Bp and Stakeholder Mismanagement

1598 Words Nov 4th, 2007 7 Pages
Thesis

Poor stakeholder management led to preventable mishaps such as the disasters in Alaska and Texas. Specifically, BP 's defensive approach towards stakeholder management led to lavish compensation for upper level management while creating hazardous working conditions for employees and a burden on all of society in the form of rising oil prices and environmental damage.

Background

British Petroleum was founded in 1908 and since then has rapidly grown to become the eighth largest company in the world . However, as of late, BP has come under fire for several high profile disasters, including the Texas City refinery explosion and the Prudhoe Bay oil spill.

In 2005, an explosion occurred at BP 's refinery at Texas City.
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The US Chemical Safety Board stated that there "is a solid case for citing some fault on cost cutting" in the Texas City disaster. In fact was BP aggressively cut maintenance investment in their refinery by 84% between the years 1992-2000 . Additionally BP lacked many company wide safety standards and left the decision making to plant managers, a position which had a high turnover rate . Cost cutting was eventually handed down to the employees in the form of a hazardous work place, with 15 deaths and over 170 others injured in the Texas City explosion.

Stakeholder Snapshot: Society

BP 's negligence and lackluster response to the Prudhoe Bay oil spill caused damage to the surrounding environment and forced a spike in oil prices, drawing intense criticism and scrutiny from the Federal government and the American public.

BP 's handling of the cleanup has raised serious questions about the concern the company has for the environment. Five months following the accident, 17,000 gallons of crude oil remained to be drained from the surrounding areas of the pipeline . Following the accident, BP has faced pressure from the Justice Department, the Environmental Protection Agency, and Congress due to the environmental damage. Prior to the spill, the company was already being investigated by the EPA for possible violations of the U.S. Clean Water Act due to pipeline corrosion. It now faces a grand jury investigation which may lead to

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