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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
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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.
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