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International Business: Competing in the Global Marketplace Fifth Edition Cases BP: CREATING A GLOBAL BRAND SYNOPSIS BP (British Petroleum) has always been one of the largest oil companies in the world. A series of 9 acquisitions in US and Europe between 1999 and 2002 doubled BP’s employment to 117,000. Many of these acquisitions were companies that were international before BP acquired them. The management challenge faced by BP was, “How should BP create an entity that operated as a unified global enterprise?” BP used extensive consultation with employees from all its disparate operating companies to articulate a set of values that are relevant around the world. The values are performance driven, innovative, progressive, and green. These core values are BP’s corporate brand. The new corporate brand tells external stakeholders what BP is all about. It gives internal stakeholders an anchor to organize around. TEACHING OBJECTIVES 1. To sensitize students to the potentially confusing situation that can arise as a rapidly growing international corporation seeks a unified way to run its disparate global operating companies. 2. To demonstrate that it is possible to discover organizing themes that remain constant across international boundaries. 3. To discuss the role of an overarching strategy and structure that transcends regional and national differences to provide guidance and direction to the employees and managers of a global corporation. STRATEGIC ISSUES AND DISCUSSION QUESTIONS 1. What are the strategic benefits to BP of emphasizing a common set of values and projecting a common corporate image worldwide? BP has experienced significant growth via acquisition. After a series of 9 acquisitions in US and Europe, more than half of BP’s employees are from companies that were independent, autonomous and international. BP’s top management faces the challenge of unifying disparate operating companies spread across multiple international boundaries under a banner that provides clarity and direction. A common set of values that cut across national and regional differences offers the cohesion that is critical to run a complex global organization effectively. These values shape the expectations of a diverse group of external stakeholders. Additionally these 43 International Business: Competing in the Global Marketplace Fifth Edition Cases values become an anchor around which employees worldwide can find common ground. Core values are the foundation on which BP builds its corporate image worldwide. 2. What do you think are the internal impediments to building this kind of common corporate culture globally? There are at least two major internal impediments to building this kind of common corporate culture. First, top management needs to recognize the need for a unifying theme and implement a worldwide internal consultation process to unearth and articulate the components of the common core values. Clearly BP overcame this obstacle. Second, operating companies that were previously independent and international may view the emergence of a unifying corporate culture as an infringement on their freedom and autonomy. BP took care to involve all its employees and articulated values which held meaning for all. This helped BP overcome the second obstacle. 3. Do you think that the values BP has chosen transcend business and national culture? A close examination of the four core values – performance driven, innovative, progressive, and green – suggests that BP has indeed chosen themes that are global in nature and can transcend the specifics of national and regional culture. 4. What kind of company is BP trying to become through this process – multidomestic, international, global, or transnational? If you examine BP’s situation in terms of strategy, interdependence, and ambiguity it becomes apparent that BP is managing the transition from a previously Multi-domestic organization into an International organization. After the series of acquisitions BP needs to manage a growing interdependence between previously independent units. Integration is required to facilitate the transfer of core competencies and skills. Foreign operations are now partly dependent on the quality of the competency transferred from the home country and some performance ambiguity can exist. This is the definition of an International structure. 44