A Critical Examination of How Crisis Management Fits In With Corporate Public Relations and Reputation Management. A Critique of British Petroleum’s (BP) Use of

Corporate Relations to Manage Negative Perceptions Stemming from the Gulf of Mexico Oil Spill

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ACKNOWLEDGEMENTS

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TABLE OF CONTENTSEXECUTIVE SUMMARY……………………………………………………………………………….. 5CHAPTER ONE: Introduction…………………………………………………………………............... 61.1 Background of Study……………………………………………………………………………… 61.1.1

British Petroleum (BP) & The Gulf of Mexico…………………………………………………… 8

1.2 Research Aim……………………………………………………………………………………… 91.3 Research Methodology: Overview………………………………………………………………... 101.4 Structure of the Research………………………………………………………………………….. 10CHAPTER TWO: REVIEW OF LITERATURE………………………………………………............... 122.0 Introduction………………………………………………………………………………………... 122.1 Public Relations: Definition………………………………………………………………………. 122.1.1

Theories Underpinning Public Relations Practice……………………………………………….... 13

2.2 Impression Management………………………………………………………………………….. 162.3 Role of Public Relations in Reputation Management...…………………………………………… 182.3.1

Corporate Communication………………………………………………………………………… 18

2.4 Crisis Management………………………………………………………………………………... 192.4.1

Role of Corporate Communication in Crisis Management……………………………………….. 20

2.5 The Gulf of Mexico Oil Spill……………………………………………………………………… 222.6 Conclusion………………………………………………………………………………………… 23CHAPTER THREE: RESEARCH METHODOLOGY…………………………………………............. 243.0 Introduction……………………………………………………………………………………….. 243.1 Research Approach………………………………………………………………………………... 243.2 Research Design…………………………………………………………………………………... 253.3 Data Collection Methods…………………………………………………………………………. 253.4 Validity, Reliability & Generalizability…………………………………………………………... 273.5 Limitations of the Research………………………………………………………………………. 283.6 Ethical Considerations……………………………………………………………………………. 28CHAPTER FOUR: ANALYSIS & INTERPRETATION OF RESULTS……………………………….. 294.1 Introduction……………………………………………………………………………………….. 294.2 Gulf of Mexico Oil Spill………………………………………………………………………….. 304.3 BP Oil Spill & Anti-Capitalist Sentiments……………………………………………………….. 334.4 BP’s PR Response to Reputation Horizon Disaster……………………………………………… 344.4.1

Risk Analysis……………………………………………………………………………………... 34

4.4.2

Crisis Management……………………………………………………………………………….. 35

4.5 Analysis of Press Release by BP During Oil Spill……………………………………………….. 37

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4.5.1

Press Release I: British Petroleum Initiatives Response to Gulf of Mexico……………………... 37

4.5.2

Press Release II: BP Offers Support to Transocean After Drilling Fire.………………………… 38

4.5.3

Press Release III: BP Offers Sympathy to the Families of the Lost in the Accident…………….. 39

4.5.4

Press Release IV: BP Pledges US$500mn for Independent Research………………………….... 40

4.6 Impact of the Deepwater Horizon Oil Spill in BP’s Reputation…………………………………. 404.7 Summary of Main Research Findings……………………………………………………………. 40CHAPTER FIVE: CONCLUSION & RECOMMENDATIONS………………………………............. 425.1 Introduction………………………………………………………………………………………. 425.2 Conclusion……………………………………………………………………………………….. 425.3 Recommendations…………………………………………………………………………………. 445.4 Directions for Further Research…………………………………………………………………… 45References…………………………………………………………………………………………. 46Annex 1: BP Press Release-April 21, 2010……………………………………………………………….. 52Annex 2: BP Press Release-April 21, 2010……………………………………………………………….. 53Annex 3: BP Press Release-April 23, 2010……………………………………………………………….. 54Annex 4: BP Press Release-May 24, 2010………………………………………………………………... 55Annex 5: Personal Development Plan…………………………………………………………………….. 56

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EXECUTIVE SUMMARY

In this research, attention was devoted to exploring how crisis management fits into public relations and corporate reputation management. In order to do this, the following issues were discussed: public relations, crisis management, crisis communication, reputation and impression management. Discussing these issues contributed to the development of a theoretical understanding of the underlying subject matter of the research.

In order to achieve the objectives developed for the research, the case study design was used. In selecting the case study for the research, the following criteria were used: scale of the crisis; diversity of stakeholders impacted; and the availability of data. The case study selected for this research was British Petroleum’s response to the deepwater horizon oil spill. In other words, attention was devoted to critiquing BP’s public relations (PR) response to this disaster. In critiquing BP’s response, critical discourse analysis (CDA) was used to analyze BP’s press releases and statements by BP executives.

One of the key findings of this research was that when faced with organizational crisis, transparency and honesty in communication is critical. Honesty and transparency in communication can help reduce the apprehension of stakeholders affected by a crisis. In crisis situations, organizations are supposed to be open about the situation or crisis. Furthermore, organizations should equally be open about measures being taken by the organization to mitigate the effects of the crisis. Being open, in this regards, supports the ‘public information’ model of public relations. The analysis conducted in this research suggests that BP was not honest about the true picture of the quantity of oil being released into the Gulf. This did not do BP any favours as it intensified anti-capitalist sentiments and the public’s outrage against all that BP stands for.

In communicating during crisis, press releases –while important- are not the only channel of reaching out to stakeholders. Television interviews and press conferences are also useful channels for communicating to stakeholders during crisis. Empathy in communication –irrespective of the channel utilized- is critical for effective management of organizational crisis. Demonstrating empathy in crisis response –whether through communication or actions- can help reduce the tension and apprehension among stakeholders affected by a crisis. Some of Tony Hayward’s statements in the days and weeks following the crisis were put under the spotlight in this research. As observed, his statements lacked empathy –especially as it concerned specific publics directly impacted by the deepwater horizon accident- and made BP appear aloof and unconcerned about the environmental degradation to the Gulf. This was, in part, responsible for his ousting as BP CEO.

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CHAPTER ONE

INTRODUCTION

1.1 Background of Study

In the current marketplace, which is intensely competitive, corporate reputation can be a commercial organization’s most significant asset. Corporate reputation can be the factor that makes a company stand out from its rivals and give it a competitive edge. This is the reason why many organizations see public relations management as a critical organizational function (Glenn, 2009). Public relations (PR), as an activity or subject matter, is concerned or closely associated with reputation management (Spaulding & Correa, 2005). For Leary & Kowalski (1990), public relations is concerned with impression management. Impressions, whether positive or negative, can form a reputation about a person or organization. Impression management can also be construed as ‘self-representation’ –a process by which individuals or organizations make an effort to control or manage the impressions that others have of them (Leary & Kowalski, 1990). From an organizational standpoint, Leary & Kowalski (1990) are of the view that public relations play a critical role in ensuring that companies make a positive impression about themselves in their interactions with external stakeholders, i.e. their customers and the public at large. Based on this position, public relations can be viewed as a tool for managing the relationship between an organization and its immediate external environment. This perspective was reinforced by Spaulding & Correa (2005) who indicate that public relations presents an avenue for companies to manage their reputation or image in a positive or well-received manner.

This research seeks to explore the role of public relations in crisis management. Crisis, which can occur in diverse forms, is an element that organizations cannot ignore. This is because crisis reflects poorly on a company and has the potential to damage reputation to a certain degree (Dilenschneider, 2000). Furthermore Jaques (2007) notes that for corporate organizations, crisis is inevitable as it can occur through conscious and unconscious actions and decisions. From an organizational context, Dilenschneider (2000:22) notes that a crisis can be viewed as an event which poses a significant threat to company operations, and can have negative consequences if not treated properly. Furthermore, Jaques (2007) indicates that a crisis can generate three main threats: (1) financial loss; (2) public safety concerns; and (3) damage to reputation. Jaques (2007) notes that a crisis can lead to financial loss if it disrupts operations. Given the threat of financial loss and the other aforementioned threats, there is reason not to ignore crisis. Jaques (2007) and Coombs (2007) note that public relations present a useful tool for managing organizational crisis. This is largely what has contributed to the popularity of crisis management both as a subject

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matter and a profession (Coombs, 2007). For Coombs (2007:3), “public relations is a vital tool in the arsenal of crisis managers”. This is somewhat ironical especially considering that public relations is often presented as a means of relationship building based on shared interests while crisis management is presented as a strategy to decrease the effect of negative publicity. Given this observation, PR can be perceived as all-encompassing with regard to supporting relationship-building and managing crisis at the same time. Furthermore, Coombs (2007) noted that public relations play a role in crisis management especially given the threat of a crisis to a company’s reputation.

Some of the studies already discussed in this chapter are of the view that companies cannot ignore crises whenever they arise. Crisis management presents a framework for addressing these crises sequentially and properly; in a manner that brings about limited damage to a company’s reputation (Dilenschneider, 2000; Coombs, 2007). Jaques (20070 notes that crisis management offers a useful framework for protecting a company and its stakeholders from threats or reduce the effect from the materialization of such threats. While crisis management can help to limit the damage emanating from crisis, it should equally be noted that crisis can present an opportunity for good public relations (Girboveanu & Pavel, 2010). In investigating the role that public relations, some of the discussions in this research look at the issue of crisis management closely. Given that crisis management can be categorized into three main phases (Girboveanu & Pavel, 2010) –pre-crisis; crisis response; and post-crisis- added attention is devoted to the ‘crisis response’ and ‘post-crisis’ phase. In so doing, data collected for the research examines BP’s response to the Gulf of Mexico Oil Spill in both phases of crisis management.

As alluded to by Coombs (2007) and Jaques (2007), the perceived role that public relations play in crisis management is reinforced by the increasing attention to media relations as a tool for managing corporate reputation. Spaulding & Correa (2005) note that one of the most critical factors in crisis management is working with the media. The array of media communications –especially as we increasingly live in a digital landscape- has given credence to crisis, whether organizational or national, as a newsworthy item. This is evident by the global media attention to the Gulf of Mexico oil spill. Most global news channels, such as CNN, BBC and Al Jazeera, devoted a significant amount of time to broadcasting heart wrenching images of the effects of the massive spill on aquatic life. In investigating the role played by PR in crisis management, British Petroleum (BP) formed the case study for the research. It is important to note that the Deepwater Horizon oil rig, the rig responsible for the spill, was owned by BP. Thus, the research critiques BP’s media response to the negative perceptions emanating from the oil spill disaster. Before providing an overview of the Gulf of Mexico oil spill, as the background context for the research, it is important to provide a brief understanding of what public relations entails. In the second chapter, added attention is devoted to exploring some theoretical models underpinning public relations practice.

What is public relations? Glenn (2009) note that public relations is about reputation –the consequence of your actions, what you say and what others say or think of you. From an organizational perspective, Girboveanu & Pavel (2010:3) define public relations as, “the management function that establishes and maintains mutually beneficial relationships between a company and external stakeholders on whom its success or failure depends”. Looking at PR as a ‘management function’ does reinforce its importance in corporate relations as alluded to by

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Glenn (2009). The cause of divergence in definition of PR can be traced to the possibility of viewing it from multiple dimensions. Glenn’s (2009) views PR from the perspective of the individual. Girboveanu & Pavel (2010) view PR from the perspective of the corporate organization. Furthermore, PR can be seen as an all-encompassing concept involving crisis management. In any case, how PR is defined can be influenced by the perspective from which it is considered. In essence, PR is critical to managing the relationship between a company and its diverse range of stakeholders. Allen et al., (2008) defines public relations as the profession or activity that is concerned with reputation management, with the objective of gaining understanding and support and influencing public opinion and behavior. Furthermore, Allen et al., (2008) indicate that public relations entail a planned, structured and sustained effort to create and maintain goodwill and mutual understanding between a company and the public. PR management applies to or can be used by a broad spectrum of stakeholders such as, private sector organizations, public sector organizations, non-governmental organizations, development agencies, and even individuals (i.e. celebrities) (Glenn, 2009). Having presented and discussed some of the definitions of PR, I shall now provide an overview of the Gulf of Mexico Oil Spill and how this event affected BP. This is done in the next section.

1.1.1 British Petroleum (BP) and the Gulf of Mexico Oil Spill

The Gulf of Mexico oil spill, also known as the Deepwater Horizon oil spill, started on 20th April 2010 in the Gulf of Mexico on the BP-operated Macondo Prospect. The spill was the result was the result of an accidental gas release and subsequent explosion. In the addition to the massive oil spill, the accident claimed eleven lives. The Gulf of Mexico oil spill is regarded as the largest accidental marine oil spill in the history of the petroleum industry with an estimated 10% to 32% rise in volume when compared to the previous largest, the lxtoc 1 oil spill (BBC News, 2012). Following the explosion and sinking of the Deepwater Horizon oil rig, a sea-floor oil gusher flowed for a period of 87 days. In fact, the United States Government contended that an estimated total discharge of 5 million barrels flowed from the leak (Weber, 2010). The effect of the spill on marine in the area was both palpable and incalculable. Juhasz (2012) notes that as a result of three-month long spill, along with the adverse impacts of response and cleanup efforts, large scale damage to marine and wildlife habitats, fishing and tourism industries, and human health concerns have continued through to 2014 (see Figure 1).

