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Reference no. 707-014-1
Prize winner
Published by:
IBS Center for Management Research (2007)
22 pages
Data source:
Published sources
This case is about the safety problems faced by BP, the third-largest oil and gas producer in the world. On 23 March 2005, an explosion at BP's Texas City refinery resulted in one of the most serious workplace accidents in the US. An investigation by The US Chemical Safety and Hazard Investigation Board (CSB) uncovered many safety lapses at the Texas City refinery. BP was accused of endangering its workers by compromising on process safety due to its high emphasis on cost cutting. The Texas accident was not the only safety lapse at BP. In March 2006, a large oil spill was discovered due to a corroded pipeline at BP's Prudhoe Bay refinery in Alaska, USA. Critics alleged that BP had put profits before safety. BP was also criticised for spending millions of dollars to project a 'green' and 'environment-friendly' image, while failing to take care of basic operational safety issues. BP surprised many when it announced that its Chief Executive Officer, Lord Robert Browne, would step down by the end of July 2007, which was earlier than the scheduled retirement in 2008. It also announced that Tony Hayward, the Head of BP's exploration and production, would succeed Browne. This case discusses the findings of the report released by the BP US Refineries Independent Safety Review Panel (popularly known as the Baker report), the criticisms regarding BP's safety culture, and the steps taken by BP to rectify these issues.
Learning objectives:
1. The case will help the students to understand the importance of safety culture and process safety management. 2. The case will help the students to understand the role of top management in establishing and maintaining a safety culture within the organisation. 3. The case is meant for MBA/MS students as part of the business ethics/corporate governance curriculum.
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