BP and the Deepwater Horizon disaster Essay

Title The Analysis of BP and the Deepwater app bent horizon Disaster of 2010 delinquent Date 5/5/13Word Allocation 2193 excluding determination maker summary, intentions, tables, references and appendicesExecutive SummaryThis report provides an examination into British Petroleum (BP) and the Deepwater thought hap of 2010. It looks specifically at the functional area of organizing from POLC and the framework from how conference and communion networks effected the purpose making bear upon on the oilrig.The summary starts by providing a history of BP and what major decisions through verboten time contributed to the organizational structure when the disaster occurred.Findings show that the asset federation position choose in 1995 alikek away province from BPs regional trading operations and later rewarded each individual site for its per realiseance. This meant the animal trainerial decision making process for each site was geared to time and cost efficiencies so uni taryr than that of preventive.The establishing of a wheel talk network on Deepwater meant that any proposals put for from attract staff, with guard as a priority, were being overwritten by the superior police squad widener as they were passed on.After the disaster occurred, BP established a sentry duty and jeopardy division and instilled staff members on each of its rigs to check over that the safety device essence was reinforced on its sites.Table of Contents1. IntroductionManagers are responsible for arranging and structuring work to assist in achieving organizational goals (Robins et al. 2012, p. 14). It is find out what tasks are to be completed, who is responsible for them, how the tasks are to be grouped, who reports to whom and at which aim decisions are to be stubborn (Robins et al. 2012, p. 14).This report analyzes the area of discourse and conversation networks, from that of the organizing function in POLC (Robins et al. 2012, p. 13), within British Petrol eum (BP) and specifically the Deepwater sensible horizon disaster. It looks at the communicating on safety procedures from old BP officials down to BP sites, the fiber of communication on key decisions that in the long run led to the sinking of the oilrig and what control measures were put in send to ensure the sustainability of the confederacy. 2. History of BP and the Deepwater panoramaIn 2010, BP was one of the get together Kingdoms largest corporations and a world leader in the production of energy (Andrew 2010, p. 7). They supplied consumers with fuel for heat, light, transport, petrochemical production and much more (Andrew 2010, p. 7). unless in its early years, triumph and profitability proved quite problematic to obtain (Ingersoll 2012, p. 2).The company that would eventually turn into BP was established in 1909 as the Anglo-Persian Oil Company (APOC) after William Knox Darcy found oil in Iran after an elongated search (Ingersoll 2012, p. 2). Then in 1914, the Br itish Government mat up they school ined a dedicated oil supply and purchased 51% venture in the borderline bankrupt corporation (Ingersoll 2012, p. 2). They heldonto the 51% share until the Thatcher government activity period of prioritization occurred among 1980 and 1990 and this led to the final s keep back being change in 1987 (Andrew 2010, p. 7). At this point, performance was still declining and in 1992, after a loss of $811 million, the company decided to take severe cost redeeming(a) measures (Ingersoll 2012, p. 3).Focusing on a streamlined workforce and portfolio of activities, BPs berth started to change signifi roll in the haytly in the mid-1990s (Ingersoll 2012, p. 3). 1998 bought the merger with Amoco and in 2000, the science of Arco (Atlantic Richfield CO.) and Burmah Castrol plc highlighted an aggressive growth strategy (Andrew 2010, p. 9). With the renewed focus on growth, BP alike began repositioning itself as a more environmentally friendly company and t his lead to a new tagline Beyond Petroleum and an official discern change to BP (Ingersoll 2012, p. 3). This lead to the launch of an Alternative Energy division and between 2005 and 2009, BP invested $4 billion into this area with a total company enthronisation of $982 billion (Ingersoll 2012, p. 3).In May 2007, Tony Hayward was appointed Chief Executive policeman (CEO) and his focus was to stem the company growth and reduce production targets (Ingersoll 2012, p. 3). surrounded by 2006 and 2009, BPs workforce fell from 97,000 to 80,300 and four levels of management were cut as Hayward felt too many people were making too many decisions leading to extreme cautiousness (Ingersoll 2012, p. 3). heretofore, BP has had a colorful history when it comes to safety within its structures (Andrew 2010, p. 14). In 2005, 15 people were killed and another(prenominal) 180 hurt when the BP Texas City refinery detonate (Andrew 2010, p. 14). Then in 2006-2007, BP had to shut down its operations in Prudhoe Bay, Alaska due to over a million liters of oil spilling into the north-central Slopes via corroded pipelines (Andrew 2010, p. 14). Alaskan state regulators had been warning BP since 2001 that management protocol was out of sync with state regulations and that critical equipment needed to be better sustain (Andrew 2010, p. 15).On the 20th April 2010, a floating semi-submersible Drilling Unit named the Deepwater celestial horizon, exploded and sunk off the disconnection of Mexico killing 11 people and