ExxonMobil is the world's largest publicly traded natural gas and petroleum company formed in 1999 after the merger of Exxon and Mobil. This biggest energy giant is globally working on almost every sector of energy and petroleum aspects including exploration and marketing of natural gas and oil. ExxonMobil, which interests even in electric power generation, is a major manufacturer and marketer of commodity and petroleum. Its overall business involves in exploration, production, transportation and marketing of crude oil and natural gas and petroleum products as well as coal and cupper mining (www.exxonmobil.com).
The company is currently operating its 54 manufacturing plants in more than 20 countries and marketing its products in more than 15o countries (Gianpaolo Ghiani, 2004).
ExxonMobil is successfully ranked the world's largest refiner and marketer of petroleum. This is the most respected organization the world in energy sector which believes in innovative technology and applied science making the things better and safer, delivering the best products to its customers worldwide(Stamatis, 1996).
Exxon has been serving as the regional marketer of kerosene since 125 years in United States and widely recognized with its brand names Exxon, Esso and Mobil (http://www.exxonmobil.com/corporate/history/about_who_history.aspx).
History of ExxonMobil
ExxonMobil, an American oil and gas corporation formed after the two big oil corporations Exxon and Mobil, both founded by John D. Rockefeller, joined together. This one of the biggest collaboration established in November, 30, 1999. This corporation is the world's largest business unit from its revenue i.e. $404.5 billion in the fiscal year 2007. ExxonMobil is the largest among six energy super giants with daily production 4.18 million BOE( barrels of oil equivalent) according the company's records in 2007 (http://www.xtimeline.com/timeline/History-of-Exxon-Mobil). Before being a part of ExxonMobil company, Esso (named later in 1951 as Esso) remained as a Anglo American Oil company in 1888 that produced oil for kerosene lamps.
Innovations in ExxonMobil
ExxonMobil is a greatest industry in the world in terms of oil extraction and production and the business volume is mainly based on oil. World's prospectus in oil and petroleum products is drastically changed. Consumers are more aware and interested in the renewable energy source. While the people were always talking about the innovation and innovation and the ExxonMobil had nothing to do despite of its billion's of dollar. The management thus thought to approach the business in different way which would base on technology and innovations. Since the consumers were searching the alternatives of petrol and oil energy where they could stay assured environmentally and personal uses. Some of the socialistic groups which never believed that there is any future of oil and petroleum products as they were badly affecting the personal lives and environment. Their loud voices which was media frenzy and almost everybody was supporting this, ExxonMobil had nowhere to go except recreating them and innovating their classical selling modules, business and ideas. Now it seemed like the ExxonMobil who always wanted to be a leader in energy sector in terms of sales, business, products and innovations as well as technology, was almost same or even gradually losing its image among the consumer level because it was producing, extracting, producing and marketing the highest level of oil and petroleum among all, seemed the major culprit of environmentally disrupting player. They had a challenge with them and if not solved, they were sure to be out of their current leading position.
As it is said that "A leader always wants to remain a leader" and this was enforcing ExxonMobil to get more innovative and technical. Public consumers' perceptions and the company's management were the main driving force for all these to happen. From the past, this company did not only sell its brands but also has been advocating the public safety as well. They have been researching, supporting and investing millions of dollars in these issues. ExxonMobil has been talking and working on the issues of climate changes their problems and solutions, advancements in fuel technologies; where consumers can get the efficient fuels in affordable prices, reducing GHG (greenhouse gas reduction) in operations including reduced hydrocarbon flaring, CCS (Carbon capture and storage) technology reducing overall emissions. They have spent more than $100 million in CFZ (controlled freeze zone) technology which ultimately will address the risks in climate change, along with Co2 separations from raw natural gas. Cogeneration is their exciting and ever growing hi-tech innovative approach in producing electricity from raw materials and consumer products; an ultimate scientific recycling process (www.exxonmobil.com).
ExxonMobil innovations and far citation technologies do not stop there. Their most advancement in vehicle and fuel technology is astounding. They are launching a concept of production the next generation biofuels from photosynthetic algae. This will not be an integral part of pride for the ExxonMobil but also will be shining future in alternative energy source sector (http://www.earthtimes.org/articles/show/exxonmobil-to-launch-biofuels-program,890554.shtml, Tue, 14 Jul 2009 ). Lithium ion battery technology making a zero-emissions vehicles, new tire lining technology for vehicles tires longevity better fuel efficiency and plastic automotive technology are the another edge of ExxonMobil's changing world vision.
Thus the public sense who were always wanted to be more and trendy now was pushing ExxonMobil, if not they were indirectly knocking the ExxonMobil to awake. ExxonMobil has always been in business with the slogan of innovations and change. They have not only changed the prospectus of oil business but also have clearly shown their planning up to 2030. This it defines that how far the ExxonMobil is thinking about changing the organization with technology and innovations.
