BP has grown into a global energy group from a local oil company. It has employed over 96,000 people.
Strategic decisions are usually long term decisions which are often risky and speculative. A strategic decision made by British Petroleum was to make redundancies of up to 620 from their solar power business to make the cost of solar power cheaper. ‘…part of the strategy to “reduce the cost of solar power to that of conventional electricity’. ‘BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies’. This decision made by British Petroleum is respectively strategic as it is reconstructing the business. This could increase the companies’ efficiency which helps to reduce costs and in turn improve profitability in the long term. Solar panels are expensive to purchase but they are said to pay for themselves in the long term. British Petroleum could be taking advantage of the credit crunch by trying to get people to invest in solar panels. They are making redundancies in hope to make the cost of solar panels cheaper. By cutting back on what the company would have been paying in wages they are now trying to improve their efficiency in the production of solar panels. BP are working with alliances to make the cost of solar power cheaper which means consumers are in effect receiving the product which is usually costly and expensive for less in a time where they perhaps cannot afford it.
British Petroleum making redundancies brings some negative publicity at a time where the economy is in recession. More people will be claiming for i.e. job seekers allowance. The downward multiplier effect comes into action as there is an increase in the unemployment rate and lowering the standards of living etc.
BP and their alliance company may be competing on price to generate more business. There will be other companies who also offer solar power/panels and therefore this would cause rivalry among businesses. Tactical decisions ‘are medium-term decisions about how to implement strategy…’ < http://tutor2u.net/business/organisation/decisionmaking.htm> A tactical decision made by British Petroleum was to join alliances with another company. This is neither short-term nor long-term. It is a decision which is for the time being. ‘BP blamed the cutbacks on the credit crunch and lower-cost competition saying its global manufacturing capacity would still increase during this year and next via a series of strategic alliances with other companies’. The credit crunch is unpredictable. Therefore a medium term decision would be to join alliances as when the credit crunch is over companies may go back to competing individually in hope to be the market leader of that particular product. Companies in the same market will again be rivals and constantly try to undercut each other. Operational decisions are short-term and structured. They are less risky and have plenty of data to back up the decision.
An operational decision made by British Petroleum was to offer a short term disability plan to its employees. The scheme which has been put in place allows employees to receive income for up to 26 weeks a year. British Petroleum may have offered a short-term disability plan so that employees will stay with the company and not look for another job. The company may be doing this as then they will not have to recruit and train new employees....