The Gulf of Mexico oil spill led to national and global outrage, most of which was directed at BP, the company responsible for the Deepwater Horizon rig. This event significantly disrupted BP’s operations which ultimately resulted in significant financial loss. In 2012, BP and the US Government came to a settlement for federal criminal charges with BP pleading guilty to 11 counts of manslaughter, 2 misdemeanors, and a felony count of lying to Congress. The Environmental Protection Agency (EPA) banned BP from new contracts with the US Government (Thompson, 2012). In the same year, BP and the US Department of Justice agreed to a record-setting US$4.25 billion in fines and other penalties (Muskal, 2013). In addition, as at February 2013, BP incurred a cost of US$43 billion as a result of criminal and civil settlements and payments to a trust fund (Fontevecchia, 2013). The financial loss also includes the cost of BP’s response to the crisis. In fact, BP (2013) notes that the cost of sealing the oil rig permanently and for cleanup activities was about US$14 billion. In the crisis response phase, BP conducted a series of press conferences to update the public on the status of efforts as regards the

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complex activity of curbing the leak; this was in addition to being involved in the cleanup effort, i.e. containment, collection and the use of dispersants.

When it comes to critiquing BP’s PR response to the Gulf of Mexico oil spill, Robertson & Krauss (2010) described it as ‘clumsy’ and not ‘properly thought out’, especially when citing comments made by Tony Hayward, the former chief executive of the company in the wake of the disaster. Given that the PR strategy for dealing with a disaster such as the Gulf of Mexico oil spill was always going to be about damage limitation, Webb (2010) describes BP’s PR response to the crisis as the worst in US history. Attempts by BP press officers to transfer blame to Transocean only backfired as subsequently, it was deemed that BP lied to the US Congress about the causes and true extent of the oil spill disaster. In light of the observations by Robertson & Krauss (2010) and Webb (2010), this research undertakes a critique of BP’s PR response to the disaster, especially as it concerned the management of negative perceptions emanating from the event. Having provided an overview of the Gulf of Mexico oil spill, it is now time to present the aim of the research.

1.2 Research Aim

The main aim of this research is to explore how corporate organizations utilize public relations to manage their corporate reputation in the face of crisis. In doing this, focus is devoted to critiquing British Petroleum’s PR response to the Gulf of Mexico oil spill. In fulfilling this aim, the research undertakes a critical stance against corporate public relations. It should be noted that corporate PR tends to be perceived as a means through which the organizations promote their agenda irrespective of public perceptions and concerns. For instance, although CSR is a welcome initiative –from the standpoint of corporate accountability to the communities in which they operate-, it is often viewed by some as a PR ploy to create a favorable image of themselves irrespective of reality. While examining how corporate organizations use PR to manage their corporate reputation, effort will be devoted to undertaking a critical and objective analysis of this approaches especially as it concerns the public sphere. In order to realize the central aim of this research, these key questions were developed by the researcher:

Research Questions

i.) How do organizations use corporate and strategic communications to manage their corporate reputations in the face of crisis?

ii.) How do organizations manipulate corporate relations to maintain their agenda when faced with crisis?

iii.) What was the nature of British Petroleum’s (BP) response to the Gulf of Mexico oil spill?

Research Objectives

In light of the context of the research and the research questions earlier highlighted, these are the main objectives of the research:

i.) To undertake a critical examination of how corporate organizations use strategic communications to manage their corporate reputations in the face of crisis.

ii.) To critically examine how organizations manipulate corporate relations to maintain their agenda when faced with crisis.

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iii.) To critically examine British Petroleum’s (BP) use of strategic communication to manage public perceptions of its culpability in the Gulf of Mexico oil spill.

In exploring the role of that public relations play in the reputation management, especially when faced with crisis, the following issues will be discussed:

Definition of Public Relations. Theories underpinning public relations practice. Role of public relations in crisis management. Relationship between public relations and reputation management. Public relations and corporate agenda setting. Role of corporate communications in crisis management.

1.3 Research Methodology: Overview

In this research, a qualitative research approach is used. Collis & Hussey (2005) note that the qualitative research approach is concerned with recording, analyzing and making an effort to uncover the deeper meaning and importance of human behavior and experience. The decision to use this particular research approach is driven by a series of factors. One concerns the nature of objectives developed for the research. In order to understand how organizations use public relations to drive their own agendas, undertaking a critique of their corporate communications is critical. In many cases, such communication consists of qualitative data hence, the usefulness of the qualitative approach. Again, the qualitative research approach provides a useful way of gaining an improved understanding of communication relationships and the social world (Daymon & Holloway, 2011).

Strategic communication plays a part as an ‘unseen influence’ (Heath, 2009) which seeks to inform how and what we know at the individual and societal levels, and also how we define our own identities in connection to others. Understanding the nature of this unseen influence requires critical thinking. Critical researchers are interested in encouraging emancipation and social transformation, for instance, challenging orthodox practices and ways of thinking, or unraveling what has been marginalized. Their methodological approaches are usually based on interpretive thinking. Interpretive thinking is useful in research because it challenges and reformulates dominant paradigms. Communications relationships cannot be separated from the social and historical contexts in which they occur, and this is demonstrated in the contextual nature of qualitative research. These observations drove the decision to use the qualitative research approach as a way of realizing the set objectives for the research.

One of the useful ways of applying the qualitative approach is through critical discourse analysis (CDA). This methodology is used when analyzing the corporate communications of BP during the Gulf of Oil Mexico oil spill. In other words, BP’s press releases during this period is analysed using CDA. The central objective of this research is to explore how corporations manipulate or use spin to manage the public’s perceptions of their reputation when faced with crisis. To do this the case study design is used. The case study design offers a useful way of understanding a complex problem by examining a real-life scenario (Collis & Hussey, 2005). Regarding the collection of data for this research, only secondary data is used. The secondary data will consist of corporate communications and press releases by BP during the Gulf of Mexico oil spill.

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1.4 Structure of the Research

In carrying out this research, the issues to be discussed are presented in five main chapters. Each of these chapters serves a particular purpose. In the first chapter, the background context for the research is presented. Here, different critical issues concerning the underlying subject matter of the research are touched on: definition of public relations; crisis management; and the role of public relations in crisis management and reputation management. In addition these issues, an overview of the Gulf of Mexico oil spill is presented. Furthermore, the key aim and objectives of the research are presented in this chapter.

In the second chapter, a comprehensive review of literature dealing with key aspects of public relations management is conducted. In addressing these aspects, views and perspectives from different studies are presented. Studies covering the following issues are discussed: definition of public relations; theories underpinning public relations practice; role of public relations in corporate reputation management; role of public relations in crisis management; and public relations and media relations. Prior to the conclusion of this chapter, BP’s PR response to the Gulf of Mexico oil spill is briefly examined.

In the third chapter, a detailed description of the methodology used in carrying out the research is presented. Here, the approaches and design used are discussed with reference to information from the review of literature. Furthermore, the methods used in collecting and analyzing data for the research are discussed. This chapter concludes with a description of ethical considerations permitted for the research.

The fourth chapter is where the data collected for the research is presented, analysed and interpreted with reference to the objectives established. Here, the corporate communications of BP both during the ‘crisis response’ and ‘post-crisis’ phases are critiqued with a view to understanding how BP managed negative perceptions emanating from the Gulf of Mexico oil spill. This chapter concludes with a presentation of the main findings from the analysis and discussions conducted.

The fifth chapter is where the conclusions for the research are presented. The conclusions highlight results from the critical analysis of BP’s use of PR to manage reputational issues arising from the Gulf of Mexico oil spill. The conclusions also show how contemporary conceptions of corporate PR.

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CHAPTER TWO

REVIEW OF LITERATURE

2.0 Introduction

The range of issues discussed in this chapter helps to form the theoretical framework for the research. The chapter begins with exploring some of the standard definitions of public relations. In addition, some key models and theories underpinning public relations practice are explored in this chapter. After exploring these theories, the issue of impression management is discussed. This forms the basis for reviewing literature on the role of public relations in reputation management. In addition to this, the role of corporate communications in crisis management is discussed. It is important to do this given that the case study for the research involved a company’s response to a crisis situation. Consequently, best practices in crisis communications are also discussed. An overview of the Gulf of Mexico oil spill is provided together with snapshots of how British Petroleum (BP) responded to this crisis. This chapter then concludes with a summary of the main issues discussed.

2.1 Public Relations: Definition

Different definitions have been provided to help capture the essence of public relations management. In this section, some of these definitions are discussed. Exploring some of these definitions will set the stage for the different range of issues addressed in this chapter. These definitions will give a sense of what public relations is and what it does? The first World Assembly of Public Relations held in Mexico city in August 1978 defined public relations as, “the art and social science of analyzing trends, predicting their consequences, counseling leaders of organizational leaders, and implementing planned programs of action, which will serve both the company and the public interest” (Allen et al., 2008). What can be drawn from this particular definition is that public relations (PR) is a field concerned with maintaining public image for high profile projects, companies and people. Joye (1997) notes that public relations people enable people to establish and maintain effective relationships with external stakeholders, i.e. third parties. This particular definition views public relations as being concerned with relationship-building or the management of stakeholder relationships. Dan et al., (2004) define public relations as a leadership and management function that supports the achievement of corporate objectives, define corporate philosophy, and encourage organizational transformation. Dan’s (2004) definition views public relations as a management function designed to to support

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the realization of corporate objectives. While this research seeks to explore contemporary perspectives of PR in the corporate discourse, Dan’s (2004) perspective is limiting as it views public relations as something domiciled to corporates. PR, according to Allen et al., (2008), can also be applied to individual relationships. Furthermore, Dan et al., (2004) note that public relations is concerned with the management of the network of relationships that an organization is directly and indirectly engaged in. In this particular context, public relations practitioners create, implement and evaluate company programs/activities that promote the exchange of influence and understanding among a company’s constituent parts and publics (Allen et al., 2008). Given differing perspectives highlighted in some of the definitions presented, the common theme among all of them is the fact that PR is concerned with the management of relationships.

Public relations is something that organizations invest in given its ability to promote mutually beneficial relationships. Allen et al., (2008) provides a characterization of public relations:

i. Public relations is a condition common to every person and organization in the human environment –whether or not they acknowledge or act upon the fact- that refers to their reputation and association with other external stakeholders.

ii. Public relations is the structured function that assesses the attitudes and behaviours of external stakeholders; harmonizes the objectives, policies, and processes of a person or company with the public interest; and implements a program of action to gain public support and acceptance.

iii. Public relations is the complete flowering of the democratic principle, in which every member of society is treated with respect, and has both a right and the responsibility of expressing their views on public concerns, and in which policies are made on the grounds of uninterrupted exchange of those views that results in public consent.

What can be deduced from the aforementioned conjecture of public relations is that it is at the core of corporate reputation management. This is evident in how it seeks to enhance the appeal of an organization to its diverse range of stakeholders including customers, the government, civil society organization e.t.c. The third conjecture of PR provided by Allen et al., (2008) is somewhat altruistic as it sees PR as democratic in nature. The argument against this is that PR can be used by corporate organizations to promote their own agendas irrespective of the interests and needs of external stakeholders. Dan et al., (2004) note that integral to the success of public relations is the proper identification of critical stakeholders. Identifying stakeholders enables an organization to properly allocate its public relations efforts. Dan et al., (2004) note that the process of identifying stakeholders can be achieved by the preparation of a stakeholder matrix.

2.1.1 Theories Underpinning Public Relations Practice

This research’s purpose will be better served by exploring certain theories that lay the ground for public relations practice. From a theoretical standpoint, PR practice can be explained by different theoretical categories, some of which include: the theories of relationships (e.g. situational theory) (Grunig & Repper, 1992); and the theories of mass communication (e.g. framing theory and agenda setting theory) (Cohen, 1963). It is essential to examine the theories of relationships because some of the studies already looked at in the first chapter indicated that

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public relations is concerned with the management of relationships –the network of relationships between an organization and its external stakeholders (Leary & Kowalski, 1990; Spaulding & Correa, 2005). Examining the theories of mass communication is critical because public relations belong to mass communication discipline, which is an aspect of marketing.

Theories of Relationships

Situational Theory

In looking at the theories of relations, more attention is devoted to the ‘situational theory’. Grunig & Repper (1992) are of the view that the concept of stakeholders provides a useful means of describing and understanding relationships as a result of existing conceptions of PR as a means of promoting and persuasion. However, they concluded that not all people in stakeholder groups would be equally likely to communicate with an organization. Grunig et al., (2002) note that publics range from those who actively seek and process information about an organization or an issue of interest, to those publics who passively receive information. Grunig et al., (2002:52) note that three factors predict when publics will search and process information about a subject: problem recognition; constraint recognition; and level of involvement. What is critical is that publics are situational. In this regard, as a situation, problem or issue changes, the publics, with which the company must communicate, and constantly change. In essence, situational changes lead to perception changes among stakeholders.

Situational theory also helps in explaining why certain groups are active on a particular issue, others are active on many issues, and others are uniformly unconcerned (Grunig & Repper, 1992). The particular relationship is determined by the nature of the groups (active or passive) and how a company is connected with the issue (Grunig & Repper, 1984; 1992). The situational theory keeps us focused on the types of information that publics want as opposed to the organization’s preference of the type of information it wants to disseminate. Furthermore, the situational theory operates on the assumption that publics will pay attention and search for information that is in their best interests.

Theories of Mass Communication

Agenda Setting Theory

Cohen (1963) notes that although media cannot determine what people will think, they are stunningly successful in telling them what to think about. This view is supported by the study conducted by Shaw & McCombs (1977) into the media reporting and voter perceptions. Shaw & McCombs (1977) discovers a positive correlation between what voters said was important and what media were reporting as being critical. Even more amazing from the results of this particular study was the fact that voters were more likely to agree with the composite media agenda than with the position of the candidate they claimed they favored (Shaw & McCombs, 1977). Public relations practitioners make an effort to influence the media agenda by offering news items for public consumption (Akpabio, 2005). To achieve this, they identify subjects that editors and news directors consider news, localize their messages, and help media representatives cover the story.

