Bp – When reality sets in

BP stats from 2011²⁹

Nine key attributes of reputation	Industry rank
Innovation	5
People management	15
Use of corporate assets	16
Social responsibility	16
Quality of management	15
Financial soundness	16
Long-term investment	11
Quality of products/services	7
Global competitiveness	14
From the March 21, 2011 issue

The key attributes marked in red are the areas, which are believed to be linked directly to the 2010 BP oil spill in the Mexican Gulf. These three areas are all connected to the crisis, while the outside world will judge BP by how they have handled the crisis in their eyes and how much they have achieved to clean up and if BP will continue to show corporate social responsibility (CSR). This is an area where organizations these days strive for, in order to achieve admiration.

As one can read from this information BP have failed to be an admired organization within this industry compared to previous years before their oil crisis in April 2010. Additionally, BP continues to strive for success as the organization looks to the future to rebuild their image and reputation so they once again can become a more admired organization within the industry of petroleum and refining. In the future BP will aim to understand and limit risk when searching and working with oil. This statement is from their annual report from 2010 “Global energy demand continues to rise, so the world needs BP and others to meet these challenges in an environmentally sustainable way. In doing this, we can never eliminate every hazard, but we can become an industry leader in understanding and limiting risk. That’s our goal.”³⁰ It is these factors that in the future will determine how BP as an organization will be judged; hence if BP succeed to limit their risk when drilling for oil, continue to protect the environment and most importantly keep their promises in regard to the crisis demand to clean up. If the organization do this, then likely they will be admired again in the future, if not they will forever be the organization associated with the largest and most devastating environmental disaster in U.S. history.
This small section is meant to give the reader an idea about the current status of BP as an organization within this industry. It gives a good indication about the admiration of BP before and after the crisis. Therefore it will be crucial for BP that their brand image have moved away from the last place when the 2012 scores approaches. These scores will show if BP is moving in the right direction to once again be in the top of admired organizations within their industry.

12 Tony Hayward – BP’s Scapegoat?

When a crisis hits with the magnitude of the one BP faced in April 2010, it is fair to say that any CEO would have had a tough task at hand. This was no different for BP’s CEO Tony Hayward. When an event such as this crisis happens, great focus will be on the organization and its leaders. As CEO, Tony Hayward was the face of the organization and he became a potential target for the media and BP’s stakeholders. As stated earlier these stakeholders look for someone to blame when a crisis occur and therefore Tony Hayward was put in the middle of a media storm as the villain of the crisis. While the organization failed to close the leak in the pipeline, tensions heated around BP’s CEO and though he worked extremely hard to solve the continuing oil spill he made some crucial mistakes seen from a crisis communicative and public relations perspective. Throughout the crisis Tony Hayward have delivered numerous quotes, which many crisis communicative experts believe have worsened BP and his own image. Hayward tactlessly griped, “I’d like my life back,” in response to the explosion that killed 11 workers, and repeatedly denied the severity of the spill.³¹ Another cringe worthy quote came on April 29^th 2010 when Tony Hayward stated “What the hell did we do to deserve this?”³² These quotes can be viewed as being detriment to BP’s organization, hence Tony Hayward’s at times poor communication style have hurt his own and BP’s image. Additionally, Tony Hayward was put under further pressure when he decided to take a break from his work during the crisis as he attended a yacht event on the Isle of Wight 4,500 miles away from the disaster.³³ Despite working extremely hard during the crisis, it was not wise of Tony Hayward to take a break from the crisis, as the public most likely will misinterpret his commitment to the crisis. Furthermore, the media will try to portray him as being a slacker and relaxing while he should be trying to fix the disaster in the Gulf. Whether he deserved a break or not, he should be aware of the consequences he put himself into, while he is the face of the organization and thereby the face of the crisis. Therefore, his spare time should be considered carefully, while the media are masters of perception. They know that the crisis will sell newspapers and when they can print Tony Hayward not showing commitment they know that he can be portrayed as the scapegoat. During this crisis all eyes will be on Tony Hayward and therefore he will be judged and measured by the media and the public in everything he says or do.

