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Bp the Bp Deepwater Horizon Oil Spill in the Gulf of Mexico

Essay by   •  September 23, 2012  •  Case Study  •  2,105 Words (9 Pages)  •  1,831 Views

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For modern society, the issue about leadership becomes more privileged in the field of business and organization. Northouse (2010) defines the concept of leadership as 'a process whereby an individual influences a group of individuals to achieve a common goal'. According to this definition, leadership is an essential component of management, which helps to maximize efficiency and to realize organizational objective. Moreover, different styles of leadership may lead to difference influences upon the management of organization and business. Hence, most researchers hold the opinion that there does not exist one leadership style, which suits every leader under all circumstances. Instead, the style should be dependent on some factors, such as the situation, the people, the task, the organization, and other environmental variables (Bolden 2004). This essay will analyze the leadership behavior based on the case of the BP Deepwater Horizon oil spill in the Gulf of Mexico. Firstly, the essay will introduce the background of the event and then will analyze the leadership behavior of Tony Hayward (the former CEO of BP) and President Obama of USA in terms of this accident of oil spill.

Background of the Event

The BP Deepwater Horizon oil spill in the Gulf of Mexico is the largest marine oil spill in the history of the petroleum industry. 'It was caused by an explosion on the Deepwater Horizon offshore oil platform about 50 miles southeast of the Mississippi River delta on April 20, 2010'(Cleveland 2010). In this explosion, most of the 126 workers on the platform were safely evacuated while 11 men working were killed and 17 workers were injured. Apart from that, there are about 4.2 million barrels pouring into the Gulf of Mexico, which significantly polluted the environment of the water and also tremendously influenced the fishing industry of USA. Moreover, to the company of BP, this issue seriously affects the company's reputation and stock price. By June 2010, BP stock had lost close to half its value, more than $82 billion (Cleveland 2010).

The Leaders Involved in the Event

In this BP's oil spill disaster, there were too many players in a maze of relationships. Several companies and government organizations were involved in the operation of the Deepwater Horizon rig. BP is the well's owner, Transocean owns the rig, and Halliburton provides oil rig services. In addition, the Minerals Management Services regulates off shore drilling and shares oversight with the Environmental Protection Agency, which reviews off shore drilling for potential damage to wildlife and the environment. And finally, the Coast Guard inspects vessels for seaworthiness and licenses crew members to work on rigs. In this relationship, the leadership behaviour of BP and the president of America will be analyzed in the essay.

Analyze the leadership behavior of Tony Hayward (the former CEO of BP)

Tony Hayward is a British businessman who was the former CEO of BP. His tenure ended on 1 October 2010 almost due to the circumstance of the Deepwater Horizon oil spill in the Gulf of Mexico. During dealing with the issue, Hayward showed the failure of leadership, which let the BP involve in crisis such as the loss of stock and the company's reputation. Hence, Hayward should take the main responsibility in BP's oil spill crisis.

For a good leader, it is vital to have a vision, which delivers a correct orientation of the company's development to the employees. In addition, the leader's vision could also influence the culture of company which may affect the decision on official business. However, BP had an inappropriate safety culture that the company over concentrated on cost cutting rather than the expense of safety (Bratspies 2011). As the CEO of BP, the leadership behavior of Tony Hayward may influence the culture of company. According to the inadequate safety culture, it could lead to a series of wrong decisions in business. Regarding this oil spill disaster in Gulf, there were several evidences, which demonstrate the inadequate safety culture. For example, when Schlumberger crew decided to perform the cement bond log test, BP chose to give up the tests because their company could save $128,000 (Bratspies 2011). The company usually took the 'cheap but risky' strategy to run its business, which inevitably caused the worst oil spill crisis in the Gulf of Mexico. In addition, BP's safety record was usually terrible even before this disaster. For instance, BP's failures already resulted in a trail of death and destruction over the world in a series of incidents. Furthermore, in its own assessment of the accident, BP concluded that 'a complex and interlinked series of mechanical failures, human judgment, engineering design, operational implementation and team interfaces came together to allow the initiation and escalation of the accident'(Bratspies 2011). Above all, the company did not care the safety compare with the profit.

Apart from the safety issue, there appeared two additional problems of Tony Hayward's leadership behavior. Firstly, the company tried to lowball the estimate during the crisis. For instance, BP initially estimated 1,000 barrels of oil was leaking daily. After eight days, they announced it was more like 5,000 barrels per day. By May 5, BP said it could be as much as 60,000 barrels a day (Spaeth 2010). This was indeed a key fact, which led to criticism that they had lowballed the estimate on purpose. Meanwhile, it also emerged a problem regarding who should take the responsibility in this crisis. In an interview with BBC, chief executive Tony Hayward attempted to transfer the blame for the crisis to the US owner of the sunken rig, Transocean (Webb 2010). As a leader of BP, Hayward should be in charge of this accident rather than diverse his responsibility. This fact demonstrated that Hayward was not a good leader who could influence the employees to trust him in BP.

Above three factors clearly indicated that Tony Hayward's leadership behavior was a failure and his failed leadership could lead to the crisis of the whole company. However, BP was not the only company, which focused more on profit than other aspects. Capitalism is an economic model grounded in a worldview of self-interest (Fry & Slocum 2008). Since leadership demonstrates the power of influencing the individual and group, the leader should also concentrate on humanity aspects of a company rather than merely profitability. Nowadays, one of the greatest challenges for leaders is to develop new business models that concentrate ethical leadership, sustainability and social



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