When Robert Horton left his position as Chairman and CEO of BP, the company was in financial trouble and the employee morale was notably low. The company was experiencing losses, the debt-to-equity ratio was out of control, and the company had positioned itself in so many diverse markets that most of the employees had no idea what the company mission and goals were. When David Simon took over as CEO, he was faced with the daunting task of turning the wayward company around. Simon accomplished this task for three reasons: he diagnosed and modified the organizational culture; he possessed important leadership skills; and he knew how to motivate employees.
One of the biggest deficiencies of Horton’s management was his attempt to Americanize the BP culture. Britain was not ready for Horton’s high profile leadership style and in his attempt to rid BP of the top heavy and stuffy management he left a feeling that the change was being imposed rather than nurtured. Through continually cutting costs, Horton’s strategy became equivalent to downsizing and the employee morale continued to deteriorate. In addition, it was not feasible to expect a company to change its culture overnight as Horton tried to do and imposing the culture of another country did not go over well either. When Simon entered, he recognized that the strategy was not necessarily the problem but that the management style and culture had to change. There were certain conditions present that were conducive to facilitating change at BP and in turn made Simon’s job slightly easier. The company was experiencing a crisis in their financial health which really drew attention to the consequences of the current culture. A sudden turnover in leadership allowed Simon to step in at the optimal time to begin changing the culture. In addition, Horton left a weak culture that employees wanted to change (Hunsaker 325). A combination of these factors and Simon’s vision for change allowed BP to transform under the reigns of a new CEO.
One of Simon’s greatest advantages was that he was a leader not just a manager. Simon possessed many essential leadership traits such as knowledge of the business, honesty and integrity, and drive (Hunsaker 369). The case highlights Simon’s great knowledge of the business with a quote from a colleague who said “he knows the figures like the night sky.” His honesty and integrity were show...
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...ng. When the oil industry started faltering this caused big problems and as a result there profits started decreasing. In 1992, a decrease in profits by 85% from the previous year, in addition employees complained that they had become so diversified that they were unsure of what the company goals were triggered the directors of BP to push Horton to resign and ultimately set in motion the cultural change that took place at BP.
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Davidson, Andrew. “The Davidson Interview: David Simon.” Management Today July 1995: 46-48.
Florent-Treacy, Elizabeth. “British Petroleum: Transformational Leadership in a Transnational Organization.” Fontainebleau, France: INSEAD, 1997.
Guyan, Janet. “When John Browne talks, big oil listens.” Fortune 5 July 1999: 116-120.
Hunsaker, Phillip L. Training in Management Skills. New Jersey: Prentice Hall, 2001.
Knott, David. “British Petroleum maps strategy for continued gains.” Oil & Gas Journal 91 (1993): 25-29.
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Weeks, Jennifer. "BP's Financial Pain From Spill Is Just Beginning." CQ Researcher 21.29 (2011): 688. MAS Ultra - School Edition. Web. 17 Feb. 2014.
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