Study On Bps Recovery Actions Management Essay

BP is a planetary energy group, using over 80,000 people and runing in over 100 states worldwide. On April 20, 2010, an detonation occurred at its Deepwater Horizon boring rig which led to a monolithic oil spill in the Gulf of Mexico.

The oil spill has deductions for BP, every bit good as its assorted stakeholders concerned. The intent of this study is to analyse some recovery actions for BP. Initially, it will hold an debut of BP. Following it, this study will concentrate on the recovery actions of BP, including globalisation, ethic and corporate societal duty and corporate administration of international concern. After that, this study will measure whether these actions are sufficient or non.

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Finally, it will hold a decision of this study.


BP is one of the largest energy corporations in the universe. BP provides the service of fuel transit, light energy, oil retail and assorted petrochemical merchandises. BP was established in 1909, which headquartered in London. Nowadays, the employees of BP have been over 80,000 people and they are distributing all over the universe. Its largest division is BP America, which is the biggest manufacturer of oil and gas in theA United StatesA and is headquartered inA Houston, A Texas. ( Yousof, 2010 ) The name “ BP ” derives from the initials of one of the company ‘s former legal names, British Petroleum.

( Masshew, 2010 ) The merchandises of BP have broad use because they can be used in the transit, day-to-day life and commercial minutess. It is the 3rd largest energy company and the 4th largest company in the universe measured by grosss and is one of the six oil and gas “ supermajors ” . ( Steigerwald, 2008 ) In recent old ages, fiscal status of BP is besides really good and is in an increasing position.

The following tabular array ( a ) reflects the fiscal day of the month of BP from 2002 to 2009. In 2009, gross revenues status of BP is non really good due to planetary fiscal crisis. In 2010, BP has been involved in a figure of environmental, safety and political contentions — 2010A Deepwater Horizon oil spill. On April 20, 2010, an detonation occurred at its Deepwater Horizon boring rig which led to a monolithic oil spill in the Gulf of Mexico.

Meanwhile, 13 people were killed and 17 people were injured by Deepwater Horizon boring rig. It besides caused serious ecological catastrophe. This event besides has serious consequence for BP and left a bad repute. In order to do up this catastrophe, BP needs to take effectual steps for recovery.

Table ( a ) Financial Data from 2002 to 2009

Financial informations in 1000000s of US $










Gross saless180,186236,045294,849249,465265,906284,365361,341239,272Earnings before interest taxes depreciation and amortization22,94128,20037,82541,45344,835Net Consequences6,84510,26715,96122,34122,00020,84521,15716,578Net Debt20,27320,19321,60716,20216,202Beginning: OpesC

Recovery Actions

After Deepwater Horizon boring rig, BP met serious challenges.

BP should afford big sum of compensations. The repute of BP decreased aggressively and BP was claimed by populaces. The following tabular array ( B ) could clearly reflect the emanation of Deepwater Horizon oil spill. Confronting this serious event, BP decides to take recovery actions in future development.

Table ( B ) : Progression of Oil Spill Flow Rate Estimates



Barrelss per twenty-four hours

Gallons per twenty-four hours

Cubic meters per twenty-four hours

BP estimation of conjectural worst instance scenario ( assumes no runaway preventer )License162,0006,800,00025,800United States Coast GuardApril 23 ( after droping )000BP and United States Coast GuardApril 241,00042,000160Official estimationsApril 291,000 to 5,00042,000 to 210,000790Official estimationsMay 2712,000 to 19,000500,000 to 800,0001,900 to 3,000Official estimationsJune 1025,000 to 30,0001,100,000 to 1,300,0004,000 to 4,800Flow Rate Technical GroupJune 1935,000 to 60,0001,500,000 to 2,500,0005,600 to 9,500Internal BP paperss conjectural worst instance ( assumes no runaway preventer )June 20up to 100,000up to 4,200,000up to 16,000Official estimationsAugust 262,0002,604,0009,857

2.1 Globalization

BP puts frontward the globalisations of concern in future development.

Globalization means that the activities of the BP concern transcend national boundary lines. Through trade, capital flows, engineering transportation, proviso of services, it forms the organic economic system in the planetary universe. ( Claude E, 2003 ) BP ‘s globalisation chiefly includes four facets, including trade free, production internationalisation, finance globalisation and scientific globalisation. However, globalisation of concern is conductive to sensible allotment of resources and planetary fluctuation of the merchandises. It is besides the signal of human advancement and the inevitable consequence of the economic development.


