Ethical issues and concerns greatly contribute to shaping of environmental and corporate values and policies. The United States has been experiencing rapid economic growth, with the political arena gaining more strength. However, the United States faces various environmental challenges as well as disasters. The growth of firms is determined by the manner in which the different players in the market cope with the challenges. The management of various businesses and organizations has the task of ensuring the establishment of proper policies that guide the operation of the business. This will ensure the business remains steadfast in its operations and growth. Competition within industries and organizations pose a threat to those firms and organizations that do not put proper measures in place to curb it. The management of any given organization is responsible for developing strategic plans that will enable the organization to remain steadfast in operations. Strategic planning involves review of the objectives and the ethical values of the business by the leaders. This enables the leaders to develop strategies that are aimed at the achievement of the business objectives. Implementation of the strategic plan enables firms and organizations to mitigate possible risks that may arise in the operations of the business. This paper will give a critical evaluation of the leadership strategies in line with the ethics of policy and decision making in BP company.
Background Information
BP is a leading investor in the United States as it enjoys coverage of wider markets. The company has invested in energy development within the United States. Since year 2007, the company has put an investment base of more than $52 billion in the energy development sector. This investment is much larger compared to what the closest competitor has invested in the same sector and even more than what the country has invested in any foreign country. The company provides significant employment to the people of the United States, having 23,000 employees working for the company directly in the United States. This contribution is close to thirty percent of the work force globally and even more in the countries where this company operates. BP enjoys being the largest producer of gas and oil within the Deepwater Gulf of Mexico. By the end of the year 2011, BP embarked on exploration in Deepwater Gulf after receiving the first drilling permit since the Deepwater Horizon accident in 2010.
The portfolio of the BP company in the United States is wide and, thus, serves extremely broad functions. The company has its operations globally, and the wide coverage gives it an upper hand in combating competition within the industry and the market at large. The company undertakes both offshore and onshore production and exploration of gas and oil, refining, retailing, and marketing, among other functions. Ensuring the proper implementation of safety measures and risk management are the foremost concerns of the business. This is alongside striving to restore the trust and enhancing the value of the shareholders.
The company has engaged in producing energy from diverse energy sources. This encompasses the traditional natural gas and oil production as well as the alternative energy, encompassing biofuels and wind. In so doing, BP ensures that the energy needs of America are met and also ensures a more secure future in terms of the energy.
Evaluation of Leadership in BP
Businesses exist with a major objective of earning profits, while in some other instances, organizations do not have the objective of making profits. The corporate governance, corporate culture, practices of risk management, and the relationship of the stakeholders in the BP company are influenced by the corporate strategy.
A classical view lies in the belief that the desirable strategic outcome is the profitability of a business. Rational planning is a means by which the objective of profit maximization is achieved. The strategic objective of any given business is to acquire a return on capital. The profitability is desired both in the long run and in the short run. Rational planning may be futile because the conditions in the market, rather than the managers, dictate the planning strategy. Rational planning as a leadership strategy allows firms to enhance their effectiveness in the business environment where the business is seen to be socially embedded. In this regard, varied economic systems lead to different outcomes that a firm pursues. There is a possibility that the outcomes emanating in Anglo Saxon environments may be different from the outcomes of businesses in the context of Asian markets.
In the case of the BP operations, it can be inferred that the corporate strategy is affected by the focus given to the rational planning by the management of the company. This is in line with meeting the objective of profit maximization. The origin of BP and its locality are based on an Anglo Saxon style in regard to economic operations. This is enhanced by the objective of maximizing the value of the shareholders. However, the company also lays much concern on the value of its wide range of stakeholders. In this regard, the operations of the BP company may at times tend to overlap with the classical view (Magarey, Colunga, & Fieselmann, 2009).
The company has engaged in competitive leadership in issues regarding capital efficiency and cash costs. The unrelenting pursuit of competitive leadership has seen the company develop a five years leadership in the industry. From the resource based view, the competitive leadership of BP is attributed to the leveraging of resources and skills. This is based on corporate learning, thus enabling the firm to achieve capabilities and resources suitable for achieving the company’s objectives. Competitive strategy is the core in ensuring improved performance of business within the industry and market.
Decision making is a core concept in running of various organizations and businesses. Management in different organizations is bestowed with the responsibility of making decisions for their firms. The performance of these firms depends on the decision made by the management and the implementation strategy of the decisions. The crisis in the Gulf of Mexico is attributable to the various leaders of the players in the industry. The behavior and attitudes of the leaders are to be blamed for the dismal performance of firms. Lack of understanding of the basic element of leadership has significantly contributed to the oil spill. Leaders in the BP have been blamed for causing an environmental disaster.
The Chief Executive Officer of BP led an organizational culture that ignored expert advice, sanctioned extreme risk-taking, and showed no concern over safety warning issues. The cause of this flawed culture is the failure to act on the disaster with the required speed and lack of keen attention on the issue. The mistake made by BP was trying to spin away out of the crisis instead of facing the problem head on. The inability to understand the reaction of the public contributes to poor decisions made by the leaders. Leaders should take time and listen to the public when making critical decisions that may affect the public. Leaders should understand when a problem should be spun and when it should not. The leader of BP was responsible for the greatest environmental damage that have been caused in the United States (Lovins, 2010). The leader did not put much emphasis on the safety issues in the decision making process. Failure to consult other leaders and lack of strategies to mitigate risk led to the oil spill that caused damage to the environment. Strategic planning is an aspect that would have ensured that the company takes into consideration the repercussions that may emanate from the decisions made.
Teaching and training of human resources will ensure the employees have the necessary skills to undertake the operations of the business. Relevant skills will ensure that companies survive harsh economic situations. The human resource department has the responsibility of imparting skills to the various players within an organization. Human resource departments that are well developed are to improve the competencies and leadership skills of the employees. Through such an approach, the company will be in a position to improve its profitability. A leader should demonstrate competence and innovativeness in the operations of a business. The decisions made by leaders should add value to the performance of the business. On the other hand, the actions of a leader should serve to win the trust among the various players of the economy. The decision of the leader in BP resulted in a lack of trust in him and the various players of the economy. This is because of the environmental damage he caused in the United States (Bagley, 2012).
In conclusion, implementation of the leadership strategies alongside with the improvement of the values and ethics of leaders is critical for the operation of the business. BP should reflect on its strengths to enable it recover from the challenges encountered due to leadership actions. Decisions made should reflect the overall welfare of the business and that of the shareholders, thus contributing to better performance. For BP to develop effective leadership and competencies, an outline of the implementation should be developed to ensure achievement of goals within the set period.