BBA 4751, Business Ethics 1 Course Learning Outcomes .docx

BBA 4751, Business Ethics 1
Course Learning Outcomes for Unit V
Upon completion of this unit, students should be able to:
2. Relate ethical behavior in high-profile events.
3. Examine regulatory and sustainability market approaches to
business’s environmental
responsibilities.
Reading Assignment
In order to access the following resource(s), click the link(s)
below:
Matejek, S., & Gossling, T. (2014). Beyond legitimacy: A case
study in BP’s “green lashing.” Journal of
Business Ethics, 120(4), 571-584. Retrieved from
https://libraryresources.columbiasouthern.edu/login?url=http://s
earch.proquest.com.libraryresources.c
olumbiasouthern.edu/docview/1513729827?accountid=33337
Roberts, P. S. (2006). FEMA after Katrina. Policy Review,

(137), 15-33. Retrieved from
earch.ebscohost.com/login.aspx?direc
t=true&db=bth&AN=21254699&site=ehost-live&scope=site
Chapter five: Lessons learned. (2005, September 15). In The
federal response to Hurricane Katrina: Lessons
learned. Retrieved from http://georgewbush-
whitehouse.archives.gov/reports/katrina-lessons-
learned/chapter5.html
Peters, J. W. (2010, June 10). Efforts in Gulf of Mexico to limit
flow of news about the spill. The New
York Times. Retrieved from
https://libraryresources.columbiasouthern.edu/login?auth=CAS
&url=http://go.galegroup.com/ps/i.
do?p=ITOF&sw=w&u=oran95108&v=2.1&id=GALE%7CA2284
71542&it=r&asid=c9f34b728871e
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Unit Lesson
Click here to access an introduction
video.
Click here to access the introduction video transcript.

UNIT V STUDY GUIDE
Ethical Actions in Times of Business
Issues Surrounding Certain Tragic Events
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iew/1513729827?accountid=33337
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4699&site=ehost-live&scope=site
http://georgewbush-whitehouse.archives.gov/reports/katrina-
lessons-learned/chapter5.html
http://georgewbush-whitehouse.archives.gov/reports/katrina-
lessons-learned/chapter5.html
&url=http://go.galegroup.com/ps/i.do?p=ITOF&sw=w&u=oran9
5108&v=2.1&id=GALE%7CA228471542&it=r&asid=c9f34b728
871ecc3f98708adb413b757
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https://youtu.be/ydkRrV5u6NY

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UNIT x STUDY GUIDE
Title
Click here to access a video that briefly
introduces topics in this unit.
Click here to access the video transcript.
Henry Potter is a slum lord banker in the famous seasonal movie
It’s a Wonderful Life. Potter is the richest
man in town, yet he charges extortionate rents. The greedy
banker is motivated only by increasing his share
of the banking and residential rental business in town at every
opportunity. He is a majority shareholder in
hero George Bailey’s Bailey Building & Loan and tries to take
advantage of the residents when there is a bank
run on Bailey’s Loan by offering the shareholders $0.50 on the
dollar for their outstanding shares. Potter is
unscrupulous, and at one point, he mistakenly receives $8,000
from Bailey’s uncle who had wrapped it in a
newspaper, which he later threw at Potter in anger. Potter steals
the money, and when Bailey realizes it is
missing, he (on behalf of his uncle) must get a loan to cover the
missing money. He ironically goes to Potter,

who unethically grants him a loan on the money Potter actually
stole. Potter later threatens to use the force of
law to imprison Bailey on a technicality of nonpayment of the
loan. Potter seemingly adheres to all of the
technical legal banking requirements, while taking advantage
(or trying to) of the residents in Bedford Falls
without regard to the ethical nature of his decisions; he is self-
interested, greedy, uncaring, dishonest,
disloyal, and unscrupulous.
Like Potter, some companies operate (technically) legally, yet
they are unethical. Companies perform their
obligations to the minimum standard required when much more
is required in the situation. To paraphrase
former U.S. Chief Justice Stewart, it can be said that ethics are
about knowing the difference between what
your rights are and what the right thing to do is (Collins, 2014).
This will be the central inquiry of this unit. In
one company we will study, they are alleged to have taken
actions that supposedly discharge their ethical and
legal obligations solely for the purpose of enhancing their
reputation. If you act ethically but for the wrong
reasons, is it still ethical? On the other hand, some
organizations say they are “doing the best they can” in a
given circumstance, yet their incompetence causes them to
behave unethically, though no harm was
intended. In this unit, we will delve into three case studies
through the lens of ethical philosophy and decision-
making by leaders. We will study the BP Oil Spill, the recent
Japanese nuclear reactor meltdown, and the
Hurricane Katrina disaster, respectively.
In the British Petroleum (BP) Oil Spill, on April 20, 2010, a
wellhead on the Deepwater Horizon oil drilling
platform exploded in the Gulf of Mexico near the Louisiana
coastline. It was the largest offshore oil spill in

U.S. history. The extent of the actual oil spill is currently
unknown partly because BP prevented the requests
of independent scientists to measure the spill on the ocean floor
given that BP stated the flow rate of the oil
was irrelevant to the response effort and might even hinder it.
How would knowing the flow rate actually
hinder the response efforts to mitigate the damage? Would
authorities not need to know how big the disaster
was in order to effectively clean it up? Media was largely
excluded from the site by President Obama and BP;
therefore, relevant and accurate information was not
disseminated.
BP was obligated to clean-up the spill, but U.S. legal
protections for wildlife in the Gulf are nearly nonexistent.
Do we have ethical responsibilities to the wildlife that
surrounds us? There was no penalty to BP for killing
thousands of animals and negatively affecting the food chain in
far-reaching areas. Technically, BP
remediated the damage to the environment, but should it have
done more given the extreme harm it caused
though no legal violation occurred? Were its actions ethical to
those nearby residents and the wildlife at
large?
Furthermore, many argue there was a deep divide between BP’s
actual operations and what it was
communicating to the public and market about its corporate
responsibility in the Gulf. In the aftermath of the
spill, BP spent large amounts of money in rebranding itself as a
“green” company, though its “green” efforts
were lackluster and may have only represented minimum efforts
on behalf of wildlife. In this unit, we will look
closely at BP’s responsive actions substantively, as well as its
“greenwashing” after the fact and address its
legal and ethical obligations, on what basis they rested, and

whether they were discharged.
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In the context of the nuclear power plant meltdown at
Fukushima Daiichi, the emergency was set into motion
when an earthquake and resulting tsunami hit the surrounding
area. The meltdown at Daiichi was as large as
the 1986 Chernobyl disaster that released 100,000 tons of
radioactive water into the Pacific Ocean and a
radioactive plume all over the world. In the context of
producing nuclear energy as a sustainable alternative
source to fossil fuels, we will focus on the theory of
utilitarianism and whether this paradigm is applied,
whether the nuclear energy program maximizes well-being to
most people, and whether there are alternatives
to accomplish the same end. We will focus on the impact of
local residents and their ethical treatment,
regulations, and violations, as well as whether key information
was disseminated. In the analysis, we will
evaluate other sources of energy, both their benefits and costs,
and compare them to nuclear energy

production. Some argue nuclear energy is “green” because it
obviates the need to use fossil fuels, does not
emit pollutants, and is generally safe. Others counter that it
produces radioactive byproducts that contaminate
the environment upon disposal for thousands of years. How does
one decide which types of energy are
ethically produced and on what basis? Might it be the process or
the end result, or is it what it prevents?
Last, we will look at the Federal Emergency Management
Agency’s (FEMA) emergency response to
Hurricane Katrina’s landfall in the New Orleans area in 2006. In
this context, we will look at whether
incompetency or inefficiency can be and was the cause of
FEMA’s disastrous response to the situation and
decide whether incompetency rather than intent can form the
basis of unethical action based on the concepts
we have already covered. We will study an organization mired
in bureaucracy, significantly under-funded and
divided, under-staffed, primarily responsible for a situation in
which it had little ability to access and
communicate information about the unfolding tragedy and
allocate its emergency services. Is it enough that
FEMA did “the best with what they had,” or was this tragedy
foreseeable, and thus they were obligated to be
better organized, trained, staffed, and funded in order to
ethically discharge their duties? In this case, FEMA
did a few things well, but on the whole, its efforts fell short,
and there were failures; too little came too late for
the residents.
Whether companies are doing what they have a right to do or
are really doing the right thing, in the context of
these disasters, is central to how we view ethical decision-
making and leadership on a grander scale. Intent
matters; however, we shall see that the lack of it can also form

the basis of unethical action.
Reference
Collins, M. A. (2014). Supreme justice. Seattle, WA: Thomas
and Mercer.
Course Learning Outcomes for Unit VI
Upon completion of this unit, students should be able to:
7. Explore the professional ethics and responsibilities of
intermediaries, the responsibilities and loyalty
of managers, and the responsibilities of employees to the
community.
8. Analyze the ethical considerations governing marketing
practices.
Reading Assignment
In order to access the following resource(s), click the link(s)
below:

Brenkert, G. (1998). Marketing and the vulnerable. Business
Ethics Quarterly, Ruffin Series, 1, 7-20.
Retrieved from
Quinn, M. J., Mujtaba, B. G., & Cavico, F. J. (2011). Global
tobacco sales dilemmas: The clash of freedom
and markets with morality and ethics. Journal of Business
Studies Quarterly, 2(2), 107-124. Retrieved
from
Headden, S. (1998). The Marlboro man lives! U.S. News &
World Report, 125(11), 58. Retrieved from
t=true&db=a9h&AN=1059522&site=ehost-live&scope=site
MacFadyen, L., Hastings G., & MacKintosh, A. M. (2001).
Teenagers susceptible to tobacco marketing.
Brown University Child & Adolescent Behavior Letter, 17(4), 3.
Retrieved from

t=true&db=a9h&AN=4347065&site=ehost-live&scope=site
Alt, E., Dies-de-Castro, E. P., & Llorens-Montes, F. (2015).
Linking employee stakeholders to environmental
performance: The role of proactive environmental strategies and
shared vision. Journal of Business
Ethics, 128(1), 167-181. Retrieved from
Palmer, D., & Hedberg, T. (2013). The ethics of marketing to
vulnerable populations. Journal of Business
Ethics, 11(2), 403-413 Retrieved from
Taken Smith, K. (2014). Millennials’ interpretations of green
terminology. Academy of Marketing Studies
Journal, 18(1), 55-68. Retrieved from
Edward Snowden: Leaks that exposed US spy programme.
(2014). Retrieved from
http://www.bbc.com/news/world-us-canada-23123964

