Crisis Communication Failures: The British Petroleum Case Study (Done by Jakhongir Ubaydullaev)

Crisis Communication (Exp-19)

31 Mar 202210:16

Summary

TLDRThis presentation covers the case study of British Petroleum (BP) and its crisis communication failures, focusing on the Deepwater Horizon oil spill of 2010. The speaker discusses key events in BP's history, the company's crisis communication strategies, and its failures in managing public perception and stakeholder relationships. BP's lack of preparedness, failure to express empathy, and inadequate crisis management are highlighted. The presentation concludes by emphasizing the importance of transparent and timely communication during crises to protect a company's image and maintain trust with stakeholders.

Takeaways

📑 The presentation covers the 'Bridge Petroleum Case Study' with a focus on crisis communication.
⛽ The Deepwater Horizon oil spill on April 20, 2010, marked the largest oil spill in the maritime history of the petroleum industry.
⚠️ Crisis communication is critical, defined as the organization's response to sudden events that impact its performance and potentially its survival.
🧠 Various researchers define crisis communication differently, but it generally involves managing outcomes, public perception, and organizational response.
📉 British Petroleum (BP) has a history of major accidents, including a 1965 oil rig collapse and a 2005 refinery explosion, both resulting in fatalities.
🌍 In 2000, BP rebranded itself as 'Beyond Petroleum,' focusing on environmental awareness and renewable energy to fight climate change.
📊 The presentation analyzes BP’s crisis communication failures, particularly in handling the Deepwater Horizon disaster.
👎 BP’s CEO admitted the company was unprepared for the Gulf oil disaster, lacking a crisis communication plan and failing to manage media scrutiny effectively.
💔 BP also failed in expressing empathy towards victims and in maintaining strong stakeholder relationships during the crisis.
📝 The conclusion emphasizes the importance of communication before, during, and after a crisis, as it greatly impacts the company’s image and stakeholder trust.

Q & A

What is the focus of the presentation?
-The presentation focuses on crisis communication within the context of the British Petroleum (BP) case study, particularly during the Deepwater Horizon oil spill and other crises.
What was the Deepwater Horizon oil spill, and why is it significant?
-The Deepwater Horizon oil spill occurred on April 20, 2010, and is significant because it was the largest maritime oil spill in history. The explosion killed 11 people and led to significant environmental, financial, and reputational damage for BP.
How does the presentation define crisis communication?
-Crisis communication is defined as a response to an unexpected event that requires quick reaction and can impact an organization’s performance, image, profitability, and possibly its survival.
What are some key historical crises BP faced before the Deepwater Horizon spill?
-BP faced several crises, including the collapse of an oil rig in 1965, killing 13 crew members, and the explosion of its Texas City refinery in 2005, which killed 15 workers and injured over 1,000 people.
How did BP try to differentiate itself after previous crises?
-BP attempted to differentiate itself by rebranding as 'Beyond Petroleum' in 2000, promoting environmental awareness and renewable energy efforts, including biofuels, hydrogen, solar, and wind power.
What were some key communication failures by BP during the Deepwater Horizon crisis?
-Key communication failures included not having a prepared crisis communication plan, inadequate media responses, lack of empathy towards victims, and poor stakeholder relationship management.
What role did NGOs play in BP’s crisis communication strategy?
-BP had previously built strong relationships with NGOs, giving donations and working with environmental groups like the Nature Conservancy. However, these relationships did not prevent negative NGO reactions during the Deepwater Horizon crisis.
What does the presentation suggest is crucial in managing a crisis effectively?
-The presentation emphasizes the importance of early and effective communication, timely and transparent reporting, and maintaining dialogue with stakeholders before, during, and after a crisis.
How much did BP spend on public relations efforts to improve its image after crises?
-BP spent $200 million on advertising and public relations campaigns to improve its image following environmental and safety-related crises.
What are some theoretical frameworks used in the analysis of BP's crisis communication failures?
-The presentation references the SCCT (Situational Crisis Communication Theory), which suggests that a company's past performance can intensify the impact of a crisis and influence its crisis management and communication decisions.

Outlines

00:00

👋 Introduction to the Bridge Petroleum Case Study

The speaker introduces themselves and outlines the key topics of the presentation, which include an introduction to the case study, history, analysis, and discussion of Bridge Petroleum's communication failures. The presentation begins by referencing the Deepwater Horizon oil spill on April 20, 2010, which marked the largest maritime oil spill in history. The disaster resulted in the death of 11 people and caused major financial and reputational damage to the company.

05:01

⚠️ Defining Crisis Communication

This section defines crisis communication, described as an event that demands quick organizational response to avoid disruption and long-term damage. Several researchers' definitions of crisis communication are referenced, including Gray's view that it's about managing public perception and outcomes, and Weick’s theory, which sees crisis communication as an organizational response aimed at reducing harm to its image. Hail's theory also frames it as a structured process for sharing vital information with stakeholders during critical situations.

10:01

📜 British Petroleum's Crisis History

This section provides a historical overview of major crises faced by British Petroleum (BP), including a 1965 oil rig collapse and a 2005 refinery explosion, both resulting in fatalities. The company faced lawsuits and charges of criminal violations. In response, BP rebranded itself in 2000 as 'Beyond Petroleum,' launching a $200 million campaign to position itself as an environmentally conscious company promoting renewable energy sources such as biofuels and solar power.

🌍 BP's Environmental Initiatives and Crisis Failures

British Petroleum’s efforts to address climate change earned it top scores in global corporate rankings in 2006. The analysis and discussion section of the presentation highlights that trustworthy sources were used to validate the data. The speaker references the SCCT theory, noting that the company’s history of negative performance could have influenced its crisis management decisions. It’s noted that BP failed to have a crisis communication plan in place and struggled with public relations after the Gulf oil disaster.

