ExxonMobil

Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas. It is affiliated with Imperial Oil which operates in Canada. ExxonMobil is one of the largest publicly traded companies by market capitalization in the world, having been ranked either No.1 or No. 2 for the past 5 years. Exxon Mobil's reserves were 72 billion oil-equivalent barrels at the end of 2007 and, at then (2007) rates of production, are expected to last over 14 years. With 37 oil refineries in 21 countries constituting a combined daily refining capacity of 6.3 million barrels (1,000,000 m3), Exxon Mobil is the largest refiner in the world, a title that was also associated with Standard Oil since its incorporation in 1870. ExxonMobil is the largest non-government owned company in the energy industry and produces about 3 percent of the world's oil and about 2 percent of the world's energy. ExxonMobil, like other oil companies, is struggling to find new sources of oil. According to Wall Street Journal it replaces only 95% by volume of the oil it pumps. This stands in contrast to natural gas, where it replaces 158% by volume through purchases or finds.

SWOT analysis:
Strengths
y

A long established name that has been in existence for over one hundred years. This gives the customers a sense of security when dealing with the organization. The organization has diversified into many different areas of the energy industry and has many strong brands under its main umbrella group. The organization in the past has been able to survive without much damage to its reputation even after the Exxon Valdez oil spill. This is partly due to a few reasons, the good corporate citizenship of the organization, the correct and appropriate crisis management and crisis communication management strategy. The organization has been innovative in the past and continues to be very innovative currently too by spending a lot on research and development to come up with more efficient and effective ways to manage the energy resources and reduce the negative impact to the environment. The organization has a global presence and thus has access to a wider customer base and a larger market than other energy companies.

The organization has a very strong presence in both India and China, the emerging markets that have been known to increase their energy demands exponentially thus the organization has been profiting from this at a higher rate than most other organizations.

Weaknesses
y

The organization has been accused of not doing enough to go green and conserve the environment, rather that it is polluting and destroying the environment. There has been much negative publicity generated from the Exxon Valdez spill and also the human rights or rather the employee rights records of the organization has been under a cloud, which is a significant weakness of the organization. Inappropriate handling of the environmental interest groups is a very big weakness of the organization and can be detrimental to it in the future. Further the organization has been known for exorbitant profits in the last few years as energy prices were increasing, which gave it quite a lot of negative publicity that the organization did not handle very well and has cost it the good will of its consumers, who consider the organization to be becoming rich at the expense of the poor consumer .

Opportunities
y

The biggest opportunities that are available to the organization currently is the increased demand of energy by developing economies in the South Asian and South East Asian regions likes Malaysia, Indonesia, Korea and Vietnam.

Threats
y

The emerging economies of China and India that have been the biggest demanders of energy in the past few years are being hit by the recession in the developed economies and thus have reduced their rates of energy consumption that has caused the organization to loose out on projected levels of profit. The increased attention to the conservation of the environment has resulted in the reduction of the use of energy and energy savings and in the future this will only increase thus reducing the profitability of the organization.

Exxon Mobil Corporation distinguishes itself through a unique, functionally based organizational structure. Each of ExxonMobil s business-line companies stewards a focused portfolio of operations around the world, with a president at the helm and significant authority to run itself. The structure consists of 10 core companies that oversee individual businesses worldwide. Another company, ExxonMobil Global Services, provides centralized support through three functions procurement, information services and facilities. This structure allows them to establish priorities on a global basis, effectively leveraging the transfer of technology and best practices across their vast worldwide portfolio. Indeed, it enables a premier

and diverse workforce hired from around the world to move quickly in capitalizing on global opportunities.

THE EXXON CRISIS, 1989

What happened? On March 24, 1989, Exxon was faced with a crisis when it spilled 11 million gallons of oil into Alaska s Prince William Sound with the Exxon Valdez oil tanker. Some species were slightly affected by the oil spill like the brown bear, but others like the harbor seals, sea otters and cormorants suffered a great loss in their population. Furthermore, Alaska s fisheries, national parks, beaches and forests were greatly affected, which in turn affected tourism. How did it happen? One of the crew members was unable to properly maneuver the ship due to tiredness from work overload. Also, the crew master was under the influence of alcohol and could not give the proper directions to his crew. Although the errors occurred once on board, one of the mistakes was Exxon s insufficient supply of trained crew members and the availability of inadequate equipment on the ship.(Fritz-Gerald Piquion)

Reaction: Exxon vs. Tylenol One of Johnson and Johnson s crisis management techniques with the tampering of Tylenol capsules, that was very effective was its quick response to the product tamper. Exxon on the other hand, waited a long time before responding to the oil spill and sending aid to Alaska. For example, an advertisement ran in the newspapers 10 days after the spill, and Exxon s chairman, Lawrence G. Rawl, did not fly to Alaska until two weeks after the spill. Instead, he sent a team of individuals who were not trained in crisis management. This showed the public that Exxon didn't consider the spill a truly environmental problem. Furthermore, the communication between management and its publics was inefficient. Exxon chose to communicate only to the people of the town of Valdez and not to the rest of the world. This made the dissemination of information difficult. Unlike Johnson & Johnson, who immediately recalled its product and made public announcements about the suspension of its usage through various media outlets. It is the duty of the company to report to its publics and the reporter s responsibility to obtain information about the matter to distribute it to the population. When Exxon s spokesman first answered the press with no comment after the spill, it took credibility away from the company and made the public feel like top management was either hiding something or had not yet gathered all of the information. Finally, Exxon never took responsibility for what happened. On the other hand, it was proven that Tylenol was not associated with the tampering, yet it still immediately assumed responsibility. This in turn restored the confidence in the consumer about the safety of its product. Exxon

completely failed at this task since it took a few days to send individuals to help clean up the oil spill in Alaska. It proved to the people of Alaska and the world that it did not care about the environment or the damage to the tourism and fishery industries in Alaska, which the country greatly depends on. Author: Alexandra Blidar AE