UNIT VI STUDY GUIDE
Ethics in Cultural Integration and Marketing
earch.ebscohost.com/login.aspx?direct=true&db=a9h&AN=1059

http://www.bbc.com/news/world-us-canada-23123964
UNIT x STUDY GUIDE
Title
Lighthouse Services. (2013). Why ethics hotlines are considered
a best practice. Retrieved from
https://www.lighthouse-
services.com/documents/Why%20Ethics%20Hotlines%20Are%2
0Considered%20a%20Best%20Prac
tice.pdf
Murphy, D. E. (2002). The federal sentencing guidelines for
organizations: A decade of promoting compliance
and ethics. Iowa Law Review, 87(2), 697-719. Retrieved from

http://www.ussc.gov/sites/default/files/pdf/training/organization
al-guidelines/selected-
articles/Murphy1.pdf
Unit Lesson
Click here to access an introduction
video.
Click here to access the introduction video transcript.
Click here to access a video that briefly
introduces topics in this unit.
Click here to access the video transcript.
Wile E. Coyote was perpetually in pursuit of Roadrunner in the
Roadrunner cartoons that aired Saturday
mornings for children. Coyote always used various implements
and strategies in order to catch him, but he
always failed. Coyote used Acme brand products—acme means
prime in Greek—however, the products were
far from prime, quality products. Instead, they were completely
generic and always faulty. The products blew
up, failed to detonate, or self-destructed in highly
disadvantageous circumstances, at least from Coyote’s
perspective, because instead of helping him catch Roadrunner,
the Acme products regularly failed and the big
bird remained free, always outwitting him—“BEEP BEEP.”

Despite their high failure rate, Coyote continued to
rely on Acme assumedly because of its superior marketing and
the implied trust and confidence he had in the
products. Coyote is, in actuality, a simpleton, a character of low
intelligence or common sense and did not
know any better. So, Coyote continued his attempts after
purchasing more Acme products, humorously
incinerating himself rather than his intended target.
In this unit on cultural integration and marketing, we will
explore what it means to market to vulnerable
populations as well as the ramifications of such marketing
techniques. Is it morally impermissible to take
advantage of the vulnerable? In what way and on what basis is
this the case? Understanding and embracing
that some are disadvantaged may or may not form the basis of
an unethical marketing policy, such as when a
clothing store markets to the Big and Tall men’s sector. The
fact that one man stands taller than the average
man could be seen as a disadvantage, but it was not something
he was able to choose. Instead, his biology
determined his height. How is marketing to the elderly and
infirm different than the man of great height; or are
they different at all? We look at especially vulnerable
populations and address their relevance within
marketing strategies along with the ethical basis of such
behavior.
0Considered%20a%20Best%20Practice.pdf

al-guidelines/selected-articles/Murphy1.pdf
al-guidelines/selected-articles/Murphy1.pdf
https://youtu.be/xbngHPFSTuk
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We will also study the special situation of the marketing of
tobacco products—how tobacco products are
marketed and in what ways the underlying product may be
different from all other legal products due to its
addictiveness. We will investigate the industry of tobacco
manufacturing and marketing and think about
whether such marketing is also pointed at an otherwise
vulnerable population of teenagers and the addicted.
We will look at companies’ responsibilities to the environment
on the basis of corporate social responsibility
(CSR) and their marketing of such corporate “green” activity to

relevant constituencies. What are their
responsibilities, and when are they called to action? When
companies do manufacture “green” products,
whether the process itself is “green” or when the end
result/product is “green,” how can it be best marketed
and to whom? What labels are generally understood and in what
ways?
In addition to discussing the contributions of whistleblowers,
we will review best practices regarding the
cultural integration of ethics into companies in order to
minimize occurrences of fraud and other illegal or
unethical activities. We will study two famous whistleblowers,
Edward Snowden and Jeffrey Wigand, who both
challenged the practices of the most powerful and well-funded
entities known: the U.S. government and the
tobacco industry. We will explore how and why they came
forward and the differences in their treatment. The
former was reviled and prosecuted, while the latter was praised
and protected. Whistleblowers take great risk
to come forward. They risk being legally prosecuted, losing
their job, and having their reputation ruined, to
name a few, and we will address their ethical, yet disparate
treatment.
Furthermore, we will address the characteristics of the “best
practices” in the industry for companies to protect
themselves against illegality and immorality. Ethics hotlines, in
addition to ombudsmen, reporting, and
whistleblowers, are the strongest defense these entities have.
Surprisingly, though many companies do not
have them, hotlines are one of the best ways to protect
themselves. An Association of Certified Fraud
Examiners (ACFE) survey (n.d.) found that almost 38% of fraud
is detected through anonymous tips
compared to 17% by management review and only 14% by

internal audit. If companies’ employee hotlines
take special steps to ensure they are confidential and
anonymous, then useful and material tips from
employees and outsiders alike will help shape the positive
ethical culture of the firm and root out expensive
behavior. According to a 2016 ACFE study, the loss due to
fraud for organizations with hotlines was half of
those without one. Therefore, hotlines essentially pay for
themselves and save a company’s bottom line, as
well as greatly improve its culture.
In addition, not only employees take advantage of hotlines.
Vendors and third parties do as well. A successful
hotline is one available 24 hours a day, 7 days a week, so
individuals can avail themselves outside of a work
day. They must assure anonymity, if requested, and
confidentiality always. Trained specialists from a third-
party company must staff the hotline, be proactive, and have an
organized system for tracking the information
generated. Early detection is key to discovering the fraud in its
infancy, thereby ensuring a better and less
expensive result.
This unit will be an especially interesting one, as we will
grapple with the ethical debate in marketing both the
controversial product of tobacco and general products to
vulnerable populations, like children and the elderly.
We will look in-depth at “best practices” in the hunt to employ
internal mechanisms to protect companies from
costly, often devastating, illegal and unethical practices.
References
Association of Certified Fraud Examiners. (n.d.). Tone at the

top: How management can prevent fraud in the
workplace. Retrieved from
http://www.acfe.com/uploadedFiles/ACFE_Website/Content/doc
uments/tone-at-the-top-research.pdf
Association of Certified Fraud Examiners. (2016). Report to the
nations on occupational fraud and abuse:
2016 global fraud study. Retrieved from
http://www.acfe.com/rttn2016.aspx
Ambush Marketing Case Study: successfully leveraging high-
profile events to raise brand profile CSCM0326/ Published
07/2010
© Datamonitor. This brief is a licensed product and is not to be
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DATAMONITOR VIEW
CATALYST
Dutch alcohol brand Bavaria Beer sparked a major debate in
marketing circles as a result of its attempted ambush of
official sponsor Budweiser during the 2010 FIFA World Cup in

South Africa. While some within the industry have criticized
the strategy for its perceived unfairness and insincerity, others
are praising its creativity and effectiveness. This case study
investigates the concept of ambush marketing by focusing on
the recent World Cup example, but also reflects on how
select companies that have historically used it effectively or
ineffectively.
SUMMARY
• Bavaria Beer’s ambush of Budweiser during the early stages
of the 2010 FIFA World Cup was initially thought to
be largely unsuccessful in that it was spotted by event
organizers, who removed and punished the participants.
However, the subsequent media interest and criticism of FIFA’s
handling of the situation resulted in Bavaria Beer
receiving a tremendous boost in profile around the world,
transforming the move into a big success.
• Global-scale sporting events are often the prize target for
ambushers. The sheer money that is involved in such
events makes them highly lucrative to be affiliated with. Over
time, organizers have become savvier to the
attempts of ambushers to generate buzz without paying for
official sponsorship deals. However, there have still
been recent examples of creative ways of circumnavigating
restrictions.

• Although ambush marketing leads to positive outcomes when
successfully executed, the perceived lack of ethics
that surround the practice, certainly in some circles, makes it a
risky strategy. Ambushes can lead to bad
publicity, alienation among powerful bodies, and are sometimes
subject to aggressive counter-measures which
can potentially damage the brand image severely. The
risk/reward conundrum means that companies must
consider all the possible outcomes (both positive and negative)
before embracing these tactics.
CASE STUDIES
Ambush Marketing Case Study:
successfully leveraging high-profile
events to raise brand profile
Understanding how and why brands look to ambush events
Reference Code: CSCM0326
Publication Date: July 2010
Ambush Marketing Case Study
07/2010

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ANALYSIS
What is ambush marketing?
When embracing ambush marketing a brand attempts to attach
itself to an event without paying official sponsorship rights.
Certain requirements must be adhered to (usually the avoidance
of using specific terms and slogans in marketing), but if
executed correctly the practice is entirely legal. However,
ambush marketing poses certain ethical and moral questions
which could potentially have a negative effect on a company or
brand’s image/reputation.
Figure 1 outlines a definition of ambush marketing, as well as a
comparison with similar—and sometimes confused—
marketing approaches (guerilla and host-parasite marketing).
All have their associated advantages and disadvantages, but
it is ambush marketing which provides the focus for this
particular case study.
Figure 1: Definitions of ambush, guerilla and host-parasite
marketing
Type of marketing Definition
Amb ush

A de li berate attem pt by an organ iza tio n to a ssocia te itse
lf with a n
eve nt ( often a sp orting event) in or der t o gain som e of the
bene fits
asso ciated with bei ng an off icial sponsor wi thou t in curri ng
th e costs o f
sp onsorship. For example by a dve rt ising during broa dcasts
of th e
eve nt.
Gueril la
The s trate gy of targe ting sm all a nd speciali zed cu sto me
r groups in
su ch a way that bigg er com panies wil l no t fi nd it worthwh
ile to
re taliate .
H ost-p arasite
Wher e one b usine ss uses an other t o gen er ate sales throu
gh a
re ferr al/re ferr al fee rel ationshi p.
Source: Datamonitor analysis, adapted from the Chartered
Institute of Marketing D A T A M O N I T O R
Although the terms sound like they have negative connotations,
they are all legitimate marketing practices which can be
extremely effective. It is ambush marketing though that requires
the most attention, both from a legal standpoint and to
ensure that it works effectively.

