BP: Putting Profits Before Safety?


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BECG071 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

Business Ethics, Employee Safety culture
Case Length : 21 Pages
Period : 2005-2007
Pub Date : 2007
Teaching Note : Available
Organization : BP Plc.
Industry : Oil and Chemical
Countries : USA, Europe

Abstract:

This case is about the safety problems faced by BP, the third-largest oil and gas producer in the world. On March 23, 2005, an explosion at BP's Texas City refinery resulted in one of the most serious workplace accidents in the US. An investigation by The US Chemical Safety and Hazard Investigation Board (CSB) uncovered many safety lapses at the Texas City refinery. BP was accused of endangering its workers by compromising on process safety due to its high emphasis on cost cutting.

The Texas accident was not the only safety lapse at BP. In March 2006, a large oil spill was discovered due to a corroded pipeline at BP's Prudhoe Bay refinery in Alaska, USA.

Critics alleged that BP had put profits before safety. BP was also criticized for spending millions of dollars to project a 'green' and 'environment-friendly' image, while failing to take care of basic operational safety issues. BP surprised many when it announced that its CEO, Lord Robert Browne (Browne), would step down by end of July 2007, which was earlier than scheduled retirement in 2008. It also announced that Tony Hayward (Hayward), the head of BP's exploration and production, would succeed Browne.

This case discusses the findings of the report released by the BP US Refineries Independent Safety Review Panel (popularly known as the Baker report), the criticisms regarding BP's safety culture, and the steps taken by BP to rectify these issues.

Issues:

» Understand the importance of safety culture and process safety management

» Understand the role of the top management in establishing and maintaining a safety culture within the organization

Contents:

  Page No.
Bp - Green or Mean? 1
Background Note 3
Tragedy in Texas 5
Alarm in Alaska 6
Other Problems 8
BP Springs a Surprise Ahead of the Baker Report 8
The Baker Report 9
Critics Question BP's "Green" Image and Culture 11
Damage Control at BP 12
Outlook 14
Exhibits 21

Keywords:

BP Plc., Safety Culture and Leadership , Process Safety Management, Baker Panel Report, Industrial Management, Green washing , Texas City Refinery, Prudhoe Bay Alaska, Corporate Culture, Succession Issues, Corporate Social Responsibility, Exxon Mobil Corporation, Lord Browne, Employee Safety, Exxon-Valdez

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