Just as the public and stakeholders need someone to blame in relation to the crisis so did perhaps the organization of BP and their board members; regardless the circumstances Tony Hayward left BP after serving as BP’s CEO of three years. BP’s annual report from 2010 stated “We have made significant changes to the board and I want to acknowledge Tony Hayward who have left the company. Tony stood down as group chief executive on 1 October 2010.³⁴ Whether Tony Hayward was fired or asked to leave the organization will remain unknown, however when such a large crisis hits an organization, they at times also search for someone to blame for the situation they are in, hence Tony Hayward in some eyes will be seen as BP’s scapegoat. One can argue whether this was a fair treatment of Tony Hayward or not but nevertheless, he was blamed for the crisis and BP as an organization must have felt that in order to look forward and restore their image the chose to act accordingly.

This short section was included to show how easy a CEO of a large organization can be put in a predicament when a crisis occur, while he was attacked from all angles by the media, stakeholders, the public, and the Government. Moreover, it also shows how every aspect of Tony Hayward’s behavior was measured and the inappropriate statements he made and the vacation days he took damaged his image and also BPs’.
13 Conclusion

This thesis is written to give the reader an insight to how complex a crisis can be for an organization. Organizations have to be prepared for crises at any given time according to theorists within this field. In other words, they have to expect the unexpected, however that is easier said than done, while the crisis BP experienced turned out to be much larger than first anticipated.

No individuals think alike within the teachings of hermeneutics and constructivism, hence various understandings and interpretations occur when people tries to understand the crisis of BP. The media have a great impact to how individuals will get their information about the crisis and since much of the material analyzed had negative connotations towards the organization and CEO Tony Hayward, they will likely get affected by the stories of the media, because individuals have their own sense of reality and their own set of values. The BP oil spill therefore becomes a personal understanding of the tragic event.

Since the media potentially print whatever they please about the BP oil crisis, they display a power discourse that gives them the ability to influence individuals through i.e. their articles.

When a crisis hits, it brings high levels of uncertainty. That is why post-crisis communication is so vital for the organization. The right approach needs to be designed in relation to the communication response given. It is important to mention what exactly happened during the crisis and what is at stake. Furthermore, stakeholders needs to be addressed in order to calm the stressful situation a crisis can cause and lastly the organization needs to explain what they intend to do to fix the situation; while the image and reputation is on the line for the organization. Moreover, Coombs (2007) suggests when a crisis as severe as the one of BP, the organization needs to give a full apology meaning that they take the full responsibility meaning cleaning up the oil spill and compensate stakeholders effected directly by the crisis.

According to the ‘Situational Crisis Communication Theory’ BP will be judged also by the crises they have experienced in the past. How they managed to fix these can help protect their image. Hence, past crises shape the perceptions of the current crisis and this is where the reputational threat lies. Reputation is met by how stakeholders view the organizations’ ability to meet their expectations. In other words, how are stakeholders treated by BP and do they feel protected by the organization?

A crisis creates a need for information. Communication is therefore an important factor. Framing the crisis message becomes key for the organization, while it shapes how individuals define problems, causes of problems, attributions of responsibility, and solutions to the problems. BP will therefore be judged in the success they have handling the crisis and fixing the damage it have caused.

Additionally, ‘Image Restoration Theory’ is about convincing the audience that this crisis was an accident and if the organization convinces their audience they likely will be held less accountable for the crisis and might reduce the damage to their image. Also taking responsibility and giving compensations to victims could help their image to improve if these are satisfied with the help the organization have given. Likewise, BP has to communicate precisely what is being done to fix the damages and how they plan to avoid similar events in the future. Prevention is therefore a key component to the future image of BP while they have to limit their risks within petroleum refining.

The oil crisis of BP in April 2010 is simply to great a tragedy for other organizations not to learn from. Being prepared for crises and expecting the unexpected is an investment all larger organizations will benefit from if disaster should strike.