According to Prof. Simon Chadwick and Andrew Burton
(published in the Center for the International Business of Sport,
2009) there are several different types of ambush marketing
which fall under two distinct groupings, as summarized by
Figure 2 below. The ‘direct ambush’ activities are closer to
being (or, in some cases, are actually) illegal. They are
generally
the more forceful and impactful forms of marketing but carry
the most risk as well. This demonstrates how there are a large
number of subtleties when it comes to ambush marketing.
Although there are more ways of carrying out an indirect
ambush, they are generally less effective in terms of being
noticed. Distractive ambushing, for example, relies on
consumers drawing a parallel with something completely
unrelated, which is far from guaranteed. Other types, such as
incidental or unintentional ambushes are relatively rare and
cannot be relied upon to generate publicity given this fact.
Direct ambushes, on the other hand, carry more risk but can also
be considerably more rewarding.

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Figure 2: There are several different types of ambush
marketing, which can either be classified as direct or
indirect
DIRECT AMBUSH ACTIVITIES
Property Infringement – the intentional
unauthorized use of protected intellectual
property
Coattail Ambushing – the attempt by a brand to
directly associate itself with a property or event
by using a legitimate link other than becoming an
official sponsor of the property or event.
Predatory Ambushing – intentionally attacking
a rival’s official sponsorship in an effort to gain
market share and to confuse consumers as to
who the official sponsor is
Self-Ambushing – marketing activities by an
official sponsor above and beyond what has
been agreed on in the sponsorship contract
Associative Ambushing – the use of imagery or
terminology to create an allusion that an
organization has links to a sporting event or
property

INDIRECT AMBUSHES
Distractive Ambushing – setting up a
promotional presence at or near an event without
making specific reference to the event itself
Values Ambushing – the use of an event or
property’s central value or theme to imply an
association with the property in the mind of the
consumer
Insurgent Ambushing – the use of surprise
street-style promotions at or near an event
Parallel Property Ambushing – the creation or
sponsorship of an event or property that is
somehow related to the ambush target and
competes with it for the public’s attention
Incidental Ambushing – when consumers think
that a brand is a sponsor or is associated with an
event or property without any attempt on the
brand’s part to establish such a connection
Unintentional Ambushing – sometimes media
coverage will mention equipment or clothing
used by an athlete, or a company that is
providing a service in support of an event
Saturation Ambushing – saturation ambushers
increase their advertising and marketing at the
time of an event, but make no reference to the
event itself and avoid any associative imagery or
suggestion
Source: adapted from Chadwick and Burton, MIT Sloan D A T

A M O N I T O R
Bavaria Beer’s ambush at the 2010 FIFA World Cup sparked a
renewed debate about the
relative merits and morals of ambush marketing
On June 14 2010, Bavaria Beer was accused of initiating an
ambush during the FIFA World Cup soccer match between
Denmark and the brand’s home country of the Netherlands.
Mid-way through the game, 36 female members of the crowd
were ejected by FIFA security (FIFA is the governing body of
world soccer), with the FIFA citing “a clear ambush marketing
activity by a Dutch brewery company”. The crowd members
were all models, dressed in identical orange dresses which
were part of a gift pack offered by Bavaria Beer. Although the
company had made efforts to ensure that the dresses were
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recognized in association with the beer (Sylvia van der Vaart,

wife of the prominent Dutch soccer star Rafael, was
approached to model the dress to raise brand awareness) the
ambush itself was likely to be low-key until the ensuing
controversy elevated the stunt to an issue reported worldwide
across all media platforms.
FIFA was criticized for its handling of the situation, going so
far as to arrest two of the participants for their role in
orchestrating the ambush. Many felt that the punishment was
too severe, but FIFA insisted with some justification that it
was going to necessary lengths possible to protect the interests
of its official sponsors. Ironically, the heavy-handedness of
the actions taken by FIFA has probably guaranteed the brand far
more exposure than if they had allowed the ambush to
continue unpunished. As far as organizing bodies are concerned,
this highlights the importance of judging the
appropriateness of a response. Successful ambushes are by their
very nature difficult to defend against, so there must be a
high degree of consideration regarding how the media and
general public will respond to the defense.
Figure 3: Bavaria Beer hired models to wear clothing
identifiable with the brand at a World Cup soccer game
Source: Datamonitor analysis D A T A M O N I T O R

This was not the first time Bavaria Beer ambushed the FIFA
World Cup. In June 2006, the brand gave out free branded
orange lederhosen to around 1,000 Dutch fans to wear at a game
between the Netherlands and Ivory Coast. The fans were
not allowed into the stadium wearing the lederhosen, and
instead were forced to watch in their underwear. The fact that
ambushes have occurred at consecutive events heightens
anticipation about what the brand might do next time (in 2014,
when the World Cup is to be held in Brazil). This kind of
elevated interest/anticipation in a brands’ activities give it a
stronger platform to generate added exposure (and possibly
sales), which only serves to highlight the attraction of
embracing ambush marketing.
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Ambushing is an enticing option to companies given its
potential to be extremely effective
at a far lower cost than paying for official endorsement
privileges
The primary goal of ambush marketing is to increase brand
awareness. Unlike guerilla marketing, where careful placement
usually has only a modest effect on brand awareness, the large-
scale targets of ambush marketers facilitate opportunities
to expose a brand to a wide (global) audience.
Major sporting events such as the Olympic Games and FIFA
World Cup are billion dollar occasions. According to
sponsorship experts IEG, the 2010 FIFA World Cup will
generate circa $1.6bn in sponsorship revenue. Major sponsors
such as Adidas and Visa have paid around $350m to be official
affiliates, while Sony has also signed a deal worth in
excess of $300m. Such enormous figures emphasize how
potentially lucrative effective marketing can be when associated
with such popular attractions. It is therefore inevitable that
these types of events are most at risk of ambush when the
rewards can be so great.
Beer sales peak during a World Cup due to the communal
element of viewing games and the fact that soccer mostly
appeals to the male demographic (which tends to favor beer as
its choice of alcoholic beverage). It is therefore easy to see

why Bavaria Beer has attempted to ambush its rivals on this
stage. Highlighting this, UK supermarket chain ASDA reported
that it expected a 37% increase in beer sales during the month-
long tournament. The first match involving England saw 12
million pints of beer sold, according to the British Beer and Pub
Association. UK Retailer Marks & Spencer announced that
sales of its own-brand beer had doubled during a World Cup
promotion. Meanwhile, in the home nation of South Africa,
SABMiller’s beer sales exceeded expectations, selling 130,000
hectoliters more than it could expect during a normal June-
July sales period. This was 30,000 hectoliters more than
anticipated, equating to an additional 44m 340ml beers.
Japanese
brewer Kirin anticipated a 4% increase in total sales as a result
of the competition, while South Korean retailers GS25 and
Bokwang Family Mart have both reported a doubling of sales
following the participation of their team.
Figure 4 below showcases the influence of branding in the
alcoholic drinks industry. When asked as part of Datamonitor’s
2009 consumer survey, global respondents ranked ‘brand name’
second, behind only ‘price’ in terms of perceived influence
on product choice. In total, two-fifths (40%) of consumers
worldwide felt that brand name had either a ‘high’ or ‘very
high’
influence on their alcohol consumption choices, while a further

39% stated it had a ‘medium’ amount of influence.
Interestingly, in the immediate aftermath of the ambush, the
brand’s website Bavaria.com, which was little-visited outside of
its core markets, was the fifth most visited beer website
according to Experian Hitwise.
07/2010
photocopied Page 6
Figure 4: The importance of strong branding is highlighted by
the influence that it carries when consumers
are purchasing alcoholic beverages
Please tell us how much influence the following factors have in
your alcoholic beverage
choice (global response)
42% 40% 38%
30%
18% 17%
11%

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Pr
ice
Br
an
d
He
alt
h
Co
nv
en
ien
ce
Et
hic

s/s
us
tai
na
bil
ity
Ha
bit
Pa
ck
ag
ing
%
o
f
re
sp
o
nd
en
ts
High or very high influence
Source: Datamonitor Consumer Survey, April/May 2009 D A T

A M O N I T O R
However, consumers are expressing advertising fatigue and
ambush marketing can
exacerbate this
Companies must also bear in mind that consumers are becoming
increasingly fatigued with, and skeptical regarding, what
is often perceived as too much advertising. Quite simply, many
companies relentlessly push brands across multiple
channels/touchpoints and this can frustrate consumers, as
illustrated by Datamonitor consumer survey fieldwork in recent
years. Figure 5 below shows how consumers in a selection of
major markets view the sheer quantity of advertising. In each
country, more than two-thirds of respondents agreed on some
level with the statement “there is too much advertising
today”. Generally speaking, consumers are more likely to
‘strongly agree’ than ‘tend to agree’, especially in 2008. In
2010,
consumers across all markets have been slightly less likely to
agree with the statement, and there has also been an
apparent softening of attitudes. While this does suggest that
advertisers are becoming more discreet, the results arguably
reflect a society that is no longer surprised by the amount of
advertising it is exposed to and has grown more accustomed
to it. Nevertheless, it is still the majority of individuals in a

given country that are expressing negative sentiment towards
the
amount of advertising they are exposed too. Given that ambush
marketing is criticized for being more insincere, this
negative sentiment could be exacerbated by a poorly executed
ambush. After all, a majority of consumers believe they are
already over-exposed to commercial messages even before
companies attempt to ambush a form of advertising that is
already generally perceived to be credible.
Other research highlights there is at least a reasonable degree of
trust in brand sponsorships. In April 2009, Nielsen
revealed that 64% of global respondents either ’somewhat’ or
‘completely’ trusted this type of advertising/marketing.
07/2010
photocopied Page 7
Figure 5: An overwhelming majority of citizens across countries
and territories believe that there is too

much advertising today, although the intensity of this
perception has declined since 2008
QUESTION: To what extent do you agree or disagree with the
following statements? There is
too much advertising today
40% 34%
66%
55% 50%
41%
50%
40%
53%
34% 35%
25%
36%
28%
39%
41%
24%
31% 38%
37%
32%
36%

