BP: Putting Profits Before Safety?
| Case Code: BECG071 Case Length: 21 Pages Period: 2005-2007 Pub Date: 2007 Teaching Note: Available |
Price: Rs.400 Organization: BP Plc. Industry: Oil and Chemical Countries: USA, Europe Themes: Business Ethics, Employee Safety culture |
Abstract Case Intro 1 Case Intro 2 Excerpts
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
The case is structured to achieve the following teaching objectives:
- 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
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Bp - Green or Mean?
Background Note
Tragedy in Texas
Alarm in Alaska
Other Problems
BP Springs a Surprise Ahead of the Baker Report
The Baker Report
Critics Question BP's "Green" Image and Culture
Damage Control at BP
Outlook
Exhibits
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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