Business and Government in Global Context - BPs Oil - Case Study Example

Business and Government in Global Context Student’s Name Institutional Affiliation Introduction The explosion and sinking of the BPs oil well in the Gulf of Mexico caused massive oil spillage which posed detrimental effects on both wildlife and marine habits (King & Library of Congress 2010). Subsequently, the massive destruction of aquatic life had adverse economic impacts on fishing and tourism industries, as well as impacting human health concerns. At the end of the day, either the firm or the state had to be accountable and accept the responsibility for oil spill. The answer to this question is not straightforward nevertheless. With the help of theoretical Susan Strange’s body of work model, there are possible ways in which accountability can be attained. The accountability can be achieved through the influence of firm, state and diplomacy over the contentious issue. Globalization and internationalization of has taken another view point of the accountability of the oil spill by creating dilemma situations. Additionally, Steve Lukes’ power theory provides various dimension of power. The power to argue, influence and decide over others is paramount in arguing the case oil spill accountability. Internationalization The issue of internationalization has brought a new siding point of deciding who should be accountable and who should accept the responsible for the explosion and oil spill, and consequent damage on the aquatic environment. Internalization was caused by the structure change due globalization. Therefore, structural change seems to be exploited by some interested groups than others, has modified the discernment of policy-makers mostly in poor states and some firms (Tencati & Perrini 2011). This modification of policy-makers’ perception gyrate on both issues of nature of the system and great opportunities it present to key players for the present and times to come. In order to determine who is accountable in this case, the key player must possess a structure advantage over other. The striking shift between the firm and state policies have influence and power over who should be held responsible, and who should be accountable (Strange 1991). State-Firm Diplomacy The other contentious issue is the state-firm diplomacy which expresses the strength of the bargaining power between states and foreign firms such as BPs. This diplomacy is a result of net structural change in the way state and firms interrelate. The stiff competition is compelling states to thoroughly bargain with foreign firms such as BPs to install their facilities and operations within the state’s territory. Therefore, bargaining is the main component of yet a new diplomacy dimension. It is in order to state categorically that transnational firms have got an arsenal command of economic weapons that are exclusively needed by states. Eventually, the state-firm diplomacy has influence over who should accept to be responsible or accountable because states find it difficult to lose transnational firms and benefits associated with these firms. This intricacy is much resolved when the concerns about globalization are known (Strange 1992). Globalization and Environmental Dilemma The other determinant of who should accept the responsibility and who should be accountable for the BP oil spill is the issue of globalization. It is noted with much concern that globalization urges firms to disregard environmental issues while ignoring the state power to inflict environmental controls. For example, Mexico as a state has the power to exercise environment controls. However, BP as a big corporation diminishes Mexico’s power over environmental policies. Therefore, as in the case of BP oil spill, a dilemma present itself between who should be accountable and who should be accept the responsibility for the aquatic endangering (Freudenburg & Gramling 2011). This dilemma reduces as we become more conversant with the issues of globalization that decreases political accountability to create a deficit in a democratic system. However, the issue of environment has created a more pronounced and inevitable dilemma. The large corporations such as BP become motivated in the world of economic savvy. These corporate players pollute and damage the environment. Therefore, the international principles of sovereignty, law, and the like have curtailed the state’s countervailing power. This situation has made it difficult to ascertain who should accept the responsibility of damaging the environment (Strange 1992). Political Dilemma Another issue to consider is the political dilemma. Most of the states that have undergone strenuous struggle for accountability and liberty are at least accountable to the people. However, globalization has transferred power from countries to firms that have tolerated international red tapes to subvert accountability. It is important to note that the new authorities who are non-state are accountable. Only some of these authorities are transparent nevertheless. This state of the political dilemma creates a democratic deficit. Subsequently, some of the states retreat from its principal position of authority in the society and economy. Therefore, political dilemma creates a two way question of who should accept the responsibility and who should be accountable for the destruction aquatic environment as a result of oil spill accident. The accountability is a question of law, not