An Analysis of BP’s Difficulties, “Signature Processes” & Performance
BP is the multinational holding company and one of the world’s major petroleum and petrochemical groups. BP’s primary activities include: exploration and production of crude oil and natural gas; refining, marketing and transportation; and manufacturing and sales of petrochemicals. In 1908, William D’Arcy and George Reynolds struck oil in Persia and established the Anglo-Persian Oil Company (APOC). In 1935 APOC was renamed the Anglo-Iranian Oil Company (AIOC). Throughout the mid-twentieth century, AIOC expanded its market and eventually became BP plc (BP.com).
Today, BP operates in 80 countries as a vertically integrated company. It has global brand recognition, which …show more content…
Through this signature process coupled with its leadership development program, BP believed it had a solid fusion of processes that had set itself apart from its competition (Gratton & Groshal, 2005). Nevertheless, BP began to focus on controlling costs and boosting its share price rather than investing in its Peer Assist Program. By the time of the Texas City and Alaskan pipeline crises, the Peer Assist Program was barely functional. In 2007, BP created increased incentives to develop shortcuts and take higher risks. The company’s judgment was distorted in two major ways: BP opted not to fix or replace the proven Peer Assist Program and the disasters before the DHOS did not result in lessons learned, paving the way for future disasters. It is said that, “The lanes were widened for what risks were permissible without punishment; rewards were primarily for cost-cutting and not withdrawn for risky behaviours” (Davenport & Prusak, 2010: 1). Due to a “climate of opinion,” the parameters around decision-making were set up to reflect the emphasis on short-term costs and benefits (Davenport & Prusak, 2010: 1). Although the Peer Assist Program allowed for knowledge generation, it was tightly project bound and therefore not equipped to address the DHOS before it happened. Even though the new BP CEO, Bob Dudley, said that the DHOS came out of nowhere, hindsight proved otherwise (MacGillivray, …show more content…
However, the article fails to discuss how signature processes can be successfully implemented. It assumes that if a company has a signature process, it is fulfilling the role that management has mandated. BP’s signature process was well-known but not fully enforced. In some ways, the article’s authors were naive, since they took the signature process at face value and failed to account for its implementation and other factors leading to superior performance. They relied on secondary sources and interviews with executives to identify the importance of signature processes and did not consider the reality of company culture. Overall, their objectivity was somewhat compromised due to their research, their signature process assumptions and their view that signature processes are a zero-sum game with regard to competitive advantage (Gratton & Groshal,
BP is the multinational holding company and one of the world’s major petroleum and petrochemical groups. BP’s primary activities include: exploration and production of crude oil and natural gas; refining, marketing and transportation; and manufacturing and sales of petrochemicals. In 1908, William D’Arcy and George Reynolds struck oil in Persia and established the Anglo-Persian Oil Company (APOC). In 1935 APOC was renamed the Anglo-Iranian Oil Company (AIOC). Throughout the mid-twentieth century, AIOC expanded its market and eventually became BP plc (BP.com).
Today, BP operates in 80 countries as a vertically integrated company. It has global brand recognition, which …show more content…
Through this signature process coupled with its leadership development program, BP believed it had a solid fusion of processes that had set itself apart from its competition (Gratton & Groshal, 2005). Nevertheless, BP began to focus on controlling costs and boosting its share price rather than investing in its Peer Assist Program. By the time of the Texas City and Alaskan pipeline crises, the Peer Assist Program was barely functional. In 2007, BP created increased incentives to develop shortcuts and take higher risks. The company’s judgment was distorted in two major ways: BP opted not to fix or replace the proven Peer Assist Program and the disasters before the DHOS did not result in lessons learned, paving the way for future disasters. It is said that, “The lanes were widened for what risks were permissible without punishment; rewards were primarily for cost-cutting and not withdrawn for risky behaviours” (Davenport & Prusak, 2010: 1). Due to a “climate of opinion,” the parameters around decision-making were set up to reflect the emphasis on short-term costs and benefits (Davenport & Prusak, 2010: 1). Although the Peer Assist Program allowed for knowledge generation, it was tightly project bound and therefore not equipped to address the DHOS before it happened. Even though the new BP CEO, Bob Dudley, said that the DHOS came out of nowhere, hindsight proved otherwise (MacGillivray, …show more content…
However, the article fails to discuss how signature processes can be successfully implemented. It assumes that if a company has a signature process, it is fulfilling the role that management has mandated. BP’s signature process was well-known but not fully enforced. In some ways, the article’s authors were naive, since they took the signature process at face value and failed to account for its implementation and other factors leading to superior performance. They relied on secondary sources and interviews with executives to identify the importance of signature processes and did not consider the reality of company culture. Overall, their objectivity was somewhat compromised due to their research, their signature process assumptions and their view that signature processes are a zero-sum game with regard to competitive advantage (Gratton & Groshal,