Abstract: When one analyzes the root causes behind the Deepwater Horizon oil rig explosion that occurred on April 20, 2010, killing 11 people and spilling 53,000 barrels of oil per day, 19 times the volume spilled by the 1989 Exxon Valdez oil spill, one sees a disregard and lack of proactivity in assessing and responding to potential threats in the offshore oil drilling line of work. In BP’s case, the lack of effective cost, quality, and risk management are interrelated and reflect a general organizational culture of being reactive rather than proactive as well as one that emphasizes cost-cutting to virtually the exclusion of all else. With this culture so long entrenched in the company, disaster was inevitable. This presentation shows the significance that organizational culture has on how a company views and responds to risk through the context of BP’s Macondo well project. Also described is a comparison of how risk events actually played out in the disaster versus how they should have been addressed had they used sound risk management processes. With each poor response to a risk event that transpired, the probabilities of future risks occurring increased showing the importance of continually revisiting and reassessing the project risks.