27%
38% 38%
41%
36%
40%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 2008
2010 2008 2010
Australia Brazil China France Germany UK US
%
o
f r
es
p
o

nd
en
ts
Strongly agree Tend to agree
Source: Datamonitor Consumer Surveys, August 2008 & July
2010 D A T A M O N I T O R
Nike has made a habit of successfully ambushing rivals during
major sporting events
Sports manufacturer Nike has developed a reputation as the
most effective creator of ambush marketing, certainly among
high-profile brands. Most famously, the company was said to
have ambushed Reebok during the 1996 Olympic Games in
Atlanta. With sponsorship costs for the games at approximately
$50m, Nike chose not to spend on becoming a legitimate
endorser and instead concentrated on generating brand exposure
in other ways. Billboards around the city of Atlanta were
blanketed and a ‘Nike Village’ was constructed outside the
athletes’ ‘Olympic Village’.
Other examples of Nike seeking to usurp official sponsors
include convincing superstar basketball player Michael Jordan
to
cover his Reebok logo when accepting an Olympic gold medal,

and the creation of elaborate television advertisements to
accompany major sporting events. Figure 6 shows some
examples of the company’s ambush of the 2008 Beijing
Olympics.
The sports bag contains a logo reminiscent of an ‘8’, while the
host city name implies association with the event without
specifically mentioning it. The advertising campaign, entitled
‘Courage’, showed a number of athletes with inspirational
slogans including “everything you need is already inside”. The
company often rolls out extravagant television advertising
campaigns to coincide with major sporting events, often leaving
consumers feeling as though they are actually connected
to the event itself.
This type of ambushing is often successful for Nike. According
to the Nielsen Company, which measures how much brands
are being discussed online, Nike garnered the highest share of
online FIFA World Cup “buzz” before the 2010 tournament
07/2010

photocopied Page 8
(when looking at English language messages). The 30.2%
accumulated by the brand more than doubled the share of the
second-placed brand and FIFA World Cup official partner,
Adidas (14.4%). To contextualize this achievement, the next-
highest non-affiliated competitor was alcoholic drinks brand
Carlsberg, with a 3.9% share. However, as the tournament
progressed, the benefits of official sponsorship became more
apparent. On July 2 (three weeks after the first match)
Nielsen revealed that Adidas (25.1%) had overtaken Nike
(19.4%), although this was partially because the supposed poor
quality of the brand’s official soccer ball developed specifically
for the tournament was a topic of fierce debate for millions of
fans. The results suggest that early ambushes can be effective,
but the longer an event lasts the more an official affiliate
can capitalize on its advantageous position.
“As an avid watcher of the World Cup, unless the brand is
specifically displayed on the digital boarders around the soccer
field or mentioned to be "official sponsors" you would never
realize who isn't an office sponsor. Many people I speak with
don't even know Adidas is a sponsor and Nike is not. Is this
wrong and marketing in bad faith? Of course not. Nike has just

planned and devised a way better marketing campaign and you
can't blame them for that.”
Josip Petrusa, Canadian consumer, quoted on
BrandChannel.com, June 2010
Figure 6: Nike ambushed the Beijing Olympics, of which it was
not an official sponsor, with advertising
campaigns and associated merchandise
Source: Nike.com D A T A M O N I T O R
There are potential pitfalls to ambush marketing that must be
considered
The most appealing aspect of ambush marketing is undoubtedly
that it is a relatively cheap way of gaining exposure to an
audience that, for the most part, does not know or care about the
legitimacy of official ties to an event. If a company can
save tens of millions of dollars on sponsorship, then
investments can be directed elsewhere, such as into the actual
marketing used to usurp competitors.

07/2010
photocopied Page 9
However, if this were the case, no company would go to the
expense of securing a licensed agreement with an event or
organization. In the past few years, more efforts have been
made to protect the interests of official sponsors. One example
is banning competitors from purchasing billboard advertising
space in the host cities of major events (as Nike so
successfully did during the Atlanta Olympics in 1996). This
makes sense for the organizers, which rely on sponsorship to
fund the event itself, and for the sponsors, who want the
supposed exclusivity of an agreement to translate to unopposed
exposure to their audience.
Aside from having to deal with stronger defensive measures,
potential ambushers must also weigh up the repercussions of
their actions. While consumers may not be overly-concerned
about the ethicality of an ambush, it damages relationships
with powerful organizers, often beyond repair. Furthermore, the
subject of the ambush can retaliate with negative marketing
which can damage the image of both brands. This was the case
when Visa and American Express clashed during the

1980s and 90s regarding sponsorship of the Olympic Games.
American Express lost its place as official partner to the
Olympics after the 1984 Games in Los Angeles. A subsequent
attempt at ambushing ensured that the International
Olympic Committee (IOC) responded forcefully. A marketing
campaign in 1986 resulted in the IOC threatening to take out
full-page adverts in major publications criticizing the company.
Moreover, the IOC also claimed that famous Olympic
athletes and sports ministers from all regions would speak out
against American Express and publically cut up American
Express credit cards in front of the media. American Express
subsequently withdrew the campaign as a means of self-
preservation.
This scenario served as a learning experience, both for the
company and the marketing industry as a whole. Ambush
marketing needs to be forceful, but also retain a certain dignity
and subtlety. In 1992, American Express famously
ambushed Visa, this time at the Barcelona Olympics, with a
television and print advertising campaign advising travelers to
take a passport and American Express credit card to the
Barcelona ‘fun and games’, while adding “and remember, to
visit
Spain, you don’t need a visa”. The campaign is regarded as one
of the more memorable examples of ambush marketing in

the past couple of decades.
However, in 1994 American Express embarked upon one
ambush too many, with the result a backfire. Following the 1992
games, a truce was negotiated between American Express, Visa
and the IOC. Visa agreed to end its comparative
advertisements that it aired in retaliation to American Express’s
ambushing. Despite this agreement, American Express
attempted an ambush of the 1994 winter Olympics in
Lillehammer. Visa was therefore allowed to respond with more
negative advertising, the result being that American Express’s
reputation was significantly tarnished in the eyes of
consumers.
"If a brand manager asks you to practise ambush marketing
tools to achieve their marketing objectives consider if that is
the reputation you wish to have in the marketplace. How would
your stable of clients feel about this approach? Is there any
potential for lost business? ...solid marketers who have been in
the game for a while tend to have long memories."
Commando Marketing, Marketing Magazine, May 2005

07/2010
photocopied Page 10
“There is a weak-minded view that competitors have a moral
obligation to step back and allow an official sponsor to reap all
the benefits from a special event. They have not only a right,
but an obligation to shareholders to take advantage of such
events. All this talk about unethical ambushing is so much
intellectual rubbish and posturing by people who are sloppy
marketers.”
Jerry Walsh, former head of marketing at American Express,
quoted on SportsProMedia.com, June 2010
Conclusion: ambush marketing can be effective in gaining
publicity for a minimal outlay but
recent events have illustrated that there is still uncertainty as to
how best to approach it
• The aftermath of the Bavaria Beer incident is a timely
reminder that there is still not a textbook approach
to ambush marketing—either from the perspective of the
ambusher or the ambushed – for FIFA, it could

hardly have been expected that attempting to defend the
interests of its official partner would incrementally add
to the exposure of the ambusher. For Bavaria Beer, what would
have likely been intended to be a relatively
minor ambush has actually led to a major amount of exposure.
Overall, this is indicative of how Ambush
marketing remains far from an exact science.
• Brands have shown that employing a rational strategy creates
the potential for success – for Nike,
ambushing major sporting events has become a tradition, with
the company using expansive and extravagant
marketing promotions that tap into key themes and concepts.
The brand is adept at identifying what consumers
associate with sporting heroes and the events they compete in.
Notions such as ‘courage’ identify with Olympic
ideals, and this creates a better, more relevant ambush. For
Bavaria Beer, the use of orange clothing and
affiliation with a soccer player’s wife identified itself with the
Dutch soccer team in a positive manner.
• Treading into more negative forms of ambushing has proven
more dangerous, even for major brands –
falling foul of event organizers and competitors potentially
leaves a company open to retaliation. Ambushing,
when done correctly, is not illegal, but it does raise pertinent

moral and ethical questions which the ambusher
must be prepared to answer.
• Bavaria Beer has shown that it is possible for a smaller player
to successfully ambush a big rival during
a major event – historically, the ambushes most referred to are
the ones that had the highest profile on the
biggest stages. This therefore makes them a key target for the
most ambitious brands looking to usurp their
competitors to maximum effect.
07/2010
© Datamonitor. This brief is a licensed product …
FEMA After Katrina
PATRICK S. ROBERTS
OLLOWiNG A DEVASTATING h u r r i c a n e , the Federal
Emergency Management Agency is in crisis. Should it be

abolished? Should emergency management responsibilities
be given to the military? Returned to the states? Consider
the descriptions from a post-disaster report:
Prior to the hurricane, "relations between the independent cities
. . . and
the county government were poor; as were those between the
county and the
state. . . . After the disaster these relations did not improve,
which impeded
response and recovery efforts."
When the hurricane first made landfall, the country initially
reacted with
a "sense of relief" because the "most populated areas had been
spared the
full brunt of the storm." After a few days, however; it became
apparent that
flood waters would swamp both urban and rural areas, leaving
thousands
without power, food, water, or the possibility of evacuation.
Patrick S. Roberts is a postdoctoral fellow in the Center for
International
Security and Cooperation at Stanford University. In Fall 2006,
he will be
assistant professor in the Center for Public Administration and
Policy at
Virginia Tech.
JUNE df" JULY 2006 15 Policy Review
Patrick S. Roberts

