This dissertation investigates the possible impacts of a crisis on a company´s risk management and economic performance through a case study of the company BP and its Deepwater Horizon accident. The hence arisen findings can be divided into two categories. The first covers BP´s risk management and performance before the disaster and the second category deals with the development of these factors after the disaster. The observed period was from 2005 to 2015 in order to see BP´s developments five years before and after the crisis.
Table of Contents
I. Introduction
1.1. Background
1.2. Research Objective
1.3. Research Questions
1.4. Structure of the Paper
II. Literature Review
2.1. History of Risk and Crisis Management
2.2. Definitions
2.2.1. Definition of Risk, Crisis and Management
2.2.2. Definition of Risk and Crisis Management
2.2.3. Distinction between Risk and Crisis Management
2.2.4. The possible Impacts of Risk and Crisis Management
2.3. Literature about sensible Risk and Crisis Management
2.3.1. Risk Management
2.3.2. Crisis Management
2.4. BP and its Risk and Crisis Management Execution and Development
2.4.1. Short Introduction to BP plc (former name: British Petroleum)
2.4.2. BP´s official understanding of Risk and Crisis Management
2.4.3. The Development of BP´s Risk and Crisis Management (2005 - 2010)
2.5. The Deepwater Horizon Disaster
2.5.1. The Accident
2.5.2. BP´s Execution of Crisis Management
2.5.3. The Consequences
III. Methodology
3.1. Research Philosophy
3.2. Research Approach
3.3. Research Strategy
3.4. Research Choices/ Research Design
3.5. Time Horizons
3.6. Data Collection Techniques and Analysis Procedures
IV. Discussion
4.1. The Correlation between the Deepwater Horizon Disaster and BP´s Risk Management
4.2. The Impact of the Deepwater Horizon Catastrophe on BP´s Performance
4.2.1. The Development of BP´s Stock Quotation: A Comparison between BP and its Competitors
4.2.2. BP´s Triple Bottom Line (TBL) from 2005 to 2015
V. Conclusion
Objectives and Topics
This dissertation examines how a major crisis impacts a company's risk management and economic performance, specifically focusing on the BP Deepwater Horizon disaster. It explores the failures of BP's risk management before the incident and analyzes the subsequent strategic shifts and performance recovery between 2005 and 2015.
- Impact of crises on corporate risk management and performance
- BP's corporate culture and historical safety violations
- Analysis of the Deepwater Horizon accident and crisis response
- Comparison of stock market performance against industry competitors
- Application of the Triple Bottom Line framework for sustainable development
Excerpt from the book
2.5.1. The Accident
The disaster occurred on the 20th of April 2010, while the Deepwater Horizon was drilling at the Macondo Prospect. The explosion on the rig was caused by an uncontrolled release of cure gas from the well after pressure control systems had failed (BP, 2016b). This explosion killed 11 crewmembers, injured 17 others and subsequently ignited the oil rig (National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2011). The resulting fire could not be extinguished and, on the 22nd of April 2010, the Deepwater Horizon capsized and sank, leaving the well gushing at the seabed (Pallardy, 2015).
According to BP (2016b), the blowout and the environmental disaster were caused by a failure of the well integrity, “[…] followed by a loss of hydrostatic control of the well. This was followed by a failure to control the flow from the well with the blowout preventer (BOP) equipment, which allowed the release and subsequent ignition of hydrocarbons. Ultimately, the BOP emergency functions failed to seal the well after the initial explosions” (BP, 2016b). This was BP´s official statement, which only stated the sequence of failures that led to the accident, but not the causes of them.
Summary of Chapters
I. Introduction: Presents the background of the study and defines the objective to investigate the impact of the Deepwater Horizon crisis on BP’s performance and risk management.
II. Literature Review: Provides a theoretical foundation regarding risk and crisis management, analyzes BP's history of safety violations, and covers the details of the Deepwater Horizon disaster.
III. Methodology: Details the research process, justifying the use of a deductive approach, a single case study strategy, and a mixed-method design for data analysis.
IV. Discussion: Analyzes the correlation between BP's risk management failures and the disaster, and uses the Triple Bottom Line framework to evaluate BP’s performance from 2005 to 2015.
V. Conclusion: Summarizes findings, providing final answers to the research questions and reflecting on BP's post-disaster shift toward sustainability and safety.
Keywords
BP, Deepwater Horizon, Risk Management, Crisis Management, Industrial Safety, Corporate Performance, Triple Bottom Line, Sustainability, Oil Industry, Safety Violations, Stock Quotation, Economic Impact, Corporate Culture, Environmental Impact, Crisis Response
Frequently Asked Questions
What is the primary focus of this thesis?
This work focuses on the relationship between corporate crisis events and their lasting effects on a company's internal risk management structures and overall economic, social, and environmental performance.
Which company is used as a case study?
The thesis uses BP plc as a case study, specifically examining their management and the outcomes following the 2010 Deepwater Horizon oil spill.
What is the central research question?
The research asks if BP's risk management failed to prevent the Deepwater Horizon disaster and analyzes how the crisis subsequently impacted the company’s risk management and financial performance.
What research methodology does the author employ?
The author uses a positivist philosophy with a deductive approach, employing a single case study strategy and a mixed-method research design to evaluate secondary data.
How is the main body structured?
The body is structured into a literature review, a methodology chapter, and a discussion section that applies the Triple Bottom Line framework to assess performance from 2005 to 2015.
What are the core themes of this research?
Core themes include the evolution of risk and crisis management, the analysis of systematic safety failures, and the use of the 'people, planet, and profit' sustainability framework.
How did BP’s stock market performance compare to its competitors after the disaster?
The study finds that while BP’s stock quotation suffered a dramatic, permanent decline following the disaster, its main competitors experienced steady growth during the same period.
Does the author conclude that BP learned from the disaster?
Yes, the author concludes that BP shifted its corporate culture after the disaster, showing an increased awareness and prioritization of safety and sustainability over pure profit.
What did the Triple Bottom Line analysis reveal about BP?
The analysis indicates that while BP’s profit-related metrics were negatively impacted, the company achieved new highs in social and environmental metrics by 2015.
- Arbeit zitieren
- Peter Bernklau (Autor:in), 2016, The possible impacts of a crisis on a company's risk management and performance, München, GRIN Verlag, https://www.grin.com/document/338578
