CASE STUDY : BP and the Gulf of Mexico Oil Spill Shortly before 10 p.m. on April 20, 2010, a series of explosions rocked the Deepwater Horizon oil rig in the Gulf of Mexico. Gas in the Macondo well had surged upward unexpectedly, causing a mix of drilling mud and seawater to spew uncontrollably. Eleven crew members died during the explosion and millions of barrels of oil spilled into the Gulf over the following three months. This industrial disaster became the largest offshore oil spill in U.S. history, causing unprecedented environmental and economic damage. As BP attempted to address the continuing effects of the catastrophe, the public became angry. BPs chief executive officer (CEO), Tony Hayward, became the subject of intense criticism for his handling of the crisis. In late July 2010, only days after oil stopped leaking from the Macondo well, BP announced that Hayward would step down as CEO. Drawing on the presidential commissions investigation, as well as numerous journalistic accounts, this case provides a detailed description of the events leading up to this catastrophic accident. The case presents the key decisions that BP and its partners made as they drilled this well, as well as the alternative choices that could have been made and the disagreements that took place (as well as those that failed to surface until later). Moreover, the case provides an opportunity to examine how BPs history and organisational culture shaped the way those decisions were made. In addition, this case explains how the regulatory environment and political forces shaped decision-making in the oil industry. The case concludes by examining the aftermath of the accident, particularly the public relations miscues that BP experienced as it tried the manage the crisis. This case has three primary learning objectives. First, it provides students with an opportunity to examine how and why catastrophic failures occur. The case illustrates that such incidents do not have a single root cause, but instead emerge based on a chain of errors and mistakes. In this way, students discover the value made errors. Such failures often result from systemic forces that shaped and influenced decision-making over time, rather than from isolated decisions or incidents. These systemic factors include forces within the firm, such as culture and incentives, as well as external drivers such as the regulatory environment. Firing the individuals who made erroneous decisions typically does not prevent future failures, unless accompanied by broader systemic change. Second, the case highlights several factors that drive enhanced risk-taking in organisational decisionmaking. Students learn how executives can induce people to take excessive risks through the metrics and incentives they choose to emphasise; they also learn how mechanisms designed to reduce risk might backfire. Organisational safety experts often argue that firms should build redundant systems to prevent accidents. However, individuals may change their behaviour given their knowledge of redundancies. If we know that additional layers of protection exist, then we may increase risk-taking. Finally, the case enables students to learn about the characteristics of effective versus ineffective safety culture. Students learn the concept of a high reliability organisation. Moreover, they come to understand that managers must do more than promote vigilance to reduce risk in complex systems: asking or demanding that people be more careful proves woefully insufficient in most circumstances. The case helps students understand the multiple dimensions of an effective safety culture, as well as the ways in which leaders can undermine a safety culture.

Question Two ALL PARTS ARE MANDATORY

Responsibilities for the Harm

a. Identify the relevant stakeholder groups that are impacted by the Deepwater Horizon oil rig disaster. This needs a comprehensive overview of the various players involved and determine their importance (salience) that have impacted upon and been impacted by the oil spill. To answer, you may need to separate those stakeholders responsible and those affected. Explain and defend in detail your answer. (50 marks)

b. Based on the identification (mapping) of the stakeholders above, determine responsibility for the Harm under the headings of culpability, complicity, and capability. This will include determining responsibility on each of the stakeholders in relation to the ethical issues that have resulted from the disaster. (50 marks) Explain your reasoning, framing your answer from your personal theory perspective whether that be cultural relativism, egoism, utilitarianism deontological or justice Page 3 of 4 theories. Hence state how your interpretation is supported by your personal ethical approach. Total: 100 Marks