Social Performance of Organizations Term Paper

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company British Petroleum, its products and services, the critical success factors for its operations and its salient stakeholders. It also discusses ways in which the primary stakeholders affect an organisation's financial performance. Then it evaluates the controversial corporate social responsibility issue of Deepwater Horizon Accident of 2010 and the formation of a stakeholder coalition to address this issue, including plans to address the challenges in persuading the affected stakeholders in forming the coalition.

British petroleum is a company with worldwide operations. It provides energy products and services to customers around the world to meet their modern energy demands. Its upstream segment is responsible for discovering oil and gas products around the world. The downstream segment is associated with energy products and services such as fuels, petrochemicals and lubricants (BP, 2014). BP has a range of products and services to cater energy demands of customers.

Air BP: This is the aviation division of the company which provides fuels, lubricants and technical expertise to the aviation industry.

BP franchising: BP aims at growing its retail business through franchising its products and services worldwide to committed and skilled franchisees who can benefit mutually from BP's expertise.

BP target neutral: This is associated with cutting the carbon dioxide emissions of vehicles while improving their performance to support the green economy globally.

BP gas/fuel cards: These cards provide simple and cash free access to fuels and gas on credit in many locations worldwide.

Gas/fuel cards for businesses: These allow access to on-road services, fleet management solutions and exclusive online services in a range of countries.

Motor oil and lubricants: Highly advanced motor oil and lubricants are delivered to customers in a long list of countries which work well with all kinds of engine.

Asphalt and bitumen: BP develops, produces and supplies asphalt products throughout the world from light industrial to highway environments.

BP biofuels: BP is producing biofuels as an alternative to fossil fuels to supply clean reliable fuels reducing environmental emissions and improving security of energy supply.

Gas/petrol stations: BP provides high performance fuels and also cafes with tasty food.

Gas/petrol station locator: It enables to easily locate the nearest BP gas or petrol station.

BP route planner: The route planner helps locating directions while traveling.

Industrial lubricants: It provides oils for industrial use such as heavy-duty engine oils, transmission fluids, gear oils and hydraulic oils.

Gas and power energy: BP finds new markets for gas and power and also develops means to deliver them.

LPG for the homes: BP provides gas to homes without connecting to the mains.

Liquified natural gas: BP constructs and operates worldwide liquefaction plants and operates modern and industry leading efficient tankers.

BP crudes: BP produces and sells many crude oils and provides technical information on them too.

Natural gas liquids: More than half of BP's energy production comprises natural gas.

Marine fuels and lubricants: BP fuels, lubricants and technical expertise to the shipping companies.

Petrochemicals: It supplies petrochemicals which are used in everyday products such as bottles, clothes, lipsticks and painkillers.

BP shipping: BP provides environmentally safe transportation of hydrocarbons worldwide.

MSDS: Details about hazards and safety precautions about each individual product are provided in material safety data sheets (BP, 2014).

External factors affecting organisation success

Economic factors: The population of the world is increasing and it is expected that it will rise by 1.3 billion from 2011-2030. This is leading to increased demand for energy which affects energy security, sustainability and affordability. BP has enough resources to meet energy demand in the foreseeable future, but there are some challenges too. For example, the places with the most concentrated energy reserves are away from areas of energy consumption. There is also an affordability challenge as the trend is shifting from fossil fuels to low carbon fuels which are costly to produce at a large scale. More diverse energy sources will be required to cater to the increased energy consumption, and this is why BP employs oil sands, shale gas, deepwater oil and natural gas production, biofuels and wind. Efficiency in technology and processes is required to conserve energy and save costs (BP, 2014).

Environmental factors: These are crucial factors for an energy company to consider. With increased globalisation, the impact of oil operations on the environment become significant. To reduce the carbon footprint of operations, energy production in a sustainable way is needed. Identification of risks to the environment and their prevention and mitigation are crucial. Careful water usage in places of scarcity of water is needed, and safe waste disposal are also issues of consideration.

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BP implements environmental performance reporting and aims to restore the environment on decommissioning a site. Additionally, responses to unplanned incidents like oil spills are also concerns (BP, 2014).

Three salient stakeholders of BP

Freeman defines stakeholders as, "Any group or individual who can affect or is affected by the achievement of the organisation's objectives."(McManus, 2002) This list of stakeholders is a comprehensive list including shareholders, customers, employees, suppliers, competitors, government and local authorities, environment, community, trade unions and other political groups.

BP has quite many stakeholder groups which have a stake in its operations but the three main stakeholders are shareholders, employees and customers.

Shareholders: The shareholders are the owners of an organisation under traditional corporate laws and are entitled to wealth maximisation. BP's strategy is to be a company that grows in the long-term and creates value for its shareholders. BP communicates with its shareholders in many ways. BP interacts with its shareholders through annual general meetings and other events. It is required by law to publish annual accounts and reports, summary review of the annual reports, quarterly financial results, and notice of annual general meetings including details of how to vote on the resolutions that are presented on these meetings. These communications are through BP's website. The website also gives details about regulation, strategy and other information. Relevant tax documentation is provided to shareholders when a dividend is paid. Additionally, shareholders can also subscribe for BP news and updates (BP, 2014).

Employees: BP has about 86000 employees in more than 70 countries. The performance of BP depends on a talented workforce which is diverse and rewarded on merit. The strategy of the company includes measures to ensure safety of employees. It has a group people committee chaired by the Chief Executive to make policy decisions about the employees. In 2012, it discussed subjects such as people priorities, quarterly reviews of progress in employee diversity, revised performance review procedures and the development of learning programs to enhance employee skill. It arranges team based, and one to one meetings to contribute to employee development and motivation by discussing internal and external factors affecting their performance. The internal channels of communication keep employees informed and updated about what is expected of them at work. Additionally, BP has constructive relationships with labour unions. Employees are also communicated in times of divestments, mergers/acquisitions and joint ventures (BP, 2014).

Customers: BP has about 125000 customers in more than 15 countries and its revenue is dependent on the scale of products purchased and the services availed by its consumers. In 2012, it communicated with its customers through global tracking research programs where customers answered questions about their level of satisfaction with BP compared with the competitors and the degree to which they recognise its brand and use its products. Additionally, sources for customer feedback include social websites such as Facebook and Twitter, focus groups, interviews with customers and online communications (BP, 2014).

Influence of primary stakeholders on financial performance

Primary stakeholders are those stakeholders whose influence is vital to the survival of the organisation (Sharman, 1994). They include employees, shareholders, customers, suppliers, lenders and government. Primary stakeholders affect the financial performance of the organisation in the following ways:

Positive and mutually supportive relationships among stakeholders lead to trust and collaborative efforts which result in increased wealth creation, for example, assets of the organisation earned through team work and familiarity

Operating as a responsible and ethical corporate citizen will give a competitive edge to the organisation in the marketplace causing a favourable impact on the financial performance because a relationship has been found between social and ethical practices and indicators of financial performance (growth, profits)

The financial success or failure of a project is dependent on stakeholder management for example, lack of resources, unrealistic expectations, ambiguous objectives and lack of IT management can lead to project failure (McManus, 2002).

The workforce has an impact on the organisation's financial performance. A skilled and motivated workforce will improve the organisation's performance.

Legislation imposed by the government can affect an organisation's financial performance favourably or unfavourably.

Corporate social responsibility concern

A gas release and subsequent explosion took place on 20 April 2010 on the Deepwater Horizon oil rig while working on an exploration well for BP in the Gulf of Mexico. This accident caused eleven deaths and few injuries. The hydrocarbons were released into the Gulf before the closure of the well. The accident was caused by a technical….....

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