Compounding disasters — wind, floods, communications and
power fail-
ures — led to catastrophe. While a large state might have had
the resources
to respond quickly, small states were overwhelmed. "They
[small states] usu-
ally cannot hold up their end of the [federal-state] partnership
needed for
effective response and recovery."
The severity of the disaster called into question the entire
enterprise of
federal involvement in natural hazard protection. "Emergency
management
suffers from . . . a lack of clear measurable objectives, adequate
resources,
public concern or official commitments. . . . Currently, FEMA
is like a
patient in triage. The president and Congress must decide
whether to treat it
or to let it die. "1
The above criticisms pertain not, as one might
Congress save ^^P^^*, to FEMA'S recent woes in New Orleans
fol-
lowing Hurricane Katrina but to the agency's dilato-
the agency an ry response to Hurricane Andrew, which
devastated
ultimatum South Florida in 1992. After Andrew, Congress
^ -J . gave the agency an ultimatum: Make major
after Hurricane improvements or be abolished. With the advice
of
Andrew: the emergency management profession and an enter-
Make major ^"^^"^ directoi; James Lee Witt, the agency under-

' went one of the most remarkable turnarounds in
improvements administrative history. In 1997, Bill Clinton
called it
or be abolished. °"^ °^ ^^^ ""mosx. popular agencies in
government."
FEMA was well regarded by experts, disaster victims
and its own employees. By 2 0 0 5 , however, the
agency had once again fallen into ignominy.
Before issuing more cries for radical change at FEMA,
reformers should
look to the lessons of the agency's reorganization in the 1990s,
which
focused on natural disasters rather than national security. Its
turbulent histo-
ry shows that while the agency can marshal resources for
natural disasters
and build relationships with states and localities, it lacks
sufficient resources
to take on too many tasks. Today, FEMA faces a protean
terrorist threat and
an increasing array of technological hazards. To address
contemporary
threats, the agency must hone its natural disaster expertise and
delegate
authority for disaster response to states and localities. True,
delegation runs
the risk of returning to the days of ad hoc disaster preparedness,
when gov-
ernment poured money into recovery without reducing
vulnerability to dis-
asters. Nevertheless, decentralizing response functions is the
best way to pre-

pare for an increasingly complex array of disasters, as the risks
and strate-
gies for recovery for different kinds of disasters vary so
dramatically from
region to region.
^ National Academy of Public Administrarion, Coping with
Catastrophe (Washington, D . C . , February
1 9 9 3 ) . ix, 8 7 . Unattributed quotations can be found in
Patrick S. Roberts, " F E M A and the Prospects for
Reputation-Based Autonomy," Studies in American Political
Development (Spring 2006).
Policy Review
FEMA After Katrina
The birth of emergency management
VIEWED AGAINST the history of emergency management,
the success F E M A enjoyed in the 1990s was the exception,
not
the rule. For most of the century, states and localities rushed to
the aid of disaster-stricken citizens, and the federal government
helped over-
whelmed communities with recovery. As a result, the federal
government
sent supplies, surveyors, and money to help rebuild the same
regions over
and over again. Federal involvement dates from at least the San
Francisco
earthquake of 1 9 0 6 , which registered an estimated 8.3 on the
Richter scale

and left 4 7 8 people dead and more than 2 5 0 , 0 0 0 homeless.
The disaster
came in two parts, one natural and the other a result of poor
planning. The
earthquake was unavoidable, but the fires that swept through
neighbor-
hoods stuffed with wooden buildings could have been prevented
had San
Franciscans used other materials or not built them so close
together.
President Theodore Roosevelt was alarmed by the disaster and
pledged fed-
eral troops to help, but local officials, not federal authorities,
were always in
control, if unofficially. On their own initiative. Army
commanders stationed
in the area ordered troops to protect the Treasury and essential
services dur-
ing the chaos after San Francisco burned. The mayor, not the
president,
issued 5,000 handbills telling citizens that he had (illegally)
ordered federal
troops and local police to shoot looters.^ (Few people were
actually shot on
this order.) Much later, the federal government directed aid to
the Bay Area
through the Red Cross.
The first broad and permanent legislation defining federal
authority in
disasters was the Civil Defense Act of 1 9 5 0 , which
centralized programs for
defense against nuclear attack. Civil defense programs might
have helped to
scare the Soviets into thinking that the U.S. was serious about
nuclear war,

but they would never have been much help during an all-out
attack. The
federal government's involvement in natural disasters,
meanwhile, was most-
ly ad hoc and too little, too late. A series of ferocious disasters
in the 60s
and 7 0 s caused great destruction: the Alaskan e a r t h q u a k
e ( 1 9 6 4 ) ,
Hurricane Betsy ( 1 9 6 5 ) , Hurricane Camille ( 1 9 6 9 ) , the
San Fernando
earthquake (19 71), and Hurricane Agnes (19 7 2) .̂
Crisis, however, is routine in politics. As my colleague Scott
Sagan says,
things that have never happened happen all the time. Each of
these disasters
was proclaimed a crisis, and each spawned legislation meant to
correct the
deficiencies that were thought to have led to the disasters.
Agencies were
^ Simon Winchester, A Crack in the Edge of the World (Harper
Collins, 2005), 307-310; Doris
Muscatine, Old San Francisco: From Early Days to the
Earthquake (Putnam and Sons, 19 7 5), 4 2 8.
^ Peter J. May, Recovering from Disasters: Federal Disaster
Relief Policy and Politics (Greenwood Press,
198s).
JUNE & JULY 2006 17
Patrick S. Roberts

organized and reorganized. Administrators installed paradigms
and mission
statements to set emergency management on course. By the late
1970s, nat-
ural disasters and civil defense were handled by a jumble of
agencies that
sometimes worked at cross-purposes. The federal government
provided for
dual-use mobilization, or the use of national security equipment
for natural
disasters, but state and local leaders, frustrated by
fragmentation at the fed-
eral level, called for the creation of a comprehensive emergency
management
policy to coordinate diverse federal, state, and local
responsibilities.''
President Jimmy Carter responded to state and local leaders'
demands by
creating FEMA in 1979. The agency brought together more than
100 pro-
grams responsible for all kinds of disasters with those
responsible for long-
term preparation and quick response. Carter had the admirable
goal of a
centralized agency that "would permit more rational decisions
on the rela-
tive costs and benefits of alternative approaches to disasters."^
The reorgani-
zation process, however, frustrated attempts to rationalize and
streamline
disaster policy. Carter's authority was limited, and in order to
create the new
agency without congressional opposition he transferred staff,
political
appointees, and procedures from existing disaster organizations.

As one par-
ticipant in the reorganization process put it, "It was like trying
to make a
cake by mixing the milk still in the bottle, with the flour still in
the sack,
with the eggs still in their carton. . . ."^ By all accounts the
creation of a sin-
gle FEMA improved disaster response by establishing a one-
stop shop to
speed communication between the White House, states,
localities, the
National Guard, and other agencies that might be called upon in
a crisis.
FEMA lacked the capacity, however, to encourage states to
mitigate disas-
ters before they occurred and to arbitrate between groups who
demanded
relief money after disaster struck. Dauphin Island, Alabama,
like other Gulf
Coast communities, used federal relief monies to grow larger
after hurri-
canes hit. In 1979, Hurricane Frederic flattened 140 homes and
caused $3
million in damage on the island. Since then, it has been struck
by five hurri-
canes, including Katrina, and has been rebuilt each time. With
local officials
controlling building and zoning codes, FEMA was powerless to
redirect
development.^ Carter's recipe for centralizing disaster policy
never achieved
his original goals, and emergency management remained
fragmented and
broken.

As the Cold War intensified in the early 1980s, President
Ronald Reagan
gave FEMA a renewed civil defense mandate. The agency not
only handled
'* "Domestic Terrorism," Emergency Preparedness Project
(Center for Policy Research, National
Governors' Association, 1978), 1 0 7 .
^ Jimmy Caner, "Message to the Congress Transmitting
Reorganization Pian No. 3 of 1 9 7 8 " (June 19,
1978) in Public Papers of the Presidents (1978) i: 1 1 1 8 - 1 1 3
1 .
^ National Academy of Public Administration, Coping with
Catastrophe (February 19 9 3), 1 3 .
^ Roberts Sheets, "The National Flood Insurance Reform A a of
1 9 9 2 , " Statement before Hearing of the
Senate Committee on Banicing, Housing, and Urban Affairs
(July 2 7 , 1 9 9 2 ) ; Gilbert M. Gaul and
Anthony R. Wood, "Uncle Sam, Insurer of First Resort,"
Philadelphia Inquirer (March 7, 2000).
18 Policy Review
FEMA After Katrina
flood and fire prevention programs as well as disaster response,
but also led
efforts at evacuation and warning against nuclear attack.
Shelters were
largely a thing of the past, but the agency still helped to run a
secret

112,544-square-foot bunker under the Greenbrier resort in West
Virginia
intended to house Congress during a nuclear war. While it had
security
clearances and high-tech equipment, FEMA never had the
resources to com-
pete with the major defense and intelligence agencies; as a
result, it
overreached in national security affairs. For instance, it
developed a secret
contingency plan that called for a declaration of martial law that
would turn
control of the United States over to FEMA during a crisis. The
agency also
attempted to usurp Department of Justice responsibilities in
preparing for a
crisis at the 1984 Los Angeles Olympics. In both
cases, other agencies — the FBI and the Department Whenever
it
ofjustice in particular — resented FEMA'S ambitions fnrpri thp
for roles it was not equipped to play, FEMA Director
Louis Giuffrida resigned in 1985 after becoming the
unexpected,
subject of a federal investigation into alleged fraud whenever a
and mismanagement.
Meanwhile, the agency still had to face the usual disaster
became
slate of fires, hurricanes, tornadoes, and chemical d catastrophe,
spills. It responded adequately to routine disasters,
but whenever it faced the unexpected, whenever a
disaster compounded to become a catastrophe, it overwhelmed.
was overwhelmed. Politicians used the agency as a
convenient object of blame when disaster response went awry.
After
Hurricane Hugo ripped through South Carolina in 1989, U.S.

