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Overcoming The Bp Crisis Management Essay

The recent explosion and spill involving the Deep Water Horizon well that is owned by BP in the Gulf of Mexico; has created heated debate about how the company is handling the situation. What happened was various executives claimed before the accident that the techniques used for deep water exploration, were considered to be a safe and reliable way to drill for oil. The lack of regulation and number of short cuts that were used by the company; created a situation that would contribute to the accident, which helped cause the environmental disaster. (Jonsson 2010) To make matters worse, many of the company executives appeared to be out of touch with reality, as their actions or lack actions, would increase the overall amounts of criticism. At which point, they would only become more severe. A recent example of this kind of outrageous behavior can be seen with CEO Tony Hayward. Initially after the accident he was supervising the cleanup operation in the Gulf of Mexico. However, after having heated testimony with Congress, he decided to have Robert Dudley oversee what was taking place. The day after the announcement occurred, Hayward was attending a yacht race with his son in Southern England. (Robbins 2010) This is problematic, because from a public relations standpoint, the various executives and the actions that they undertake are: making the company appear to be unconcerned about the accident from their well. As result, since the incident has begun the image of the company has been severely damaged from these actions. To repair this damage, BP must engage in an unorthodoxed strategy to show that they are doing everything they can; while at the same time working with the Gulf Coast residents to effectively clean up the spill. Where, the company is facing the largest environmental disaster ever seen and large amounts of lawsuits, which could cause liabilities to rise to the trillions of dollars. As a Public Relations (PR) Consultant, your job is to take this situation and slowly rebuild a favorable image of the company. To achieve this objective will require: examining successful PR strategies used in the past (through a literature review) and how these ideas could be implemented into an actionable plan. Together, these two elements will provide the greatest insights, as to how the company can be able to slowly rebuild its image.

Aims and Objectives

The aim of this study is to determine how the BP can be able to overcome the disaster and improve its public image. To do this you would need to answer a number of different questions. The most notable would include: what are the possible legal ramifications that the company can expect if it does not improve its image? What strategies were used in the past to overcome major PR related issues? What elements should a public relations strategy contain, to show that the company is doing the best it can? The answers to these questions will provide: a general overview, as to how the company should move forward to rebuild it image.

Objectives

To answer the various research questions, a literature review will be conducted using a variety of different sources. This will provide a historical perspective on what tools and tactics worked most effectively, in helping to restore the company image. At which point, a research analysis will be conducted that will examine the results using qualitative research. This is when researchers are examining various forms or research and data to see the true effect. (Qualitative versus Quantitative Research 2007) In the case of BP, this information is useful in helping to indentify what types of actions, can be taken that can restore a favorable image of the company. The type of data that will be collected for the review is: though the use of various scholarly academic sources such as: journals and books.

Strategies

In the article ‘There’s No Excuse’, it talks about how the Exxon Valdez disaster was the result of a trend that has been occurring in the oil and gas industry, since the downfall of the Soviet Union. Where, various unproven reserves were opened up to multi national corporations. While this produced inexpensive oil, it also set the stage for large environmental disasters to occur. As a result, the author calls for international standards that would apply to the oil and gas industry. (There’s No Excuse 2007)

In the article ‘Green Remediation Strategy for Superfund Sites’, it shows how a superfund has been established and administered by the EPA to deal with a variety of environmental disasters. Where, since the 1980’s this fund has been used to clean up various hazardous waste sites around the country. The fund is also used to help a variety of industries make a successful transition, in implementing various green technologies and reducing their overall environmental impact. (Green Remediation Strategy for Superfund Sites 2009)

In the article ‘Issues and Crisis Management’, it discusses a recent oil spill that occurred in the UK, which caused about 3 thousand gallons to wash up on the beach. According to the article, the company that was involved in the spill faced a major public relations and health disaster. Where, the spill made the company initially look bad, while large groups of volunteers would go to the affected beaches and begin camping out, to help the clean up efforts. To rectify the situation, the company began to coordinate efforts with government officials and local volunteers. The result of the increased amounts of transparency and cooperation helped the company to be seen more favorably. Where, they were viewed in this light because their response to the spill. (Issues and Crisis Management 2007)

In the article “Boards of Directors Need to Oversee Corporate Sustainability more Effectively’, it discusses how the majority of Corporate America does not have any kind of long term environmental plans or accident contingency plans. Where, the Conference Board conducted a survey of 50 corporations, to determine how prepared companies were for various environmental or other kinds of crisis situations they could face. The results were: that 89% of corporations had either a generic plan in place or did not have a plan. The Conference Board also found, that the boards of directors of most companies never have any kind of discussions as to what to the long term environmental impacts of their activities will be.

In the article ‘Maritime Law Protecting BP’, it discusses how the Death on the High Seas Act (DOHSA), limits the total amount of liability to $75 million dollars. This would include all available compensation for the families of the oil rig workers and the Gulf Coast residents who saw their livelihoods destroyed, by the accident. The article then, calls for this law to be amended to force BP to pay their fair share. (Maritime Law Protecting BP 2010)

Research Methodology

The above research indicates, that in order for BP to restore their image they must be engaging in a strategy that will address a number of different issues on multiple fronts. At the same time, they have to show flexibility and empathy for what happened. The actions that the CEO has taken during the crisis are showing; that he does not fully understand how important the public relations aspect is. As a result, the image of company continues to become worse, as the days to turn into weeks.