Framing Theory

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Mass media scholars, such as Entman (1993), are of the view that the messages and information sent to audiences contain with them pre-existing set of meanings or what some would refer to as ‘frames’. Entman (1993) defines framing as an active process of drawing out dominant themes from the content. Dozier et al., (1995) notes that these meanings stem from the cultural and social groupings in which we live and work. For instance, the culture in the United States is one that is highly individualistic based on Hofstede’s cultural dimensions framework (Hofstede, 1990). This cultural attribute tends to be reflected in stories presented by the media. For example, CNN tends to carry stories of people who overcome adversity or those who excel in sports. As a result, the focus on individual effort shapes the way people in the United States communicate. The framing theory is of importance to public relations practitioners because understanding common frames makes for easy and meaningful communication with the public or audiences (Dozier et al., 1995). In fact, Entman (1993) notes that if we want to communicate effectively with each other, we are bound to utilize common frames as an essential condition to being understood.

2.1.2 Models of Public Relations

One of the most effective ways of contemplating and understanding the issue of public relations has been through the identification of widely shared orthodox thinking behind public relations practive and how these are connected to each other (Broom & Dozier, 1986). Grunig & Hunt (1984) propose four models of public relations that are dependent on communication, research and ethics: press agentry; public information; the two-way asymmetrical model; and the two-way symmetrical model. For the purposes of this research, focus is placed on ‘press agentry’, ‘public information’, and the two-way asymmetrical model. The rationale for focusing on these three models stems from the fact that they deal with communication mechanisms between an organization and its stakeholders or the public.

Press Agentry

Press agentry is the model where information moves one way –from the company to its publics. This is one of the oldest or most traditional models of public relations. This particular model is concerned with the issues of promotion and publicity. Adherents of this particular model are always seeking opportunities to get their company’s name favorably stated in the media (Grunig & Repper, 1984). This model includes propaganda tactics such as the use of celebrity names and attention-gaining tools such as giveaways, parades, and grand openings. Despite the fact that press agents are not unethical, they do not desire to be ethical either. The louder the noise, the more attention-getting the story, whether it is true or false, the better they are at doing their jobs (Gruning & Hunt, 1984).

Public Information

Public information differs from press agentry because the intent is to inform as opposed to press for promotion and publicity, but the communication is still essentially one-way (Grunig & Hunt, 1984). Currently, this model represents public relations practices in government, educational institutions, non-profit organizations, and even in certain corporate organizations. Public relations practitioners that adopt this particular model do very limited research about their audiences beyond testing the lucidity of their messages. Such PR practitioners are seen as

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“journalists-in-residence”, who place value on accuracy but decide what information is best to disseminate to their audiences (Grunig & Repper, 1984; Grunig & Hunt, 1984).

Two-way Symmetrical Model

The two-way symmetrical model is also referred to as ‘mixed motives’, ‘collaborative advocacy’, and ‘cooperative antagonism’ (Grunig, 2000). This particular model highlights a public relations orientation in which organizations and their publics adjust to each other. This depiction of public relations placed the organization and its publics on a continuum (Dozier et al., 1995). It stresses the utilization of social science research methods in accomplishing mutual understanding and two-way communications rather than one-way persuasion (Grunig, 2001). This particular model is regarded as the most ethical because all groups are involved in the problem resolution process.

2.2 Impression Management

Included in the scope of the research is the role that public relations play in impression management. Impression management is critical because it can build up into defined reputation. Bearing in mind that public relations is about managing relationships (Spaulding & Correa, 2007), understanding how to manage impressions is important because it forms the basis for developing positive interpersonal relationships. Leary & Kowalski (1990:34) define impression management as the process by which people control the impressions others have of them. People and organizations have a continuous interest in how others see and evaluate them. Schlenker (1980) notes that impression management is also referred to as ‘self-presentation’. Schlenker (1980) further notes that because the impressions individuals make on other people have implications for how others see, evaluate, and treat them, as well as for their own views of themselves, people sometimes act in ways that will create particular impressions in others’ eyes.

Different factors motivate and constrain public impression management and private self-image maintenance differs in many respects. Many of the purely social variables that influence people’s images play little or no part in private self-maintenance. As Tedeschi (1986:10) observes, “secret agendas, a desire to manipulate other people, the goal of making other people to mediate reinforcements that otherwise would not be attainable, together with possession of different views, information, and values contribute to significant variances between the observations and evaluations of one’s on behavior and the attributions made by other people”.

Given that a person is motivated to create an impression on others, the issue becomes one of determining precisely the type of impression one wants to make and choosing how one will go about making that impression. Impression management is looked at differently. Gergen (1965) views impression management as primarily the attempt to create impressions of one’s personal characteristics. Gaes et al., (1978) treat impression management as being more or less equivalent to self-description. Miller & Cox (1982) view impression management as the management of physical appearance. Forsyth et al., (1977) and Leary & Kowalski (1990) view impression management as involving all behavioral efforts to create impressions in others minds. For Leary & Kowalski (1990), individuals attempt to create impressions not only of their personal attributes, but also of their attitudes, moods, roles, status, physical states, interests, beliefs etc. Furthermore, people also use means other than self-description to create desired impressions (Leary & Kowalski, 1990). This position is supported by Jones & Pittman (1982) who also

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indicate that both verbal and non-verbal cues are critical in how people form the impressions that they want others to believe or accept.

The construction of impression is a structured, conscious and continuous process. The process of creating an image to sell to a target audience is a conscious effort which is designed to influence the perception and evaluation of the target audience (Miller & Cox, 1982; Leary & Kowalski, 1990). For an organization, the formation of corporate mission and objectives serves as a guide for determining the image that it wants to convey, both to its customers and other stakeholders. This image tends to be reflected in the organization’s products or services, culture, internal processes and structure (Broom & Dozier, 1986). Furthermore, the cultivation of this image or identity is achieved through corporate and media communications. Sriramesh & Vercic (2003) note that corporate identity management is a term used to identify the different strategies used to oversee and direct variables that impact the company’s identity, both internally and externally. This means that the identity management effort not only has to do with the cultivation of a viable corporate culture that lends itself well to the interests of the company. Earlier on, it was noted that the cultivation of corporate image can be facilitated through corporate and media communications. Sriramesh & Vercic (2003) note that as an internal process, corporate identity management will usually pay added attention to developing an internal flow of information that makes it possible for staff members at all levels to actively participate in moving the organization forward. Having looked at the issue of impression management, it is now time to look at the role of public relations in reputation management. This is done in the next section.

2.3 Role of Public Relations in Reputation Management

Reputation management has emerged as a popular theme in corporate communications and public relations. In addition to looking at the how PR facilitates reputation management, the issue of corporate communications is discussed in this chapter. Girboveanu & Pavel (2010) note that public relations is all about reputation –the result of what you do, what you say and what other people say about you. Spaulding & Correa (2007) note that public relations is the discipline which looks after reputation, with the objective of gaining understanding and support and influencing opinion and behavior. Furthermore, Spaulding & Correa (2007) indicate that public relations is the planned and sustained effort to create and maintain good will and mutual understanding between a company and its external stakeholders or publics. Sriramesh & Vercic (2003) note that public relations not only tell a company’s story to the publics, it also contributes to the shaping of an organization and the manner it works. Through research, feedback, communication and evaluation, the PR practitioner needs to find out the concerns and expectations of a company’s publics and explain them to its management (Chartered Institute of Public Relations, 2009). Reputation management is the process or practice of monitoring the reputation of a company, addressing contents which are damaging to it, and utilizing customer feedback solutions to get feedback or early warning signals of reputation challenges (Milo, 2013). Lieb (2012:43) notes that public relations is critical to reputation management because it bridges the gap between how an organization perceives itself and how others see it.

The reputation of an organization is not just the image the company conveys, it also entails what external stakeholders think of the company (Lieb, 2012). The process of building positive images in the minds of these external stakeholders is determined by the nature of relationships between the company and these stakeholders. When it comes to the role of PR in reputation, an interesting observation was made by Horton (2009:4):

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We can’t manage reputation –never could, if we mean controlling how other people independently evaluate a person or organization. On the other hand, if reputation management is construed as monitoring how other people think and attempting to persuade them to think in a different way, then perhaps we do ‘manage reputation’ to a certain degree (Horton, 2009).

Horton (2009) further notes that the monitoring function of reputation management is concerned with gathering intelligence from the external environment to inform decision-making, especially in the nature of corporate communications. Monitoring engenders situational awareness, but it can also lead to paralysis when there are divergent opinions. The reputation of an organization stems partially from perceptions of actions and partially from misinformed observations (Horton, 2009). This view is supported by Bilton (2011) who indicates that while public relations can communicate accurately and clearly what the company is doing and try to decrease misinformation, it does not have incentives or punishments to stop rumour mongers, agitators, disgruntled investors/employees, or committed activists. In other words, reputation management is not about controlling perceptions rather it is more about influencing the views, opinions and perspectives of external stakeholders.

Given that the opinions and views about an organization can change, many organizations have a dedicated PR department. The approach used by the PR department can be categorized as being either reactive or proactive (Girboveanu & Pavel, 2010). Girboveanu & Pavel (2010) note that whether the reactive or proactive approach is used, chief of the public relations department’s functions is managing the organization’s reputation and responding to any crisis that threatens the positive image of the organization. The reactive PR approach is one where the organization waits for bad publicity or public criticism before they act or respond. Bearing in mind that reputations are formed and re-informed in people’s minds continuously, and because public issues debates are continuously taking shape, a more strategic approach is to be proactive (Girboveanu & Pavel, 2010).

2.3.1 Corporate Communication

There is a popular belief in the management world that in the current business environment, the future of any organization is critically dependent on how it is perceived by its stakeholders, such as shareholders, customers, consumers, and other members of the community in which the business operates (Horton, 2009). Perception management is of more importance to organizations because of globalization and corporate crisis (Marchand, 1998). In a study interviewing chief executive officers and senior managers of large corporations on the importance of reputation management, Murray & White (2004) discover that the majority view was that companies nowadays consider protecting their company’s reputation as ‘critical’ and view corporate reputation as a very important strategic objective. Given this observation, Horton (2009) notes that the goal of developing, maintaining and protecting a company’s reputation is one of the core responsibilities of corporate communication practitioners.

In the past, practitioners used the term ‘public relations’ to describe communication with stakeholders. This public relations function, which tended to be tactical in many companies, largely involved communication with the press (Harris, 1991). But when both internal and external stakeholders started to demand more information from companies, it became clear that communication was more than public relations (Marchand, 1998). At this point, it is essential to

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define what ‘corporate communication’ is. Hutton (1996) defines corporate communication as a management function that offers a framework for the effective coordination of all internal and external communication with the aggregate objective of creating and maintaining favorable reputations with stakeholder groups upon which the company is reliant. Furthermore, Hutton (1996) notes that corporate communication can be a complex undertaking for companies with a broad geographical span. This is because the coordination of communication ends up being a balancing act between the company’s head office and its network of subsidiaries and branches.

Whatever be the case, Hutton (1996) is of the view that corporate communication plays a critical role in corporate reputation management. Hutton (1996) suggests that communication is strategic because it informs the company’s image over time –from the past to present. This is reinforced by the following key concepts that encapsulate the strategic role of corporate communication: stakeholder; public; corporate reputation; corporate identity; corporate image; mission; vision; corporate objectives; and corporate strategies (Hutton, 1996; Marchand, 1998).

2.4 Crisis Management

In the previous section, the need to explore the role of corporate communication in crisis was mentioned. Before doing this, it is essential to understand what crisis management is all about especially as Dilenschneider (2000) notes that public relations enable organizations to address organizational crises in a proactive manner. Coombs (2007) defines crisis management as a process that is designed to prevent or lessen the damage a crisis can inflict on a company and its stakeholders. Nwaocha (1999) defines crisis management as the application of proper steps to either present a crisis from happening or to promptly control it once it happens. In addition, Fearn-Banks (2001) notes that crisis management is proactive, preventive, planned and structured in nature. Barton (2001) notes that crisis management is a critical organizational function, and that one of the tasks of public relations practitioners is to help organizations address organizational crises. Furthermore, Barton (2001) notes that failure can lead to serious harm to an organization, especially its reputation and financial position. Dilenschneider (2000:22) notes that a crisis can be viewed as an event which poses a significant threat to company operations, and can have negative consequences if not treated properly. Furthermore, Jaques (2007) indicates that a crisis can generate three main threats: (1) financial loss; (2) public safety concerns; and (3) damage to reputation. Jaques (2007) notes that a crisis can lead to financial loss if it disrupts operations. Given the threat of financial loss and the other aforementioned threats, there is reason not to ignore crisis.

As crisis management can be categorized into three main phases –pre-crisis; crisis response; and post-crisis (Girboveanu & Pavel, 2010) - added attention is devoted to the ‘crisis response’ and ‘post-crisis’ phase. In so doing, data collected for the research examines BP’s response to the Gulf of Mexico Oil Spill in both phases of crisis management. The crisis response phase of crisis management deals with what management says and does after the crisis hits. Here, public relations plays a vital role in the crisis response phase by helping to create the messages that are sent to different publics (Coombs, 2007). Furthermore, Coombs (2007) notes that the crisis response phase consists of two aspects: (1) the initial crisis response; and (2) reputation repair and behavioural intentions. The initial response aspect stresses the need for communication to be quick, accurate and consistent. While the reputation repair aspect deals with the following: attack the accuser; denial; look for a scape goat; look for an excuse etc

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(Coombs, 2007). In the case of Gulf of Mexico oil spill, BP adopted the scapegoat approach when it blamed Transocean for safety issues that led to the environmental disaster.

