Understanding low-probability/high-impact risks in the oil and gas industry: Multiple case analysis

by Ashiru, Taofeeq A., D.B.A., CAPELLA UNIVERSITY, 2015, 247 pages; 3746807

Abstract:

Major disasters in the oil and gas industry usually draw local, national, and international attention due to sometimes multiple fatalities, enormous asset damages, and environmental pollution. Such major disasters fall into the classification of low-probability/high-impact events due to their high degree of uncertainties and significant impact if they do occur. The high degree of uncertainties of such major disasters in the hydrocarbon industry presents great challenges to decision-makers in terms of identification, assessment, planning, and resource allocation. This qualitative descriptive multiple case study, examined the causes of low-probability/high-impact risks in the hydrocarbon industry, how these causes are related and identification of early warning signs for effective response. Using content analysis strategy and theoretical framework of complexity and behavioral sciences, the study established that the major causes of catastrophic events in the hydrocarbon industry are both behavioral and systemic in nature. The behavioral factors include inadequate organizational safety culture, poor organizational learning, and high-risk tolerance. The systemic factors include failure to detect early warnings, ineffective strategic decision-making, regulatory ineffectiveness, technology, and unclear processes and procedures. While most of the causes of catastrophic events in the hydrocarbon industry showed weak relationships, failure to detect early warnings did show strong connectivity to inadequate organizational safety culture and high-risk tolerance. This study provided the precursor for predictive framework needed to explore the complex interactions of multivariable factors by examining causes, early warning signs, escalation actions, and de-escalation actions pertaining to the hydrocarbon industry.

AdviserDavid Braga
SchoolCAPELLA UNIVERSITY
Source TypeDissertation
SubjectsBusiness administration; Management
Publication Number3746807

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