Now, it was a time to come with change in the way to customers and had no options as the newly established oil and petroleum organizations also were coming with at least few publicly demanded issues and this was the threat to ExxonMobil. However, they are always in the favor of changes and innovations, they had not walked dramatically till they brought a concept of bio fuel for an algae. The world was thrilled when it was officially informed that ExxonMobil is not only working to produce the biofuell from algae but also had proved the world that it has worked well in the process. This innovative step of ExxonMobil not only differentiate it and it's pattern of business from other competitors but also showed and proved how excited and interested the ExxonMobil was about the consumer's interests, expectations, demands and environmental aware. They not only heightened themselves in terms of business with this but also were successful to win the heart of the consumers.
Being a leader in the energy sector, ExxonMobil has maintained to satisfy its millions of customers worldwide with the commitment to safe operations, developing the employees and providing the huge contribution to the community.
Importance and implementation of change
ExxonMobil has changed the concept of the world the way it looked to energy and fuel related subjects. They have developed such a technologies and services that are directly related to meet the consumers' needs. Thus, their change and innovative ideas were directly associated with easy lives. These steps were not only made ExxonMobil a strong leader among the competitors, technically and financially with profitability. People working can be a part of a big ethical organization that believes on innovations and change. They are more likely to be productive, innovative and efficient. Organizationally, they have already gone to the next level of business and brand. On the other hand, the consumer level which are its main and only source of survival, are likely to be more satisfied with what they were getting. Thus, ExxonMobil is getting name, prestige and profit with its revolutionary products and changes. Their environmental friendly projects and green products are the ultimate solutions of the many problems in terms of climate and public health and which are sure to get an quick response and acceptance.
Inventing something is difficult but making it established is more difficult process in business. There can always be unexpected problems in the market and products even if the idea seemed perfect. ExxonMobil spent billions of dollars in inventing, researching and making things better but there are many challenges which they are likely to face. If one product fails or doesn't get any acceptance of the people it is the matters of loss of millions of dollars and time. Thus investing only was not sure to make benefits.
In 2001, some INGOs such as Greenpeace and other few along with public activists called upon the stop ExxonMobil campaign for its negations on international environmental regulations in slowing down the global climate change. People of Australia, US, UK and other countries demanded ExxonMobil's international efforts in GHG (Green House Gas) emissions and investing in renewable source energy (Rob van Tulder, 2006). Thus management is being hammered for its own innovations publicly as they believe that without damaging the short term well-being, any company can't address the issues of climate change or investing in the sustainable and renewable energy is not the responsibility of a particular company; rather than a government. Some criticize that the oil company, which itself is the biggest culprit of global warming and climate change cannot honestly address such big global issues as these are less or not profitable projects. In the same year 2001, wall Street Journal conducted a poll, where nearly a half of the people who knew about ExxonMobil gave the poor rating in its environmental responsibility (Wall Street Journal, 2 July, 2001). These hot issues are the major problems in implementing the change in ExxonMobil and it is a true ground reality.
Regardless the nature and quality of the products, some people are resistive; they never want to change or try the new things and products. Highly innovative ideas also do not work to such people who are already satisfied with what they have been using. Fear of not getting the same level of satisfaction to the level of their expectations, price and culture can be such driving force to resistivity or reservations. Political issues of the regions where the products or changes are being taken can be one of the major reasons while implementation. These issues have affected ExxonMobil operation many times in the past, even in the highly developed countries like UK and US. Once, ExxonMobil had to face the massive public boycotts in many countries as mentioned before. Where the petrol stations of ExxonMobil were blocked by the public and such things happened in Canada as well. Some of the South Asian countries like India, Nepal and Bangladesh are mostly affected by the consecutive multiple days of strikes. Most of the times the political parties or agitating groups call the strike over the whole nation. This critically affects and badly ruins the national economic condition. Thus launching the new products and new innovations in such countries are nightmares. Obviously new ideas may not promptly work in such conditions and regions affecting on proper implementation.
Supply chain also could be another challenge that ExxonMobil may face to make its brands widely present among the consumers. Delayed process in supplying the goods may lead to the disruption in making appropriate changes. ExxonMobil, this can be a major problem. Organization itself should be ready internally even after everything is set to go to the market. Bringing the changes in internal system, working pattern, planning must be updated. ExxonMobil is a multinational company with thousands of employee attached with its flag worldwide. Certainly everybody may not be equally capable to handle the changes and innovations are taking place within the organization and its ideas. Failing to communicate the right message to each and every team member can fatal as this is exactly what needs to be communicated and distributed to the consumer level. This is essential and in the multinational company like ExxonMobil, it is a very complicated process. A team member working India may not necessarily equally be aware as a team member in US. Thus a strong and effective international communication system and workshops are necessary before launching any new innovative products and changes in organization. This can be one of the big problems in ExxonMobil.