Effective crisis management deals with threats in a sequential manner. The fundamental concern in a crisis has to be public safety (Jaques, 2007; Coombs, 2007). Jaques (2007) notes that a failure to deal with public safety concerns only intensifies the damage caused by the crisis. Reputational issues and financial concerns are viewed as also important, that is after public safety concerns have been addressed (Jaques, 2007). The post-crisis phase of crisis management is the phase where the organization is returning to normality after the worst of the crisis has been felt. This phase is critical as it is here that the company rebuilds trust with its external stakeholders (Coombs, 2007). Thus, the reputation repair aspect can continue into the post-crisis phase. Critical to the effective crisis management in the post-crisis phase is communication. In this regard, the onus lies on the organization to provide regular information on the recovery process. Regular provision of information is critical to rebuilding trust with external stakeholders. Coombs (2007) provides the following post-crisis best practices:

Deliver all information promised to stakeholders as soon as the information is known. Keep stakeholders updated on the progression of recovery efforts including any

corrective measures being taken and the progress of investigations. Analyze the crisis management effort for lessons and integrate those lessons in to the

company’s crisis management mechanism.

The aforementioned best practices proved useful while examining the BP’s crisis management response to the Gulf of Mexico oil spill. It should be reiterated that in analyzing BP’s PR response to the crisis, more attention is focused on the ‘crisis response’ and ‘post-crisis’ phases. Given the importance of communication in crisis management situations, attention is devoted to looking at effective communication during crisis management in the next section.

2.4.1 Role of Corporate Communication in Crisis Management

Companies operating in crisis mode typically create a team of senior executives to manage the crisis. This small group of executives usually includes the chief executive officer or managing director, the chief financial officer, the senior operations manager, the senior legal counsel and other managers relevant to the crisis (Marra, 1998). The media relations officer usually acts as the interlocutor between the company and the media especially as news reporters are usually drawn to crisis situations. Crisis communication plans and strategies offer the means to collect and release information as rapidly as possible during a crisis. Authors such as Bernstein (1986), Barton (1993) and Fearn-banks (1996) describe crisis communication tactics in great detail. Fearn-Banks (1996) notes that crisis communication tactics usually perform an important function by enabling companies to provide correct and particular information on very short notice. To critical publics demanding immediate answers to a crisis that impacts them.

Barton (1993) notes that when it comes to communication during crisis situations, certain organizations often find themselves trapped in the myopic view that public relations is a one-way communication to reporters. This perception can carry far-reaching consequences on the crisis management effectiveness of the organization. Furthermore, Barton (1993) notes that companies that place more emphasis on ‘the general public’ at the expense of more specific publics such as staff members, customers, government officials, shareholders, and members of the community

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usually suffer unnecessary financial, and perceptual harm. Stocker (1997) notes that effective public relations during crisis management is dependent on the ability of companies to immediately provide customers with explanations and information during a crisis that go beyond the primary information offered by reports in the mass media. Furthermore, Stocker (1997) notes that majority of costs connected with a crisis are not legal costs or penalties. Citing the case of Sears to buttress this position, Stocker (1997:6) observes:

Sears reputation with customers was severely damaged in 1992 when its automotive centres were accused of selling unnecessary repairs. Auto centre repairs decline by US$80 million and generated a third-quarter loss. Legal fees were about US$11 million. Reimbursing California for its investigation and offering mandated employee training added another US$5 million. By far the biggest losses were to the shareholders and employees. The stock immediately lost 1.5 points, or an estimated US$565million. Finally, 1993 revenues declined by US$1.5 billion (Stocker, 1997:6).

The observation by Stocker (1997) underscores the variety and intensity of damage that a company can suffer from bad or negative publicity. In investigating the Gulf of Mexico oil spill, an effort will be made to provide a profile of the reputation and financial losses suffered by BP as a result of this particular crisis. Furthermore, regarding Sears, Stocker (1997) indicates that poor communication by management contributed to mounting losses suffered by the company. Although it was inevitable that Sears was bound to suffer financial harm from the mis-selling debacle, effective, detailed and immediate communication to customers would have reduced the extent of losses suffered by the company (Stocker, 1997).

Effective crisis management cannot exist without exceptional communication. Regarding the role of communication in crisis management, companies must compare their ability to communicate in a crisis situation against the following attributes of excellent crisis communication identified by Marra (1992) & Grunig (1992): pre-crisis relationships; autonomy of the public relations staff; and communication culture.

Pre-Crisis Relationships

Marra (1992) argues that six attributes consistently appear in the management and communication studies as a measure of relationships –trust, understanding, credibility, satisfaction, cooperation, and agreement- and all of them are applicable to crisis public relations. Marra (1992) notes that poor or non-existent relationships work in the opposite direction –they can easily magnify the negative effects of a crisis. In essence, if you do not trust someone, or are not satisfied, you are not likely to agree with their actions during a crisis. Grunig (1992) notes that companies cannot build or repair relationships during a crisis, and even the most comprehensive crisis plan cannot compensate for poor pre-crisis relationships.

Autonomy of the Public Relations Staff

The degree to which a company’s communication staff can become involved in deciding the mature of communication response to a crisis, independent of the control of senior management, can significantly determine the effectiveness of crisis communication. Companies, therefore, are required to give their public relations staff the necessary autonomy to communicate

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with relevant publics during crisis situations. In the absence of autonomy for public relations staff, communication response to a crisis is likely to be delayed and tepid.

Communication Culture

Companies have many varying cultures within themselves. Mitroff & Kilmann (1984) identifies different typical company values: do not disagree with your boss; do not rock the boat; enjoy your work; treat women with respect; be diligent in your work etc. In similar vein, many companies possess definable communication cultures. While certain organizations rely on two-way communication during a crisis, some others may rarely provide information to relevant publics. Mitroff & Kilmann (1984) suggests that a communication culture that is open, responsive and multi-dimensional is likely to be more effective at responding to a crisis situation than one which is not. Again, Grunig (1992) advises that the role of public relations cannot be underestimated and should be treated as strategic. Consequently, the top communicator for an organization should be involved in the board room. Having explored the importance of communication in crisis situations, it is now time to present an overview the Gulf of Mexico Oil Spill and BP’s PR response to this effect. A more detailed analysis of BP’s PR response to the crisis is presented in the fourth chapter.

2.5 The Gulf of Mexico Oil Spill

The Gulf of Mexico oil spill, also known as the Deepwater Horizon oil spill, started on 20th April 2010 in the Gulf of Mexico on the BP-operated Macondo Prospect. The spill was the result was the result of an accidental gas release and subsequent explosion. In the addition to the massive oil spill, the accident claimed eleven lives. The Gulf of Mexico oil spill is regarded as the largest accidental marine oil spill in the history of the petroleum industry with an estimated 9% to 32% increase in volume when compared to the previous largest, the lxtoc 1 oil spill (Robertson & Krauss, 2010). In terms of the cost of the oil spill to BP, here are some startling financial statistics: the Environmental Protection Agency (EPA) banned BP from new contracts with the US Government (Thompson, 2012). In the same year, BP and the US Department of Justice agreed to a record-setting US$4.25 billion in fines and other penalties (Muskal, 2013). In addition, as at February 2013, BP incurred a cost of US$43 billion as a result of criminal and civil settlements and payments to a trust fund (Fontevecchia, 2013). The financial loss also includes the cost of BP’s response to the crisis. In fact, BP (2013) noted that the cost of sealing the oil rig permanently and for cleanup activities was about US$14 billion.

Majority of the public criticism suffered by BP at the onset of this crisis stemmed from its inept and haphazard PR response to the crisis. BP’s poor PR response to the crisis was encapsulated by some of the comments made by its former CEO, Tony Hayward (Beam, 2010). For instance, on an interview with the Guardian immediately following the explosion on the rig and the subsequent leakage of crude oil into the Gulf of Mexico oil spill, Tony Hayward noted: “This was not our accident…This was not our drilling rig….This was Transocean’s rig. Their systems. Their people. Their equipment”. In fact, BP’s press officers, whilst briefing journalists in the week that the accident occurred, repeated the line that, “this was not our accident”. This approach could be seen as the, “looking for the scapegoat approach” (Webb, 2010). Webb (2010) notes that Tony Hayward’s comments made a bad situation worse. In fact, Duncan John, a partner at StrategicFit, a strategy consultancy, made the following comments regarding the comments by BP’s CEO and press officers: “communication over the degree of their

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responsibility and the consequences may run the risk of aggravating an already skeptical public if not carefully managed” (Webb, 2010). What can be perceived from the initial communication response of BP was a demonstration of lack of consideration for public safety. Based on the issues discussed in this chapter, this can be perceived as poor crisis management in the crisis response phase. Ultimately, this made the public suspicious of BP’s every move thus, complicating its already compromised crisis response mechanism.

Following what has been broadly judged as poor crisis response, BP continues to devote sufficient effort and resources to rebuilding its corporate image. This is buttressed by its willingness to accept financial liabilities where due and the speedy release of information on BP’s effort at restoring the ecosystem in and around the Gulf of Mexico. In December 2013, BP issued the following statement:

We have acted to take responsibility for the clean-up, working under the direction of the federal government to respond swiftly to compensate people affected by the impact of the accident, to look after the health, safety and welfare of the large number of residents and people who helped respond to the spill. We have equally carried out studies with federal and state natural resource trustees to identify and define the injury to natural resources in the Gulf of Mexico (BP, 2013).

The overview presented in this section drives the direction of the research. In essence, during the data analysis and interpretation phase, attention is devoted to critiquing BP’s response to the Gulf of Mexico crisis with a view to identifying dos and don’ts in crisis management. At this point, it is essential to conclude this chapter by summarizing the main issues discussed.

2.6 Conclusion

The review of literature highlights the importance of public relations to the corporate discourse. This is because organizations are involved in a network of relationships, whether consciously or unconsciously, with a broad range of stakeholders –customers, government, NGOs, CSOs, consumers, regulatory agencies etc. Public relations present a useful means of managing these relationships. PR is there to enable organizations build a positive image with these stakeholders. This is the reason why PR plays a huge role in corporate reputation management. Reputation management is the process or practice of monitoring the reputation of a company, addressing contents which are damaging to it, and utilizing customer feedback solutions to get feedback or early warning signals of reputation challenges. Public relations is critical to reputation management because it bridges the gap between how an organization perceives itself and how others see it. When it comes to the best PR approach to use when managing the image of an organization, some of the studies examined (Girboveanu & pavel, 2010), stressed the need to be proactive.

Critical to building a positive reputation during and after a crisis situation is communications. Crisis communication is critical to how an organization is perceived during crisis mode. Communication is a very sensitive issue and must be treated with care especially whilst communicating relevant publics during a crisis situation. Hutton (1996) suggests that communication is strategic because it informs the company’s image over time –from the past to present. This is reinforced by the following key concepts that encapsulate the strategic role of corporate communication: stakeholder; public; corporate reputation; corporate identity; corporate

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image; mission; vision; corporate objectives; and corporate strategies. Poor communication in the crisis response phase was cited as being responsible for the public outrage that BP felt during the Gulf of Mexico crisis. As a result, in critiquing BP’s response to the crisis, some of deal of attention is devoted to its communication during this period. As stated earlier, this analysis will help to identify best practices in crisis management communication.

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

In this chapter, attention is devoted to discussing the methodology adopted for the research. This chapter begins by looking at the research approaches used. The approach selected for the research informs the method for analyzing the data collected for the research. Following the discussing on the research approach used is a discussion of the research design. The design is central to the methodology of the research. In addition to identifying the design used, the section on the research addresses how data is collected and analysed. This chapter also addresses the issues of validity, reliability and generalizability. After these issues are addressed, the underlying limitations of the research are discussed. The chapter concludes with a discussion on critical ethical considerations for the research.

3.1 Research Approach

The approach selected for a research usually underscores the technique to be used to address the questions developed for a research (Saunders et al., 2005). Collis & Hussey (2005) defines the research approach as a method for fabricating new or innovative knowledge or deepening understanding about the subject matter under investigation. In essence, the research approach is a method for confirming facts and generating new information. When conducting research, there main approaches are available to a researcher. These approaches are: the quantitative approach; the qualitative approach; and the mixed methods approach (Collis & Hussey, 2003). The mixed methods approach entails a mix of the qualitative and quantitative approaches (Collis & Hussey, 2003).

The researcher’s interest in crisis management requires consideration of established procedures and protocols for ‘good practice’ in professional PR. In view of this observation, a qualitative approach is used. Denzin & Lincoln (2005) define the qualitative research approach as a form of investigation used in different disciplines, especially in the social sciences, but equally in market research. Furthermore, Denzin & Lincoln (2005) further note that the qualitative research approach is one where the researcher is interested in obtaining an in-depth understanding of human behavior and the reasons that determine such behavior. This particular

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explanation contains one of the justifications for use of the qualitative approach in this research. In the literature review, public relations is identified as dealing with a network of relationships that an organization is involved in (Joye, 1997; Allen et al., 2008). In corporate settings, public relations concern how companies manage their relationship with external stakeholders –the community in which they operate; their customers; the government; the media etc (Allen et al., 2008). This network of relationships can be categorized as belonging to the social sciences domain hence, the suitability of the qualitative approach for this research. It is essential to note that irrespective of its usefulness in social sciences, one of the main weaknesses of qualitative approach is that it is a subjective method of inquiry (Collis & Hussey, 2005). The qualitative research approach is usually used in social science research. In essence, the qualitative approach is useful when studying human behavior actions. Consequently, it is a useful approach for understanding how companies and their representatives respond to crisis, especially from a PR perspective, ie. communications, actions, behavior of executives etc.

Another rationale for the use of qualitative approach stems from the nature of data collected for the research. The data collected for the research is largely qualitative –corporate communications; media reports; observations, comments, reports- hence, the suitability of the qualitative approach to the demands of this research. There are different tools or instruments which can be used when using the qualitative approach. Some of these are: ethnography; grounded theory; case studies; discourse analysis etc. For this research, case studies and discourse analysis is used.

