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Disaster in the Gulf of Mexico: A Case of “An Ounce of Prevention…”?

Disaster in the Gulf of Mexico: A Case of “An Ounce of Prevention…”?. Agenda. April 1, Halliburton questions BP’s use of cement April 16-18, BP only uses six stabilizers instead of 21 April 20 5PM, Cement tests unsatisfactory or inconclusive. June 2009, Concern over type of casing being used

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Disaster in the Gulf of Mexico: A Case of “An Ounce of Prevention…”?

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  1. Disaster in the Gulf of Mexico:A Case of “An Ounce of Prevention…”?

  2. Agenda

  3. April 1, Halliburton questions BP’s use of cement April 16-18, BP only uses six stabilizers instead of 21 April 20 5PM, Cement tests unsatisfactory or inconclusive

  4. June 2009, Concern over type of casing being used March 2010, Unexpected bursts of gas March 2010, “Blowout preventer” leaking

  5. April 20 8PM, BP decides to end cement tests and switch mud with seawater April 20 9:49 PM mud flows out of the top of the derrick and a small explosion occurs April 20 9:50PM, A large explosion erupts

  6. Was the Deepwater Horizon accident a clear and unequivocal case that illustrates the proverb “An ounce of prevention is worth a pound of cure”? Yes No

  7. What is the most important control issue in this case?

  8. Definition of Control Essential to a company or organization Involves regulation for behaviors and activities

  9. Most Important Control Issue Operational Control • Assessment and regulation of the specific activities and methods an organization uses to produce good or services. • March • Sudden and unexpected bursts of gas (kicks) • The “blowout preventer” • April • Only 6 “centralizers instead of the recommended 21 • Mud leaking in • Explosion

  10. Focus of Control The decision about where to focus control in an organization involves critical choices based on which actions and outcomes should receive the greatest attention Financial Safety Structural

  11. Keeping in mind costs, what is the single most effective control step BP could have taken in advance to prevent or reduce the possibility of a blowout?

  12. Mistakes BP could have used the correct casing for the job Fix the blowout preventer Listen to the engineers Use all of the centralizers Stop BP from going against Halliburton’s best practices

  13. Mistakes Complete the full test of the cement plug Do not remove the mud and replace with seawater Allowed BP to lower the pressure of the blowout preventer Center the casing better

  14. Aside from problems relating to control, name three other important sets of management issues that were involved in this incident. Justify your choices and provide a ranking of those issues.

  15. Management IssuesWhy Did This All Happen? Ethical Lapse • Knowing right and wrong • Blatantly disregarding protocol and safety laws • No social responsibility Organizational barriers • Who was in charge? • No reinforcement Improving sending skills • Communication style “It’s pretty well understood amongst the crew who's in charge” (Captain of the Deepwater Horizon as quoted in Hitt et al. 2012)

  16. Questions? What do you think?

  17. References Hitt, M. A., Black, J. S., & Porter, L. W. (2012). Management (3rd ed.). Upper Saddle River, NJ: Prentice Hall.

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