a crisis management consists of communication and that much of a crisis lies not in its reality, but in its perception.
This case study, demonstrates that initial actions made by a company in times of crisis, significantly influence public opinion about the crisis and an organization’s handling of the event (Hale et al, 2005)
More notably, as predicted by Ulman (2001), BP initial crisis communication was largely focused on legal concerns and resulted in denials of responsibility, minimization of the extent of damages and lack of useful information to stakeholders. Referring to Coombs (2007b), in the initial response phase, BP should have provided information and should have taken actions that might help affected people to cope psychologically and physically with the crisis. For BP it was better to take its responsibility, to reassure victims and specifically to begin by expressing concern for the victims of the crisis which could reduce the negativity effect of the crisis.
BP also ignored that when a crisis occurs, crisis leaders, specifically spokesperson have a central role in building and sustaining organization’s trust and credibility among stakeholders (Schoenberg, 2005) and that in times of crisis, leaders and therefore spokesperson must be able to communicate with all stakeholders and should be exceptional communicators (Seijts, 2004). Because of being not prepared to a crisis, former BP CEO has significantly contributed to BP loss of reputation with his arrogance, negligence and famous statements.
This case study provides then empirical evidence on the importance of the initial actions in times of crisis as a significant factor influencing the public opinion about the crisis and an organization’s handling of the event (Hale et al., 2005).
he third lesson refers to the relationship between the company and its stakeholders. This case study is in fact a strong reminder that a company should no longer operate independently of their stakeholders. It has rather to interact and to build strong relationship with them, not only during and after a crisis, but also prior to a crisis.
Prior to crisis, the company can benefit from its interaction with its stakeholders by implementing standards of corporate responsibility that meet their expectations (Heath, 1997), by understanding how stakeholders might react to a crisis, what resources and information they might have available to assist in the management of a crisis, how they might be impacted by the crisis, and how they might exert a negative impact on the organization’s ability to manage the crisis (Mitroff et al., 1996). In addition, companies that build alliances and achieve coordination with their stakeholders prior to a crisis will experience greater success outcomes and less failure outcomes in crisis management than will those
organizations lacking such alliances (Pearson and Clair, 1998).
Even, if the interaction with stakeholders cannot help an organization avert every crisis, it can at least play an important role in how the organization resolves a crisis (Ulmer, 2001). Otherwise, if a company doesn’t have strong relationship with its stakeholders, they may withdraw their support during a crisis, prolong the effects of a crisis and even intensify the threat associated with the event (Ulmer and Sellnow, 2000).
In addition, Stakeholders want to feel informed, safe and connected when a crisis occurs (Seijts, 2004). So, open, timely and trustworthy reporting, as well as regular dialog and communication with all stakeholders should be maintained in times of crisis. The company should also be honest about what it knows and does not know, which would give it far more credibility. Specifically, the company must not ignore the central role of media during the crisis, because the majority of the information stakeholders collect about organizations is mainly derived from the news media; therefore, media coverage is an important feature of reputation management (Carrol and McCombs, 2003). Seeger (2006: 240) said that rather than viewing the media as a liability in a crisis situation, risk and crisis communicators should engage the media, through open and honest communication, and use the media as a strategic resource to aid in managing the crisis‖. Lastly, after a crisis, a company should collect information from a wide range of stakeholders including external stakeholders and has to continue to work in close dialog with them in order to reduce feeling of anger and blame, to reassure them, to understand how they perceive and feel about it after the crisis and to involve them in effort to repair reputation damages (Coombs, 2010).
The fourth and last lesson is that company should learn from a crisis. The succession of BP
accidents demonstrate that nothing has been learned from its previous accidents. From the
beginning of the crisis and until today, BP often gets defensive position and denies its whole responsibility.
Ideally, companies should consider the end of every crisis as the beginning of the preparation step for the next one (Jaques, 2007). Recovery is not just getting back to work, but it is asking, what we have learned to prevent this happening again and what could we have done differently. Surely, crisis inevitably creates severe harm, but it also has the potential to serve as a renewing force for the organization (Seeger et al., 2005). Companies which can survive after disasters are more prepared for future challenges (Penrose, 2000). Unfortunately, this is often not the case.
At last, companies would not learn only from their own experiences, they must consider the critical events and experiences of other companies and try to learn from them (Baum and Dahlin, 2007). Besides, the BP disaster has served as a lesson to its closest competitors. Four of the world’s largest oil companies (Exxon Mobil, Chevron, Shell and ConocoPhillips) agreed to form a $1 Billion joint venture, called the Marine Well Containment Company, to create a rapid-response system to capture and contain oil spills in the deep waters of the Gulf of Mexico. The created new company aims to develop response plan and technology that will be able to act into 24 hours and to capture and contain up to 100,000 barrels of oil from deep-water rigs in the case of an accident.
Conclusion
This paper aims mainly to examine how BP managed the Deepwater Horizon spill oil, the worst environmental disaster the US has faced. It reveals that because of many failures as well as its negative history, BP was fighting two crises at the same time, the big spill oil and the deep loss of its reputation.
In spite of being purely exploratory, this case study has allowed to give some empirical evidence to some propositions – as yet theoretical, and to highlight lessons learned from the management of the disaster. It mainly reminds; first that CSR and crisis management are connected concepts. Second, that in time of crisis, the initial response has major repercussions on company image and reputation. Third, that company should consider stakeholders as effective partners when managing a crisis, and fourth that crisis has the potential to serve as a renewing force for the organization. The organization should then learn from crisis to prevent next crises and to be prepared for them.
As for the research perspectives, it is strongly recommended to deepen the examination of the effects of reputations repair strategies on the company reputation depending on a crisis type, because it can effectively help crisis managers to prevent, to prepare for and to deal with crisis.
At last, it should be noted that this case study is one of the few researches whose results are not derived from a laboratory experimental research. Nevertheless, adopting a qualitative approach using only secondary data and giving our own interpretations to some events, does not allow to draw generalizations from the results of this study. Besides, that has never been the intention.
References
Baum, J. A., & Dahlin, K. B. (2007). Aspiration performance and railroads’ patterns of learning from train wrecks and crashes. Organization Science, 18(3), 368-385.
B Carroll, C. E., & McCombs, M. (2003). Agenda-setting effects of business news on the public’s images and opinions about major corporations. Corporate Reputation Review, 6(1), 36-46.
Coombs, W. T. (2010). Parameters for crisis communication. The handbook of crisis communication, 17-53.
Dawar, N., & Pillutla, M. M. (2000). Impact of product-harm crises on brand equity: The moderating role of consumer expectations. Jou
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