3.2 Research Design

Bryman & Bell (2011) define the research design as a systematic plan to solve or study a problem, whether scientific or unscientific. In addition, Bryman & Bell (2011) suggest that the research design solves the research problem by addressing the following concerns: hypotheses; research question; study type; issues of causation and correlation between independent and dependent variables. Yin (1989) notes that the research design underscores the logical approaches for addressing the research problem. In essence, the study design deals with the logical structure of inquiry. Collis & Hussey (2005) note that the research or study design underscores the strategy for answering the questions developed for a research. There are different designs which can be used when conducting research. Some of these are: descriptive design; exploratory design; case study design etc (Bryman & Bell, 2011).

For this research, the case study design is used. Collis & Hussey (2005) note that the case study design is a design where an organization, event, or scenario is studied closely as a means of addressing a research problem. The case study is useful when doing qualitative research. Yin (1989:1) notes that the case study is employed in many situations to contribute to our knowledge of individual group, organizational, social, political, and associated phenomena. In order to understand how crisis management fits into corporate public relations and reputation, the case study is a critique of British Petroleum’s use of corporate relations to manage negative perceptions stemming from the Gulf of Mexico oil spill. In essence, careful attention is devoted to examining BP’s response to this crisis from a public relations perspective. In addition, the responses of stakeholders –environmental groups; the American government; affected communities; and the public- to BP are also examined. The critical analysis of perspectives from these different groups will form the basis for drawing valid conclusions for the research. Furthermore, this particular case study is selected because of the scale of the damage to the

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environment from the deepwater horizon oil spill. This particular oil spill has been described as the worst in American history. Again, the diversity of stakeholders affected by this spill –government, fishermen, the US government, communities in coastal states bordering the Gulf; and shareholders-makes it a useful case study for understanding PR in the context of crisis of management. In critiquing BP’s PR response to the deepwater horizon oil spill, more attention is devoted to examining the behavior of BP executives and press releases by BP in the days and weeks following the accident.

3.3 Data Collection Methods

This section addresses the nature of data collected for the research. In addition to describing the nature and how data is collected for the research, this section also shows how the data collected is analysed.

3.3.1 Primary Data

Primary data can also be referred to as ‘raw data’ (Collis & Hussey, 2003). This description stems from the originality of primary data (Collis & Hussey, 2005). Bryman & Bell (2011) referred to primary data as data that is directly collected by the person doing the research other than another party. Easterby-Smith et al., (2008) defined primary data as data or information that is collected directly from first-hand experience. In other words, primary data is the creation of the researcher as it does not previously exist. Based on the definitions highlighted, primary data can be described as having two main qualities: originality; and it is collected only by the researcher (Bryman & Bell, 2011). Primary data could also be derived from empirical recording. Arguably, it is the act of researching that turns information into data although there is still an element of interpretation and choice by the researcher that constructs data as such.

This research involved the collected of primary data. The primary data collected for this research involved the following: feedback from interviews conducted with individuals in affected communities (sourced through Youtube); feedback from interviews conducted with BP officials (newspaper, Youtube and other media sources); responses from officials of the American government (newspapers and Youtube); and remarks by public relations practitioners (newspapers, Youtube, and other media channels). Data from these sources are subjected to the analytical framework developed for the research. The information obtained from these sources form the primary data used for the research. Information from the aforementioned media sources –Youtube and newspapers- are regarded as primary data because the researcher is studying the constructions and interpretations of media commentators who are working within the terms of journalistic discourse.

3.3.2 Secondary Data

Secondary data is different from primary data. Collis & Hussey (2005) define secondary data as information that is not collected by the researcher but collected by other parties. In other words, unlike primary data, secondary data lacks the quality of ‘originality’. Bryman & Bell (2011) note that secondary data usually consists of information that is already in existence. This is the reason why secondary data can be accessed or sourced from public domains such as websites, academic textbook, academic journals, company publications, unpublished manuscripts, and other public domains. Information is obtained from these sources for the

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purposes of this research. The fact that secondary data is information that is collected by some other party does not in any way reduce its usefulness. For the purposes of this research, the information obtained from Youtube is treated as primary data because as mentioned earlier, the researcher is studying the constructions and interpretations of media commentators who are working within the terms of journalistic discourse.

In fact, secondary data can be used to support any primary data collected for a research. This is the case in this research as secondary data was used to develop the literature review chapter for the research. In addition, information from the literature review chapter is used to support the analysis of data collected for the research.

3.3.3 Analysis of Data

This section solely addresses how the critical data collected for this research is analysed. While discussing the approaches adopted for the research, discourse analysis is identified as one of the principal instruments of qualitative research. Given that this research uses the qualitative research approach, critical discourse analysis (CDA) is used to analyse to primary and secondary data collected for the research. In addition to CDA, textual analysis will equally be used to analyse the data collected for the research.

Critical Discourse Analysis (CDA) is an interdisciplinary approach to the study of discourse that sees language as a type of social practice and places more focus on the means through which social and political domination are reproduced in text and talk (Fairclough & Clive, 1995). Van Dijk (1993:353) views critical discourse analysis is a study of the relations between discourse, power, dominance, social inequality and the position of the discourse analyst in such relationships. Van Dijk’s (1993) position highlights the suitability of CDA for the analysis of data collected for the research. Given that relationship management-especially with critical stakeholders- is a dimension of public relations practice, the application of CDA in this research enhances understanding of the implications of language and communication of perceptions, especially stakeholder perceptions. The application of CDA in the data analysis phase of this research entails a critical examination of corporate communications –press releases- by BP during the crisis and stakeholder interpretations of the use of language in these communications.

To support the CDA analysis, textual analysis will also be used to analyse or assess the content of communication both from BP and the content of interpretations from different stakeholders. The American Heritage Dictionary of the English Language (2000) defines textual analysis, “as a systematic analysis of the content rather than the structure of communication, such as written work or speech, including the study of thematic and symbolic elements to determine the goal or meaning of the communication”.

3.4 Validity, Reliability & Generalizability

Winter (2000:1) notes that, “the concept of validity in qualitative research is not a single, fixed or universal concept, but rather a contingent construct, inescapably grounded in the

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processes and intentions of specific research methodologies”. Bashir et al., (2008) notes that the validity in qualitative research implies the degree to which the data is plausible, credible and trustworthy; and as such, can be defended when challenged. Furthermore, Bashir et al., (2008) suggests that validity exists to enhance researchers to achieve rigor in qualitative research. To issue of validity in this research is addressed by the use of rigid techniques for the analysis of data collected. This is achieved through the application of textual analysis and Critical Discourse Analysis (CDA) to the data collected.

Regarding the issue of reliability in research, Lincoln & Guba (1985:300) likened the concept to dependability. In essence, reliability in qualitative research can be seen as a form of ‘inquiry audit’. The suitability of methods selected for data analysis can be influence the dependability of a research’s methodology, and indeed its findings (Saunders et al., 2005). Given that one of the disadvantages of qualitative research is that it is subjective (ie. result in subjective findings), rigid forms of analysis can be used to enhance the dependability of findings. To enhance the objectivity of the analysis and ultimately the findings of this research, triangulation (ie. use of information from the literature review chapter) and references to some of the theories and models discussed is used to interpret the results from the application of CDA and textual analysis.

Generalizability is mainly concerned with the degree to which a research’s findings can be applied to other scenarios. Given the rigor of the analysis, the results of this research offer a useful lens for understanding how communications can be used to influence public perceptions. Furthermore, the results of this research can be used to show how crisis management fits into public relations and reputation management.

3.5 Limitations of the Research

When conducting a research, there is potential for encountering certain difficulties or challenges. These challenges are also referred to as ‘limitations’. They are limitations because the can affect the research process. In addition, they can affect the validity and reliability of a research’s findings (Bryman & Bell, 2011). One of the main limitations of this research is the inability of the researcher to conduct face-to-face interviews with PR practitioners to get their perspective of British Petroleum’s management of the Gulf of Mexico oil spill crisis from a PR perspective. Such interviews would have generated additional useful information for the research. In absence of the interviews, the research relied on information in the public domain. To compensate for the lack of these interviews, the researcher ensures that the analysis of both the primary and secondary data collected are as rigorous as possible to generate useful findings.

Another limitation of the research stems from the use of only the qualitative research approach. As mentioned earlier whilst discussing the approach selected for the research, one of the weaknesses of the qualitative approach is that it is subjective in nature, ie. dependent on the researcher’s perspective or point of view. To address this particular gap, the researcher uses triangulation during the analysis of data collected. In essence, results from the review of literature are referenced during the interpretation of data collected for the research. The use of triangulations contributes to making the research less subjective.

3.6 Ethical Considerations

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Before providing a definition of what ‘research ethics’ is, it is helpful to first understand what ethics is. Ethics refers to professional norms of conduct that create a distinction between what is right and what is wrong (Resnick, 2011). In many cases, different disciplines or professions, have their own ethical standards that guide actions and behavior (Resnick, 2011). Research ethics is mainly concerned with the rules or guidelines that a researcher is expected to adhere to while conducting research (Easterby-Smith et al., 2008). Collis & Hussey (2003) refers to research ethics as the code of conduct for carrying out research-related investigations or inquiry.

Given that majority of the data collected for this research are collected from public domains, the researcher that sources were appropriately referenced. The referencing style used is the Harvard referencing style. In addition, given that particular attention is devoted to the content of communication both from BP and other stakeholders, careful attention is devoted to ensuring that any information presented is not falsified or distorted. This helps to enhance the validity and reliability of findings for the research.

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CHAPTER FOUR

ANALYSIS AND INTERPRETATION OF RESULTS

4.1 Introduction

In this chapter, attention is devoted to addressing and critiquing the public relations approaches used by British Petroleum (BP) to manage negative perceptions stemming from the Gulf of Mexico oil spill. In carrying out this critique, content analysis and critical Discourse analysis is used. Furthermore, some of BP’s press releases in the days and weeks following the deepwater horizon accident are subjected to analysis using established PR models. At the end of the discussions in this chapter, a summary of the main findings of the research is presented. These findings are used to develop the conclusion chapter of the research. At this point, it is essential to present an overview of Gulf of Mexico oil spill. This overview then forms the context for the other discussions conducted in this chapter.

4.2 Gulf of Mexico Oil Spill: Background

The Gulf of Mexico oil spill, also known as the Deepwater Horizon oil spill, started on 20th April 2010 in the Gulf of Mexico on the BP-operated Macondo Prospect. The spill was the result was the result of an accidental gas release and subsequent explosion. In the addition to the massive oil spill, the accident claimed eleven lives. The Gulf of Mexico oil spill is regarded as the largest accidental marine oil spill in the history of the petroleum industry with an estimated 10% to 32% rise in volume when compared to the previous largest, the lxtoc 1 oil spill (BBC News, 2012). Following the explosion and sinking of the Deepwater Horizon oil rig, a sea-floor oil gusher flowed for a period of 87 days. In fact, the United States Government contended that an estimated total discharge of 5 million barrels flowed from the leak (Weber, 2010). The effect of the spill on marine in the area was both palpable and incalculable. Juhasz (2012) notes that as a result of three-month long spill, along with the adverse impacts of response and cleanup efforts, large scale damage to marine and wildlife habitats, fishing and tourism industries, and human health concerns have continued through to 2014 (see Figure 1).

The Gulf of Mexico oil spill led to national and global outrage, most of which was directed at BP, the company responsible for the Deepwater Horizon rig. This event significantly

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disrupted BP’s operations which ultimately resulted in significant financial loss. In 2012, BP and the US Government came to a settlement for federal criminal charges with BP pleading guilty to 11 counts of manslaughter, 2 misdemeanors, and a felony count of lying to Congress. The Environmental Protection Agency (EPA) banned BP from new contracts with the US Government (Thompson, 2012). In the same year, BP and the US Department of Justice agreed to a record-setting US$4.25 billion in fines and other penalties (Muskal, 2013). In addition, as at February 2013, BP incurred a cost of US$43 billion as a result of criminal and civil settlements and payments to a trust fund (Fontevecchia, 2013). The financial loss also includes the cost of BP’s response to the crisis. In fact, BP (2013) notes that the cost of sealing the oil rig permanently and for cleanup activities was about US$14 billion. In the crisis response phase, BP conducted a series of press conferences to update the public on the status of efforts as regards the complex activity of curbing the leak; this was in addition to being involved in the cleanup effort, i.e. containment, collection and the use of dispersants. Before critiquing BP’s response to the oil spill disaster, it is essential to highlight the effects of the oil spill, together with identifying the key stakeholders in this disaster.

4.2.1 The Effects of the Gulf of Mexico Oil Spill

It is necessary to highlight some of the main effects of the Gulf of Mexico oil spill. This is important because it will form the context for identifying the principal stakeholders that BP is accountable to following the oil spill disaster. While several studies are under way to determine the effects of the Deepwater Horizon oil spill on the Gulf of Mexico, the degree and severity of these effects and the value of the resulting losses cannot fully be measured without considering the commodities and services provided by the Gulf (National Research Council, 2012). At the moment, state and federal agencies are utilizing a process called the ‘Natural Resources Damage Assessment’ which is authorized under the Oil Pollution Act of 1990 (National Research Council, 2012). In addition to the environmental impacts stemming from the oil spill disaster, there are also individual and economic effects that equally demand consideration. Among the effects of the oil spill are: impact on livelihoods; impact on coastal wetlands; impact on marine mammals; and impact on the deep sea.

In terms of the impact on livelihoods, the oil spill has affected the fisheries industry in the United States. According to the US Environmental Protection Agency (EPA) (2012), fishery closures reduced commercial production by 20%, which created an immediate economic hardship for fishermen. The spill also contributed to increased public concerns concerning the safety of Gulf seafood, ie. poisoning. Furthermore, EPA (2012) notes that as a result of the toxic effects of the oil spill, the productivity of fish populations would be affected for a significant period of time. This could have far-reaching implications on jobs in the fishing industry.