When you analyze the research that was conducted, it is clear that the company needs to use those techniques that have worked in the past, to help mitigate the potential fall out that will take place. This means, that they must consider using a number of different principals of various strategies that have worked in the past. The most notable would include: supporting international standards for drilling, improving transparency and taking the lead in establishing a fund to compensate victims. Obviously, the disaster shows how there are a lack of international standards in place for deep water drilling. This problematic, as reports are surfacing that the company knowingly cut corners and circumvented regulations, in order to achieve their production targets. From a PR standpoint, if the company actively supported efforts within the industry to create some kind of international standards, they could begin to start deflecting some of the criticisms. (BP Engineer Called Deepwater Horizon Nightmare Well Days Before Blast 2010)

The way that the company is handling the spill shows a lack of transparency in the process. Where, BP will provide periodic updates, yet beyond this point is when the company seems to be very secretive, about what actions they are taking to stop the leak and clean up the spill. Evidence of this can be seen with the company being slow to provide information, on the total amounts of oil that are leaking into the ocean and the various restrictions that they have placed on media coverage. (Lack of Transparency Afflicts Oil Spill Response 2010) This problematic, because when there are restrictions and the company is slow to release information, it appears as if they have something to hide. At which point, the public will become furious with the company, from their perceived unwillingness to cooperate. This could have negative political fallout, as various Congressional Committees and regulators will demand all documents relating to the spill. Once this take place, it sets the stage for an ugly showdown with Congress and the White House. Where, they could seek to force the company to disclose more documents and engage in criminal investigations, as these actions give the appearance that executives are hiding the truth. The research indicates that once these kinds of situations occur, the company needs to cooperate fully, by having a transparent and open process. This will help the public and government officials to see that the company is not trying to hide anything, reducing the damage to BP’s image. What this shows, is that if the company wants to improve their image they must dramatically increase transparency and cooperate with officials. Otherwise, the image that the company has something to hide; will be engrained in the minds of the general public and regulators.

Another aspect that is hurting the overall image of BP is: their slow response in paying claims and establishing a special fund to compensate victims. Not long ago, BP agreed to establish a special fund of $20 billion to pay compensation claims. The problem is that executives took these actions, weeks after the spill occurred and after being pushed by the White House to do so. This problematic, because it shows that the executives of the company do not care about what happens in the Gulf, by not setting up a way to compensate victims quickly. (BP Establishes a $20 Billion Claims Fund 2010) The research shows that those companies that establish a fund to help clean up spills early are: viewed more favorably by the general public. Where, this has commonly been established by a number of different industries, to help pay for any kind of clean up. In some case, various industry trade groups will establish special clean up funds in advance, to help pay for the effects of possible spills or environmental damage. What this shows, is that BP needs to establish a fund that will provide enough money to protect the environment and compensate residents. The $20 billion is good start, but far more needs to be done voluntarily by the company (instead of at the urging of the White House.) At which point, they should take the lead and call for an industry wide fund, to protect against oil spills in the future. These actions would help to show that company is doing everything; that it can to rectify the situation, by helping to mitigate the fall out from this incident as much as possible.

Clearly, the oil spill involving the Deep Water Horizon well in the Gulf of Mexico is having a dramatic impact upon the image of the BP. Where, the various actions or lack of actions taken by the company and key executives, have caused many to view the company as aloof. Once this takes place, it means that the anger will continue to grow, as the overall amounts of frustration will boil over. At which point, it means that it is only a matter of time until the company could face a flood of lawsuits and the possibility, that key executives could face criminal charges. In many ways one could argue, that their unfavorable public image is contributing to the situation. To reverse these effects, the company needs to engage in a bold new strategy that will involve the elements of: supporting international standards for drilling, transparency and taking the lead in establishing a fund to compensate victims. If BP can begin to implement these changes as soon as possible, they can create a shift in the image that public has of the company. Where, they will no longer be viewed as the greedy corporation that does not care about what happens; as they are seen as a responsible member of the business community. Part of this responsibility is admitting wrong doing and rectifying the situation, as effectively as possible. Over the course of time, this will help to limit the political / image related issues that the company is facing. Otherwise, BP could face the possibility of financial ruin, as the total amounts of claims could rise in the ten of trillions of dollars and there is the chance that the company could be indicted on criminal charges. This is why the company must move quickly to restore its image, for it does not, it could be facing a number of regulatory and legal challenges over the long term.

Reliability and Validity

Maylor (2005:159) revealed that reliability of a study means that if another researcher would work on the same task, that he/she would come to the same result. Due to the limited sources and availability of data, it is highly possible that other researchers end up with the same results. The novelty of the business approach and the difficulty to measure a potential business however makes it almost impossible to predict.

As per Maylor (2005:158) validity shows up how accurately the researcher has arranged the research. In this case the researcher found profound and valuable information concerning the online behavior of Germans.

As for the information about the business itself, it is impossible to find accurate information, due to the new and unique approach. The researcher attempted comparing existing businesses of the same branch to get a realistic overview of the potential of the business.

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