On April 20, 2011, an oil rig in the Gulf of Mexico exploded on British Petroleum’s (BP) Deepwater Horizon. As a result, of the 126 BP crew members aboard, 11-15 were reported missing. Six days later, underwater robots reveal at least two leaks are dumping 1,000 barrels of oil into the Gulf per day. Consequently, this would become one of the worst oil spills in the history of the United States and perhaps the petroleum industry. This recent Oil Spill portrays one of many dilemmas BP has faced as it scrambles to expand and globalize itself as a transnational corporation in the world economy against other oil and gas companies. Although this disastrous event has affected BP negatively, the company has found a way to overcome it, while still becoming the 6th largest in the world; it continues to do this by offshoring, outsourcing, and merging with other oil and gas companies, three key strategies BP has been using since its establishment in 1909.
Globalization as Matthew Sparke defines, "is the extension, acceleration, and intensification of consequential worldwide interconnections” (2013, p. 3). In others words, globalization integrates social, economic, and political factors that shape the world. Globalization can be thought of as a great phenomenon; similarly, it can be thought of as quite the opposite. This paper will explain when, where, how and why BP Plc. has become a transnational corporation through globalization by offshoring, outsourcing, and merging with other companies. In addition, this paper will discuss the successes and consequences caused by globalization through BP’s three key strategies.
Like many others who start out, BP Plc. was a small company struggling to succeed after experiencing almost two bankruptcies. Before it was established, finding oil was hard and one of BP’s main founders, a Briton named William Knox D’Arcy was on the brink of giving up. On May 31, 1908, D’Arcy received the good news by his driller, George Reynolds of oil being found in Persia (now Iran). A year after this tremendous discovery, BP Plc. under the name of Anglo-Persian Oil Company opened and began selling oil to consumers.
In 1914, Anglo-Persian Oil Company almost went bankrupt due to Europe and the Americas having majority control of the oil market. Additionally, high prices of cars hindered most people from buying cars, hence, not many people were buying oil. With World War I and their oil-powered vessels, the Britons needed oil and they couldn’t look for any better oil company to purchase it from. Winston Churchill, the Prime Minister of the United Kingdom began advocating for the British government to purchase from the Anglo-Persian Oil Company. Soon enough, “UK government became a major shareholder in the company” (BP.com) ending its cash problems. This was the beginning to success of the Anglo-Persian Oil Company. In 1917, the British government seized control of the Germany firm brand British Petroleum (located in Britain) now that the...