New Darden Cases Probe America's Largest Oil Spill

August 20, 2010 — As oil continues to ooze into the Gulf Region’s marshy bays, devastating wildlife, tourism and the fishing and seafood industry, First Year MBA students at the Darden School of Business will debate two new case studies about the environmental disaster during their first week at business school.

The multimedia case “After the Oil Spills: Deepwater Horizon,” written by Darden Professor Erika James, case writer Gerry Yemen and multimedia producer Stace Carter, and published by Darden Business Publishing, will challenge students to think through the complexity of the oil spill crisis and to consider the views of various stakeholders, from the owner of a net and tackle shop to the executive director of the Louisiana Seafood Promotion and Marketing Board.

The authors’ second case “After the Oil Spills: Transformation at the JIC” chronicles an employee’s struggle to bring order and structure to the Joint Information Center, which is the unit within the Unified Incident Command Center that is charged with disseminating information to media and others about the clean-up efforts for the spill.

James, co-author of the recently published book Leading Under Pressure: From Surviving to Thriving, Before, During and After a Crisis, traveled to the Gulf in June to prepare the case studies and to see the damage caused by the April 20 explosion of BP’s drilling rig firsthand.

“The explosion has shaken both the region and the powerful London company to their core,” says James, who has studied executives’ response to oil spills before; she wrote several Darden Business Publishing cases following the Exxon Valdez disaster of 1989.

“Where BP really dropped the ball was in communicating its side of the process,’’ she says. “The media portrayed the company’s and the federal government’s reaction to the crisis as botched. Yet, when you’re there, you come away with a different impression. I was actually surprised by the level of coordination and collaboration, but it was not communicated effectively to the press.”

Darden Professor Mike Lenox, an expert in energy innovation and the policy implications of industry self-regulation, has also studied BP in-depth. He recently joined James and Darden’s Manager of Sustainability Programs Erika Herz, to analyze BP’s response to the explosion and possible future strategies on the podcast series, the Darden GreenPod, produced by Gary Peters.

Says Lenox, “Others companies have had industrial accidents that have had an even greater human impact (for example, Union Carbine’s chemical accident in Bhopal India and the Chernobyl accident in the former USSR), but for pure environmental impact, this is devastating.”

“It’s unclear whether this will be the end of deep-sea drilling,’’ says Lenox, who is Executive Director of Darden’s Batten Institute for Entrepreneurship and Innovation. “I think it will be interesting to see politically and in the court of public opinion whether the spill is viewed as a result of problems at just one firm or as a revelation that this is an inherently risky activity. If it’s the latter, we may see the spill have a long-term impact on the energy sector. However, I’m hesitant to predict whether this will be a call-to-arms that leads to substantial changes in energy policy in the U.S. We have had events in the past that seem to eventually fade from public consciousness without any major change in policy.”

During their first week of business school, Darden’s Class of 2012 will debate whether or not BP, the environment and the region’s industries can recover from the nearly 5 million barrels of oil that have gushed from BP's well. The new cases will be added to the Darden Case Collection and available to the public in September of this year.

Watch the video on the Darden Business Publishing YouTube channel - After the Oil Spills: Deepwater Horizon Case Study.