Senator
Ernest "Fritz" Hollings called FEMA "the sorriest bunch of
bureaucratic
jackasses I've ever known." When disasters struck Califomia the
following
yeari Representative Norman Y. Mineta claimed that FEMA
"could screw up
a two-car parade." Dissatisfaction with FEMA came to a head in
1992
when Hurricane Andrew caused about $30 billion in damage in
south
Florida, leaving 160,000 people homeless.
FEMA owned technology that could have helped in 1992, but
much of it
was unavailable and restricted to national security uses. State-
of-the-art
satellite phones were controlled by the national security
division, while
FEMA'S hurricane response team, with communications down,
resorted to
buying Radio Shack walkie-talkies.^ FEMA kept asking the
states and locali-
ties what they needed, and Florida officials kept saying that
they needed
everything, anything — yesterday. With the situation in chaos.
President
George H.W. Bush replaced the FEMA director and ordered
Andrew Card,
the secretary of transportation, to take charge of the recovery
along with a
^ Robert Ward et al., "Network Organizational Development in
the Public Sector: A Case Study of the
Federal Emergency Management Administration (FEMA),"
Journal of the American Society for

Information Science 51 (2000).
JUNE df JULY 2006 19
Patrick S. Roberts
cadre of generals, F E M A lore holds that the agency's poor
performance in
response to Andrew was enough to cost Bush re-election.
James Lee Witt and reorganization
C / HE A G E N C Y ' S S T R I N G of poor performances was
certainly
/ enough to have some members of Congress calling for radical
v _ > / reform and others demanding its abolition. In 1 9 9 3 ,
the General
Accounting Office summed up the conclusions of numerous
expert reports:
"The response to Hurricane Andrew raised doubts about whether
F E M A is
capable of responding to catastrophic disasters." Though state
and local
officials would always be the first to react to the initial stages
of a disaster,
the national agency was blamed for the poor response. It would
be more
accurate, however, to blame F E M A for failing to prepare
states and localities
for the great demand for food, water, transportation, medical
care, and law
enforcement in the initial aftermath and for failing to reduce the
vulnerabili-

ty of the dense south Florida population.
Unlike the emergency management crises of the 1970s that
spawned hap-
hazard changes, Andrew led to a comparatively comprehensive
reorganiza-
tion. Academics and emergency management professionals
suggested a bat-
tery of reforms that were adopted by the agency's new director,
James Lee
Witt, who successfully lobbied Congress and the president for
patience and
support. Chief among the changes was the elimination of the
agency's
national security functions, and with it many of the appointed
positions that
had made F E M A a dumping ground for political appointees
with little emer-
gency management experience. Congress streamlined its
oversight accord-
ingly, easing the agency's relationship with relevant
committees. As Witt
trimmed FEMA'S Cold War inheritance, he built the foundation
for a legacy
of his own of hazard mitigation and crisis management.
Witt was, on the one hand, one of the many "friends of Bill"
who accom-
panied Clinton from Arkansas to the White House. While
previous F E M A
directors might have struggled for time with the president, Witt
was invited
to the White House for movie nights. On the other hand, Witt
was a
Southern Democrat with emergency management experience and
extraordi-

nary political skill. He never attended college, but he made a
career as a con-
struction-company entrepreneur and was elected to a county
judgeship at
age 3 4 .
Upon taking office, Witt asked Clinton for the authority to make
changes.
During his first months on the job, he spoke to the chairs of the
20 commit-
tees that had a stake in F E M A ' S reorganization. He
convinced skeptical
members of Congress that F E M A could work to their
advantage if it provid-
ed constituents affected by disaster with an immediate and
effective response
for which politicians could receive credit. Witt followed bold
promises with
bold actions. He brought in deputies with experience responding
to disas-
20 Policy Review
FEMA After Katrina
ters, and he adopted the recommendations of two expert reports
that coun-
seled a more streamlined approach to natural disasters.
The "all hazards, all phases" approach was the intellectual
centerpiece of
the reorganization, FEMA was a small organization with limited
resources
and an awesome task — preparation for and response to a range

of natural,
industrial, and deliberate disasters. "All hazards" gave priority
to programs
that could be used for a range of disasters rather than a single
type and thus
ensured that resources would go farther than they had in the
past because
they could be used year-round. In some years, hurricanes posed
the greatest
threat, while catastrophic earthquakes and oil spills occurred
more frequent-
ly in others, FEMA had to prepare for all of these, but it could
not know
which threat would be preeminent in a given year.
Practically, the "all hazards" approach deempha- Previous
sized the agency's national security responsibilities, j - . i j
where much of the federal money tended to flow.
The 1993 reorganization eliminated the national Struggled for
security division and created a smaller office to han- time with
the
die programs that would preserve government func-
tions if the federal government were ever attacked. president.
Witt
During the reorganization, over 100 defense and went tO the
security staff were reassigned to other duties, and , „ , , . „ ^
nearly 40 percent of FEMA staff with security clear- ^ ' ^ " ^
tlOUSe jOr
ances had their clearances removed. Practice reflect- movie
nights.
ed the organizational changes. While responding to
floods in the Midwest in the summer of 1993, FEMA used
mobile commu-
nications vehicles that had previously been reserved for national
security
programs.

Before the all-hazards regime, the agency operated according to
"dual use
mobilization" — the idea that federal resources devoted to civil
defense and
national security could be used in the aftermath of a natural
disaster to help
communities recover.̂ In theory, this would allow the
government to assem-
ble national security equipment and personnel to be deployed
for any type
of catastrophe. In practice, states and localities could not
penetrate the red
tape in time to get much federal help before or during a major
disaster. The
federal government resorted to sending ever greater amounts of
money to
disaster-stricken communities after a disaster occurred.
The "all phases" portion of the concept attempted to involve the
federal
government before a disaster occurred in order to reduce
vulnerabilities. It
emphasized all four stages of the disaster timeline, including
mitigation,
preparation, response, and recovery. The agency formalized the
concept
when it developed federal response plans to coordinate duties in
different
disasters. States and localities outlined plans along the same
lines, essentially
° See, for example. National Security Decision Directive 4 7 ,
"Emergency Mobilization Preparedness"
(July 22, 1982).

JUNE & JULY ZOO6 2.1
Patrick S. Roberts
sidelining national security responsibilities and bringing natural
disasters to
the fore.
FEMA'S reputation had hit bottom because of its poor
performance dur-
ing Andrew's immediate aftermath. Not surprisingly, one of
Witt's first acts
was to ensure that F E M A could respond more quickly. He
interpreted
statutes and secured agreements allowing the agency to put
people and
equipment into place before a disaster struck. Response, too,
improved as
the agency cut much of the red tape.
Witt's tenure was best known for his emphasis on mitigation. A
new
Mitigation Directorate was intended to reduce loss of life and
especially
damage to property by encouraging people to reduce risk and
vulnerability
before disaster struck. The "Flood Safe" program, for example,
persuaded
some homeowners in flood-prone areas to buy insurance against
losses. It
also delivered federal money to states and localities, which
pleased con-
stituents and their political representatives.

"Disasters are political events"
HILE THE 1993 reorganization focused and improved FEMA'S
capacity to address natural disasters, it neglected other
responsi-
bilities. It was precisely FEMA'S celebrated focus on all
hazards
that caused the agency to put civil defense and terrorism on the
back burner.
As one longtime F E M A employee put it, "Some will say he
introduced all
hazards. I say he reduced the importance of some hazards at the
expense of
others." In shifting resources to programs that could be more
generally
applied to natural hazards, Witt scaled back the agency's
national security
role and left it ill-prepared to combat the emerging terrorist
threat. Between
1998 and 2 0 0 1 , the Hart-Rudman Commission looked for a
cornerstone
for a new domestic security effort but found FEMA'S culture
and capabilities
insufficient for taking a lead role in counterterrorism.^o
While the agency was applauded for its quick response to
natural disas-
ters, some of its acclaim came from people who simply received
more money
for recovery under the Witt regime than they had before. The
president
declared more disasters per year after 1 9 9 3 , including "snow
emergencies"
for which previous administrations had refused aid. Disaster
funds were

more likely to flow to politically important districts where the
president or
members of F E M A ' S oversight committee faced a
competitive election.^
Large disasters always received federal aid, but political
interests determined
whether smaller ones would receive federal dollars or states
would be left to
make do on their own. In 1 9 9 4 , for example. Bill Clinton
refused to pro-
1" Frank G. Hoffman, personal e-mail correspondence
(December i i , 2003). FEMA'S witnesses before
the Hart-Rudman Commission were Lacey Suiter and V. Clay
Hollister. Notes of their briefing do not
exist.
22 Policy Review
FEMA After Katrina
vide recovery aid after floods caused $6.7 million in damage on
the south
side of Chicago. Illinois was considered a solidly Democratic
state and there-
fore not critical to Clinton's reelection efforts. A year later,
Clinton provided
aid to help residents of New Orleans, where a flood had caused
$10 million
in damage. The difference was that Louisiana was deemed a
competitive
state. Most of the federal money went to rebuild the city, not to
better pre-
pare it for future floods.