1.1 Effect of Globalization

Globalization could assist BP to retrieve the concern from four facets.Promoting the internationalisation of production:Productivity is the basic motive for the societal development. Productiveness performs the map of driving the international markets for BP.

( Jagdish, 2004 ) If the BP supports the globalisation of the concern, the productiveness will be enhanced. Under this circumstance, the productive component could be fluctuated between different states. To back up the globalisation of the concern, it will be good for the sensible allotment of the productive elements. The efficiency of BP must be limited by the resource and market. Merely if the planetary resource and market ranges integrative, BP could interrupt away off the resource and market in a maximal grade under current state of affairs.

Through the globalisation of concern, BP could recognize the production by most favourable conditions and so make gross revenues activity by most favourable market. In this state of affairs, BP may accomplish the optimized status. The economic efficiency of BP will be increased and they can supply more trade goods to fulfill the demands of consumers.Promoting the globalisation of capital:Capital is an of import factor in the development of concern. If BP adopts the globalisation of concern, it will better the globalisation of capital. As a consequence, the competitory strength of industries could be improved. ( Claudia, 2004 ) Nowadays, the competition in the market is really intense, so BP needs to maintain competitory position. Through the globalisation of capital, BP can exercise its advantages in a big extent.

It means that BP engages in fabricating more advantageous merchandises. Thus the fabrication graduated tables of BP will be enlarged and eventually BP may accomplish the scale consequence. If BP supports the globalisation of concern, it can besides speed up the transportation and fluctuation of the capital.

BP has chances to take part in the international market and recognize the development and invention. In the terminal, BP is positive to research new merchandises and better the competitory power in the international market.Promoting the trade free:If BP supports the globalisation of concern, it could advance the development of the trade free.

With the economic development, the cargo trade, service trade and technological trade are developed in the universe. ( Cavanagh, 2004 ) With the globalisation, the multiple trades could be formulated in this state of affairs. If so, it can convey the addition velocity of international trade among industries. In a certain grade, more industries could take part in the international trade. As a effect, through the globalisation of concern, BP could merchandise with the universe. In another facet, the economic recovery could be accelerated.Promoting the internationalisation of scientific engineering:If BP pays more attending on the globalisation of the concern, the scientific engineering of BP could be developed mostly.

The globalisation of scientific engineering means the optimized allotment of the scientific technological resources in the worldwide ranges. ( Alfred, 2005 ) Scientific engineering is the new developing field in the globalisation of concern. Through the globalisation of concern, advanced engineering and explored ability in the industries can be transferred cross-country. Under this circumstance, the technological criterions in the industries will go consistent in different states. BP may get the hang the techniques to command the development in the same line. Depending on this advantage, BP could derive the many net incomes.

2.1.2 Hazards

At the same clip, globalisation besides has the hazards for BP in the procedure of retrieving concern. It will convey the instability of the economic system. In the procedure of globalisation, different states rely with each other.

BP has already been in a recovery stage. Under this environment, economic infection will be inevitable. Globalization has the hazards for economic instability. In add-on, the economic power of BP besides faces a challenge. By the daze of Deepwater Horizon oil spill, the place of BP in the universe may diminish much. BP aims to recovery the concern with globalisation.

But it is likely that BP will lose the taking power in the international market. Therefore, BP should avoid the hazards in a maximal grade.


2 Ethical motives and Corporate Social Responsibility

Ethical motives and societal duty refer to that the possible ordinances and moral which single or organisations should follow with in concern activities. ( Serenko, 2009 ) After Deepwater Horizon oil spill, BP should follow with concern moralss more purely and carry through more societal duty. Ethical motives and duty maintain that the concern could be done swimmingly and could the market order in a certain grade. It is a possible ordinance which people should detect.

( Friedman, 2000 ) The purpose of concern moralss and societal duty is to make good and just concern environment. Business is non a dealing that one gets the benefit and the other loses something. ( Davis, 2001 )Presently, planetary concern environment for BP is serious due to Deepwater Horizon oil spill. The Deepwater Horizon oil spill caused big catastrophe. Under this circumstance, if BP does non follow with the concern moralss and societal duty, the concern environment will endure in a worse status. As a consequence, concern moralss and societal duty could allow BP keep a good market order.

