BP
In 1992 the Board of BP removed its Chief Executive Robert Horton. By 2001 BP was generating annual revenues of $120 billion, employing 100,000 people in over 100 countries. In 1998, BP began a series of mergers and acquisitions totaling $120 billion, first with Amoco in 1998 and then with ARCO in 1999. BP had become the third largest company in the oil industry, trailing behind only Royal Dutch Shell and Exxon Mobil. These mergers also created a large, fragmented company. By 2000 the company consisted of three groups; BP (60,000), Amoco (40,000) and ARCO (20,000) BP’s management had to decide how to bring together these three into a single new business with one global brand and one organization.
Focus on Reputation
“When we talked to the outside world, the oil industry was seen as big, powerful, dirty, secretive, grey – and we didn’t want that. We didn’t want to be an unknown player in a big sector not known for goodness or as a force for goodness.”
The attributes of the brand – progressive, green, innovative and performance driven – were the values that would shape BP’s future.
Questions:
does it really matter if you have a good reputation, but if your stock still trades at a discount to your competitors? the CEO of bp believed that by focusing on reputation, and on doing the right thing, that he would increase his employees morale, and that in turn would improve productivity and his companies net worth. Is this true? Will it work?
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