💬 BP's Crisis Communication Failures

The presentation discusses several key communication failures by BP. These include a lack of preparation for the Gulf oil disaster and CEO Tony Hayward admitting that BP's contingency plans were inadequate. BP also failed to communicate empathy towards victims and maintain strong relationships with NGOs and other stakeholders. Despite having established partnerships with environmental groups, BP's crisis response remained insufficient and uncoordinated, contributing to a loss of public trust.

🔚 Conclusion: Lessons from BP's Crisis Communication

The conclusion emphasizes that BP ignored essential principles of crisis communication before, during, and after the disaster. The importance of timely, transparent, and consistent communication with stakeholders is highlighted, especially in the first hours of a crisis, when public perception can significantly impact a company's reputation. The conclusion reinforces the role of communication in crisis management, noting that perception often matters more than reality in such situations.

🙋 Final Remarks and Invitation for Questions

The speaker concludes the presentation, thanking the audience for their time and attention. They invite the audience to ask questions if they have any, signaling openness to further discussion or clarification.

Mindmap

Keywords

💡Crisis Communication

Crisis communication refers to the strategies organizations use to communicate with the public and stakeholders during a crisis to manage the situation and protect their reputation. In the video, it is defined as an event that requires quick action to avoid further disruption to organizational performance. The speaker highlights how British Petroleum (BP) failed in this regard during the Deepwater Horizon oil spill, which severely impacted their public perception.

💡Deepwater Horizon Oil Spill

The Deepwater Horizon oil spill, mentioned as the largest maritime disaster in petroleum industry history, occurred on April 20, 2010. It resulted in the explosion of an oil rig, killing 11 people and leading to the worst oil spill in U.S. history. This disaster is central to the presentation's discussion, as it exemplifies BP's crisis management failures and the resulting financial and reputational damage.

💡British Petroleum (BP)

British Petroleum, often referred to as BP, is the company at the center of the case study. The video describes how BP faced significant challenges in dealing with various crises, including the Deepwater Horizon spill. Their failure to manage crisis communication effectively, such as their inadequate response and lack of preparedness, is a core focus of the presentation.

💡Tony Hayward

Tony Hayward was the CEO of BP at the time of the Deepwater Horizon disaster. His admission in a BBC interview that BP was unprepared for the disaster and that their contingency plans were inadequate is highlighted as a significant failure in crisis communication. Hayward's handling of the situation was criticized, and he became a symbol of BP’s inability to manage the crisis effectively.

💡Reputation Management

Reputation management is the effort to influence how a company is perceived by the public, particularly during crises. The video emphasizes that BP’s poor handling of communication during and after the oil spill led to a significant loss in reputation, showing how critical effective crisis communication is to maintaining a company’s image during a disaster.

💡Stakeholder Relationships

Stakeholder relationships refer to the connections and communication a company maintains with key groups such as NGOs, customers, and the public. The video discusses how BP had previously established strong relationships with environmental NGOs, which they hoped would protect them in the event of an accident. However, their inadequate response during the Deepwater Horizon crisis strained these relationships.

💡Environmental Awareness

BP had tried to position itself as a company committed to environmental awareness, even rebranding itself as 'Beyond Petroleum.' The video highlights this as an ironic point, as BP’s failure to handle the environmental disaster of the Deepwater Horizon oil spill showed a disconnect between their public image and actual crisis management, undermining their credibility.

💡Crisis Preparedness

Crisis preparedness refers to the planning and readiness of a company to handle emergencies effectively. The video makes it clear that BP was not adequately prepared for the Deepwater Horizon spill, with their CEO admitting to having no effective crisis communication or contingency plan. This lack of preparedness was a major reason for the company’s failure to manage the disaster.

💡Media Scrutiny

Media scrutiny is the intense examination and coverage by the media during high-profile events or crises. The video mentions that BP was unprepared for the intense media coverage of the oil spill, and this lack of preparation made it difficult for them to control the narrative, contributing to their public relations failures during the crisis.

💡Public Perception

Public perception refers to how the public views a company or organization, particularly in the wake of a crisis. The video emphasizes that the damage to BP’s public image was severe following the Deepwater Horizon spill. Their poor crisis communication and slow response significantly worsened public perception, leading to long-term reputational harm.

Highlights

Introduction to the Deepwater Horizon oil spill, the largest maritime disaster in petroleum history.

The explosion resulted in 11 deaths and caused significant financial and reputational damage to BP.

Definition of crisis communication as an event requiring quick reaction to prevent organizational disruption.

Crisis communication is essential for managing public perception and organizational image during crises.

Researchers such as Gray and Hail define crisis communication as a process of information management, decision-making, and stakeholder engagement.

BP has a history of multiple disasters, including the 1965 oil rig collapse and the 2005 Texas refinery explosion.

BP was subject to lawsuits and criminal violations following these disasters, leading to reputational harm.

In 2000, BP rebranded itself as 'Beyond Petroleum' and launched a $200 million advertising campaign.

BP positioned itself as a leader in environmental awareness and renewable energy efforts like biofuels and solar power.

BP's environmental and climate change strategies were highly rated by the Coalition for Environmental Responsible Economies in 2006.

The analysis suggests BP was unprepared for the Gulf oil disaster, as admitted by former CEO Tony Hayward.

BP failed to effectively communicate during the early stages of the crisis, leading to intense media scrutiny.

BP was criticized for lacking empathy and concern for the victims and stakeholders affected by the disaster.

Despite strong relationships with NGOs prior to the disaster, BP failed to leverage these partnerships effectively during the crisis.

The conclusion highlights BP's failure to follow crisis communication principles, stressing the importance of open, timely, and trustworthy communication.