14 Bibliography

Journal articles:
Benoit, W. L. (1997). Image repair discourse and crisis communication. Public relations review, 23(2), 177-186.
Coombs, T. W. (2007). Protecting organization reputations during a crisis: The development and application of situational crisis communication theory. Corporate reputation review, 10(3), 163-176.
Coombs, T. W., & Holladay, S. J. (2001). An extended examination of the crisis situations: A fusion of the relational management and symbolic approaches. Journal of public relations research, 13(4), 321-340.
Coombs, T. W., & Holladay, S. J. (1996). Communication and attributions in a crisis: An experimental study in crisis communication. Journal of public relations research, 8(4), 279-295.
Coombs, T. W. (2004). Impact of past crises on current crisis communication: Insights from situational crisis communication theory. Journal of business communication, 41(3), 265-289.
Dellinger , B. (1995). Critical discourse analysis. 1-9.
Dijk, T. A. V. (2001). 18 critical discourse analysis. Oxford: Blackwell, 352-371.
Ihlen, Ø. (2010). Love in tough times: Crisis communication and public relations. The review of communication, 10(2), 98-111.
Kim, J. S. (2005). The effects of a constructivist teaching approach on student academic achievement, self-concept, and learning strategies. Asia pacific education review , 6(1), 7-19.
Mallery, J. C., Hurwitz, R., & Duffy, G. (1986). Hermeneutics:from textual explication to computer understanding?. Massachusetts institute of technology, 1-22.
Seeger, M. W., & Padgett, D. R. G. (2010). From image restoration to renewal: Approaches to understanding postcrisis communication. The review of communication, 10(2), 127-141.
Press releases:
BP. (2010, April 21). BP confirms that transcend ltd issued the following statement today. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061443
BP. (2010, April 21). BP offers full support to transocean after drilling rig fire. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061458

BP. (2010, April 22). Bp initiates response to gulf of mexico oil spill. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061490

BP. (2010, April 24). Bp offers sympathy to the families of those lost in the us oil rig fire. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061514
BP. (2010, April 25). Bp forges ahead with gulf of mexico oil spill response. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061518
BP. (2010, April 26). Bp gulf of mexico spill response accelerating. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061537
BP. (2010, April 28). Bp pledges full support for deepwater horizon probes. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061626
BP. (2010, April 29). Bp mc252 gulf of mexico response continues to escalate on and below surface. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061663
BP. (2010, April 30). Bp steps up shoreline protection plans on us gulf coast . Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061565
BP. (2010, April 30). Bp onshore preparations for gulf coast oil spill. Retrieved from http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7061712
BP Annual Report 2010:
BP. (2010, December 31). Annual report and form-20f 2010. Retrieved from http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/I/BP_Annual_Report_and_Form_20F.pdf
Newspaper articles + Time Magazine articles:
Gibson, M. (2010, November 10). Who will be time's 2010 person of the year?.
Leake, C. (2010, June 20). There's no oil slicks here, tony: White house blasts bp boss as he watches yacht race 4,500 miles away from gulf disaster. Mailonline
Walsh, B. (2010, May 15). From the top down, sloughing off blame for the spill.
Walsh, B. (2010, June 10). The gulf disaster: Whose asses need kicking?.
Walsh, B. (2010, June 3). Catastrophe in the gulf: How bad could it get?.
Walt, V. (2010, July 19). Can bp ever rebuild its reputation?.

