BP Energy Company’s Business Ethics and Strategy Essay

August 9, 2022 by Essay Writer


Business ethics is an important aspect of businesses in the modern world. In this respect, businesses have developed codes of ethics as the guides to all the internal stakeholders in the dispatch of duties to customers. The codes of ethics are integrated into the long-term strategy of businesses to form the companies’ cultures.

This essay reviews the ethical issues involved in the strategy of the BP Energy Company with the special reference to the April 20 explosion of Deepwater Horizon offshore drilling rig. The ability of a for-profit company to balance its ethical practices while operating in a modern competitive marketplace is also discussed. A recommendation is given on how differently the business strategy of BP would be handled before the Deepwater Horizon oil spill tragedy.

Ethics involved with BP Energy Company’s strategy and actions

BP is among the six major oil and gas companies and has operations in over 80 countries (BP, 2014). On the 20th April 2010, the company was involved in the largest marine oil spill accident that resulted from an explosion and subsequent sinking of its offshore oil drilling unit. Eleven workers died while the other 16 obtained serious injuries, and the oil spills lasted for 87 days (Favennec, 2011). Investigation revealed that the company’s strategy and actions prioritized profits over the safety of the plant (The Guardian, 2014).

The most obvious ethical issue, in this case, is the negligence and disregard of the known risks. Another ethical concern is disregard to the corporate social responsibility, where the company failed to elicit responsible behavior towards its employees and the environment. Following the accident, the company had paid more than $42.2 billion in criminal and civil settlements by February 2013 (Fontevecchia, 2013).

Companies exist to make profits; thus they develop strategies to keep them ahead of other companies in the market. Among the generic strategies employed by most firms, cost leadership is the most important and widely spread one, where firms strive for lowering their operating costs so as to increase their profit margins or lower the prices of their products.

In the context of BP Company, this strategy failed because the cost-cutting measures that led to the Deepwater Horizon explosion have resulted in heavy fines and tarnished the name of the company.

In today’s marketplace, customers give companies the mandate to operate by rewarding those that show responsibility to their various stakeholders, and such important spheres as the environment. This reward is in the form of the consistent purchase of the companies’ products.

Ethical business practices, implemented by the firms create trust among their customers, who continue their long-term relationships with such firms, thus ensuring sustainability (Parboteeah & Cullen, 2013). Thus it is needless to state that in today’s competitive business world, firms can effectively balance their ethical business practices while competing for market share. Cost-leadership strategies are commendable, although the techniques of minimizing costs should not compromise the ethical practices.

As the company’s CEO, I would have handled the company’s strategy execution differently by taking measures beforehand to ensure that the plant was in no danger of explosion. I would invest more funds to construct a stable and durable plant, taking into consideration the recommended materials and measures.

I would observe due diligence in every aspect of the oil exploration exercise in order to reduce the chances of accidents as well as the liability of the company to third parties. This would involve performing experiments beforehand to determine the ability of the construction materials to withstand the different aspects related to oil drilling.


From the discussion, it is evident that ethical issues in business are paramount. Giving priority to the pursuit of a strategy and ignoring ethical concerns may result in cases that increase the criminal or civil liability of the company.

It is possible for the firms to balance their ethical practices in their pursuit of increased market share as customers reward those businesses with a sense of ethical responsibility by maintaining business relationships with them. It is also important that firms act ethically by observing due diligence in order to avoid situations that result in losses.


BP. (2014). BP at a Glance. Retrieved from BP: http://www.bp.com/en/global/corporate/about-bp/bp-at-a-glance.html

Favennec, J.-P. (2011). The geopolitics of energy. Paris: Editions Technip.

Fontevecchia, A. (2013, May 2). BP Fighting A Two Front War As Macondo Continues To Bite And Production Drops. Retrieved from Forbes: http://www.forbes.com/sites/afontevecchia/2013/02/05/bp-fighting-a-two-front-war-as-macondo-continues-to-bite-and-production-drops/

Parboteeah, K. P., & Cullen, J. B. (2013). Business Ethics. Oxon: Routledge.

The Guardian. (2014, September 4). BP’s reckless conduct caused Deepwater Horizon oil spill, judge rules. Retrieved from The Guardian: http://www.theguardian.com/environment/2014/sep/04/bp-reckless-conduct-oil-spill-judge-rules

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