History or the profile of any organization is directly proportional with the success and failure of the products, brands or implementation of any changes forwarded. This is the main source that consumers' level wants to know or judge their brands accordingly. More precisely, if a company has had a bad profile among the consumers level because of its past actions, the changes, innovations and products are more likely to fail no matter how innovative, cheap or customer focused the approaches be. Consumers do have the very bad experience with ExxonMobil because of number of reasons. It has been many times criticized before publicly with safety, human rights, racial and other issues. ExxonMobil Valdez oil spill, where 240,000 barrels of oil was discharged in the south coast of Alaska, severely damaging the environment (http://topics.nytimes.com/topics/reference/timestopics/subjects/e/exxon_valdez_oil_spill_1989/index.html, and Exxon Brooklyn oil spill are the serious environmental damages performed by ExxonMobil and the public hardly forget such big accidents. It had to face the human rights allegations as well in 2002, then the international Labor Rights Funds accused ExxonMobil of failing to address and prevent the human rights abuses near the natural gas plant in Aceh, Indonesia (Lacy, 2005).These big issues which may adversely affect in the proper implementations and innovations that ExxonMobil is currently talking about. There will always be a challenge to establish the changes because of the perception of the consumers about the company.
Since the company is spending billions of dollars in inventions, infrastructures and new technology, there are chances of price of certain products to go higher than the public expectations and affordability. Hence this also can be the problem to face up.
If the people, whom the changes of the company are focused, are not aware enough, failure is inevitable and not necessarily the majority of consumers may be aware. Developing and less developed countries are not much aware about the climate changes, its effect and the solutions. Thus environmental friendly products and the green products concepts including the biofuels concept of ExxonMobil are less likely to get success to those territories and nations.
Organizational strategy of ExxonMobil
ExxonMobil has not been in the top position with small games. Their visionary approaches, perfect management, a systematic way of working, cooperative teamwork and open forum for innovation has made them successful. To manage the change in any organization, it is necessary to build the intercultural bridges and highlight the necessity of dedicated training in the area of emotional intelligence. Probability of successes is related to the impact of the human emotions on business development.
ExxonMobil is effectively using the resources within the organization to bring the innovations and managing the change. Effective use of people, technology and processes with smartest workflows is what they are being able to manage the success from. According to John P. Kotter (Kotter, 1996), a change within the organization can be established by establishing the sense of urgency, creating the guiding coalition, developing a change vision and strategy, communicating the change vision, empowering the employees, generating the short term wins and consolidating change.
The vision of change can be practiced and realized fully only when most people of the organization know and understand the goals and direction of the company in which they are being led. This mutual goal-sharing and the shared sense of desired outcomes in future can motivate each and every team member and coordinate actions which lead the organizations towards the transformation in the organization.
As (Weijermars, 2007), suggests the primary business value is created with the combining effect of people, updated innovative technology, process and workflow, ExxonMobil management is far ahead in organizing these key factors in managing change and developing the organization. ExxonMobil employs the people who are skilled and do have the passion in adding the value to the organization. They further train and develop the team members to sharpen their productivity thus prepares the valuable assets to bring changes. They always believed in technology and innovation which provides the state-of- the -art tools of the company. ExxonMobil is properly utilizing the capitals, time and a perfect combination of human and machines.
Securing access to reserves is another driving strategy of ExxonMobil. They have changed their policy and physical state of the organization according to the demand of the time from merger and adoption e.g. merger of Exxon, Mobil and Esso. Their attention to technology innovation, speeding up of reserve growth and production growth and cultural diversity is among the key managing factors.
Communication is the major source in the process of organization's success. An effective approach in communication is necessary across the management level. Organization needs to know well that people's egos, prejudices, traditions, cultures, conflicting feelings, goals and their strong differences of opinion may undermine the mutual understanding. If the team members do have the opposite feelings, they may not comfortably share the ideas and knowledge at the fullest. Thus the cultural communication gaps needs to be recovered. ExxonMobil is applying the principle of perfect communication. This connection is across the organizations from team member to another team member, within management level, senior management to junior teams including marketing teams, a proper communication is necessary and that is what ExxonMobil is maintaining. There can be the experiential, inter-disciplinal, organizational and cultural communications gaps to be addressed. In the large organization like ExxonMobil, the chain of command may have too many layers to pass the messages from sender to receiver. Even in ExxonMobil has got the multilayered culture but they have the strong and faster communication command which promptly responds to the issues concerned.
Organizational culture plays the vital role in effective management in change. Most of the employee find ExxonMobil a good working place because of the culture of the company.
