Transformational Change at British Petroleum : one goal two different leaders

Résumé du document

Before Robert Horton took over as CEO and Chairman of British Petroleum (BP) in 1990, the company's situation was difficult in terms of the lack of clearness of mission and strategic policy within the top 150 managers surveyed at the beginning of 1989. This survey revealed the managers feeling in relation to the company's structure, which obstructed collaboration and operational flexibility within different business (White 1992).

Additionally in the late 1980s, BP was described as a politicized, top-heavy bureaucracy, administrated throughout by a burdensome matrix structure. An example of this is the 15 signatures required before of any financial proposals could be accepted; also the working hours of top executives were absorbed in meetings of 86 committees (Roberts 2005).

When Horton took over the company's control, he announced the Project 1990, whose main objectives were to reduce organizational complexity in order to develop the speed and effectiveness of managerial decision-making, redesign the central organization, and cost reduction. This last goal was achieved thought the transfer of authority for numerous decisions, from the corporate centre to the business streams. During this process, management positions were eliminated, and office staff was reduced by over 80 percent (Roberts 2005).

Horton's plan to change the company culture from one of secrecy to one of openness was depicted by the acronym named OPEN, meaning: openness, personal impact, empowerment and networking (Varey 1997). Though the changes above were necessary, the plan introduced by Robert Horton was not completed under his management. He was replaced by David Simon who continued the transformation at BP but in a different leadership style.

Extraits

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[...] He was replaced by David Simon who continued the transformation at BP but in a different leadership style. In the case of transformation at BP is evident the existence of two different types of leadership in the two people who carried out the changes in this company. Is possible to affirm that from the point of view of leadership behaviour the Horton's leadership style is directive, also called authoritarian or autocratic leadership. This type of behaviour is characteristic of a person who formulates all decisions and expects that all employees to follow orders (Senior 2006). [...]

[...] External factors include all triggers describing the PESTEL framework and internally when the change can be driven by reorganizations, measures to improve efficiency and working procedures” (Grundy cited in Helgesson, 2005). In the case of BP the ups and downs are represented by the performance of the company from one manager to another. For example with Horton the employees' morale was low and the company's profits and dividends decline, different situation happened in the David Simon period due that this person communications skill rebuilt BP internal morale and price shared increased (Evans 2002). [...]

[...] Instead, the public is demanding that business organizations take extra-economic values into account when establishing both goals and means. This is so because in recent year's business has become the predominant institution in the social landscape, eclipsing family, polity, community and church in importance. Organizations, on the other hand are looking on individuals to give them a competitive edge in the face of a dynamic, turbulent, uncertain and intensely competitive environment. The challenges of competition, corporate downsizing, and industrial renaissance and economic dislocation are the new watchwords of US business (Jusela, 1994). [...]