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Business & Marketing
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English (U.K.)
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Topic:
BP's management strategy
Essay Instructions:
::DO NOT USE WIKIPEDIA AS A SOURCE. DO NOT USE BLOGS, OR FROM WEBSITES OF ORGANIZATIONS THAT MAY HAVE A BIASED OPINION. USE A MIX OF ONLINE PAPERS, JOURNALS AND BOOKS:: SEE UPLOADED FILES FOR INFORMATION.
SCENARIO FOR THE ESSAY
The explosion of the Deep Water Horizon exploration ship in the Gulf of Mexico and the
subsequent oil spill have caused significant problems for BP. The US Government,
environmentalist and a large proportion of public opinion has come down against BP.
Numerous reports have claimed that BP had a culture that promoted financial results
over safety. BP CEO Tony Hayward was pressurized into standing down despite being
in the role for only 2 years.
BP needs to work with a range of interest groups. These are decision makers and
opinion formers. People and organisations in positions of influence make decisions and
form opinions that can affect BP. These include academics, government, media,
business leaders and the financial community. Today's Companies and leaders of
business can no longer hide from their responsibilities to wider stakeholder community
by claims of ignorance of corporate malpractices and of failure. Key peoples are
responsible for both the successes and failures of their companies, as well as their own
conduct and behaviours, though most corporations focus on profit and business
expansion.
The new CEO has ordered a review of BP's strategy with a view to avoiding this type of
incident and the subsequent damage. You have been asked to carry out this review
and provide your conclusions.
**Construct a management strategy
- Research BP's corporate strategy in the period 2000-2010, with special focus on the last two years leading up to the Gulf of Mexico Oil leak.
- Propose a suitable structure to ensure appropriate participation in the process. Identify appropriate objectives and strategies
- Develop criteria for reviewing potential options.
- Identify appropriate objectives and strategies (refer to included PESTEL AND FIVE FORCES). These must be directly related to the macro and internal analysis carried out
-Summarise the initiatives that have been taken by BP as part of their Corporate Social Responsibility.
**BP's management understand that Vision and Mission statements are inherently connected to the strategy. For this reason they have decided to review these and develop new Vision and Mission statements.
- Draft a new (or amend current) Vision and Mission statement, objectives and measures for BP
- Consider the organisation\'s ethical, cultural, environmental, social and business background against current standpoints
- agree appropriate objectives and develop measures for evaluation
- A Diagram For Bp's Value Chain, and a brief explanation. (100 words) and also use Benchmarking tool.
++Use Creative and lateral thinking in application of strategy
concepts to the situation. Appropriate and creative solutions
which differ from the current BP position should be encouraged
as long as they are justifies by the analysis++
Essay Sample Content Preview:
Running head: BP’s management strategy
BP’s management strategy
Name
Course
University
Lecturer
Date
Introduction
Strategic planning is one of the most important functions that are performed by any manager in an organization. In the course of making decisions managers are assisted by number of strategic management models that can be applied at different levels or in different kinds of situations usually faced by senior managers. (Azar Kazmi.2008, 14). In order to understand the concept, an explanation of decision making in the business sense is necessary. From a strategic management point of view, planning would involve selecting a course of action from among a number of alternatives. The process involves a number of aspects. First, the objectives that are desired have to be determined. Second, alternative ways through which the objectives can be achieved are then identified. Next, each of the alternatives is closely analyzed in terms of the ability to achieve the objective and finally from among the alternatives the best one is selected. (Pankaj Ghemawat 2001. 22)
The end result of the process is a decision that is to be implemented. While the process might appear to be simple, the actual practice of planning and formulating a strategy is a highly complex phenomenon. This is due to the fact that at each stage of the process, problems are likely to be encountered. Thus this makes strategic planning an extremely difficult and complicated process. Another fact that makes the process more critical is that strategic planning is what determines most aspects of strategy formulation and implementation. Examples of such a scenario would be determining what environmental opportunities and threats to focus on and determining where exactly to allocate resources from a number of alternatives.
Globalization, rising complexity of doing business, increased competition and access to a wide variety of information are some of the factors that have pushed to the forefront the importance of strategic planning and formulation. This is necessary due to increased pressure to gain competitor advantage over rival firms, increase shareholders wealth and to keep on enhancing the profitability of their organizations. While some of the models used by managers to assist in strategic planning may at times happen to be passing fads or trends, some have of them are proven over time and they remain solid ideas worth considering and applying widely to many different situations in the management context. (Lamb, Robert, and Boyden.1984. 67). It is some of these models that have been used to carry out this study.
MANAGEMENT STRATEGY FOR BRITISH PETROLEUM
The main strategies employed by the oil company at the moment are those that will ensure maximum profitability on their part and without consideration on the side effects of its ambitions.