ExxonMobil has created the different directories, divisions, groups, units and strategic business units to manage such things within the organization. In support of managing change there should be the processes namely, performance management, where organizations comprises the regular budgeting, monthly reporting, market research, governance, risk management, unintended consequences, performance appraisal etc. thus the challenges are overcome and changes are defined. Governance, where the poorly managed changes are re characterized by unclear accountabilities. Another process is risk management; this is a process of assessing risk in terms of changes outcomes and in terms of risk of disruption associated with implementation of changes. The final process is of solving the unintended consequences. This is a part of risk management while managing the changes but to those issues which need especial or separate treatment (Carnall, 2007).
Employee management is the most difficult and the most admired part of ExxonMobil. Poor team management and poor strategy leads to the disruption in changes and the expected outcomes cannot be achieved. Thus ExxonMobil has ensured the compatibility between structure and change vision. Company is aware that if the structure barrier is not dissolved, managing the change is difficult as the employee get frustrated, less motivated, narrowed leading to the impaired productivity and this undermines transformational effort and changes brought. Employees get empowered are more prone to succeed when they are equipped with right skills, knowledge, motivations and attitude to operate the intended organizational environment. Keeping these things as major issues, ExxonMobil continuously improves the quality of its employee by training them about the technical skills, social skills and attitudes. This way, they have effectively being able to manage the change and innovate their ideas.
The ultimate strategy usually involves the quality or performance of the products, cost and price, sale promotion and service, and strength of the sales channels. There are four segments where ExxonMobil's strategy is working.
- Product differentiation: ExxonMobil is spending billions of dollars and investing the great deal of time in researching and branding their products to position it uniquely in the market place e.g. biofuels from algae
- Market segmentation: management level of ExxonMobil has cleverly segmented and advertised its products, changes and innovations differently in deferent regions. They have mergers and acquisitions e.g. in India and China.
- Price and cost leadership: ExxonMobil is leader in the market because of quality products and affordable prices, however, the prices have been a subject of concern from last few years.
- Construction of entry and mobility barriers: this is where ExxonMobil leaves every another company far behind. Its vision till year 2030, hi-tech products e.g. biofuel from algae etc makes competitor difficult to enter the market in same specialty.
These are the strategies that ExxonMobil is applying in managing producing and managing changes within the organization. (Stewart Clegg, 2005)
There is no question that ExxonMobil is a perfect structure of a successful and admirable corporation in the world in terms of business and profit but there are certain things that the company needs to be aware about in the days to come. They had the very bad experiences in the past because of some of the oil spill, human rights and racial related issues and thus should work not to repeat such accidents and involvements as such accidents and involvements not only damages the organization's economy badly but also ruins the image and prestige among the consumer's level. ExxonMobil products need to be equally advertised and marketed in the Asian countries like Nepal, where their presence is almost zero. A company that is talking about the global issues like climate and environmental protection should invest in the developing or underdeveloped countries as well so that the consumers will benefit from its products in affordable prices. Their interest in environment is exciting but there has been inappropriate handling of environmental interest groups and this weakness must be repaired otherwise, it can be detrimental to the organization in the future. The organization has been known for its unethical profits in last few years because of the hike in the energy prices and they are getting negative publicity as the organization did not handle it very well eventually costing the goodwill of the customers. Hence, a reasonable and affordable, yet stable price plan is necessary.
ExxonMobil has been operating in the energy sector for over hundreds years and is the world's largest publicly traded company that operates in integrated petroleum and natural gas industry. Te energy giant operates and facilitates around the world and explores for oil and natural gas in six continents across the globe. This is a leading industry in every aspect of energy and petrochemicals. In the past few years, the company has been actively working in the exploration of the new source of energy to help meet the increased demand of energy. ExxonMobil is a leader in researching and developing the new source of energy and technology and has been working in the major global concerns like climate change and environmental concerns.
There are many reasons behind the huge success of the organization in the operation of around a decade. First thing is that the organization has been able to increase its operations over the globe thus increasing the customer base as wells. Moreover, it has spent much on researching and development. It has an icon of innovations, technology and the development among the other companies and this will continuously help the organization to remain at the top level in the future as well. The diversification of the operations into many different sectors of energy supply, a massive investment in technology, research and development to invent the new methods of energy exploration, efficiency and refinement give the great contributions in the ever growing success of the company.
There is no doubt that the company is growing enormously in terms of profitability, market share or potential and consumer base but there are some threats which are looming in the immediate future of the organization. The increasing public interest in the conservation of the environment has resulted in the reduction of the use of energy and energy savings and ultimately, this will reduce the profitability of the organization. Company is a perfect example in innovating and managing the changes within. Sense of responsibility of the company to the employees and the vision as well as planning of the company has made it easy to manage the changes brought.
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