Spills and Spin: The Inside Story of BP

Mattathias Schwartz writes:

The beginnings of the Deepwater Horizon disaster, Bergin argues, can be found in the reorganisation Browne undertook, applying to BP the leaner management principles he learned at Stanford. The company was divided into ‘strategic business units’, independent companies within the company, each of which could allocate its capital and manage projects as it saw fit. Managers were held to short-term ‘performance contracts’ focusing on high production and low cost. Those who could extract the most oil while spending the least money were rewarded with promotions and bonuses. Promising junior executives were shuffled between posts all over the world, rarely staying anywhere long enough to bother replacing outdated equipment or rusting pipelines. ‘Go to the limit,’ Browne told his managers. ‘If we go too far, we can always pull back later.’

(LRB 6 October 2011)