FEMA made a trade-off: It gave more aid more quickly to
disaster-stricken
areas in exchange for loosening procedures for accountability
and oversight.
As a result, recovery and mitigation programs helped more
people but also
served a political purpose. The programs delivered resources to
devastated
communities that turned to the federal government for help and
then
rewarded public officials during elections. Witt acknowledged
the political
nature of emergency management when he told a Senate
subcommittee in
1 9 9 6 that "disasters are very political events." He claimed he
was the "eyes
and ears" of the president during the recovery of the bodies of
victims of
TWA Flight 8 0 0 . Before 1 9 9 3 , it appeared that natural
disaster agencies
would never have sufficient resources because disasters lacked
the durable
constituencies that supported such other agencies as the Social
Security
Administration or the Department of Education. The 1993
reorganization
proved that citizens would support an effective natural-disasters
agency and
that politicians could use the agency to serve their constituents.
Hurricane Katrina
V y^^uRRiCANE KATRINA SHOWED that by 2005 the link
between
fg political support and speedy disaster response had been

severed.
^>^ C Like any president. Bush would have been best served by
a FEMA
that could respond effectively to natural disasters. But his
administration
wanted to take the agency in a new direction after 2 0 0 1 ,
subjecting its
spending to greater accountability and including it in a larger
organization
devoted to security and terrorism preparedness. What caused F
E M A to dete-
riorate so soon after having made a remarkable turnaround?
With so much blame to go around, the Katrina catastrophe was
overde-
termined. Some sections of New Orleans-area levees had been
poorly con-
11 Garrett and Sobel note both that from 1991 to 1999 states
politically important to the president had
a higher rate of disaster declaration by the president and that
disaster expenditures were higher in states
that had congressional representation on FEMA oversight
committees. They also find election-year
impacts for disaster aid, controlling for the true size of a
disaster measured through private property
insurance claims and Red Cross assistance levels. Thomas A.
Garrett and Russell S. Sobel, "The Political
Economy of FEMA Disaster Payments," Economic Inquiry 41
(2003). Other studies have found that the
president's decision to issue a disaster declaration is influenced
by congressional and media attention. See
Richard T. Sylves, "The Politics of Federal Emergency
Management," in Richard T. Sylves and William
H. Waugh Jr., eds.. Disaster Management in the US and Canada

(Charles C. Thomas, 1996).
J U N E d ' ' J U L Y 2 0 0 6 23
Patrick S. Roberts
structed because of poor planning and botched contract work. ̂ 2
gtate and
local agencies had failed to plan adequately for the
transportation, housing,
and security that would be needed during an extended crisis.
Once the hurri-
cane bore down on New Orleans, local officials waited too long
to issue an
evacuation order that failed to account for the poorest residents,
and state
and federal agencies were too slow to provide rescue and
recovery
resources.13 When help finally arrived, it was poorly
coordinated. Even at
the height of FEMA'S power under James Lee Witt, Katrina
would have been
a costly disaster. And yet from 1993 until 2 0 0 1 , FEMA was
far better pre-
pared to handle a catastrophic natural disaster than it was in
2005.
The agency had lost many of the elements essential to its
turnaround of a
decade earlier. Politically appointed emergency man-
T> agers, including Witt, were replaced by appointees
with little disaster experience, including, most

departures, famously, director Michael Brown, whose previous
earlv retirement position had been with the International
Arabian
Horse Association. By 2 0 0 3 , departures, early
and job retirement, and job dissatisfaction had sapped the
dissatisfaction agency's career force.̂ '̂ The all-hazards, all-
phases
, J J idea, too, was weakened when preparedness grant-
had sat)t}ed • j <• •
^ ^ mg programs were moved out of FEMA mto a sepa-
the agency's rate office in the Department of Homeland
Security.
'^xxzi wars put distance between the preparedness,
response, and recovery offices.
Though FEMA could have used an infusion of
experienced professionals, simply repeating the Witt recipe for
reorganiza-
tion would not have addressed the challenges of the twenty-first
century.
Career FEMA employees, like civil servants across government,
began to
retire in droves. At the same time, oversight committees began
to worry that
programs for mitigation and recovery lacked proper procedures
to ensure
that money was being spent wisely. Terrorism posed the greatest
challenge.
Witt initially had refused to take on more responsibility for
terrorism pre-
^^ Audrey Hudson, "'Malfeasance' cited in Katrina flooding,"
Washington Times (November 3 , 2005).

Also see the October 2 0 0 5 Social Science Research Council
Forum, "Understanding Katrina:
Perspectives from the Social Sciences."
^^ Historian and New Orleans resident Douglas Brinkley
provides the first and most thorough book-
length account of the failures of leadership at the federal and,
especially, state and local levels during the
hurricane. See Douglas Brinkley, The Great Deluge: Hurricane
Katrina, New Orleans, and the Mississippi
Gulf Coast (William Morrow, 2006).
1'* FEMA ranked last in worker satisfaction among large
agencies in a 2 0 0 3 survey. In 2 0 0 5 , the
Partnership for Public Service and the Institute for the Study of
Public Policy Implementation ranked the
Department of Homeland Security, which absorbed F E M A ,
next to last among agencies (twenty-ninth out
of 30) as "best places" to work in government. Stephen Barr,
"Morale Among FEMA Workers, on the
Decline for Years, Hits Nadir," Washington Post (September 1 4
, 2 0 0 5 ) ; Federal Emergency
Management Agency: Status of Achieving Key Outcomes and
Addressing Major Management Challenges
(GAO-oi-832, July 9, 2001).
…
Beyond Legitimacy: A Case Study in BP’s ‘‘Green Lashing’’
Sabine Matejek • Tobias Gössling
Published online: 31 December 2013
! Springer Science+Business Media Dordrecht 2013

Abstract This paper discusses the issue of legitimacy and,
in particular the processes of building, losing, and repairing
environmental legitimacy in the context of the Deepwater
Horizon case. Following the Deepwater Horizon catastrophe
in 2010, BP plc. was accused of having set new records in the
degree of divergence between its actual operations and what
it had been communicating with regard to corporate
responsibility. Its legitimacy crisis is here to be appraised as a
case study in the discrepancy between symbolic and sub-
stantive strategies in corporate greening and its communi-
cation. A narrative analysis of BP’s ‘‘beyond petroleum’’-
rebranding and the ‘‘making this right’’-campaign issued in
response to the Gulf of Mexico disaster discusses their
respective implications for (green) corporate change. Fur-
ther, the question is addressed why BP’s green image
endeavors were so widely accepted at first, only to find
themselves dismissed as corporate greenwashing now. The
study concludes that where a corporation’s ‘‘green narra-
tive’’ consistently evokes established narratives, its legiti-
macy will be judged against narrative, rather than empirical
truth. Thus, the narrative will be more willingly accepted as
speaking for the issuing company’s legitimacy, irrespective

of whether it reflects substantive greening or not.
Keywords Corporate environmental responsibility !
Impression management ! Narrative analysis ! Corporate
communication ! Image crisis ! BP
Introduction
Legitimacy as a social construct that relates the impression
of the audience concerning the behavior and actions of
organizations with approval or disapproval is a central
topic in institutional organization theory (Suchman 1995).
In that context, two different discussions about legitimacy,
although highly related with each other, can be discerned:
On the one hand, research discusses the consequences of
legitimacy; on the other hand, the question is on the
antecedents of legitimacy, also translated to the managerial
perspective and related to the question what organizations
(can) do to build, maintain or lose and repair their legiti-
macy. Both perspectives are dealt with in the seminal work
by Mark Suchman (1995) who defines legitimacy as ‘‘a
generalized perception or assumption that the actions of an
entity are desirable, proper, or appropriate within some
socially constructed system of norms, values, beliefs, and

definitions’’ (ibid, p. 574). In his work, Suchman distin-
guishes between three essential types of legitimacy, i.e. (1)
pragmatic legitimacy, related to the products and services
that an organization offers and the perception of these to be
relevant for the society, (2) moral legitimacy, based upon
actions and behavior of the respective organization, and (3)
cognitive legitimacy, which refers to the comprehensibility
of an organization and its actions.
In the CSR debate, the concept of legitimacy is used to
understand and explain the business–society relationship
and, in particular, the business case in business ethics. In
this context, it is often argued that organizations that vio-
late societal rules lose legitimacy whereas those organi-
zations that contribute to the well-being of societies will be
rewarded accordingly. For instance, Palazzo and Scherer
(2006, p. 71) state the following: ‘‘In recent years, many
corporations have been involved in conflicts with civil
S. Matejek (&)
International Business, DHBW Mannheim, Coblitzallee, 1-9,
68163 Mannheim, Germany
e-mail: [email protected]
T. Gössling
Organization Studies and Tilburg Sustainability Center, Tilburg
University, Tilburg, The Netherlands

