Looking at the future, they have an optimistic view: “Clearly, after a very troubled and demanding 12 months, BP is a changed company. As a board we have much to do, and we are working with the executive team to ensure successful implementation of a refocused strategy built on the pillars of safety, trust and value creation… The full board will continue to maintain close oversight of matters related to safety. And we will have even greater engagement on the strategic implications of risk. ” (BP Annual Report 2010)
Discussions BP, one of the largest global oil and gas companies, founded in 1909, has a culture which relies on four characteristics, described by them as “progressive, responsible, innovative and performance driven” (www. bp. com. Is BP a culture itself, or it actually has its own culture? There are different visions, the first one belonging to Pacanowsky and O’Donnell-Trujillo who truly believe that a company is a culture, while Brown (1998,7) states that any culture “has norms, values beliefs and ways of behaving” that are embraced by all the employees.
Consequently, all cultures are defined by people who are in a continuous movement and progress and may switch from one company to another, bringing new concepts and values along with them. So, which one is right? Judging critically, Brown’s vision seems to apply more for BP, as such a large corporation can only exist through employees, who come with their own assets and influence the group of people they are working with.
The firm position of BP was severely afflicted by a major oil spill, which took place in April 2010 on the Deepwater Horizon, causing serious environmental damage and killing 11 people. This is considered to be the start of a major crisis and as an evidence for this serves Alvesson’s statement, that ‘the transformation of existing ideas, beliefs or values which are regarded as problematic'(2002) and immediately lead to the need for culture change. Why is that?
Because following the tragedy BP lost its credibility and trust, “BP’s stock has lost a market value of $25 billion” (www. visualeconomics. com) and they had “to suspend dividend payments” (www. investorschronicle. co. uk). On one hand, by analysing Handy’s typologies, the task culture seems appropriate for BP because it is ‘job orientated, relies a lot on its employees, brings together professionals from different areas, and is team focused'(Brown,1998).
In addition, as the chairman claims, “to encourage excellence in risk management throughout the organisation, we are reviewing how we incentivize and reward people” (Annual Report 2010), rewards for results being another characteristic of the task culture typology. On the other hand, Deal and Kennedy identify “bet your company” typology, applies to BP because this major oil company operates in a risky environment and as a result the chairman sees the need to “ensure that safety and responsibility are at the heart of everything we do.
We must show that we can be trusted to understand and manage our risks” (Annual Report 2010). Furthermore, “bet your company” typology applies to big companies such as BP, where ‘feedback takes long and huge amounts of money are invested'(Brown, 1998). Also, they focus a lot on the future:” As a board we have much to do, and we are working with the executive team to ensure successful implementation of a refocused strategy built on the pillars of safety, trust and value creation”(Annual Report 2010).
As all these statements show, it can be clearly understood that BP is aware of the disappointment they caused and seek new ways of making important changes, by using words such as “responsibility”, “safety” or “trust”. Having decided the fact that culture change is indispensable for BP, socialisation can be defined as ‘the process which each employee has to be involved in to adapt to the new ideas, beliefs and behaviours'(Brown,1998). For this case study, socialisation is closely linked to safety.
One of BP’s priorities is “to become safer” and they “are working with governments, service contractors and industry peers to take risk management and equipment design to the next level”(Annual Report 2010). The three stages: separation, transition and incorporation apply to BP in this way: separation rites, a divorce from the previous aims, values and customs, transition rites which reinforces the previous process and emphasises on the new values, in this case improved measures of safety and risk management promoted by BP and lastly, the incoporation of these new values in the company’s structure.
Exploring Schein’s life-cycle model, BP seems to be in the organisational midlife phase because it has a complex structure, strong subcultures and due to the fact that it was founded in 1909, its culture is deeply embedded into routines ; structures. It might be claimed that BP belongs to the organisational maturity stage because it is highly complex, but at the same time this stage is inappropriate because it describes a highly stable company, which is not one of BP`s characteristics at the moment.
Any culture change can only be achieved through a successful mechanism of change. There are several mechanisms that could be useful for BP: the ‘managed revolution through outsiders’ involves a crisis as a starting point, which applies to BP entirely and the fact that outsiders are brought in, which also happened in BP’s case, as they have made significant changes to the board, including a new chief executive, Bob Dudley and the former head of the US Nuclear Navy, the Admiral Frank L ‘Skip’ Bowman who “will help BP improve its safety measures”(Annual Report 2010).
The ‘managed evolution through hybrids’ may fit because BP’s leaders recognise that after 12 months of struggle, Bob Dudley claims that BP “will emerge from this accident as a company that is safer, stronger, more sustainable, more trusted and, in time, more valuable” (www. fuelfix. com). Also, culture change began to be implemented systematically, step by step. The “Turnaround” mechanism may be a suitable one because it requires leadership skills, which is one of the main rules when starting culture change.
Due to its size and financial resources, BP is entitled to have the power to implement a new culture, but which one of these mechanisms fits better? Conclusions Overall, it needs to be stated that because of the major oil spill which lead to a crisis, BP needs culture change in order to rebuild its corporate identity and regain people’s trust. Culture change is a long-term process and BP has already started it by bringing a fresher attitude, new members of staff and new aims which focus more on safety, protection of the environment and taking care of humans.
Drawing some general conclusions, firstly, BP fits in the “bet your company” typology better than in the “task” culture because in most of the cases it relies on highly skilled individuals rather than on teamwork. In addition, characteristics which define the “task” culture, such as rapidity and speed of reaction seem inappropriate for a big company as BP. Secondly, BP categorically fits into the “organisational midlife” phase, at the moment, due to its lack of stability, but it has strong chances to upgrade to the next level after their current process of change proves to be successful.
Thirdly, from all the mechanisms of change previously described, ‘the managed revolution through outsiders’ seems to be taking place now according to Dudley’s declarations, who mentions a new board. Critically examining the actual situation, some progress has been made since the accident; however, the culture change needs further improvement and continuity, as some additional measures will be suggested in this report.
RecommendationsOrganisational socialisation, sometimes termed enculturation, refers to those processes by which participants learn the culturally accepted beliefs, values and behaviours, so that they are able to act as effective members of the group. Large corporations make extensive efforts to construct formal socialisation mechanisms, usually in the form of new employee orientation and induction courses, training programmes and mentoring systems. Most organisations, however, rely on informal socialisation processes, in which new recruits learn what is expected of them by trial and error under the guidance of their work colleagues.
Informal socialisation processes are often more significant than an organisation`s formal and official procedures, because they allow more relevant information to be transmitted in a more personal manner and by means that new recruits are more likely to remember. Formal socialisation processes are often termed rites of passage. Well-constructed rites of passage usually have three distinct phases. First, there are separation rites, which divorce individuals from their previous context and unfreeze them from the roles they have previously filled.
Second, there are transition rites, which reinforce rites of separation and the unlearning of previously held work norms. They frequently involve debasement experiences such as being refused entry to certain parts of the building, or not having a reserved car parking space, secretary or certain office equipment. This transitional or liminal state lasts until the individual experiences rites of incorporation. These may be more or less well defined, but always inform new recruits that they have been accepted and what their new responsibilities now are.