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Case Analysis

1. BP: Facing Multiple Challenges


2.Developing Chinks in the Vaunted 'Toyota Way

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Submitted By Anne Ordona (ESG 1108057 ) Bhasker Nalluri (ESG 1107049 ) Dipankar Mishra (ESG 1105033) Jill Vergara (ESG 1106041) Poonam Dadlani ( ESG1009051)

BP: Facing Multiple Challenges

Case Analysis

BP Case Analysis

Background

1. British Petroleum formed by taking over the Anglo Persian Oil Company by British Government after the WWI

2. Global Energy group : Oil exploration and other alternate energy recourses
3. Competitors : Exxon Mobil, Shell , Chevron etc 4. More than 96,000 people , 13 million customers in over 100 countries 5. Traditionally Hierarchical later on embraced entrepreneurial corporate structure

BP Case Analysis

Issues and Symptoms

Company practices were not aligned to Corporate vision.

Damaged reputation as a socially responsible company.


BP losing its commitment of being an environmental friendly company
Polluting the Lake Michigan by disposing hazardous material

Ethical issues
June 2006 Regulatory issues in energy trading

Failure to use technology


March 2005 , explosion at BPs Texas office March 2006 Oil spill in BPs Prudhoe Bay pipeline

BP Case Analysis
Globalization

Factors contributing to the Issues

Company split into 150 business units

Leading Diverse Workforce


Vigorous growth through Mergers and acquisitions Not enough effort put to build cultural cohesiveness

Ethics Character/Personal Integrity


Managers pay linked to their units profitability

Failure to use technology


Focus on cost cutting and not adapting to new technologies at the cost of not conforming to safety regulations
For example : 1. The series of controversies sustained by the BP refinery in Indiana such as deficiencies in their wirings, heat alarms and fire hydrants was also seen as irresponsible) 2. BP did not comply to use corrosion testing device ( Smart-Pig ) to save cost.

BP Case Analysis

Possible Solutions

Addressing Global workforce by institutionalizing their corporate mission and values


Cost saving to be rationalized taking into account the safety and environmental regulations Revaluate the incentive structure.

Appointing a VP for Environmental Sustainability whose main role is to comprehensively


review and lead actions to improve BPs track record in corporate social responsibility
This department must establish and implement new policies that will contribute to their goal, e.g. ensuring that audits and safety checks in BP refineries are implemented on a regular basis

Use of new technology and regular safety audits


Ensuring ethics are followed uniformly across all business units

BP Case Analysis

Strategy

The problems are multidimensional the company requires to employ a mix of possible solutions

Developing Chinks in the Vaunted Toyota Way

Case Analysis

Toyota Case Analysis

Background

CONTINUOUS IMPROVEMENT VS RADICAL CHANGE


Toyotas culture which is called The Toyota Way is comprised of five distinct components: -KAIZEN = process of continuous improvement -GENCHI GENBUTSU = problem identification -CHALLENGE -TEAMWORK -RESPECT This culture has served the company well for many years. Now the Company wishes to move to Kakushin radical change.

Toyota Case Analysis

Issues and Symptoms

Toyota=Quality perception is declining.


Decline in Toyotas performance compared to its competitors Superiority in quality of components still superior but declining.

Design flaws
Quality control problems: Recall of 2.38 million vehicles in US due to manufacturing and design flaws

Losing its competitive edge Pressure to maintain quality across 52 global manufacturing locations

Toyota Case Analysis

Possible Reasons

Factories and engineering practices are not efficient enough


Companys rapid growth cannot sustain quality The Toyota Way that the employees are used to might not be applicable to current and

future setting
Product recalls Global presence and volume of business

Toyota Case Analysis

Transformation - Possible ways

Change and embrace the KAKUSHIN- NEW TOYOTA WAY by top executives
Form a long-term vision and meet challenges with courage and creativity. Shift toward more effective and proven quality methodologies Cultural change has to be thoughtfully/intentionally implemented.
Risks involved as it is a departure from a system that has produced results in the past.

Toyota must also take into consideration the resources that make them unique: people and
their ideas and abilities.

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