Books:
Newsom, D., & Haynes, J. (2011). Public relations writing. (9 ed.). Boston: Wadsworth.
Tench, R., & Yeomans, L. (2009). Exploring public relations. (2 ed.). Essex: Pearson Education Limited.
Websites:
www.bp.com
CNNMoney. (2011, Match 21). World's most admired companies. Retrieved from

http://money.cnn.com/magazines/fortune/mostadmired/2011/snapshots/6327.html

CNNMoney. (2011, March 21). World's most admired companies. Retrieved from http://money.cnn.com/magazines/fortune/mostadmired/2011/industries/42.html
Youtube. (2010, June 17). Chairman stupak questions bp ceo tony hayward . Retrieved from http://www.youtube.com/watch?v=QCN0UpaqOgE&feature=related
Youtube. (2010, June 17). Chairman waxman questions bp ceo tony hayward . Retrieved from http://www.youtube.com/watch?v=Yj3ULzWpqt0&feature=relmfu

15 Appendices

Press releases:
BP confirms that Transocean Ltd issued the following statement today
Release date: 21 April 2010

BP confirms that Transocean Ltd issued the following statement today:

"Transocean Ltd. Reports Fire on Semisubmersible Drilling Rig Deepwater Horizon"

“Transocean Ltd. (NYSE: RIG) (SIX: RIGN) today reported a fire onboard its semisubmersible drilling rig Deepwater Horizon. The incident occurred April 20, 2010 at approximately 10:00 p.m. central time in the United States Gulf of Mexico. The rig was located approximately 41 miles offshore Louisiana on Mississippi Canyon block 252.”

“Transocean's Emergency and Family Response Teams are working with the U.S. Coast Guard and lease operator BP Exploration & Production, Inc. to care for all rig personnel and search for missing rig personnel. A substantial majority of the 126 member crew is safe but some crew members remain unaccounted for at this time. Injured personnel are receiving medical treatment as necessary. The names and hometowns of injured persons are being withheld until family members can be notified.”

“For more information about Transocean, please visit our website at www.deepwater.com. Among the documents posted on our web site is the Transocean Ltd. Proxy Statement and 2009 Annual Report.

SOURCE: Transocean Ltd.”
BP Offers Full Support to Transocean After Drilling Rig Fire
Release date: 21 April 2010

BP today offered its full support to drilling contractor Transocean Ltd. and its employees after fire caused Transocean's semisubmersible drilling rig Deepwater Horizon to be evacuated overnight, saying it stood ready to assist in any way in responding to the incident.

Group Chief Executive Tony Hayward said: "Our concern and thoughts are with the rig personnel and their families. We are also very focused on providing every possible assistance in the effort to deal with the consequences of the incident."

BP, which operates the licence on which Transocean's rig was drilling an exploration well, said it was working closely with Transocean and the U.S. Coast Guard, which is leading the emergency response, and had been offering its help - including logistical support.

Transocean reported the fire earlier today on the rig, located approximately 41 miles offshore Louisiana on Mississippi Canyon block 252, saying that a "substantial majority" of the 126 personnel on board were safe, but some crew members remained unaccounted for. A number of personnel were reported to be injured.
BP Initiates Response to Gulf of Mexico Oil Spill
Release date: 22 April 2010

BP today activated an extensive oil spill response in the US Gulf of Mexico following the fire and subsequent sinking of the Transocean Deepwater Horizon drilling rig 130 miles south-east of New Orleans.

BP is assisting Transocean in an assessment of the well and subsea blow out preventer with remotely operated vehicles.

BP has also initiated a plan for the drilling of a relief well, if required. A nearby drilling rig will be used to drill the well. The rig is available to begin activity immediately.

BP has mobilized a flotilla of vessels and resources that includes:

• 
  significant mechanical recovery capacity;
  
• 
  32 spill response vessels including a large storage barge;
  
• 
  skimming capacity of more than 171,000 barrels per day, with more available if needed;
  
• 
  offshore storage capacity of 122,000 barrels and additional 175,000 barrels available and on standby;
  
• 
  supplies of more than 100,000 gallons of dispersants and four aircraft ready to spray dispersant to the spill, and the pre-approval of the US Coast Guard to use them;
  
• 
  500,000 feet of boom increasing to 1,000,000 feet of boom by day’s end;
  
• 
  pre-planned forecasting of 48-hour spill trajectory which indicates spilled oil will remain well offshore during that period;
  
• 
  pre-planned staging of resources for protection of environmentally sensitive areas.
  

