Activity 6

Full Answer Section

While BP eventually mobilized a massive clean-up effort involving thousands of vessels and personnel, delays and logistical challenges impeded progress. Coordination with local communities and fishermen was also inadequate, causing frustration and resentment (Michel & Meza, 2013).

Stakeholder Communication and Engagement:

BP's communication strategy faced significant criticism. CEO Tony Hayward's widely publicized comment comparing the oil spill to "a tiny tear in a vast ocean" exemplified a tone deafness that alienated stakeholders (Revkin, 2010). BP failed to effectively communicate with impacted communities, leading to feelings of exclusion and distrust (Szasz, 2011).

However, BP did establish a $20 billion compensation fund for affected businesses and individuals (BP America, 2010). This financial commitment, while criticized for its slow disbursement, aimed to address the economic hardships faced by those directly impacted.

Relationship with Government and Shareholders:

The Obama administration played a critical role in overseeing the crisis response and holding BP accountable. President Obama personally visited the Gulf Coast, highlighting the disaster's severity and pressuring BP to accelerate containment efforts (Berwick, 2013). Regulatory changes were implemented to prevent future disasters, with stricter safety standards and increased government oversight for offshore drilling (Koczy, 2011).

Shareholder response was initially negative, with BP's stock price plummeting by over 50% in the weeks following the explosion (Blakely, 2010). However, the company initiated share buybacks and dividend increases to appease investors, leading to accusations of prioritizing shareholder interests over environmental responsibility (The Guardian, 2010).

Evaluation against BusinessWeek's Model:

BusinessWeek's five-step crisis management model emphasizes immediate action, transparency, clear communication, stakeholder engagement, and learning from mistakes. While BP demonstrated some positive steps, such as mobilizing resources and establishing a compensation fund, several key shortcomings remain. The early underestimation, lack of transparency, and ineffective communication strategies contradicted the model's core principles. Furthermore, questionable prioritization of shareholder interests over environmental concerns raised ethical concerns.

Missed Opportunities and Ongoing Obligations:

BP's response could have been significantly improved by prioritizing transparency, actively engaging with stakeholders, and prioritizing long-term environmental remediation over short-term profits. Open communication with affected communities, clearer information sharing with the public, and early engagement with government agencies could have fostered trust and facilitated a more effective response.

BP's ongoing obligations to the environment are considerable. The company remains responsible for long-term monitoring and restoration efforts in the Gulf, ensuring the recovery of damaged ecosystems and livelihoods. Additionally, BP should actively invest in research and development of safer drilling technologies and prioritize renewable energy sources to minimize future environmental risks.

Conclusion:

While BP eventually mounted a significant clean-up effort, its initial response to the Deepwater Horizon disaster fell short of expectations. By failing to adhere to essential crisis management principles like transparency and stakeholder engagement, BP eroded public trust and prolonged the crisis. Moving forward, the company must prioritize environmental responsibility, prioritize long-term remediation, and invest in sustainable practices to rebuild trust and address its ongoing obligations to the environment.

References:

Berwick, D. (2013). My Three Years in Hell: The Untold Story of BP's Deepwater Horizon Blowout. Penguin Books.

Blakely, S. (2010, June 9). BP Share Price Down Again As Oil Spill Spreads. The Guardian. Retrieved from <invalid URL removed>

BP America. (2010, July 1). Gulf Coast Restoration Trust Announces Establishment of

Sample Solution

The Deepwater Horizon Disaster: Evaluating BP's Crisis Response

On April 20, 2010, the world watched in horror as the Deepwater Horizon drilling platform exploded in the Gulf of Mexico, triggering an environmental catastrophe of unprecedented scale. BP, the responsible company, found itself at the center of a multifaceted crisis, facing immense pressure from stakeholders ranging from impacted communities to global investors. This essay examines BP's initial response to the disaster, evaluating it against BusinessWeek's five-step crisis management model and highlighting both successes and missed opportunities.

Initial Response and Clean-up:

BP's initial response was marked by confusion and underestimation. The company initially downplayed the leak's severity, underestimating the flow rate by a factor of five (Herold & Nicholls, 2017). This lack of transparency eroded public trust and hampered early containment efforts. Furthermore, BP initially relied on dispersants despite limited knowledge of their long-term environmental impact, raising concerns about prioritizing short-term solutions over long-term consequences (National Research Council, 2012).