123
J Bus Ethics (2014) 120:571–584
DOI 10.1007/s10551-013-2006-6
society and as a result their legitimacy has been chal-
lenged.’’ Even though it is often not made explicit, legiti-
macy in a CSR context is moral legitimacy: Companies
that contravene social institutions risk losing their legiti-
macy; consumers and investors can take economic action,
thus not buy the respective products or shares any more,
employees can take organizational behavior actions in the
sense of withdrawing commitment and losing motivation
(Gössling 2011).
Environmental legitimacy is part of moral legitimacy
(Bansal and Kistruck 2006). Corporate stakeholders, the
media, including social media, NGO watchdogs, and gov-
ernmental regulators have all been putting increased pres-
sure on companies to assume corporate environmental
responsibility (CER), i.e., to strategically consider and
manage the impact of their products and operations on the
natural environment. The objective of CER engagement is

for the company to build and sustain environmental
legitimacy.
Bansal and Clelland (2004, p. 94) define corporate
environmental legitimacy as ‘‘the generalized perception or
assumption that a firm’s corporate environmental perfor-
mance is desirable, proper or appropriate’’ and conse-
quently deserving of approval. This definition of the term
stresses that environmental legitimacy is assigned by
stakeholders in a process of perception, based primarily on
impressions. Companies faced with their stakeholders’
CER demands are thus drawn into the process of impres-
sion management, in which ‘‘the firm’s image is negotiated
between the organization and its audience’’ (Bansal and
Kistruck 2006, p. 166), as the company takes deliberate
influence on how it is perceived with regard to CER ‘‘by
controlling what is disclosed and how’’ (ibid). This man-
agement of impression is closely related with strategic
responses to institutional pressures (Oliver 1991). The key
argument in Olivers’s ideas is that organizations possess
different possible reactions on institutional pressure, and
compliance is just one possible strategy to satisfy stake-
holders. Compromising, avoiding, defying or manipulating

or other strategic responses (ibid, p. 152).
Public impressions of CER will usually be limited to
what is communicated by the company and the media,
including social media. Most stakeholders, and consumers
without NGO-clout or state legislation on their hands in
particular, are usually not privy to a company’s strategies
and activities in terms of its substantive actions, i.e., they
are not in a position to tell whether the greening activities
‘‘create real and material change in the organization’s
goals, structures, and processes’’ or not (Bansal and Ki-
struck 2006, p. 166; see also Brown 1994; Cole and Van
Orman 2008). Rather, corporate greening can be accessed
and evaluated only by proxy of the symbolic representa-
tions of substantive actions (Cherry and Sneirson 2011),
making external communication a vital aspect of corporate
environmental legitimacy. This aspect deserves particular
attention, given the rather complicated issue of corporate
communication as compared with third party communica-
tions. Transparency differs between organizations with
regard to the amount of information that is demanded and
provided (Holt and Barkemeyer 2012). Different types of

social and environmental audits and rankings aim at mak-
ing CER measurable and comparable; however, the amount
of information provided in such rankings is controversial,
ambiguous and too numerous for consumers to be workable
(ibid). Critical consumers, active in the blogsphere, point
particularly to problems caused by focal organizations
(Etter and Fieseler 2011). However, they do so in very
particular cases and are rather selective with pointing their
attention to organizations. Also as a consequence of this,
some organizations are more transparent than others, since
the pressure for transparency differs between sectors and
organizations. Hence, organizations that apply sophisti-
cated communication systems can manage to be the most
important source concerning information about themselves
for the majority of stakeholders.
Green narratives, i.e., the plots in which a company
structures environmental issues to communicate them, are a
decisive aspect of symbolic representations in this context.
Narratives make communicable what is considered valu-
able (Kearney 2002; Starkey and Crane 2003). They rep-
resent one of the rare means of access to corporate values
and culture, which are renowned for their evasive, implicit,

and abstract nature that makes them difficult to tackle
(Boje 2008), but also a crucial source of motivations and
restrictions on individual as well as corporate behavior
(Brown 1994).
Green narratives can possibly represent two different
things: First, they can be the explicit communication and
the representation of underlying substantive greening. On
the other hand, they may also be deployed deliberately ‘‘in
order to direct attention away from certain facts and
towards others’’ (Brown 1994, p. 166), taking any degree
of deviation from substantive activities in an organization.
In this case, symbolic actions may even eclipse substantive
activities entirely, a phenomenon generally referred to as
greenwashing, or window dressing. Hence, green narratives
‘‘serve as a form of deception to mislead critics of a firm’s
environmental record by merely embracing the narrative as
a rhetorical device, rather than as a reflection or impetus to
action’’ (Starkey and Crane 2003, p. 233). Symbolic
actions, then, ‘‘are acts to which meaning is attributed
beyond their substantive impact’’ (Brown 1994, p. 863) and
which replace, rather represent what they communicate.
Empirically, this study investigates the stark contrast in

BP’s public communications with regard to environmental
responsibility before and after the Gulf of Mexico crisis in
572 S. Matejek, T. Gössling
123
2010. By means of a narrative analysis, it offers an
explanation for the fast decline of corporate (environmen-
tal) legitimacy in the context of a crisis. It strives to answer
the questions of how BP’s symbolic commitment to cor-
porate greening could create an image of substantial
environmental responsibility, and, consequently, environ-
mental legitimacy, and to what extent its prior ‘‘green’’
differentiation aggravated the reputational, financial, and
operational crisis after the Deepwater Horizon catastrophe.
In 2010, BP plc. had to experience a severe loss of
legitimacy. After the explosion of the Deepwater Horizon
oil platform with its fatalities and the subsequent envi-
ronmental fallout, BP’s was caught in a corporate legiti-
macy crisis. The company was not only found to have
failed at fulfilling its responsibilities toward its employees,
the environment, its stakeholders, and its shareholders

(Reidel 2010; Rickens 2010; Steffy 2010). But, as it is to be
shown in the following, the media and environmental
NGOs also cast BP as a corporation willing to don a green
image for mere symbolic sake, without backing it up with
the necessary strategic and operational change which
would give it substance. The following overview of the
media response to the Gulf of Mexico crisis shows how
BP’s greening campaign set the stage for the dimensions to
its loss of legitimacy in 2010.
BP in Waters Too Deep
Through an elaborate, $200 Million rebranding campaign
driven by former CEO John Browne (Lowry 2010), BP had
turned itself into the first global player of the oil business to
find its strategic vision in a future ‘‘beyond petroleum.’’ BP
acknowledged the inevitably finite nature of its primary
product resource and, in deliberate contrast to its industry
competitors in general and market leader ExxonMobil in
particular, was also the first oil company to publically
accept the scientific reality of man-made climate change
(Cherry and Sneirson 2011; Heubaum 2010; Reidel 2010;
Vetter et al. 2010). BP declared it would proactively and

sustainably diversify its product portfolio, turning toward
alternative, renewable energy sources (Lowry 2010).
Claiming to take its business objectives beyond petro-
leum was a daring move, considering the intrinsic paradox
of a ‘‘green’’ extractor, refiner, and marketer of crude oil
products. Its greening campaign was consequently met
with equal measures of awed approval and cynical ridicule
within and outside the company from the very beginning
(Balmer 2010; Cherry and Sneirson 2011; Hicks 2010;
Frey 2002; Kenney 2006; Macalister 2002; Reidel 2010;
Krauss 2001; Lowry 2010; Rickens 2010; Vetter et al.
2010). Most decisively, however, assuming the role of a
green industry leader placed BP under increased scrutiny,
and the group was to be measured against different stan-
dards ever since (Cherry and Sneirson 2011). After having
raised itself to the heights of spearheading in CER and
profiting from the advantages of favorable visibility (Frey
2002; Hart and McGinn 2010; Macalister 2002; Cherry and
Sneirson 2011; Hicks 2010; Reidel 2010), BP had to take a
severe ‘‘green lashing’’ (Bansal and Clelland 2004) from
financial markets, government representatives, industry
regulators, environmental pressure groups, the media, and

those directly affected by the oil spill in 2010.
As lease owner, BP was legally responsible for opera-
tional safety on the Deepwater Horizon drilling rig.
Although it was not the only responsible party involved in
the accident and its consequences, BP was confronted with
by far the most severe charges of fault or shortcomings in
congressional and legal investigations (Mufson and
Kornblut 2010; Chazan and Carlton 2010; Cline 2010). The
kind of operations it faced in response to the crisis ‘‘had
never been done before in 5,000 feet of water’’ (PR VII)
and BP had to concede that their success could not be
guaranteed since ‘‘[t]his will be the first time this proven
shallow water technology has been adapted for the deep-
water’’ (PR IV) or even ‘‘tested in these conditions’’ (PR
VII). Likewise, BP was facing the accusation that it had
been conducting deepwater drilling with technology
developed and proven reliable only under shallow water
conditions, and without adequate measures to either pre-
vent a blowout, or react to one (Chazan and Carlton 2010;
Mufson 2011). Even though BP was no exception to its
industry competitors in this regard, and even though it had

obtained the necessary permits from the US authorities, this
earned it no leniency with the public regarding its per-
ceived environmental irresponsibility (Eilperin 2010).
Only days after the accident, emails and internal com-
munications were leaked to the media which suggested, if not
documented, that BP had repeatedly ignored safety concerns
raised by its own and contracted engineers on the Deepwater
Horizon drilling rig (e.g., Steffy 2010). When investigations
into the Deepwater Horizon catastrophe exposed a clear lack
of substantive care for environmental and personnel safety
(Cline 2010; Eilperin 2010; Heubaum 2010; Mufson and
Kornblut 2010), BP was not only criticized for the risks they
had taken when operating the platform but also for their
efforts to let the company appear greener than it was. Critics
worldwide were launching ironical redesigns of the BP logo,
spoofed ad layouts, and rewritings of its former marketing
spins; wherever BP had positioned itself as beyond petro-
leum, environmentally friendly, or setting new standards in
sustainability, these communication artifacts were now
‘‘hijacked’’ and used to discredit BP (for examples see e.g.,
Balmer 2010), see as an example Fig. 1.
The loss of legitimacy was utterly expensive, costing the

group record amounts in cash (estimates of the total costs
Beyond Legitimacy 573
123
ran between $16 and $67 billion, depending on the degree
of negligence BP would be found guilty of; cf. Mufson
2011; Reidel 2010) and 50 % of its market capitalization in
2010 (see Fig. 2). This drastic drop was largely due to the
pending question of liability as, for months, it remained
unclear how much exactly BP would owe the US author-
ities and how much the courts would assign to those
affected on sea and at the shores (Hannam 2010; Hicks
2010; Reidel 2010). While the values lost in trust and
license to operate in and beyond the Gulf of Mexico states
may be less easy to quantify, the fact that BP has not
entirely recovered its pre-crisis market value (see Fig. 2)
indicates that the same company with the same assets may
considered to be worth less without as a consequence of its
loss in moral legitimacy. Effectively, the company had not
lost any of its pragmatic legitimacy, since it was still fully
able to operate its petrol business and provide all products

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