BP’s main strategies include partnering with corporations that will boost their profitability in their quest for more power and control in different parts of the world.
Aggressive exploration and product expansion is a strategy that BP has employed over time and hence its large market share that it enjoys today.
BP has always tried to maintain a good reputation to attract customers even at times resulting to giving false information in order to avoid the results of some of the blunders they commit.
Although some of these strategies failed the oil company, its mission and objectives are clear cut and can aid in the achievement of the company’s strategies if they are followed and implemented carefully.
BP’s mission, corporate values and business objectives are stated below:
MISSION STATEMENT
British Petroleum is a great organization, competitively successful with the fundamental belief that we can make a change in the world. We help the world meet its need for heat, lighting and transport. We strive to achieve that by producing secure and safe energy that does not cause damage to the environment.
CORPORATE VALUES
Responsible: BP is committed to safety and development of the communities in which we operate and aim for no accidents, no harm to people and no damage to the environment.
Innovative: we push boundaries and seek to create breakthroughs through technology and our people. (B Petroleum website, 2010)
Partnerships: We believe in building productive relationships with our partners and customers.
Accountable performance: we seek to deliver our promises through continuous development, reliable, open and trustworthy operations.
OBJECTIVES
Key long-term objectives of BP are:
To expand the exploration of new wells aggressively so as to improve the production capacity of the organization.
To become the leading contributor towards corporate social responsibility projects in the global oil industry.
To improve safety in our operations so as to protect staff, society and the environment in which we operate from.
Become the leading innovator in the global oil and gas exploration and marketing industry.
Attain world class prominence in the bio fuels industry.
Become the benchmark in social and environmental responsibility. (B Petroleum website, 2010)
Improving BP management strategy
Improving environmental safety
The main aim of improving BP’s management strategy is to integrate sustainability and environmental awareness into the operations of BP. The challenge will be to prove that the organization can be working towards improving safety and environment and at the same time be the profitable behemoth that it is. But adopting a pro reactive approach to environmental issues is inevitable after the disaster that happened in the U.S gulf coast. As a result of the incident, the resultant public outcry and massive losses to BP in terms of cash, shareholder value and public goodwill the company would be best served to have safety and the environment among its key agendas.
Ensuring safety precautions
The initiatives that have been suggested through this management strategy will have to be integrated into British Petroleum’s basic business processes. That would mean ensuring the issues such as highest standards of safety or ensuring that the company follows proper guidelines on environmental protection would be no different from any other business activity such as procurement. For the strategy to be successful there should be a total alignment of all the business processes, traditional and newly implemented.
This would call for a single system of management in the organization instead of having one that looks at the “priority” which is profits and another that looks at safety and environmental issues as a second option. The fore the chief executive officer should also be the chief safety officer or the chief environmental officer. The role of the newly established positions in public relations, safety and environment should be to act as strategic consultants or facilitators within the organization.
Also BP should be more transparent regarding its social and environmental issues and keep reporting the progress that it makes as a way of rebuilding trust and earning back public goodwill and input in the form of feed back from other stakeholders.
BP STRENGTHS, WEAKNESSES, THREATS AND OPPORTUNITIES
STRENGTHS
Strong research and development capability
Success in exploration and production
Significant cash reserves
Availability of latest technology
Focused and strong management and staff
Well managed operations
Use of innovation to gain competitive advantage
WEAKNESSES
Worldwide consumption is declining
Large scale operation that is difficult to manage
Absence of strong environmentalists to spearhead sustainability efforts
Lack of strong public relations arm
Lack of good reputation in some key markets
Main focus on shareholder wealth
Lower return on capital compared to main competitors
THREATS
Markets might become hostile to com...
BP’s management strategy
Name
Course
University
Lecturer
Date
Introduction
Strategic planning is one of the most important functions that are performed by any manager in an organization. In the course of making decisions managers are assisted by number of strategic management models that can be applied at different levels or in different kinds of situations usually faced by senior managers. (Azar Kazmi.2008, 14). In order to understand the concept, an explanation of decision making in the business sense is necessary. From a strategic management point of view, planning would involve selecting a course of action from among a number of alternatives. The process involves a number of aspects. First, the objectives that are desired have to be determined. Second, alternative ways through which the objectives can be achieved are then identified. Next, each of the alternatives is closely analyzed in terms of the ability to achieve the objective and finally from among the alternatives the best one is selected. (Pankaj Ghemawat 2001. 22)
The end result of the process is a decision that is to be implemented. While the process might appear to be simple, the actual practice of planning and formulating a strategy is a highly complex phenomenon. This is due to the fact that at each stage of the process, problems are likely to be encountered. Thus this makes strategic planning an extremely difficult and complicated process. Another fact that makes the process more critical is that strategic planning is what determines most aspects of strategy formulation and implementation. Examples of such a scenario would be determining what environmental opportunities and threats to focus on and determining where exactly to allocate resources from a number of alternatives.