Regarding the impact of the oil spill on marine mammals, dolphin populations have been affected in the Gulf of Mexico. Dolphins provide scientific, cultural, and recreational services in the Gulf of Mexico oil spill. Since the oil spill in 2010, over 800 bottlenose dolphin deaths have been recorded (EPA, 2012). This could also affect the hospitality industry in communities whose coastal areas transverse the Gulf of Mexico.

The deep sea is the largest yet least well-appreciated region of the Gulf of Mexico, making it challenging to ascertain the total effect of the oil spill on ecosystem services. Among the services derived from the deep sea are pollution attenuation by hydrocarbon-degrading

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microbes, and nutrient recycling, which supports much of the marine biodiversity at all depths in the Gulf of Mexico oil spill (National Research Council, 2012). Based on the issues discussed in this section, it is clear that the oil spill has led to both environmental and economic effects. At this point, it essential to identify the stakeholders in the Gulf of Mexico oil spill. Having provided an overview of the oil spill, the stakeholders of the oil spill are as follows: communities in the coastal areas traversing the Gulf; the US fisheries industry; the government; environmental groups; and the public (see Figure 1). These stakeholders form the people that BP is responsible to and as such, their perspectives are taken into consideration whilst examining BP’s response to the Gulf of Mexico oil spill.

Figure 1: Stakeholders of British Petroleum

Figure 1 highlights the main stakeholders of BP. On a more specific note, the relevant stakeholders in the oil spill disaster are as follows: fishermen living off the sea; inhabitants of affected coastal states; the US government; media; families of employees who lost their lives in the accident (specific public); shareholders; and environmentalists. Consequently, in addition to addressing the concerns of the general public, BP must device more specific measures for addressing the unique concerns of the aforementioned relevant stakeholders in the oil spill disaster. Given the magnitude of the disaster, there is need to consider the varying perspectives of specific publics. These perspectives and concerns ought to be taken into consideration by BP in its response –action and communication- to the crisis. The specific publics discussed are the following: fishermen; BP shareholders; inhabitants of affected coastal states; environmentalists; and the US Government.

Stakeholder Perspectives of the Gulf of Mexico Oil Spill

Fishermen:

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Fish, crab and fish farmers have described the disaster as the worst for the fishing industry according to Matt O’Brien, owner of Tiger Pass Seafood (New York Times, 2011). The US Chamber of Commerce (2011) reported that it would take years for the US fishing industry to recover. The impact on jobs and livelihoods of communities in the coastal states impacted appear dire according the US Chamber of Commerce (2011). According to the US Environmental Protection Agency (EPA) (2012), fishery closures reduced commercial production by 20%, which created an immediate economic hardship for fishermen.

BP Shareholders:

The shareholders are mainly concerned about their stake and the impact of the disaster on the corporate brand and reputation of BP. Within one week of the oil spill disaster, BP shares dropped by as much as 5% (Yahoo Finance, 2010). BP stock decreased by 50% in 50days on the NYSE from US$60.57 (20 April, 2014) to US$29.20 (9 June, 2014) (Yahoo Finance, 2010).

Environmentalists:

The homeland department’s infrastructure and risk analysis centre (2010) reported that the continued release of crude oil, natural gas and diesel fuel poses an increased risk of environmental contamination in the Gulf of Mexico. In the weeks following the disaster, there were disturbing images being released of the following: thick sludge, blood stained pelicans, dead fish washing up ashore etc. These messages intensified protests by environmental groups –such as BP- against BP. The long term effects of the oil spill on marine life in the Gulf remains a significant environment concern.

The US Government:

The US Government is one of the principal stakeholders in this oil spill disaster, especially as it is the party that gives out licenses for offshore drilling. The Obama administration had to respond appropriately by ensuring that appropriate fines and penalties were levied on BP. It should be noted that at the time of the crisis, BP had its offshore drilling license suspended. While these moves may be viewed by some as anti-business, the Obama administration can claim credit for its response to disaster when compared to the US Government’s response to Hurricane Katrina. In fact, the Obama administration is credited for getting BP to set up a US$20bn trust fund to deal with the fallout from the crisis –civil settlements and long term environmental recovery efforts.

4.3 BP Oil Spill and Anti-Capitalist Sentiments

One of the main elements of critical discourse analysis is examining power allocation and power dynamics as it concerns social behavior (Fairclough & Clive, 1995). Given this observation, there is a need to explore the oil spill disaster in the context of the anti-capitalist sentiments. Anti-capitalism comprises a broad range of movements, ideas and attitudes that are against or treat capitalism with suspicion (Newman, 2005). Anti-capitalist movements –some with a socialist mindset- tend to view corporations as wielding excessive power hence, they need

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to be rigidly regulated as the can wield their power and influence to the detriment of the public, ie. excessive profit-seeking. In certain cases, anti-capitalist movements are sometimes suspicious of the relationship dynamics between big corporations and government. While writing for the World Socialist Movement, White (2010) notes that the ongoing disaster in the Gulf of Mexico and the US government’s complicity and impotence in relation to energy giant BP highlight in the most striking way the irrationality and socially destructive character of the capitalist system. White (2010) adds that even as the world suffers from the effects of the global financial crisis and the spread of Wall Street’s toxic assets, the same irrational and inconsiderate drive for profit, this time by multinational oil conglomerates, has resulted in an ever-spreading toxic mix of crude oil and chemical dispersants in the Gulf Mexico that threatens to travel as far as Europe.

The distrust for ‘big corporations’ was buttressed by the attempt by BP executives to conceal the actual extent of the disaster. It should be noted that when appearing before the US senate, Tony Hayward stated that about one thousand barrels of oil were being released on a daily basis into the Gulf. This claim was later debunked by the EPA (2010) who note that between ten and fifteen thousand barrels of oil were being released into the Gulf on a daily basis after investigation. This revelation was the one of the mistakes in a series of PR blunders by BP especially considering the disparity between estimates from BP and that of relevant government agencies. The EPA’s revelations only served to intensify anti-capitalist sentiments in America, especially as the US economy was still reeling from the effects of the global economic meltdown –the result of poor regulation of the reckless activities of global financial institutions- at the time. There is in truth nothing specifically recent or new about American mistrust of the big corporation. American capitalism has always been more statist than the stereotypical view holds. Vast tracks of the US industry are indirectly subsidized through various instruments in the budget. The bail out of banks at the onset of the global financial crisis by the Federal Government highlights the suspicious relationship that exists between government and big business. ‘Big business’ has long been seen in the US as being as much a threat to livelihoods and freedoms of individuals as ‘big government’. The motives of big business have always drawn valid suspicions from sections of the public. The threat of big business becomes more tangible when it interfaces with ‘big government’. For one, big government leads to ‘crony capitalism’. While writing for the Front Porch Republic, Masciotra (2012) makes an important observation:

“First big government took care of big business. Then big government took care of itself. It is a vicious cycle that continues, is seemingly unstoppable, and spins with the velocity of the wheels on Harley. In this cycle, the American public are the road kill, left with an unemployment rate close to 20%”.

In view of the success of litigation brought against BP –the imposition of US$4.25bn in fines and penalties- is testament to the proactive approach of the Obama administration in addressing this crisis. While sections of the American society may view the backlash and actions of the Obama Administration against BP as ‘anti-capitalist’, the earlier mentioned effects of the oil spill justify the administration’s actions. It should be noted that given the effects of the oil spill on the ecosystem of the Gulf and the livelihoods of those in the fishing industry, BP’s liabilities are expected to rise. Now that the oil spill has been discussed in the context of anti-capitalist sentiments, there is need to now focus on analyzing BP’s public relations responses to negative perceptions stemming from the deepwater horizon disaster.

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4.4 BP’s PR Response to the Deepwater Horizon Disaster

This section focuses on examining how BP responded to the oil spill disaster, especially from a PR standpoint. In analyzing BP’s PR response to the Gulf of Mexico oil spill, three key elements come to mind namely: (i) risk analysis; (ii) crisis management; and (iii) best practices in crisis management.

4.4.1 Risk Analysis

In his assessment of BP’s response to oil spill disaster, Terry Corbell –a PR consultant- notes that prior to the disaster, BP lacked or did not have any PR response strategy for dealing with such a problem (Corbell, 2012). Fundamental to a PR response to a crisis such as the oil spill disaster is the need for appreciation of the importance of the need for a comprehensive risk analysis. Corbell (2012) notes that in a crisis scenario, empathy and competence are critical. Given the public and government’s backlash against BP and its former executive Tony Hayward, serves as evidence that BP was not prepared to successfully deal with such a catastrophe. Faced with such a crisis, a good old-fashioned SWOT analysis of strengths, weaknesses, opportunities and threats with worst-cases scenarios would have sufficed. At the early stages of the oil spill, comments credited by Tony Hayward did not help matters. For instance, when asked about what BP was doing to stem the oil spill, Tony Hayward stated:

“We are doing our best to stem the release of oil into the Gulf..It should be noted that this is not the fault of BP rather it is the fault of Transocean”.

The aforementioned statement is devoid of empathy and makes BP appear unconcerned about the damage to the environment and livelihoods. His statement can be seen as arrogant and insensitive. In fact, his statement reinforced anti-capitalist sentiments among the American public. For possible insight into British Petroleum’s corporate mindset, a former CEO of one of Royal Dutch Shell’s subsidiary –John Hofmeister- in his article, “Why We Hate Oil Companies”, provided the following explanation on how certain CEOs of corporate oil companies dysfunction:

“Retailing fuels is fundamentally a secondary exercise from the oil company’s standpoint, a way to get rid of the product it has spent so much time and money producing. This makes the retail side the least valuable part of the business, more often a nuisance than a value creator”.

Based on Hofmeister’s statement, the flaw in BP’s PR response to the oil spill stemmed from reactions overshadowed by the drive for profitability. This profit-seeking mindset appears to have overshadowed the need for empathy by BP executives. From a risk analysis perspective, the lopsided responses of BP, both from an operational and PR perspective, support the view that BP had not conducted a proper risk assessment of its deepwater oil exploration activities. Consequently, the oil spill highlighted BP’s inability to properly address the negative publicity its brand image suffered from this event. Coombs (2007) noted that public relations play a role in crisis management especially given the threat of a crisis to a company’s reputation. Jaques (20070 notes that crisis management offers a useful framework for protecting a company and its stakeholders from threats or reduce the effect from the materialization of such threats. While

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crisis management can help to limit the damage emanating from crisis, it should equally be noted that crisis can present an opportunity for good public relations (Girboveanu & Pavel, 2010).

4.4.2 Crisis Management

Despite BP’s efforts, the company was not been properly represented properly in public media at the time of the crisis. What was even worse is that whenever BP appeared in the media, it was not a proper picture. Evidence of BP’s poor performance and inept management of the crisis are available in the public domain. One instance was when BP offered US$5,000 to potential plaintiffs not to litigate in anticipation of lawsuits (BBC, 2010). Whatever BP’s intentions might have been at the time, this move attracted immense criticism from both the American public and the government. Offering US$5,000 to forestall litigations only show BP as ‘insensitive’; in essence, BP viewed this amount of money as sufficient to change or influence the views of the American public and those affected by the spill.

The deepwater horizon cast the spotlight on BP’s safety records. In responding to a question about BP’s safety record in an interview with ABC’s George Stephanopoulos, Tony Hayward remarked:

“I think we have made enormous strides as a company in the last three or four years with a remorseless focus on safe, reliable operations. Ah, this wasn’t our accident. This was a drilling rig operated by another company. It was their people, their systems, their processes. We are responsible not for the accident but we are responsible for the oil, dealing with it and cleaning the situation up”.

This statement can be said to have an air of arrogance about it as it fails to pay due consideration to environment and to those whose livelihoods have been affected by the spill. What is the difference between the accident and the oil being released into the Gulf? Claiming responsibility for the oil and not the accident does not make any sense and certainly does not endear BP –the company he represents to the American public. Rather than showing empathy to those affected by the spill, Tony Hayward’s statement seeks to transfer blame for the disaster to Transocean. This was not necessary at the moment as what one would have expected –especially people employed in the fishing industry- is a response stating how BP was going to address their concerns. The statements by Tony Hayward could have increased anti-capitalist sentiments and led to what Grunig (2000) referred to as ‘corporate antagonism’. Having examined some of the statements made by BP executives at the onset of the crisis, below are some recommendations on how Tony Hayward would have responded to the crisis:

Tony Hayward should have been mindful of every aspect of BP’s operations. In the middle of the disaster recovery efforts soon after his interview on ABC, the following negative headline was published by the Washington Post (2010): “Washington State fines BP US$69,000 for violations”.

Initial comments by Tony Hayward to the crisis should have contained a significant note of empathy, especially as it concerned the need for due diligence in oil exploration safety.

Tony Hayward’s appearance and demeanor during the crisis did not show a person that was concerned about the far-reaching implications of the disaster. He appeared to calm for the liking of the American public and the American government. He would have done the BP image a great service by being shown as directing recovery efforts.

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Communication is critical during crisis. Steady flow of communication during a crisis helps in reducing apprehension among the general public or concerned stakeholders. Hutton (1996) is of the view that corporate communication plays a critical role in corporate reputation management. Hutton (1996) suggests that communication is strategic because it informs the company’s image over time –from the past to present. In the area of communication, at the onset of the crisis, BP did little in the way of communication. This kept specific and the general public in the dark about the crisis and what measures were being put in place by BP to manage the crisis. Stocker (1997) notes that effective public relations during crisis management is dependent on the ability of companies to immediately provide customers with explanations and information during a crisis that go beyond the primary information offered by reports in the mass media.

Given the aforementioned observations on BP’s response to the crisis, here are some suggested best practices in crisis management:

Be transparent about the situation or crisis. Be open about measures being taken by the organization to mitigate the effects of the crisis.