In this state of affairs, it will be conductive to the current serious concern environment. Experiencing Deepwater Horizon oil spill, BP should recognize that they could set up a good market order to treat the planetary concern. Therefore, concern moralss and societal duty could help BP to retrieve the cubic decimeter concern in a certain grade.With Deepwater Horizon oil spill, ecological issues have become chief job. BP needs to pay more attending on the economic efficiency. As a consequence, concern moralss and societal duty becomes even necessary.

The serious ecological crisis is the consequence of Deepwater Horizon oil spill. Business moralss and societal duty requires business communities to foreground the environment jobs. They could non accomplish the concern intent by giving the environment. Enterprises that are deficiency of concern moralss would organize ecological crisis. Therefore, concern moralss and societal duty plays an of import function in the ecological issues.

2.3 Corporate Administration of International Business

After Deepwater Horizon oil spill, BP should hold more administration on the international concern.

One of the most of import points that BP must follow with all the ordinances in the international concern which is constituted by related organisations. ( Paul, 2004 ) At the same clip, BP should pay more attending on the hazard direction in the international concern. As oil spill will do serious jobs to environment and authorities, BP needs to measure the hazards plenty. As a effect, BP should do hazard designation, hazard extenuation, action planning, public presentation prosodies and stockholder value. In the procedure of international concern, the authorities normally provides the support or service to the endeavors. ( Vahlne, 2007 ) Therefore, BP could do usage of the services that are provided by the authorities.It is really of import for BP to increase the foreign capital in the international concern. The addition of foreign capital will do the economic growing of the states.

( Dilip, 2004 ) The authoritiess are responsible for national economic growing. Merely if economic growing of the states, it could convey the sweetening of state power. At the same clip of presenting the foreign investing, the advanced direction theory and experience can be learnt to the local endeavors. ( Wright, 1994 ) BP could do the pull offing invention on the footing of foreign endeavors ‘ pull offing experience. In add-on, foreign investings will enroll many employees in local topographic point. So the addition of foreign investings could drive the employment for the authoritiess.

Under this circumstance, BP can obtain advantage, which is good for the building and development.


It is non sufficient to take the recovery actions-globalization, moralss and corporate societal duty and administration of international concern. It can be said that the repute of BP lessenings from the top to bottom when go oning Deepwater Horizon oil spill. BP ‘s recovery actions could non better the repute mostly and allow the populace have the same repute before. Therefore, the recovery actions are non plenty. This point could be discussed from three facets.

First, in the Deepwater Horizon oil spill, BP was non responsible. The response of BP on the oil spill volume and environmental jobs is incorrect. This made the public think they aim to conceal the facts. They do non supply a just response in public after the event. Therefore, people could non believe BP after taking recovery actions.Second, Deepwater Horizon oil spoil is the most serious environmental catastrophe in the American history. ( Robertson, 2010 ) The below tabular array ( degree Celsius ) reflects the destiny of oil released by the event.

From the tabular array, it could be seen that the harm is serious. American authorities besides claimed BP and required to hold a legal action. This event will do American people to diminish the trust to BP aggressively. They will ne’er bury this catastrophe which BP brought.

Therefore, the potency of American market for BP is so little. It is difficult to salvage through some recovery actions.Table ( degree Celsius ) : Destiny of Oil Released by Deepwater Horizon Oil SpoilBeginning: National Incident Command CenterThird, after Deepwater Horizon oil spoil happened, BP could non take any effectual steps within 48 hours. The steps BP took could non hold any positive consequence. In add-on, BP did non supply inside informations information towards this event. As a effect, Deepwater Horizon oil spoil is a incubus.

BP lost much trust from their clients.


In conclusive, BP is one of the largest energy groups in the universe. However, after Deepwater Horizon oil spoil, the repute of BP decreased much and people have a bad image on BP because BP truly brought serious environmental catastrophe to America. Although BP decides to implement some recovery actions, they could merely hold a small consequence.

The recovery actions are non plenty and BP has faced a big challenge presently. It has much instability for BP ‘s hereafter.