Bp Texas City Oil Refinery Explosion (2005) – Case Summary

1660 words - 7 pages

BP is the leading energy company. BP took its name from the initials of the company’s previous official name British Petroleum. The company was trying to persuade everyone that it was an environmental friendly company that was using and develop alternative energy technology. During its existence it paid so much in fines for pollution that it is become obvious that management did not really care about the environment, but only about maximizing profit in anyway. It was easier for them to pay fines than to change their management system and prove safety improvements in the workplace. After the explosion, BP’s stock price and its reputation went down, and it is one of the numerous results of the disaster. It has definitely happened because of a lack of strong ethical guidance.

BP- Texas City Oil Refinery Explosion (2005) – Case Summary
In one of the largest oil refineries in Texas City, on March 23, 2005, the explosion and fire took place, which took away 15 lives, injured over 170 people, and obligated thousands residents that lived close to the plant to stay in their homes. BP generates diesel and jet fuel, and gasoline. In 2005 a huge cloud filled with hydrocarbon ignited approximately 1:20 pm. The explosion caused solid harm to the plant and to its name. In fact, the company had couple not so serious accidents before the explosion, and there were none engineering problems addressed by the management of the company. Because of a cost-saving plan, the maintenance and safety was paid less attention that needed in order to avoid the disaster at the plant. For sure, all the responsibility of the accident should be blamed on executives in London that were aware of the safety issues and budget cuts. It was definitely strong mismanagement at the BP and this was proved by investigations that took place in this case. In fact, one of them was provided by Chemical Safety and Hazard Investigation Board that "offered a scathing assessment of the company."

It is very important to take stakeholders interests into account. BP did not properly place its stakeholders at the center of its strategy. Instead of being fixated on legal liability, which originally impacts internal stakeholders (management, employees, shareholders, creditors, customers); BP should have empathized with external stakeholders (customers, public, communities, media) that will suffer from the explosion. Finally, BP has hurt all of its stakeholders.
7 Steps
1. What are the facts of the case?
I think the most significant fact is that BP was neglecting obvious warning signs about the plant's weakening conditions, and was focusing on the minimizing costs and the maximizing profits. Employees were aware of the working conditions at the plant because every day they were going to work with a fear that something terrible could happen at any time. BP failed to repair a lot of safety problems they knew about, and it led to the explosion in 2005, 15 deaths and over 170...

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