Control the images released to the public. Maintain a steady channel for information flow to concerned stakeholders. Always display empathy and concern for people –especially specific publics (Barton,

1993)- affected by the crisis. In the case of an environment disaster, the organization should not be found to be

lobbying for environmental waivers.

During the review of literature on public relations and corporate reputation, the issue of communication during crisis management was discussed. Results from the review of literature on this particular matter showed that communication plays a strategic role in crisis management. Crisis communication plans and strategies offer the means to collect and release information as rapidly as possible during a crisis. Bernstein (1986), Barton (1993) and Fearn-banks (1996) describe crisis communication tactics in great detail. Fearn-Banks (1996) notes that crisis communication tactics usually perform an important function by enabling companies to provide correct and particular information on very short notice. To critical publics demanding immediate answers to a crisis that impacts them. Given these observations, it is essential to critique BP’s response to the oil spill disaster from the standpoint of its communication or press releases at the time.

4.5 Analysis of Press Releases by BP During the Oil Spill

In this section, attention is devoted to analyzing the communications and press releases of BP during the oil spill. In analyzing these press releases, one would be in a position to determine the effectiveness of BP’s communications during the crisis.

4.5.1 Press Release I: British Petroleum Initiates Response to Gulf of Mexico Oil SPill

BP’s first press release was on the 21st of April 2010, a day after the explosion on the rig. This particular press release particularly focused on providing information to the general public about the rig accident. In addition, the press release also demonstrates support to Transocean –the company operating the rig. It should be noted that the rig was 100% owned by BP. The press

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release also highlighted some of the actions being taken by BP to reduce the escape of oil and protect the marine and coastal environments from its effects. The press release also highlights BP’s commitment to expediting action in dealing with the crisis (bp.com) (see Annex 1). This particular press release is intended to address the concerns of the public. This press release fits the ‘public information’ model which is intended to inform as opposed to press for promotion and publicity (Grunig & Hunt, 1984). Under this model, the information released is meant for general consumption as opposed to for specific publics. Now, while BP should be commended for the timeliness of the press release, there are certain issues not addressed in the press release. For one, BP gave little away regarding the causes of the accident and whether there were any casualties. The lack of these pieces of information only served to heighten the apprehension of the families of workers on the rig together with general public.

4.5.2 Press Release II: BP Offers Full Support to Transocean after Drilling Rig Fire

BP issued another press release on 21 April 2010. In this particular press release, BP offered support to drilling contractor Transocean and its employees. In the second paragraph, Tony Hayward issued the following remarks: “our concern and thoughts are with rig personnel and their families. We are also focused on providing every possible support in the effort to deal with the consequences of the incident”. This statement was followed by the following statement in the third paragraph, “BP, which operates the license on which Transocean’s rig was drilling an exploration well, said it was working closely with Transocean and the US Coast Guard, which is initiating the emergency response, and had been offering its help which includes logistical support. In this particular statement, the ‘scapegoat mentality’ is evident. In essence, there seems to be an attempt by BP to transfer blame for the incident rather than facing the crisis head-on. Surprisingly, this perspective was reflected in some of the remarks –some of which have already been discussed in this chapter- credited to Tony Hayward during television interviews (bp.com) (Annex 2).

The second paragraph is written in such a manner that BP is made to be assisting Transocean in the incident. There is no attempt whatsoever by BP to assume responsibility for the incident. This approach will later prove to be BP’s undoing following its grilling at the hands of the US Senate. If BP had assumed responsibility for the accident- given that it owned the rig- the backlash from the public following the disaster would have not been as aggressive as what it turned out to be.

4.5.3 Press Release III: BP Offers Sympathy to the Families of those Lost in the US Oil Rig Fire

This particular press release was made public on 23 April 2010. In the first paragraph, BP offered its sympathies and condolences to the families and friends of employees who died as a result of the explosion on the Deepwater Horizon rig. This message was communicated in Tony Hayward’s message in the second and third paragraphs of this particular press release (bp.com) (see Annex 3). This is impressive as it shows empathy to the families of those lost. Demonstrating empathy is one of the fundamental requirements of crisis communication (Jaques, 2007).

While BP demonstrated empathy to the families of those lost in the deepwater horizon explosion, BP failed to provide any information of the extent of the damage and its effects. This

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was the case in the previous press releases released by the company. This can be interpreted as a ploy by BP to manage any anxiety on the part of the general public. Again, this particular press release fits into the ‘public information model’ of PR where information released is aimed at the general public (Grunig & Hunt, 1984). It should be noted that as at the time this particular press release was made public, BP executives should now have been made aware of the leakage of oil into the Gulf. Failure to make this information available in this and previous press releases represents a PR blunder. Perhaps, this was the reason why the public outcry was more when it became public knowledge that barrels of oil were being released into the Gulf. It should be noted that BP only came forward with information about the release of oil into the Gulf during its appearance before the US senate. And even at that, BP executives still underestimated the extent of the problem. This can be seen as a form of dishonesty and lack of transparency on the part of BP. While listing some of the best practices in crisis management, the need for transparency was highlighted as one of the key cardinal points in crisis management.

4.5.4 Press Release IV: BP Pledges US$500 Million for Independent Research Into Impact of Spill on Marine Environment

This particular press statement was released by BP on 24 May, 2010. In the first paragraph of this particular press release, BP announced that it was committing the sum of about US$500million for the purposes of studying the impact and generating viable recommendations of addressing the effects of the Deepwater Horizon oil spill in the Gulf of Mexico (bp.com) (Annex 4). Given the commitment amount and its purpose, it is clear that BP can be seen as taking corrective action in response to the crisis albeit a belated one. This particular move can be viewed as a form of ‘press agentry’ in the sense that BP seeks to improve its image by committing significant funds for scientific enterprise. BP, as part of its safety program, should have invested in research into deepwater oil exploration a long time ago. This move is likely to be seen as a welcome development by the scientific community. Whether this move will draw the same response from the general public –especially those whose livelihoods have been affected by the spill- remains to be seen. One can only guess that reactions from the general public is likely to be mixed especially considering earlier PR blunders by BP in its immediate response to the disaster. Some members of the general public may view this move as an attempt by BP to deflect attention from the crisis, whose effects are still being felt today by the fishing industry and coastal communities in the United States. This press release highlighted some key questions for the research. Given the questions elicited in this press release, it is clear that the oil industry will benefit from this research. Having critiqued the some of the press releases made by BP in the days and weeks following the deepwater horizon oil spill disaster, it is now time to examine the impact of the oil spill on BP’s reputation.

4.6 Impact of the Deepwater Horizon Oil Spill on BP’s Reputation

In this section, attention is devoted to examining the impact of the deepwater horizon oil spill on BP’s corporate image. For one, for the first time in eleven years, British Petroleum was removed from the index of the world’s 100 most valuable corporate brands (Interbrand, 2010). The implication of this was a reduction in the share price of BP in the weeks following the event. BP stock decreased by 50% in 50days on the NYSE from US$60.57 (20 April, 2014) to US$29.20 (9 June, 2014) (Yahoo Finance, 2010). This decline highlights a fall in the aggregate market value of BP. The financial losses suffered by BP also included a decline in sales at its gas stations following the backlash from the general public. The backlash from the American public

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was factored in by Interbrand in its decision to remove BP from the global index of 100 most valuable corporate brands. At this point, it is essential to note that BP was fined about US$4.25 billion by the US government. Not to mention that BP’s liabilities could rise as much as US$20 billion as costs from the oil spill continue to increase.

BP’s reputation also suffered from a drop in its credit rating by Fitch Ratings. Fitch ratings agency cut BP’s credit rating six notches from “AA” to “BBB”. It is essential to note that the “BBB” rating is just two notches above junk status. The implication of the cut in BP’s rating is that it will pay more in interest rates when raising debt finance (Wearden, 2010). Prior to the year 2010, BP had the best image of any oil or gas company. After the deepwater horizon oil spill, BP lost its reputation as an environmentally-friendly business. Images of environmental degradation stemming from the oil spill have been circulated widely on the internet thus, intensifying anti-capitalist sentiments and the public outrage against BP. In fact, Tom (2011) noted that the deepwater horizon oil spill will have long term effect on BP’s corporate brand and reputation, especially as the more serious effects of the oil spill on the ecosystem still remains to be seen.

4.7 Summary of Main Research Findings

Having critiqued BP’s response to the deepwater horizon oil spill, these are the main findings of the research:

For effective public relations, BP must identify and target its communications to these stakeholders. In communicating during crisis, findings from the analysis conducted in this chapter suggest that the message for the general public tend to differ from the message for specific publics. The main stakeholders that BP should pay attention to in the oil spill are as follows: fishermen living off the sea; inhabitants of affected coastal states; the US government; media; families of employees who lost their lives in the accident; shareholders; environmentalists.

The public outcry against BP following the oil spill disaster can be interpreted in the context of anti-capitalist sentiments. The global economic crisis in 2009 spurred anti-capitalist sentiments and increased the American public’s wariness of big corporations. The public is even more wary of the intersection of big business and big government. Statements by Tony Hayward –some of which were highlighted in this chapter- only served to intensify the distrust of big corporations.

The critique showed that BP did not carry out proper due diligence, especially as it concerned proper risk analysis of deepwater or deep sea oil exploration. If BP had done this, it should have been aware of the risks of deep sea drilling. Awareness of these risks would have prepared BP on effective approaches to responding to the deepwater horizon oil spill. Some of the statements made by Tony Hayward in the days and weeks following the accident highlighted Tony Hayward’s limited knowledge about key aspects of BP’s operations, especially its deep sea oil exploration activities.

In addition to the lack of proper risk analysis, it appeared that BP lacked a comprehensive plan for dealing with large scale crisis, such as the oil spill. It is essential for

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organizations to always have in place a comprehensive crisis management strategy. Such a strategy should lay the framework for PR response to the crisis.

In analyzing the behavior and responses of BP executives, it is clear that BP lacked empathy; something that is fundamental to PR and crisis communications. As a representative of BP, Tony Hayward’s statements and demeanor only contributed to making BP appear like an inconsiderate firm. This only contributed to intensifying the American public’s outrage against BP; something that the Obama administration could not ignore.

While BP maintained a steady flow of information in the days and weeks following the oil spill disaster, the content of some of its press releases contained some flaws. For the four press releases discussed in this chapter, BP can be said to have applied the public information PR model in its crisis communications. In BP’s second press release, BP makes an attempt to deflect responsibility for the accident to Transocean. This was a wrong move as BP owned the deepwater horizon rig.

Given the analysis conducted in this chapter, ‘the need for transparency’ was highlighted as one of the best practices in crisis communications. On this front, BP failed woefully. For instance, BP made an attempt to conceal the true and accurate picture of the effects of the accident, ie. the actual number of barrels of oil being released into the Gulf. The estimate of the oil spill provided by BP executives was a stark contrast to the actual extent of the spill, ie. BP far underestimated the extent of the pollution. This was a display of dishonesty on the part of BP and as such, BP ended up not winning any favours from both the US government and the American public.

In critiquing BP’s response to the oil spill disaster, the researcher also identified some of the impacts of the disaster on BP’s corporate reputation. The following were identified as effects of the deepwater horizon accident to BP’s corporate reputation: (i) removal from index of leading 100 corporate brands; (ii) significant decline in its share price and shareholder value; (iii) operational bottlenecks as its offshore drilling license was suspended by the US Government; and (iv) significant financial liabilities

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CHAPTER FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Introduction

In this chapter, the conclusion and recommendations of the research are presented. The conclusion is based on the key findings of the research as outlined in the previous chapter. In outlining the conclusions, effort is made to demonstrate how the main objectives of the research are realized. After outlining conclusions, the recommendations are highlighted. The recommendations will equally highlight best practices in crisis communications based on findings from the analysis of BP’s PR response to the Gulf of Mexico oil spill. The recommendations are accompanied by a section suggesting recommendations for further areas of research.

5.2 Conclusion

While reviewing relevant literature for the research, one key observation was that public relations is not only used for promotional purposes. It is also useful in periods of crisis such as the unprecedented one faced by British Petroleum (BP). The decision to use BP’s PR response to the deepwater horizon oil spill as the case study for the research was informed by the scale of the disaster; almost on the same pedestal with the Hurricane Katrina disaster. The diversity of the stakeholders affected by the oil spill disaster also highlights the scale of the disaster: US government, fishermen, communities around the coastal areas, BP shareholders, oil companies, and the general public. These stakeholders are a critical consideration with regards to how BP manages reactions to the disaster. In managing perceptions stemming from the oil spill incident, public relations is critical given the potential for this crisis to affect the corporate reputation and image of BP. Poor public relations (PR), in this regard, can have negative consequences for the reputation of BP. . Girboveanu & Pavel (2010) note that public relations is all about reputation –the result of what you do, what you say and what other people say about you. Spaulding & Correa (2007) note that public relations is the discipline which looks after reputation, with the objective of gaining understanding and support and influencing opinion and behavior. Furthermore, Spaulding & Correa (2007) indicate that public relations is the planned and sustained effort to create and maintain good will and mutual understanding between a company and its external stakeholders or publics.

The first objective of this research concerns undertaking a critical examination of how organizations use strategic communications to manage their corporate reputation in periods of

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crisis. As mentioned earlier in this chapter, PR is not only used for the purposes of promotion or publicity, it equally instrumental to managing organizational crisis. Consequently, PR managers and practitioners are expected to crisis managers. Dilenschneider (2000) notes that public relations enable organizations to address organizational crises in a proactive manner. Coombs (2007) defines crisis management as a process that is designed to prevent or lessen the damage a crisis can inflict on a company and its stakeholders. Critical to managing crisis is the manner of communications released by the concerned organization to both general and specific publics. Corporate communications –whether through media briefings, press releases or televised interviews- is a sensitive issue that must treated with utmost care given its ability to influence the perceptions and mindset of stakeholders.

