British Petroleum Oil Spill Essay Example | Topics and Well Written Essays - 3250 words

British Petroleum Oil Spill - Essay Example Findings   3.1 Summary of findings of your analysis   4. Conclusion   4.1 Discussion of findings in context of theory and prior literature 5. References 1. Introduction   1.1 Theories used in case analysis The paper talks about the oil spill caused by British Petroleum’s (BP) in 2010 that occurred in the Mexican Gulf and caused irreparable damage to the environment and life in and around that area. It looks at the company’s behavior post the oil spill and their reaction in front of the media and as expressed in their annual reports. More specifically, this paper looks at how BP’s reaction post the disastrous oil spill ties in with the theories about company behavior. Some theories used as reference for this paper include the legitimacy theory, the stakeholder theory and the institutional theory etc. 2. The case   2.1 Context   Background information about the case   British Petroleum (BP) is the 6th largest oil and gas company worldwide. BP is invol ved in all stages including the extraction of oil to the retail of the final product (BP, 2012, p.1). In â€Å"2010† the company faced a ruinous crisis when the drilling rig, Deepwater Horizon blew up on April 20, 2010. This cataclysmic disaster resulted in the killing of 11 persons and critically wounded many others (BP Annual Report, 2010, p.6). The spill continued for almost three months, making this catastrophe the biggest disaster of its kind (Mason, 2010, p.1). The scientists who had been vigorously studying the possible repercussions were still not sure about the complete extent of the environmental damage even after a whole year had passed. Further research is still required to provide a holistic detail on the matter because the destruction caused by the BP oil spill is too far reaching in a ripple effect caused by direct environmental damages. (Kinver, 2011, p.1). 2.2 Data   description of corporate disclosure vehicles chosen for analysis The annual report for 2010 was highly reflective of BP’s reaction to the disaster. O’Donovan (2002, p.344) says that companies reveal information in the annual reports only with the purpose of gaining support from the society and to retain their legitimacy in society. Companies that find themselves in situations that BP found itself in often try to improve their image by providing more information in their annual reports that â€Å"concerns† ethics and environmental issues (Deegan et al., 2002, p.312). This information is used by the company to clean up the mess it has somehow created in a disaster that has happened on its watch (Deegan and Rankin, 1996, p.50). BP increased greatly the amount of environment related information in its annual report under the law of legitimacy and to counter the bad press it was receiving in the aftermath of th disaster. It kept repeating to the media how it would clean up its mess, compensate the people and make amends for its mistake, thus making sure th at all stakeholders, including the society and the government, continued to foster a positive image of the company, as explained by the stakeholder theory once more. These changes in the annual report were useful for the investors, accountants, regulators, environmental groups and the community because they provided these stakeholders with additional insight about the disaster and how BP proposed to go ahead with the scenario (Summerhays, 2011, p.3). BP’s reaction was timely, even â€Å"instantaneous† according to the institutional â€Å"theory† (BP, 2010, p.1) however they were condemned by the government because they failed to contain the spill before it reached the coast (Robertson