Hindsight is always 20/20, especially for the companies involved in the Gulf Oil Spill. You can read a list of the bad decisions they made through this link:
http://www.aolnews.com/2010/11/09/disaster-in-the-gulf-one-bad-call-after-another/
In the article, a situation is described where the company was worried about just getting the job done, not worried about the quality of the work. Basically, all of the mistakes were just a case of not double-checking the work that was done and materials were used that had not been tested properly.
I believe this relates back to an overconfidence bias from the company. They were confident to do this type of drilling in the past and just assumed they would do it correctly again. The problem is they also did not feel the need to put in the checkpoints I'm assuming were previously used. The company used their experience to justify not following all of the guidelines and it cost them and thousands of others dearly.
Should there be guidelines placed on companies that do drilling? Is there any way to hold companies like this accountable for their decision-making before disaster strikes again?
Casey Zimmerman
The oil industry, and its related partners, has established a rather negative reputation surrounding its business practices. This could be mostly due to the price gouging that we consumers experience, the power ties they have in government, and their general ability to escape serious penalties
ReplyDeleteOne solution that could hold firms accountable is establishing a rewards program. For every guideline the company meets or every inspection that is passed with flying colors, a monetary or political reward could be awarded. This would provide substantial incentives for companies to ramp up safety features. Unfortunately, this also creates a terrible situation. Should the public provide extra rewards to companies for simply doing what they were required to do in the first place? It is a slippery slope from there. Will we provide monetary rewards for executives who do not engage in insider trading, employees who don't commit theft, or corporations who do not plunder the communities they are in? I think a stand-alone, preemptive rewards program would create a massive financial burden on society.
We could impose heavy fines and penalties that strongly discourage companies from making these monumental atrocities. However, issuing crippling fines could devastate an industry. The oil, financial, and retail industries could be severely weakened. Walmart and BP may be able to survive crippling penalties, but what about smaller firms? Failure among firms and across industries would lead to higher prices and less competition.
Business is a two way street. Just like our class today, we would be throwing collaboration to the curb. I think a combination of approaches is necessary to move to the next level. We need to understand that we need businesses in order to enjoy the luxuries that we have today. Perhaps more importantly, companies need to understand that they cannot exploit their stakeholders or subject them to serious danger. Who buys their products and ensures their survival? In the end, they are only hurting themselves.
Regards,
Jarek Palmer- Big Bang Bloggers
I did find one other relevant story I wanted to share with you. I must have missed this in the media. BP has certainly become the bad guy, and rightfully so. But the following story is a testimony to my opening comments. The article is titled, "BP may drill again in oil spill reservoir."
ReplyDeleteRemember how much agony and uproar was created when the news finally broke? Why don't we hear more about this story? I am sure many people would be furious if they knew the same exact player, who had caused a mess in their homes, was one of the first companies allowed to come back into the Gulf and drill, in the same exact place!
If you want the full story, check out the brief article at:
http://www.usatoday.com/communities/greenhouse/post/2010/08/bp-oil-spill-gulf-1/1
Thanks again,
Jarek Palmer