Coombs (2007) notes that corporate communications in periods of crisis must contain best practices in crisis communication, ie. proper explanation of the crisis, transparency, empathy etc. In this research, four of the press releases made by BP in the days and weeks following the deepwater horizon disaster were analysed with a view to understanding if it helped to reduce negative perceptions about BP. In the first press release (April 21, 2010), BP did a good job of presenting an overview of the rig accident to satisfy the information needs of the general public. In this particular press release, BP also did a good job reducing the apprehensions of the American public and the US government by providing information on some of the steps that are being taken to address any fallout from the sinking of the rig. It appears at this point that BP is aware that oil was being released into the Gulf. While this press release contained the following attributes that reflect best practices in crisis communications (ie. explanation about the accident, transparency, responses being taken by BP to address any fallout from the accident), it failed to address the concerns of the families of employees who lost their lives (ie. specific public) in the explosion. This can be regarded as a PR blunder on BP’s part. It took a second press release from BP’s CEO –Tony Hayward- to address their concerns. Given anti-capitalist sentiments, BP failed to understand that the American public is likely to commiserate with the families of employees lost in the accident. Such commiseration is likely to ultimately intensify the public outrage against BP; something that became evident in the weeks following the accident.

Press releases are not the only form of communication available to an organization in periods of crisis. The statements made by BP executives, whether during interviews or informal appearances, also form communications during periods of organizational crisis. Some of the statements made by Tony Hayward in the days and weeks following the deepwater horizon accident highlighted PR blunders that proved to be his and BP’s undoing. It should be noted that barely a month after the deepwater horizon accident, Tony Hayward was relieved of his position as CEO of BP. Take this statement credited to Tony Hayward in an interview with the ABC’s George Stephanopoulos:

“I think we have made enormous strides as a company in the last three or four years with a remorseless focus on safe, reliable operations. Ah, this wasn’t our accident. This was a drilling rig operated by another company. It was their people, their systems, their processes. We are responsible not for the accident but we are responsible for the oil, dealing with it and cleaning the situation up”.

An in-depth analysis of the aforementioned statement reveals the following: lack of empathy for stakeholders; an attempt to transfer blame to Transocean; and an attempt to deflect responsibility for the fallout from the accident to another part. The situational theory of

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relationships suggests that the perceptions of stakeholders change and as such, there is a need for organizations to change their communications to reflect this change (Grunig & Repper, 1992). Tony Harward’s statements only intensifying anti-big corporation sentiments and the public outrage against BP. Tony Hayward’s statements –a form of strategic communication- and the public’s reactions to them highlight the importance of communication during crisis management. When asked about the amount of oil and dispersant flowing into the Gulf in an interview with the Guardian, Tony Hayward remarked:

“The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume”.

While the aforementioned statement is technically accurate, Tony Hayward’s comments made BP to appear aloof and unconcerned about the environmental damage being done to marine life in the Gulf and the livelihoods of fishermen. This statement lacked empathy and only served to annoy the public, especially those directly impacted by the disaster. These observations contribute to the realization of the first research objective (see section 1.2).

The second objective of the research concerns exploring how organizations manipulate corporate relations to maintain their agenda when faced with crisis (see section 1.2). In understanding how organizations can manipulate corporate communications to suit their own ends in periods of crisis, BP’s press releases and statements credited to BP executives when they appeared before the US Senate are useful pivots. One of the best practices identified as critical in effective crisis management communications is “the need for transparency”. From a transparency standpoint, BP executives committed a PR blunder when –in their appearance before the US Senate- they lied about the actual number of barrels of oil being released into the Gulf from the ruptured well. Initial estimates by BP were that about 5,000 barrels of oil were being released into the Gulf. This was a stark underestimation of the actual figure which turned out to be between 10,000 and 12,000 barrels of oil per day. This can be viewed as an attempt by BP to manipulate the perceptions of stakeholders –US Government, the communities bordering coastal areas, environmentalists, and the general public- regarding the true and accurate extent of the fallout from the deepwater horizon accident. The fourth press release by BP on 24 May 2010, highlighted the commitment of US$500million by BP to scientific research into ways of tackling the environmental impacts of the deepwater horizon accident. While this can be viewed as corrective action on the part of BP, it can also be viewed as an attempt by BP to decrease public outrage against it. These observations contribute to the realization of the second and third research objectives (see section1.2).

The third objective of the research concerns a critical examination of British Petroleum’s (BP) use of strategic communication to manage public perceptions of its culpability in the Gulf of Mexico oil spill. In analyzing BP’s use of crisis communication to manage public perceptions of its culpability in the deepwater horizon accident, the statements of BP executives and BP’s press releases provide the information needed to realize the third research objective. Already in this chapter, some of the statements made by Tony Hayward, the then CEO of BP, have been discussed. The statements made by Tony Hayward highlighted the following: the appearance of BP as aloof and unconcerned about the environment damage of the spill; BP as being dishonest with reference to the quantity of oil being released into the Gulf; BP as being insensitive to the people affected by the crisis (ie. environmentalists, coastal communities in the states affected, fishermen, and the general public); and BP as being less aware of the risks of deepwater oil

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exploration. The statements and press releases of BP lacked best practices in PR management of organizational crisis. If provided another opportunity, BP would have conducted its PR in a different manner given the lessons learnt. These observations contribute to the realization of the third research objective (see section 1.2). At this point, it is essential to outline the main recommendations for the research.

5.3 Recommendations

Having outlined the conclusions, the recommendations for the research are now outlined in this chapter. Among the recommendations presented in this chapter are best practices in crisis management:

When faced with a crisis scenario, timeliness in response is critical especially when the crisis affects or concerns a broad range of stakeholders –some of which are external to the organization concerned. From the standpoint of timeliness of response, the discussions conducted in the fourth chapter showed that BP was quick in its response. Nevertheless, there were concerns about its content.

When faced with organizational crisis, transparency and honesty in communication is critical. Honesty and transparency in communication can help reduce the apprehension of stakeholders affected by a crisis. In crisis situations, organizations are supposed to be open about the situation or crisis. Furthermore, organizations should equally be open about measures being taken by the organization to mitigate the effects of the crisis. Being open, in this regards, supports the ‘public information’ model of public relations.

The analysis conducted in this research suggests that BP was not honest about the true picture of the quantity of oil being released into the Gulf. This did not do BP any favours as it intensified the public’s outrage against it.

In communicating during crisis, press releases –while important- are not the only channels. Television interviews and press conferences are also useful channels for communicating to stakeholders during crisis. Empathy in communication –irrespective of the channel utilized- is critical for effectiveness. Demonstrating empathy in crisis response –whether through communication or actions- can help reduce the tension and apprehension among stakeholders affected by a crisis. Some of Tony Hayward’s statements in the days and weeks following the crisis were put under the spotlight in this research. As observed, his statements lacked empathy –especially as it concerned specific publics directly impacted by the deepwater horizon accident- and made BP appear aloof and unconcerned about the environmental degradation to the Gulf. This was, in part, responsible for his ousting as BP CEO.

Critical to the crisis management is the need for organizations to be seen as taking corrective action where necessary to address causes and dealing with the effects of the crisis. The commitment of US$500million by BP to support research in dealing with both the short and long term effects of the crisis can be hailed as a move in the right direction albeit a belated one. The belatedness of this move can be viewed with suspicion especially in light of growing anti-capitalist sentiments in the United States. Irrespective of this observation, the support to research is likely to benefit the oil industry especially as it concerns the potential environmental risks of offshore drilling, particularly deepwater oil exploration.

5.4 Directions for Further Research

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In this research, attention is devoted to exploring how crisis management fits with corporate public relations and reputation management. Findings from this research suggest that indeed, crisis management fits into public relations practice. Furthermore, it was discovered that critical to effective crisis management is corporate communications. The examination of the case study –BP’s PR response to the deepwater horizon accident- highlights the importance of communication in managing the perceptions of stakeholders involved in a crisis situation. While this research has contributed to existing knowledge on the relationship between public relations and crisis management, there is still a need for additional research

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Annex 1

BP Initiates Response to Gulf of Mexico Oil Spill

Release date: 22 April 2010

BP today activated an extensive oil spill response in the US Gulf of Mexico following the fire and subsequent sinking of the Transocean Deepwater Horizon drilling rig 130 miles south-east of New Orleans.

BP is assisting Transocean in an assessment of the well and subsea blow out preventer with remotely operated vehicles.

BP has also initiated a plan for the drilling of a relief well, if required. A nearby drilling rig will be used to drill the well. The rig is available to begin activity immediately.

BP has mobilized a flotilla of vessels and resources that includes:

significant mechanical recovery capacity;

32 spill response vessels including a large storage barge;

skimming capacity of more than 171,000 barrels per day, with more available if needed;

offshore storage capacity of 122,000 barrels and additional 175,000 barrels available and on standby;

supplies of more than 100,000 gallons of dispersants and four aircraft ready to spray dispersant to the spill, and the pre-approval of the US Coast Guard to use them;

500,000 feet of boom increasing to 1,000,000 feet of boom by day’s end;

pre-planned forecasting of 48-hour spill trajectory which indicates spilled oil will remain well offshore during that period;

pre-planned staging of resources for protection of environmentally sensitive areas.

"We are determined to do everything in our power to contain this oil spill and resolve the situation as rapidly, safely and effectively as possible," said Group Chief Executive Tony Hayward. "We have assembled and are now deploying world-class facilities, resources and expertise, and can call on more if needed. There should be no doubt of our resolve to limit the escape of oil and protect the marine and coastal environments from its effects."

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As part of its planning and approval requirement prior to offshore activity, the area was evaluated for use of dispersants and the plans approved by the US Coast Guard which has now given the go-ahead for their use.

Annex 2

BP Offers Full Support to Transocean After Drilling Rig Fire

Release date: 21 April 2010

BP today offered its full support to drilling contractor Transocean Ltd. and its employees after fire caused Transocean's semisubmersible drilling rig Deepwater Horizon to be evacuated overnight, saying it stood ready to assist in any way in responding to the incident.

Group Chief Executive Tony Hayward said: "Our concern and thoughts are with the rig personnel and their families. We are also very focused on providing every possible assistance in the effort to deal with the consequences of the incident."

BP, which operates the license on which Transocean's rig was drilling an exploration well, said it was working closely with Transocean and the U.S. Coast Guard, which is leading the emergency response, and had been offering its help - including logistical support.

Transocean reported the fire earlier today on the rig, located approximately 41 miles offshore Louisiana on Mississippi Canyon block 252, saying that a "substantial majority" of the 126 personnel on board were safe, but some crew members remained unaccounted for. A number of personnel were reported to be injured.

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Annex 3

BP Offers Sympathy To The Families Of Those Lost In The US Oil Rig Fire

Release date: 23 April 2010

BP today offered its deepest sympathy and condolences to the families, friends and colleagues of those who have been lost following the fire on the Deepwater Horizon oil rig in the Gulf of Mexico this week.

Group Chief Executive Tony Hayward said: “We owe a lot to everyone who works on offshore facilities around the world and no words can express the sorrow and pain when such a tragic incident happens.

"On behalf of all of us at BP, my deepest sympathies go out to the families and friends who have suffered such a terrible loss. Our thoughts also go out to their colleagues, especially those who are recovering from their injuries," he said.

He added: "BP will be working closely with Transocean and the authorities to find out exactly what happened so lessons can be learnt to prevent something like this from happening anywhere again."

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Annex 4

BP Pledges $500 Million for Independent Research into Impact of Spill on Marine Environment

Release date: 24 May 2010

BP today announced a commitment of up to $500 million to an open research program studying the impact of the Deepwater Horizon incident, and its associated response, on the marine and shoreline environment of the Gulf of Mexico.

"BP has made a commitment to doing everything we can to lessen the impact of this tragic incident on the people and environment of the Gulf Coast. We must make every effort to understand that impact. This will be a key part of the process of restoration, and for improving the industry response capability for the future. There is an urgent need to ensure that the scientific community has access to the samples and the raw data it needs to begin this work," said Tony Hayward, BP's chief executive.

The key questions to be addressed by this 10-year research program reflect discussions with the US government and academic scientists in Washington DC last week. BP will fund research to examine topics including:

Where are the oil, the dispersed oil, and the dispersant going under the action of ocean currents?

How do oil, the dispersed oil and the dispersant behave on the seabed, in the water column, on the surface, and on the shoreline?

What are the impacts of the oil, the dispersed oil, and the dispersant on the biota of the seabed, the water column, the surface, and the shoreline?

How do accidental releases of oil compare to natural seepage from the seabed?

What is the impact of dispersant on the oil? Does it help or hinder biodegradation?

How will the oil, the dispersed oil, and the dispersant interact with tropical storms, and will this interaction impact the seabed, the water column and the shoreline?

What can be done to improve technology:   * To detect oil, dispersed oil, and dispersant on the seabed, in the water column, and on the surface?   * For remediating the impact of oil accidently released to the ocean?

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BP already has ongoing marine research programs in the Gulf of Mexico. Building on these, BP will appoint an independent advisory panel to construct the long term research program. Where appropriate, the studies may be coordinated with the ongoing natural resources damages assessment. The program will engage some of the best marine biologists and oceanographers in the world. More immediately, a baseline of information for the long term research program is needed. A first grant to Louisiana State University will help kick start this work.

"LSU has a significant amount of experience in dealing with the oil and gas industry and deep knowledge pertaining to the Gulf of Mexico across numerous topical disciplines. The first part of the program is about obtaining and analyzing samples and assessing immediate impacts. Other areas of importance will emerge as researchers become engaged and the potential impacts from the spill are better understood," said Professor Christopher D'Elia, Dean of the School of the Coast and Environment. Subsequent awards will be controlled by the independent advisory board.

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