Essay on Bp-Crisis

6801 Words Sep 26th, 2014 28 Pages
ISSN: 2278-3369

International Journal of Advances in Management and Economics
Available online at www.managementjournal.info

CASE STUDY

Crisis communication failures: The BP Case Study
Daniel De Wolf1, Mohamed Mejri2*
1University 2Ecole

of Littoral Côte d’Opale (ULCO)/Management & Economics, Dunkerque, France.

Superieure de Commerce/Management Department, University of Manuba, Tunis, Tunisia.

*Corresponding author: Email: mohamed.mejri@univ-littoral.fr

Abstract
On the 20th of April 2010, an outstanding explosion of the BP Deepwater Horizon oil rig situated in the Golf of Mexico caused the largest maritime disaster oil spill in the USA history and particularly caused considerable reputation and financial losses to
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The company was facing simultaneously two main issues: the biggest spill oil in the US history and considerable financial and reputation losses. At the financial level, BP shares loosed on June 25, 2010, nearly 7% and fell to its lowest level since 14 years in the London Stock Exchange. In addition, the BP stock market valuation, which was $182 billion on April 20, dropped to $ 89 billion on July 2, 2010. As for the company’s reputation, it has dramatically collapsed not only in the U.S.A. but also worldwide. According to Covalence, an organization that tracks the ethical reputation of multinationals, BP’s reputation has fallen sharply as the spill has progressed without a resolution. BP was then awarded the grade E, the lowest grade attributed by Covalence in a ranking used
Daniel De Wolf, Mohamed Mejri |Mar.-April. 2013 | Vol.2 | Issue 2|48-56

by ethical investors. In addition, a PR Week/One Poll’s survey conducted about one month before the accident showed that the public feels that BP has not done enough to stop the leak. This reputation loss persisted till yet. Almost a year after the Deepwater Horizon oil spill, the “l2th Annual Harris Interactive U.S. Reputation Quotient (RQ) Survey,” (released on May 2 by research group Harris Interactive polled over 30,000 Americans between December 2010-February 2011) revealed that, among the 60 most visible US companies, BP was second from last with a score of 49.82 and

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