Question 1 [50 Marks] Read the Case Study below and Answer the Case-study Discussion Questions Sustainable Development at British Petroleum

In the early 1990s, UK-based oil and chemical major, British Petroleum (BP), faced a crisis situation. The company had amassed a huge debt and its share price saw a drastic fall. BP also faced pressure from the external agencies to stop polluting the environment. Lord Browne (Browne) who became CEO of the company in 1995 realized that the company needed to change its policies and re-brand itself if it had to survive in the industry. In 1998, BP entered into a merger agreement with Amoco Oil Corporation (Amoco).3 Even before the merger, Amoco had framed policies to become environmental friendly. BP was inspired by Amoco's environmental friendly policies and after the merger, in 1999, adopted a new set of business policies based upon the best practices followed by both the companies. (Refer Exhibit I for Values and Policies of BP). BP became the first company in the oil industry to emphasize the need for Health, Safety, and Environmental (HSE) performance On March 11 2002, while giving a speech at Stanford University on climate change, Browne said it would be necessary to take preventive measures to face climate change He also said BP would reinvent its energy business and would go 'Beyond Petroleum BP believed that its HSE performance would be vital for its success in the countries where it operated. In 2002, BP underwent significant changes to project itself as a 'green' company. The company re-branded its logo - changing it from a green shield to the white, green, and yellow sunburst logo of Helios5 (Refer Exhibit II on the old and new logos of BP). The company also changed its name to 'bp', without any meaning being attached to the letters. It incorporated a new catchphrase "Beyond Petroleum". These changes reflected the company's concern for the environment and its entry into renewable sources of energy. Environmental Initiatives In 1996, BP quit the Global Climate Coalition (GCC), which was formed by a group of USbased companies after the report given by the Intergovernmental Panel on Climate Change (IPCC) in 1989.

The panel assessed the scientific reports on climatic changes caused by harmful human activities and stated that the greenhouse gas (GHG) emissions were increasing due to harmful human activities and suggested reduction of such emissions. The GCC was not in favor of taking any action to reduce the GHG emissions. BP was the first company to quit GCC. It also supported the Kyoto Protocol, which was an agreement entered into by the industrialized countries to reduce GHG emissions. In 1998, the company reduced the hydrocarbon emissions into the air by 15% from the 1997 levels. Its water discharges were reduced by 6% and the carbon dioxide emissions remained unchanged. However, it failed to control oil spills, which increased by 20% from the 1997 levels...

Regional Development

BP promoted regional development programs by way of creating employment opportunities and providing training to people in the regions where it operated. In many places, it encouraged the local business communities to become its suppliers. The company opened an Enterprise Centerin Azerbaijan which, by 2004, provided 130 training courses, seminars, and workshops for 3,000 people belonging to the local companies. These courses incorporated many issues including health, safety, and accounting. BP began oil exploration and production in Columbia in 1987. It had oil fields in Cusiana and Cupiagua. Between 1994 and 1996, BP faced protests from the Columbian government and the Human Rights Watch for its operations in that country. It faced accusations of polluting the environment and had to pay a fine of $ 276,000 to the Columbian government in 1994 for destroying the environment. BP also had to face protests from the human rights activists.

Source: extracted from http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/Business%20Ethics%20 -%20Sustainable%20Development%20at%20British%20Petroleum.htm a) Using the above case study illustrate how BP can use the comprehensive model of strategic alliances and networks to operate in the global markets. In your answer try to be as practical as possible.