injuring another 17 (Andrew 2010, p. 16-17). BP had leased the Deepwater Horizon rig from Transocean, an oil based industriousness support company that specialized in deep water bore (Ingersoll 2012, p. 1). The rig was hired to complete work on the Macondo well, which BP owned the rights too (Ingersoll 2012, p. 1). Of the 126 on board, 79 were from Transocean, seven from BP and the rest from other firms (Ingersoll 2012, p. 1).As of 2010, the Deepwater Horizon disaster wa s the biggest marine oil spill to transpire in United States waters with nearly five million barrels of oil leaking into the Gulf of Mexico (Ingersoll 2012, p. 2). decisivenesss make on the grammatical case of well casing, the number of centralizers used and the decision to not perform a cement bond log may arrive at contributed to the well blowing out (Ingersoll 2012, p. 1). just, regardless of the ultimate causes, it is worth examining the communication networks within to obtain exactly where the caution over cost essence broke down. 3. Managers and talk Networks TheoryEffective internal and external communication is seen as a requirement for organizational success (Ruck & Welsh 2012, p. 1). Organizations need to constantly assess and enhance communication especially in increasingly difficult economic times (Ruck & Welsh 2012, p. 1).Communication can be broken down into two assorted areas formal or casual (Robins et al. 2012, p. 405). Formal communication follows a chain o f command that typically takes place within the organizational work arrangements (Robins et al. 2012, p. 405). Informal communication does not take place within the organization hierarchy and typically allows employees to satisfy their brotherly inter satisfy needs along with creating an alternative channel to communicate (Robins et al. 2012, p. 405). However this instruction can take to the woods in a number of contrastive ways.Communication within an organization can move by the by-line means downward, upward, lateral and diagonal (Robins et al. 2012, p. 406-07).Table 1 explains how each causa and its definitionTable 1 Types of reading flow(Adapted from Robins et al. 2012, p. 406-07)Reinforcement of information flow encourages employees to speak out and adopt a participative approach (Ahmed 2010, p. 122). shared dialogue within an organization contributes to the foundations of shared value and trust (Ahmed 2010, p. 122). twain the vertical and horizontal communication flow s within an organization can be combined into a number of assorted patterns labeled communication networks (Robins et al. 2012, p. 407). Researchers have recognized that basic networks of communication can be classified into different types of interaction (Eunson 2012, p. 116) like those shown in table 2 and 3 belowFigure 1 Eunson Types of Communication Networks(Source Eunson 2012, p. 117)Figure 2 Robins Three vulgar Organizational Communication Networks(Source Robins et al. 2012, p. 407)When examining the theory listed within this paper compared to the types of communication, flow and communication network structures within BP, we can greater understand exactly what lead to the sinking of the Deepwater vessel. 4. Analysis of Communication Networks between BP and Deepwater BP Senior ManagementIn the late 1980s, BP had several layers of management that fell within a intercellular substance structure that made it problematic for anyone wanting to make a decision quickly (Ingersol l 2012, p. 4). As patronage and overall performance at BP was floundering, Robert Horton decided to cut $750 million form BPsannual expenses (Ingersoll 2012, p. 4). Horton, who was appointed BPs CEO in 1989, removed several managerial layers with the intent of travel up the decision making process and the pace of business (Ingersoll 2012, p. 4). The business was transformed into smaller, more flexible teams with the vision of maintaining open streams of communication (Ingersoll 2012, p. 4). Horton transferred decision-making assurance to the upstream and downstream business divisions and employees at all levels were encouraged to take responsibility and exercise business initiative (Ingersoll 2012, p. 4).During the 1990s, John physiognomy was heading up BPs Exploration and Production division, BPX (Ingersoll 2012, p. 4). He wanted to farm a spirit of entrepreneurship amongst his employees and extended the decision-making responsibilities to further levels within the organizatio n (Ingersoll 2012, p. 4). Decision making authority and responsibility was no longer held with BPs regional operating companies and was now completed by the site managers (Ingersoll 2012, p. 4). The model was cognise as Asset Federation and was applied company wide when Browne took over as BP CEO in 1995(Ingersoll 2012, p. 4). The asset federation model compensated employees for the performance of their individual site so there was puny incentive to share best practices on risk management amongst respective(a) other BP exploration sites (Ingersoll 2012, p. 4). Deepwater CommunicationThe benefits of an all channel network or matrix structure are that the leaderless group has constant information flow between all members within the work team (Robins et al. 2012, p. 407). The potential for brainstorm and exchange of information is great within this type of model (Eunson 2012, p. 118). However information overload and irreconcilable differences due to no emergence of a leader can be a downside (Eunson 2012, p. 118)Figure 3 Deepwater