Leadership Theory and Practice via an Account of BP’s Gulf of Mexico Oil Spill Essay

Moral Accountability Issues at BP

Every organization is expected to be morally accountable in all its operations and activities (Caulfield, 2011; Tittle, 2000). Lack of moral accountability can lead to lawsuits and loss of consumer loyalty. Companies should be responsible in all they do.

They should ensure that their activities do not cause harm to the people around or to the ecosystem. It is a legal requirement in most countries that companies should be morally accountable (Bergsteiner, 2012; Fisher, 2012). BP is a company that has been accused of accidents that occur mainly due to lack of accountability.

The company deals with petroleum products, which are known to be very harmful to both human beings and the environment in general if not handled responsibly.

From the perspective of a rig operator, one of the morality issues that seem to be inherent at BP is the failure to follow the right procedures in making the rig machinery.

Secondly, the maintenance of the machinery is not done in the right way. Despite the aging machinery, no one seems to care

. For instance, in the year 2004 the company did not pay attention to the concerns raised by its workers regarding safety and environment. Instead, managers opted to save on maintenance costs through a practice referred to as “run to failure.”

The aging equipment was left to continue running with little or no maintenance. This led to spills in the year 2006 of over 200000 gallons. It was the largest spill that ever happened in Alaska’s North Slope.

In the year 2006, BP failed to follow the correct procedure in the manufacture of the rig machinery. Before the completion of the machine, there had to be final drawing designs that are called the “as-built” drawings.

These drawings are very important since they ensure that the machinery being made is ready for use and ensures the safety of people. When Kenneth Abbott was hired as the project control leader, he advocated for the completion of “as- built” documents since they were essential for a standard machinery.

The BP engineers strongly opposed this idea and supported the making of this machinery without the forms. It is understood that they did this in order to save on cost.

The impact of these issues to the rig operator is that his life is left at risk since the machinery can explode any time. The people around him, as well as the ecology around the area of operation are also exposed to risk.

From the perspective of a UK based retiree with a major income stream from BP shares, following shortcuts would be beneficial in that the earnings would increase. However, the machinery manufactured is not standard. The machinery is likely to explode at some time.

Their major concern is the loss they might incur if the machinery exploded and/or the spill occurred. The default machinery would also lead to poor perception of the company by employees, both current and potential employees.

The implication would be high turnover of employees who would fear for their safety. Potential employees would be reluctant to join the company. The retiree shareholders would be concerned since the productivity of the firm relies largely on the employees and their morale.

Leadership issues

Leadership is essential for the success of any organization (Northouse, 2010). The issues that have been affecting BP can be associated to poor leadership of the company. There are a number of leadership issues that are notable in the company.

First, the managers of BP harass or intimidate employees so that they do not report the negative things that happen within the company. The employees are concerned about their safety since the equipment is not safe to work with.

However, the leaders intimidate them and the problems result in big losses through spills and explosives. Leaders avoid these problems from being reported since they do not want to spend a lot of money on repairs and maintenance costs.

This indicates conflicting interests between managers and employees. While employees want the aging equipment well maintained, the managers, on the other hand, do not want to maintain it since they want to reduce costs.

The other leadership issue that needs to be addressed is about promotion of managers. Promotion should be done on merit (Gill, 2010). A manager or any other employee should be promoted depending on his or her performance. At BP, senior managers are never held accountable for failures.

They are, instead, offered promotions despite their poor performance. This is a leadership issue that is likely to affect the organization negatively in the long run. This is a policy that needs to be amended.

If managers are promoted without any merit, in the future the company will be headed by managers who do not have the ability to propel it forward. These managers will cause poor performance and probably failure of the organization.

It is important to note that promotion of managers without merit might demotivate employees who have the interest of the organization at heart (Winkler, 2010).

Such employees will feel that they are being overlooked despite their efforts. Such employees are likely to leave the organization or their productivity is likely to go down.

Leadership theories

The practices of managers in BP can be changed if the organization adopts the right leadership theories.

The theories or the policies that are applied in the organization today are not effective, or they have insignificant effect if any since the organization seems to be going the wrong way in terms morality issues (Meindl and Schyns, 2005).

Global policies today advocate for a clean environment, but BP is not in line with the global policies as the case displays.

One of the leadership theories that can be applied in BP management is the contingency theory. Under this theory, the managers of BP would have the responsibility to determine the leadership style to be applied in various situations. Situations are bound to change since the world is full of uncertainties.

The success of an organization is dependent on a number of variables (Banner and Blasingame, 1988). One of the variables is the leadership style that should be used.

For instance, the leaders of the organization ought to have applied the autocratic leadership style in the situation where the machinery had to be designed only after the ‘as- built’ documents had been completed.

The leaders should have stood firm and ensure the making of the machinery does not proceed until the documents are completed. The documents ensure that the machinery is of high quality, and that it can be safe for use by anyone.

The compromising behaviour of the managers could be as a result of pressure from shareholders who want costs to be reduced so that their earnings can increase.

Managers should be bold and not compromise since the machinery could be risky to the employees and to the environment. Their decision making in such a situation needs to be centralized.

