Changes in British Petroleum (2014-2016)
This report consists of critically analyzing the Change Management strategies of British Petroleum during the period of 2014-2016. The report also outlines the various change management process in relation to British Petroleum and providing them with suitable recommendation for improving their change management process. British Petroleum is one of the energy companies of United Kingdom. It is primarily engaged in oil and natural gas that has a base in London. According to the Forbes magazine, it is one of the largest companies of the world and the third largest organization in respect to Oil and Natural Gas.
In addition, as on 31 December 2015 British Petroleum has its operations in more than 70 countries, it has the capacity to produce approximately 3.3 million barrels of crude oil per day, and has a total reserved of 17.18 billion barrels of Oil. There are more than 15,000 people in United Kingdom working in British Petroleum or more about 20% of their total workforce. British Petroleum has three major research and development centers located in United Kingdom for the development of their operations and implementing changes in their business maneuver.
Moreover, British Petroleum has 1100 service stations located in United Kingdom and it is known as the flagship retail brand of UK. British Petroleum has the largest oil spill tragedy under their name, the oil spill started on April 20, 2010 that almost injured seventeen people and killed eleven people. The primary product of British Petroleum is Natural Gas, Aviation Fuels, Petrochemicals and Motor Fuels. The organization has achieved a net profit of US$ 115 million in the year 2016 (bp.com 2017).
The period of 2014-2016 is one of the most tragic situations for the Oil and Natural Gas Sectors. There been a huge undergo in oil prices and it was very difficult for the majority of the firms to lower their profit margins (Pugh 2016). Therefore, in order to handle and tackle the situations British Petroleum has made major changes in their organization core values. British Petroleum has four specific values that helps to express the way the organizations conduct their business and provides a framework to translate their mission towards practical actions. Organizations these days are undergoing changes in some way or other. BP has been able to benefit from a large share of market and put on competitive advantage over its challenger because of recognition of change taking into account its surroundings and through proper learning. BP has been able to adapt in any environment. For instance, the company has gone green in protecting the environment and becoming the large campaigners for going green. This fact has led the company to focus on stakeholders.
Change Management Model
Progressive: British Petroleum is looking for a better way to conduct their business operations. In the year between 2014-2016, they have initiated relationship with Ford to build hydrogen vehicles and open fuel stations in California and Michigan respectively. British Petroleum has also reformulated their Amoco Ultimate fuel that helps in reducing air pollutants (Miksell 2016).
Innovative: During this time period, British Petroleum has created transition in their employee structure and provided sufficient training to them in order to create efficiency in their operations. Moreover, British Petroleum has implemented innovation it their daily operations and have developed cutting edge drilling technologies to ensure burst through solutions to their customer (Covaci 2015).
Green: The organization has a tragic history of Oil spill and polluting the society so the company has initiated committed environmental leadership strategies in their operations. British Petroleum has developed lower carbon emission energy sources that will help them to store gasoline in double-skinned tanks that will provide them from severe accidents like oil spills and leaks (Bianconi and Yoshino 2014).
Performance Driven: British Petroleum has also changed their framework of global standards of performance in the financial and environmental dimensions, growth of the business, safety and both the customer and employee satisfaction (Selley and Sonnenberg 2014).
Figure 1: Change Management Model
Source: (Cameron and Green 2015).
The management of British petroleum needs to understand that different organizational dimensions and should consider the procedures through its internal value chain and development mechanisms according to the recent changing trends in the economy.
In addition, British Petroleum management must address in respect to human resources of the company and their potential contributions towards the development of the organization. The organizational dimensions often demand a lot of attention from British Petroleum management to create possibilities of success for British Petroleum in the long run (Cameron and Green 2015).
The management must provide enough focus to remember and consider that the purpose of the analysis of all people, process and tools that are sustainable in the long term. Moreover, with the help of this change management model the management of British Petroleum needs changes in the three stages indentified by the researcher that is focusing on the basic conditions of survival addressing the management of change in their organization and promoting organization on the basis of their abilities. The basic survival stage indicates the requirements issues that are necessary for the company to have feasibility in the modern market (Goetsch and Davis 2014).