fibril of Command(Source Ingersoll 2012, p. 20)However, when looking at the chain of command on the Deepwater Horizon (see table 4), it could be seen to form a wheel network rather than that of amatrix structure (see table 3). Typically, wheel communication flows form an identifiable leader at the top of the wheel (Eunson 2012, p. 117). The leader serves as the hub and the flow of information is typically one way but can be two way, dependent on the leaders volitioningness to accept information (Eunson 2012, p. 117). This can cause the satisfaction of team members to be low compared to that of chain, distribute and channel networks (Robins et al. 2012, p. 407). Wheel networks have the disadvantage of being prone to message distortion (Eunson 2012, p. 118). As the message gets passed from one individual to another, or from one level to the next, the message is edited or mangled by the vector in each interaction (Eunson 2012, p. 1 18).The distortion in the wheel network is visible when looking at the decision making process for the type of well casing and number of centralizers. Decisions in these two areas were relayed by the engineering science team leader, Greg Walz (Ingersoll 2012, pp. 10-11). Greg received input from the engineers in the operations unit on what they thought were best safety practices, however final decisions on the projects were ultimately made due to the cost and time savings (Ingersoll 2012, pp. 10-11). The decision makers on the Deepwater had only been in their positions for a minimal amount of time (Ingersoll 2012, p. 9) and this meant that the lessons intimate at Texas City and Prudhoe Bay had not reached the Gulf of Mexico site (Reed & Fitzgerald 2010, p. 156). It could be seen that the safety communication message had flowed downward from senior managers to line manager and staff however line managers felt a greater decide to reward cost and time savings. Control MeasuresOn Jul y 27, 2010, BP inform that curtsey Dudley would succeed Tony Haward as BPs Group Chief Executive on October 1, 2010 (EHS straight off 2010, p. 17). In light of the Deepwater disaster and to ensure sustainability of the company, BP leadership announced plans to create a new safety division to oversee and canvas the organizations operations worldwide on September 29, 2010 (EHS Today 2010, p. 17). The Safety and bump function has the authority to intervene in all technical aspects of BP activities to ensure that operations are carried out to that of stated common standards (EHS Today2010, p. 17). module will be imbedded in all of BPs operating units and will report directly to Mark Bly, head of safety and operations (EHS Today 2010, p. 17). Mark reports directly to the CEO, Bob Dudley to ensure the safety message from senior BP officials filters down into each site (EHS Today 2010, p. 17). 5. ConclusionCommunication is continually attributed to a vital variable in determining org anizational success (Hargie & Tourish 2009, p. 419). Many business issues stem from poor communication procedures and early action and intervention in this area can avert a disaster at a later date (Hargie & Tourish 2009, p. 3).By conducting analysis into the communication and communication networks at BP, we can ascertain that a number of different factors may have contributed to the BP disaster. The asset federation model took away responsibility from BPs regional operations and subsequently the companys safety message. The rewarding of each site and its managers for its individual performance further contributed to the dilution of grandeur on safety. A wheel network with key decision makers who had not been in their roles for very long, meant that lessons learned from past incidents werent filtered into the Deepwater Horizon and decisions were made with the view of saving money and time compared to safety.The establishment of the Safety and Risk division immediately after the di saster ensured that the safety message from senior management would be heard within each site and coiffure the opportunity for a disaster of this magnitude to occur in the future. 6. denotation keep downAhmed, Z 2010, Managerial Communication The Link Between Frontline leaders And Organizational Performance, Journal Of Organizational Culture, Communications & Conflict, 14, 1, Health line of work Elite, EBSCOhost, viewed 5 May 2013, p. 122EHS Today 2010, BP Creates New Safety and Risk variableness, 3, 11, Health Business Elite, EBSCOhost, viewed 3 May 2013, p. 17Eunson, B 2012, Communication in the Workplace, e-book, accessed 05 May 2013, p. 116-118 .Hargie, O & Tourish, D 2009, Auditing Organizational Communication A Handbook of Research, Theory and Practice, e-book, accessed 05 May 2013, pp. 3, 419. .Ingersoll, C, Locke, RM & Reavis, C 2012, BP and the Deepwater Horizon Disaster of 2010, MIT Sloan Management, pp. 1-4, 9-11, 20Reed, S & Fitzgerald, A 2010, In Too Deep BP and the Drilling endure That Took it Down, e-book, accessed 26 April 2013, p. 156 .Robins, Bergman, Stagg & Coulter, 2012, Management, 6th edn, Pearson Australia, Australia, pp. 13-14, 405-07Ruck, K & Welch, M 2012, Public Relations analyze Valuing internal communication management and employee perspectives, Volume 38, Issue 2, June 2012, p. 1 7. inclination of FiguresFigure 1 Eunson Types of Communication NetworksFigure 2 Robins Three normal Organizational Communication NetworksFigure 3 Deepwater Chain of Command8. List of TablesTable 1 Types of information flow