The other theory that should be used by the BP managers is the situational theory. This theory is not very much different from the contingency theory. Under situational theory, a leader or a manager should take the best action that can address the situation he or she is faced with.

This means that the decisions the leader makes in various situations could be based on various leadership styles, depending on the situation at hand. Some situations need decentralized decision making, while others need centralized decision making (Schyns, 2006).

In the former, the leader can apply the democratic leadership style, while in the later the authoritative leadership style is applicable. BP managers are faced with a number of situations that lead to accidents and losses. One of the most notable situations is the Gulf Spill, where gallons of oil spilled off.

The spills were as a result of poor maintenance and poor management. BP managers need to be authoritative in such a situation, but they should have the best interest of the organization at heart. The decisions they make should be favourable to the well- being of the organization, as well as its employees and the environs.

Decision making is one of the most sensitive activities in an organization (Schyns, 2006). Managers are trusted with decision making since they are knowledgeable and have experience in decision making.

Decision making at BP is more sensitive since the company deals with products that could be risky to human beings, as well as the environment. The machineries used in the industry are subject to breakdown and they can cause much damage if they do not function properly.

In such situations managers need to apply the best leadership styles to ensure that the machinery is corrected and functioning properly.

In replacing those machines that have faced out or are becoming obsolete, democratic leadership style could be effective. Leaders could meet with all the stakeholders and decide on the best machine to make or buy.

BP senior managers need to adopt the participative theory of leadership. This is the leadership style whereby the input of the rest of the organizational members is put into consideration. All the members of the organization are included in decision making and other activities within the organization.

At BP, managers get promotion even if their performance is poor. The employees are always ignored and usually threatened if they raise concerns about their safety and environmental issues.

This kills the morale of employees, and their productivity is negatively affected. Participative leadership will always motivate employees.

Employees feel they are part of the organization and they report any problem before it occurs (Dion, 2012). This keeps the mangers on alert such that they take the necessary actions before the problem occurs.

If participative leadership was applied in BP by the senior managers, the Gulf Spills could not have occurred. The employees had already raised concerns about their safety and the environment, but the managers chose to ignore the employees and even intimidated them.

As a result, the management could not prevent the spills since they failed to pay attention to employees’ concerns. In participative leadership, employees are considered as important people who can make positive contributions in the organization (Mann, 2011).

Finally, management theory of leadership could be very influential and effective at BP Company. The theory is also referred to as the transactional theory (Mann, 2011). Its focus is mainly on supervision, as well as on the group’s performance. As it is displayed in the case, there is poor supervision in the activities being conducted.

This is displayed in the making of rig machinery. The machinery was made without the completion of ‘as- built’ documents. Proper supervision of a project ensures that all the relevant and significant procedures have been followed in the manufacturing process.

It ensures that quality products have been produced. Proper supervision was not conducted, thus the machine produced was of poor quality and it ended up with an explosion.

Under management theories, reward systems as well as punishments are embraced. This lacks in BP Company. The managers ignore important issues that end up with serious accidents, but they always get away with it (Dion, 2012). The managers are never punished for their negligence.

To make the matters worse, the managers who ruin the company are promoted contrary to expectations. This encourages them to go ahead with their dismal actions and performances. There are employees who have always raised concerns about the aging equipment and the threat it poses, yet they are always ignored.

Under managerial theory, such employees could be appreciated and rewarded so that in future they would talk of a problem they perceive in the organization.

This would be effective in preventing future accidents in the organization. BP managers should adopt the above named theories since they would be very effective in salvaging the situation that is currently in the organization.

List of References

Banner, DK & Blasingame, JW 1988 ‘Towards a developmental paradigm of leadership’, Leadership & Organization Development Journal, vol. 9, no. 4, pp. 7 – 16

Bergsteiner, H 2012 Accountability theory meets accountability practice, Emerald, Bingley

Caulfield, H 2011 Vital notes for nurses, John Wiley & Sons, Hoboken, NJ

Dion, M 2012 ‘Are ethical theories relevant for ethical leadership? Leadership & Organization Development Journal, vol. 33, no. 1, pp. 4 – 24

Fisher, K 2012 Moral accountability and international criminal law: Holding agents of atrocity accountable to the world, Routledge, London

Gill, R 2010 Theory and practice of leadership, SAGE Publications Ltd, London

Mann, S 2011 ‘Leadership: A very short introduction’, Leadership & Organization Development Journal, vol. 32, no. 5, pp. 529 – 529

Meindl, JR & Schyns, B 2005 Implicit leadership theories: Essays and explorations, Information Age Publishers, Greenwich, CT

Northouse, PG 2010 Leadership: Theory and practice, Sage Publications, Thousand Oaks, CA

Schyns, B 2006 ‘The role of implicit leadership theories in the performance appraisals and promotion recommendations of leaders’, Equal Opportunities International, vol. 25 no. 3, pp.188 – 199

Tittle, P 2000 Ethical issues in business: Inquiries, cases, and readings, Broadview Press, Peterborough

Winkler, I 2010 Contemporary leadership theories: Enhancing the understanding of the complexity, subjectivity and dynamic of leadership, Physica-Verlag, Berlin