This report will give a description of the oil spill event and discuss the importance of business risks management of the incident. We can learn about the problems of BP’s risks management by finding the reasons.
For the BP, there are some strategies to manage the crisis to minimize the financial and non-financial damage. Firstly, BP Company should provide the regular and current progress report, information and real data to the investors and the public. These reports need deliver information of the latest progress of oil spill event. Investors and shareholders can learn about the real business development direction.
At the beginning of oil spill event, BP wanted to find a method to escape from their duty and the CEO of BP, Winston viewedthat this event was nor serious. He could not correctly understand the influence of these comments and only made the event development become worse. It means that the business should take responsibility for result or their mistakes.
Next we focus on the kinds of the risks in the BP business, the catastrophic risks were the biggest problems in the business. For instance, the environmental risk was the catastrophic risk that would lead to the failure of the organization development. The risks of environment can threat the enterprise survival. As long as a crisis appeared, the ecological disasters and environmental pollution could rapidly destroy the reputation of the BP. Due to this accident, BP Company made a huge loss of market value and intangible benefits. In this respect, BP business need take their environmental risks into account and as a catastrophic risk when they manage the business risks.
From above the key characteristics of risk analyses，We can analyze the BP’s business risk and give some advices to the BP Company. First of all, BP did not show the high performance to deal with this catastrophe. BP should understand that it was important to make the best use of first impressions demonstrating and they can solve this business risk use the method of SWOT analysis that contains four elements of strengths, weaknesses, opportunities and threats.
When managed the oil spill crisis, we can see from these actions, the BP Company did not use the effective management method. BP did not implement the right strategies of crisis management. These main strategies contained whether the sections or businesses have ability to respond to crisis immediately, whether they positively take the related responsibility and whether the corporates have the power to solve these crisis in time. For the BP Company, they only offered a series of related strategies and management methods to solve the crisis, while they did not provide the implementation plan in reality.