BP TEXAS CITY

1 CASE ANALYSIS
This case articulates the critical incident happened in the city of Texas. It demonstrates how
organizational policies can have impact on organization in longer term. British Petroleum one the
successful name in petroleum industry ever known; it is responsible for the explosion and fire in one of its
refineries way back in 2005. This explosion was noticed by giants in the state who undertook
investigation to explore the underlying factors behind this excruciatingly sad event. This case is structured
in a good way; first of all its opening vignette informed us about the important news which in terms of
management perspective holds a substantial purpose. Then it tells us three major organization results who
investigated the symptom of this major incident. This refinery was acquired through merger by British
petroleum. This incident was the catalyst of cost cutting and profitability goal of BP Texas City. Top tier
management had this vision to lead towards cost cutting whilst earning profitability. In lieu of
undertaking this strategy they neglected the consequence of this on employee. On the contrary side they
made safety policies which tremendously decreased the rate of personal employees injuries. While
Chemical Safety Board was investigating the reasons behind it came to know cost cutting lead to decrease
in maintenance cost of machineries. Management neglected to maintain the machinery. In fact some of
the machineries were obsolete which were no longer used by other refineries anymore. Due to which
problems associated with catastrophic safety risks remained. In reference to CSB observation came to
know that unsafe and antiquated equipment design were left in place and unacceptable deficiencies in
preventive maintenance were tolerated. It apparently seemed that management was purposively infallible
towards this to take corrective measures. Explosion occurred in that equipment which was no longer been
used by other refineries.
This massive explosion was not purely an accident in fact it was repercussion of the various events
associated with it for instance working environment, preemptive measures, poor organizational structure,
lack of education. Baker panel investigations revealed that BP Texas City had not established safety as
the core issue. Furthermore British Petroleum never made comprehensive policies which ensured that
adequate resources were allocated towards high level of safety performance. Management was more
focused towards fulfilling corporate initiative and management never responded effectively to
deficiencies entailed in machinery. Bakers Panel came to the conclusion that major factor which was
accountable for this incident was ineffective leadership.
My analysis says they have compromised on safety of their employees just to earn more profits. This case
reveals that it is a major crime if a company is overlooking the employee safety. Employee safety has to
be put up on high level because they are the ones working for the entity. BP underestimated this and they
became liable for paying the highest fine in the history. If their human resources has effectively carried
out cost benefit analysis they would have known long time before about the huge implications can be
incurred with this policy. Human resources was mainly accountable who has not made aware about the
severe implications. Cost cutting is always the good strategy but before implementing it proper analysis
had to be carried down. Analysis and rational reasoning towards this strategy in whole of the
organizational issues had to be dealt upon were supposed to be discussed.
2 BREAKDOWN IN ETHICAL OR SAFETY SYSTEMS?
There is an imperative significance that company has to perform ethically to promote good practices
throughout the company. Employee safety rights are of significant value because they are the assets of the
company. One of the researches came to the conclusion that supervisor moral conduct leads to higher
probability of employee productivity. Now we need to associate the ethical conduct with the incidence of
BP Texas city. BP Texas city was deliberately taking measures to increase their profitability. This can be
cited to number of incidents in case study. As research carried out by CSB and Bakers Panel said that
company overlook to compensate the obsolete equipment used by the company. Management knew long
before about the series of events which could be obsolete in long term. If we have to say and give
acknowledgment to management that they have taken measurement towards individual employee safety
which implies that ensured with the safety systems is totally wrong. They wanted to do cost cutting thats
why compromised on maintenance and depreciation cost of the equipment used by the company.
Furthermore the machine which is accountable for explosion was no longer used by other industries.
Which I believe that it is gullible to say that they were unaware of this information. Management is the set
of personnel who know every bit of information regarding internal activities and external competition. I
believe that there was a breakdown of ethical systems in the British Petroleum. Due to decentralization in
the organizational structure resulted in most of the managers were not reporting to anyone. Top tier
management gave derived this policy to cut costs and earn profits. They emphasized this on to the entire
hierarchy of the company that managers were overlooking the aspect of ethical systems used to prevail in
the company. It was in their knowledge that employees were complaining defects in machinery. Managers
were letting it go. In an epilogue I would like to say ethical systems has a lot of importance. This
breakdown went on to the entire structure of the organization. If main CEO became impulsive and selfish
in nature to earn profits what can be expected from the rest of the employees in organization. Thats why I
believe they took this irrational move which excruciatingly effected the ethical behavior of organization.
In fact case has already said there was lack of leadership which comes under ethical standards.
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