Even as BP’s oil spill continues to contaminate the Gulf, experts have already begun their postmortem exploring the deficiencies within the organization that have befuddled its disastrous response to the crisis. While it is vital that we examine the technical and regulatory aspects of this tragedy, we need to remember that the outcome in the Gulf is in fact the result of innumerable business decisions undertaken over the last decade. At root, BP’s actions before and after the rig explosion demonstrate a paucity of resources as well as imagination. It’s hard to believe that a company that earned $5.6 billion in the most recent quarter before the explosion could be so little prepared, and have such puny assets in place for responding. Accidents happen. But the response is no accident. This is the true scandal – not the situation in the Gulf as bad as that is, but the larger systemic failure in which this operational calamity long incubated.

What decisions led to this chronic indecisiveness? After years of “lean and mean” reengineering, companies like BP have come to excel at squeezing the most output from minimal investment. What this managerial theory failed to provide is in fact a safety valve — a capacity within management and among employees — to imagine those unexpected yet inevitable disruptions that complicate the unfolding of perfectly imagined efficiency. (more…)

Tags: BP ethics, lean and mean
Posted in Management Studies | No Comments »