Globalization, rising complexity of doing business, increased competition and access to a wide variety of information are some of the factors that have pushed to the forefront the importance of strategic planning and formulation. This is necessary due to increased pressure to gain competitor advantage over rival firms, increase shareholders wealth and to keep on enhancing the profitability of their organizations. While some of the models used by managers to assist in strategic planning may at times happen to be passing fads or trends, some have of them are proven over time and they remain solid ideas worth considering and applying widely to many different situations in the management context. (Lamb, Robert, and Boyden.1984. 67). It is some of these models that have been used to carry out this study.
MANAGEMENT STRATEGY FOR BRITISH PETROLEUM
The main strategies employed by the oil company at the moment are those that will ensure maximum profitability on their part and without consideration on the side effects of its ambitions.
BP’s main strategies include partnering with corporations that will boost their profitability in their quest for more power and control in different parts of the world.
Aggressive exploration and product expansion is a strategy that BP has employed over time and hence its large market share that it enjoys today.
BP has always tried to maintain a good reputation to attract customers even at times resulting to giving false information in order to avoid the results of some of the blunders they commit.
Although some of these strategies failed the oil company, its mission and objectives are clear cut and can aid in the achievement of the company’s strategies if they are followed and implemented carefully.
BP’s mission, corporate values and business objectives are stated below:
MISSION STATEMENT
British Petroleum is a great organization, competitively successful with the fundamental belief that we can make a change in the world. We help the world meet its need for heat, lighting and transport. We strive to achieve that by producing secure and safe energy that does not cause damage to the environment.
CORPORATE VALUES
Responsible: BP is committed to safety and development of the communities in which we operate and aim for no accidents, no harm to people and no damage to the environment.
Innovative: we push boundaries and seek to create breakthroughs through technology and our people. (B Petroleum website, 2010)
Partnerships: We believe in building productive relationships with our partners and customers.
Accountable performance: we seek to deliver our promises through continuous development, reliable, open and trustworthy operations.
OBJECTIVES
Key long-term objectives of BP are:
To expand the exploration of new wells aggressively so as to improve the production capacity of the organization.
To become the leading contributor towards corporate social responsibility projects in the global oil industry.
To improve safety in our operations so as to protect staff, society and the environment in which we operate from.
Become the leading innovator in the global oil and gas exploration and marketing industry.
Attain world class prominence in the bio fuels industry.
Become the benchmark in social and environmental responsibility. (B Petroleum website, 2010)
Improving BP management strategy
Improving environmental safety
The main aim of improving BP’s management strategy is to integrate sustainability and environmental awareness into the operations of BP. The challenge will be to prove that the organization can be working towards improving safety and environment and at the same time be the profitable behemoth that it is. But adopting a pro reactive approach to environmental issues is inevitable after the disaster that happened in the U.S gulf coast. As a result of the incident, the resultant public outcry and massive losses to BP in terms of cash, shareholder value and public goodwill the company would be best served to have safety and the environment among its key agendas.
Ensuring safety precautions
The initiatives that have been suggested through this management strategy will have to be integrated into British Petroleum’s basic business processes. That would mean ensuring the issues such as highest standards of safety or ensuring that the company follows proper guidelines on environmental protection would be no different from any other business activity such as procurement. For the strategy to be successful there should be a total alignment of all the business processes, traditional and newly implemented.
This would call for a single system of management in the organization instead of having one that looks at the “priority” which is profits and another that looks at safety and environmental issues as a second option. The fore the chief executive officer should also be the chief safety officer or the chief environmental officer. The role of the newly established positions in public relations, safety and environment should be to act as strategic consultants or facilitators within the organization.
Also BP should be more transparent regarding its social and environmental issues and keep reporting the progress that it makes as a way of rebuilding trust and earning back public goodwill and input in the form of feed back from other stakeholders.
BP STRENGTHS, WEAKNESSES, THREATS AND OPPORTUNITIES
STRENGTHS
Strong research and development capability
Success in exploration and production
Significant cash reserves
Availability of latest technology
Focused and strong management and staff
Well managed operations
Use of innovation to gain competitive advantage
WEAKNESSES
Worldwide consumption is declining
Large scale operation that is difficult to manage
Absence of strong environmentalists to spearhead sustainability efforts
Lack of strong public relations arm
Lack of good reputation in some key markets
Main focus on shareholder wealth
Lower return on capital compared to main competitors
THREATS
Markets might become hostile to com...
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