MGMT 3551
The Spill
Employees and Labor-
This chapter was precisely about what it was titled, employees and labor. It discussed the
necessity of properly managed employees and how crucial it is to guide managers. Because,
those managers will be supervising the employees. In the video, BP had plenty of labor, the main
problem with the company was the upper management. BP had gone through some extremely
tough times in the 1980-90’s time period, and continually shifted out CEO’s and upper
management. This created a culture of ambition as the new management wanted to push BP into
the big leagues. Particularly, when CEO John Browne took over in 1995, he went on to purchase
Amoco for $61 billion, and 5 other companies. Browne quadrupled the value of BP in just a 5
year period. This aggressive expansion created the need for extremely good management as there
were so many more assets that needed inspected and more plants to run. Since BP had spent so
much money, CEO John Browne called for 25% cost cutting each year. Often times, this cost
cutting was undermining safety needs for new equipment. For example, after the acquisition of
Amoco, a 1200 acre oil refinery plant in Texas was now under ownership of BP. The refinery
was built in 1934, and was in dire need of new equipment for safety reasons. Due to the cost
cutting-measures taken from the upper management, equipment did not get upgraded and
replaced. This led to an explosion at the Texas plant that killed 15 people. BP had to pay only