Role of leadership in a Change Management Process
The second stage address the changes in management both internally and externally by allowing the organization to address traditional ways of doing things and indentifying the various obstacles or troubles and also allowing the management to create a vision to guide their efforts accordingly. The last stage consists of creating effective promotional strategies for the organization. The management of British Petroleum must implement new ways of doing things and promote their brand globally to attract and acquire more number of valuable customers (Cleary and Wong 2016).
Change management process can be referred to as a natural process to a company, which it undergoes at different stages of its operations depending on the changing market scenario. Moreover, the period of 2014 to 2016 witnessed a significant cut in the oil pricing, which resulted in a reduced profit business to most of the organizations. To a big company like the British Petroleum, it becomes an utmost important to be flexible with the changing nature of market to reduce the losses to the maximum possible level. Nevertheless, a pure leadership quality is the one important weapon, which helps organizations in maintaining its firm grip on its business during such a critical time (Ross 2012). Through proper leadership, companies can pass through any tough situation. High quality performance and quality of products are essential on the company’s’ part to survive in the market that is only possible through proper leadership.
An ideal leader plays many different roles during the change management process to meet with the situational requirement to bring the best feasible solutions to the problems created. Moreover, it plays the part of a role model, which comes at the forefront and takes the ownership. Further, it helps others in understanding their roles & responsibilities that are expected during the change management process (Pearson and Watson 2012).
It plays a part of a decision maker, which takes the ownership & controls various resources such as budgets, people and many more. Moreover, the functionalities of a pure leader as a decision maker do not end here. It rather has a broad domain of expertise such as construction of strategies, discussing the strategies with the management, seeking the feedbacks of employees, preparing decisions on the financial part with the help of financial advisors and many more (Bolton 2012).
Pure leaders do also play a role of a voice, which communicate with its management to share the plan & strategies that have captured his or her mind. Moreover, it also shares information with the other top most position member in the organization such as the financial advisors, supervisors and many more (Alterman 2012).
By being, the motivator is one of those important characteristics of a pure leader that plays a crucial role in implementing the deliberate strategies of the organization. Motivation plays one of the most important roles for a Leader as it provides the Leader to boost the morale of its employees. Leaders are considered to have the realization power about the level of input required from its employees. Moreover, a successful leader motivates its employees to step down from their comfort zone to meet the expectation of the business operations (Hall and Atkinson 2016).
The role of an enforcer is another very important characteristic of a quality leader, which brings authority in its command that is necessary for maintaining a balanced work force in the organization. Moreover, some employees are common to most of the organization, which are not active workers; they rather need some push from the higher management for achieving their task (Kilian 2014). The higher management needs to put in that extra yard to bring the best out of their employees in tough situations.
Under the circumstances, which the oil price drop has created, there is an utmost requirement to have a leadership quality in the British Petroleum Company. Not only the British Petroleum Company but also most other companies are facing the same kinds of problem due to the falling oil prices (Brown et al. 2014).
Moreover, the failure of Tony Hayward as an ex- CEO of the British Petroleum Company has produced an emergency for the Company to have a change in their leadership skills to stand solid against the created threat. Further, the cut down on the oil prices have created threats to most of the organizations for their profitable venture and British Petroleum is no any exception (Critchlow, 2017).
The cut down on the oil pricing has affected the British Petroleum Company, as it is evident in the statement of the upstream chief executive Lamar McKay, which held the situation as a serious concern for the Company. The main challenge for the management is to decide about the project, which is to be holding on to suppress the rising pressure of investors (Palmer and Cooper 2013). However, Mr. McKay is optimistic about a good counter attack to the created threat with the help of numerous other projects that are underlined. Moreover, Mr. McKay is eyeing on a growth for its deepwater and gas assets in the coming future. Further, Mr. McKay did say that the Company has such a quality schemes, which could add up to the existing production limit with a substantial figure of 900,000 barrels per day in the coming future. Moreover, it can prove its worth in boosting the cash flow for the British Petroleum Company. Nevertheless, the cut down on the oil prices are a serious threat to the cash flow (Critchlow, 2017).
