“BP’s New Chief Puts Emphasis on Safety”

Despite tragedy and disaster, there are many examples of leaders that promote good corporate social responsibility. Path-Goal Theory is a very interesting theory that is laid out very well within this article. In this article, BP’s new CEO Robert Dudley has a goal to strengthen the company’s image and social responsibility. He is going to do this using Path Goal Theory.  

We learned in class that Path-Goal Theory is when a leader (Dudley in this case) directs their subordinates along a path (restructuring BP) around obstacles (the oil spill and BP’s damaged image) towards a goal (increased safety standards at BP and implement them).  As we all know, the oil spill on April 20, 2010, was the result of an oil rig explosion. As I mentioned, the oil spill is acting as the obstacle in this case. BP’s new CEO, Dudley has created a path to strengthen BP’s corporate image and he plans to provide support along the way to his goal.

In this case, Dudley has two leadership behaviors: directive and achievement-oriented. He has a directive leadership behavior because he is initiating new structure to BP.  Dudley is (or plans to) set clear safety standards of performance at BP and he is making the rules and regulations (new safety standards) clear to his subordinates (other top BP executives).

Dudley is using achievement-oriented behavior because he is (or plans to) establish a high standard of excellence (new safety standards) for his subordinates and BP. You will read in my summary, that he is challenging Mark Bly to develop and lead the new safety unit at BP.

In this article, Chazan outlines the changes that incoming CEO Robert Dudley has for BP. According to Chazan, BP’s reputation significantly fell after the Deep Water Horizon disaster in the Gulf of Mexico last April. Dudley has plans to improve safety by creating a new safety unit lead by Mark Bly. Bly is author of the company’s inquiry into the oil rig disaster and currently holds the position of top safety executive. Dudley also has plans to restructure the company by removing two senior executives who were in charge of drilling operations in the Gulf, during the disaster.  Dudley’s changes are focused towards rebuilding the public’s trust and BP’s stock value; because it plunged more than a third since the disaster. The new safety unit is going to be made up of safety specialists that will make sure BP operations are executed to the highest safety standards in the industry. Dudley also has plans to divide its exploration and production division into three functions: exploration, development, and production. Each function is going to be run by a senior executive that will report to Dudley.

The Deep Water Horizon disaster is not BP’s first disaster where the public has lost trust in them; it is just the worst yet. Chazan lays out how BP is restructuring in order to adapt to the new (post disaster) environment. Dudley has to act quickly in restricting BP and implementing these safety standards/units. He recognizes the company needs to significantly change to raise its organizational performance. Firms and their leaders must learn that cutting corners will lead to customers losing trust in them. Trust is everything in business, without it organizations fail. 

I encourage everyone to read the entire interesting article by: Clicking Here

I also encourage everyone to post any comments. The BP oil spill was one of the greatest disasters in history. And this was very interesting to me because it showed how a new Leader plans to use the Path Goal Theory to change BP and get over the devastating obstacle/disaster; for the better good of the company, the environment, and everyone in the world. 

--Michael Cosentino