a question of fact (Strange 1992). The first face of power- The issue method The issue method is founded on Dahl work who argued that an individual who wins an issue or an argument possess the power to decide who should be accountable for the oil spillage. Following an extensive search, the crew continued to find oil stretching from the Macondo site all the way to Florida Panhandle, as well in the Tampa Bay. Hence, the scientists concluded that the dispersant mixture and oil is held up by the sand. Similarly, in 2013 reports indicated that a significant number of marine lives were at risk with young dolphins being the most vulnerable. Investigations into the issue by the government agencies indicated that BP was unable to control the oil spillage that led to the occurrence of the incident. Therefore, according to the issue method the government has the power over the BP since it won the argument. However, in an attempt to defend itself from the claim, the company argued that the government overestimated the volume of the oil spill burned before entering the gulf waters. Despite, the company’s claims concerning overestimation of the volume of the oil that spilled over, it had no power over the government. The fact remains that the company was responsible for the occurrence of the incidence thus the government wins the issue (Lukes 2005). The second face - Setting the Agenda Lukes argues that for the party to show its real power it must set the agenda. The agenda implies that such a party has the authority to decide the issues under discussion, hence dictating the situation. In this case, the government had the real power of setting the agenda and conducting several investigations to determine what caused the explosion. Therefore, the government’s real power enabled it to conduct investigations that indicated that BP was to be blamed for defective cement on the well. Also, through the government's ability to set the agenda, it laid its blame on Transocean (the rig operator at the moment), as well as Halliburton who was the contractor. Similarly, the White House commission accused the company and its partners due to its numerous strategies aimed at cutting costs and its inadequate safety systems. Therefore, since the government is superior over the firm, it had the power to set the agenda and determine the cause of action to be taken for the company’s failure to observe safety needs for the people and the environment (Lukes 2005). The third face- Manipulating the views of others The first and the second face of power illustrates the extent to which the power can be used in order to make one party follow another’s demands, even if the demands do not favour them. On the contrary, the third face of power gave a description of how power can influence others to involve in an activity they would not rather have done through changing what they wished (Lukes 2005). Therefore, the United States of Justice pressed criminal charges against the company. Hence, BP had no option but to plead guilty to two misdemeanours, loss of 11 lives and a case to answer for being dishonest to Congress. Similarly, the company agreed to be monitored by the government for a period of four years in relation to their safety precaution measures, as well as ethics. Additionally, the Environmental Protection Agency decided that the company would be momentarily banned from securing new contracts with the United States’ Government. Similarly, the Department of Justice forced the company to pay a fine of $4.525 and other compensation. Therefore, the third face of power dictated what BP was supposed to do even if it was against its will. Hence, the company was held responsible for the explosion, fire and subsequent sinking of BPs oil well in the Gulf of Mexico on April 20th 2010 (Freudenburg & Gramling 2011). Conclusion Therefore, through the application of the Susan Strange’s body of work based on the diplomacy, state and firm, the BP was responsible for oil spill leading to the explosion. According to Strange, state-firm diplomacy forms the basis of the bargaining power between firms and states. Similarly, in determining who should be responsible for the Deepwater Horizon spill, the issue of globalization arises. It is evident that globalization does not consider environmental implications that would result due to the establishment of multinational corporations. Additionally, it ignores the state power to impose environmental controls. Conversely, the Lukes’ power theory indicates the actual purposes of influencing where the government has more power to influence its decisions on the firm. Therefore, through its thorough investigations on the cause of oil, the BP Company was accountable, hence accepted the responsibility for the oil spill. References Freudenburg, W. R., & Gramling, R. (2011). Blowout in the Gulf: The BP oil spill disaster and the future of energy in America. Cambridge, Mass: MIT Press. King, R. O., & Library of Congress. (2010). Deepwater Horizon oil spill disaster: Risk, recovery, and insurance implications. Darby, PA: Diane Publishing Lukes, S. (2005). Power: a radical view. London, Palgrave Macmillan. Strange, S. (1991). Erosion of the State. Cambridge: Cambridge University Press. Strange, S. (1992). States, Firms and Diplomacy. New Jersey: Wiley on behalf of the Royal Institute of International Affairs. Tencati, A., & Perrini, F. (2011). Business Ethics and Corporate Sustainability. Cheltenham: Edward Elgar Pub Read More