Corporate crises are not new. What is relatively new is the increased public awareness and interest in such crises as a result of globalisation, the availability of 24-hour news and the use of the internet and social media to disseminate news. This means that reactions to and scrutiny of events, such as the 2010 global financial crisis or Toyota’s car safety crisis, differs very much from the public reaction to crises in the eighties, such as the Tylenol crisis that befell Johnson & Johnson or the Exxon Valdez disaster, when world reaction was less obvious.
The recent BP Deepwater Horizon Oil Spill in the Gulf of Mexico has indeed borne the brunt of this increased level of scrutiny – but its far reaching consequences provide a good case-in-point to discuss how corporate crises can be prevented and if not, how their impacts might be reduced and their outcomes better managed in the future.
As time passes, a more balanced analysis of such a crisis becomes possible. Whilst definitive judgements about how much responsibility different players should bear has to wait for technical experts and the courts, the list of those who may have to share responsibility – directly or indirectly – becomes clearer. This paper is based on an on-going project amongst a cross- disciplinary group of faculty at Cranfield School of Management to draw out lessons and ideas from the Deepwater Horizon disaster, for leadership, strategy, organisational change, institutional learning, finance, mergers & acquisitions, and corporate governance and responsibility. This includes the development of a multi-part business school teaching case.
The Hot Topic paper is written in collaboration with PA Consulting Group; a leading management and IT consulting and technology firm who are working with organisations around the world to drive sustainability through innovation, regulatory compliance and the measurement and mitigation of the impact of climate change.
This paper has not been written by lawyers or technical experts in deepwater drilling, and was written with no access to confidential information. The intention is neither to pillory nor to exonerate. We use the case with the purpose of exploring some of the issues raised for Corporate Responsibility; and to provoke further debate about the complexities and challenges of doing business in today’s connected, global society.
