British Petroleum (BP) case study
British Petroleum (BP) is a global oil and chemical company with global headquarter in London and United States operation in Houston, Texas. BP owns numerous oil fields, refineries and chemical manufacturing plants worldwide. It is the largest company in the United Kingdom while BP America in U. S. is the largest BP division. BP operations as of 2013 were spread in over 80 countries around the world. The brands controlled by the multinational include BP, Castrol, ARCO, and AmPm. BP’s production statistics indicates that the natural gas accounts for over 50 percent energy production in the United States. The company is vertically integrated and is involved in multiple operations in oil and gas industry, which encompass production, exploration, refining, power generation, petrochemical, marketing, and distribution. BP has also ventured in alternative energy technology and has prioritized solar, wind, and bio fuels (Seljom & Rosenberg, 2011). The external environments that are likely to affect BP’s business success include political and environmental factors. BP's financial success can be affected by political factors. BP operates in diverse markets where politicians create legislations in the oil industry that may affect its operation. BP global presence is also threatened by numerous international conflicts such as Arab spring and war in Gulf region (Aldrich, 2008). Environmental and technological factors have a direct impact on BP’s financial success since the company will require huge finances to develop new and renewable energy sources. Demand for renewable energy is growing as consumers embrace green energy to replace fossil fuel. Environmentalists, consumer advocacy groups, are calling for the development of alternative energy sector in order to reduce the environmental pollution associated with hydrocarbon. BP has invested heavily in the oil industry and were strong in the oil industry as opposed to alternative energy sector. BP enormous knowledge in oil refining, drilling, transportation, storage, and marketing cannot be matched with the photovoltaic industry (Haugh & Talwar, 2010). BP’s salient stakeholders
Just like any other organization, BP has organizations and individuals who are affected by the operations (Aaltonen, Jaakko & Tuomas, 2008). The key PB stakeholders include shareholders, customers, and the employees. BP’s shareholders are the owners of the company, and they expect they expect their funds to be used efficiently and yield much profit. Shareholders expect the management board to formulate strategies that will give the company a competitive advantage and ensure the company’s growth. BP’s customers are also key stakeholders whose decision determines the success of the company. The customers are the end consumer of company’s product and services; BP requires support from core customers in order for the company to last. BP customers expect the company to offer products they value and communicate honestly and transparently. Customers are also concerned with the company activities that may affect the environment. They require BP management to act ethically especially on environmental matters. The third group of BP’s stakeholders is employees. The impact of employee relations has been recognized in today’s organizations, and employees are regarded as assets. Employees who are treated fairly by the employer shows commitment and loyalty. BP as a multinational company provides employment to tens of thousands employees world over. BP employees offer crucial services to the company and ensure the company has achieved its objectives. BP employees engage the company through trade unions at different BP sites worldwide. Stakeholders’ influence on the organization financial performance Stakeholders are a critical part of a company success because their decision may have serious consequences to the...
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Seljom, P., & Rosenberg, E. (2011). A study of oil and natural gas resources and production. International Journal of Energy Sector Management, 5(1), 101-124.
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