"We are determined to do everything in our power to contain this oil spill and resolve the situation as rapidly, safely and effectively as possible," said Group Chief Executive Tony Hayward. "We have assembled and are now deploying world-class facilities, resources and expertise, and can call on more if needed. There should be no doubt of our resolve to limit the escape of oil and protect the marine and coastal environments from its effects."

As part of its planning and approval requirement prior to offshore activity, the area was evaluated for use of dispersants and the plans approved by the US Coast Guard which has now given the go-ahead for their use.

BP Offers Sympathy To The Families Of Those Lost In The US Oil Rig Fire
Release date: 24 April 2010

BP today offered its deepest sympathy and condolences to the families, friends and colleagues of those who have been lost following the fire on the Deepwater Horizon oil rig in the Gulf of Mexico this week.

Group Chief Executive Tony Hayward said: “We owe a lot to everyone who works on offshore facilities around the world and no words can express the sorrow and pain when such a tragic incident happens.

"On behalf of all of us at BP, my deepest sympathies go out to the families and friends who have suffered such a terrible loss. Our thoughts also go out to their colleagues, especially those who are recovering from their injuries," he said.

He added: "BP will be working closely with Transocean and the authorities to find out exactly what happened so lessons can be learnt to prevent something like this from happening anywhere again."
BP Forges Ahead With Gulf of Mexico Oil Spill Response
Release date: 25 April 2010

BP, as lease operator of Mississippi Canyon Block 252 (MC252), continues to forge ahead with a comprehensive oil well intervention and spill response plan following the April 22 sinking of the Transocean Deepwater Horizon drilling rig 130 miles south-east of New Orleans.

“We are attacking this spill on two fronts – at the wellhead and on the surface offshore,” said BP Group Chief Executive Tony Hayward, who has travelled to Texas and Louisiana this week to meet with response personnel. “The team on the ground and those at sea have the Group’s full resources behind them.”

BP continues to assist Transocean’s work below the surface on the subsea equipment, using remotely operated vehicles to monitor the Macondo/MC252 exploration well, and is planning and mobilizing to activate the blow-out preventer.

BP is preparing to drill relief wells to permanently secure the well. The drilling rig Development Driller III is moving into position to drill a second well to intercept the Macondo well and inject a specialized heavy fluid to securely prevent flow of oil or gas and allow work to be carried out to permanently seal the well.

As of Saturday, April 24, the oil spill response team had recovered more than 1,000 barrels of an oil-water mix of which the vast majority is water. The material has been collected by skimming vessels and vessels towing containment boom. Dispersants have also been applied to the spill. Equipment available for the effort includes:

• 
  100,000 gallons of dispersant are ready to be deployed, which is a third of the world’s dispersant commodity; BP is in contact with manufacturers to procure additional supply as necessary.
  
• 
  32 spill response vessels (skimmers, tugs, barges, recovery vessels).
  
• 
  5 aircraft (helicopters and fixed wing including a large payload capacity C-130 (Hercules) for dispersant deployment).
  

In Houma, La. where the field operations response is being coordinated, almost 500 personnel on- and offshore have already been deployed to coordinate the oil spill response. BP’s team of operational and technical experts are working in coordination with several agencies, organizations and companies including United States Coast Guard, Minerals Management Service, Louisiana Department of Environmental Quality, National Oceanic and Atmospheric Administration, US Fish & Wildlife Service, Louisiana Wildlife and Fisheries, and Marine Spill Response Corporation. More teams have been mobilized in Houston and New Orleans to support the effort.

According to Steve Benz, President and CEO of the Marine Spill Response Corporation (MSRC), “At BP's request we are mounting the single, largest response effort in MSRC’s 20-year history. The many years of working together with BP on drills and exercises has proved invaluable to us as we move forward on this response effort."

“Given the current conditions and the massive size of our response, we are confident in our ability to tackle this spill offshore,” Hayward added.

Along with the response teams in action, additional resources, both people and equipment, continue to arrive for staging throughout the Gulf states in preparation for deployment should they be needed.