Bp And Stakeholder Mismanagement
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. Fifteen employees were killed and 170 were injured in a fiasco resulting in $1.6 billion in victim compensation and millions in fines . In January of 2007, former Secretary of State, James Baker, published the Baker Report, outlining BP's failing safety standards as the reason for the incident.
In March of 2006, BP faced yet another incident when its corroded pipeline in Prudhoe Bay spilled roughly 270,000 gallons of crude oil onto the Alaskan tundra. The incident crippled its North Slope operations in the Prudhoe Bay field .
Although it is alarming that the incidents occurred due to negligence as a result of BP's defensive approach to stakeholder management, it is perhaps more disturbing that the company continues to employ this strategy in the face of severe public outrage and legal scrutiny. A defensive approach is characterized by companies who "abide strictly with legal requirements but make no attempt to exercise social responsibility beyond what the law dictates- thus they can and do act unethically" . As a result, the needs of some stakeholders are sacrificed in order to fulfill those of others.
Stakeholder Snapshot: Upper-Level...
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