In the globalised world, it is very much necessary for companies to observe regular challenges and must provide entire focus on developing strategies that will allow them to gain a competitive place in front of their competitors.
Therefore, if British Petroleum wants to be competitive in the market they must evaluate their products with the ones from their competitors. The company can also be benefitted by investing on to their employees and look for joint ventures to expand their operations globally. Moreover, by doing this British Petroleum will create efficiency in their operations and will also increase their cost reduction and the organization will create new partnerships that will assess them to create more number of opportunities for export. British petroleum can gain potential competitive advantage with the help of change management process through several other strategies. The strategies consists of synchronization of tasks, restructuring of various role of the employees, responsibilities towards solving specific organizational problems, clearly identifying the goals and objectives of the organization (Veil, Sellnow and Wickline 2013). The steps through which British Employees will implement the above strategies are as follows:
- Enlistment of commitment to change throughout a joint scrutiny of problems
- Development of communal vision of the organizational procedure and methods that will provide the company to accomplish its objectives like competitiveness
- Encouragement of adaptation of new apparition and gaining the competency to implement it
- Growing the activities of each departments without creating pressure from top management and not forcing the problem directly but to allow all the departments to find a new approach towards efficiency
- Complement activities through a formal policy, structures and systems
- Scrutinize and adjust strategies in response to the problem of the change management process
According to the researcher, British Petroleum must use diversification strategies as one of their future strategic options in order to gain continue response to all the environmental challenges. The organization should also diversify their product range that is association with the production of solar and wind energy for their potential corporate and individual customers. British petroleum should implement expertise in green house gases and take proper initiatives to reduce carbon emission that will hinder to the growth of their organization.
The role of British Petroleum is to make expertise in the field of sustainability and produce more eco friendly operations. Most of the people think that nature-friendly products are the best things to use which the company should consider. Environment friendly products would be best option for British Petroleum to make a competitive advantage in the market place.
Moreover, in the transport sector the CEO of British Petroleum should make proper investment in innovating the Pipelines that would generate more safety of the environment. The organization also needs to re organize their marketing strategies and put more focus on creating an effective marketing mix so that they can secure competitive advantages over other competitors in the market place.
Moreover, the organization must provide expertise in E-learning initiatives and develop their E-learning training activities across the globe simultaneously. The organization must run series of professional development programs in order to apply leadership framework within the workforce team that should include work-based activities, seminars, courses and conferences.
Conclusions:
British Petroleum is the third largest Company in the Oil and Gas industries. At its initial stage, it only operated in the Oil & Natural gas sector; however, it goes on adding domains to its expertise with the passage of time. The recent cut down on the oil prices have produced a substantial amount of threats to most of the Oil & gas companies. Moreover, the British Petroleum Company is no any exception and it faced the similar kinds of problems. Nevertheless, the created situation demands the inception of a quality leadership, which could actually produce some significant ways out of the problem. Moreover, the present CEO of the Company Mr. McKay did show his concerns on the ongoing situation by saying that it is a serious issue for the Company. However, Mr. McKay does also feel that there are some other projects in the hand, which could actually fill the gaps created by the loss because of a reduced oil pricing. Moreover, these few new schemes could actually produce an additional of 900,000 barrels per day of Oil, which is extremely important for an improved cash flow of the Company. Nevertheless, the cut down in the oil pricing do affect the cash flow. It is concluded that the main strategies of British Petroleum is to avoid more political risks and must move to more stable countries to conduct their business operations. The organization must provide more attention towards their human resource development rather than only focusing on the product and promises of the company.
References:
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