Exxon Mobil Was Founded 125

Exxon Mobil was founded 125 years ago. Today it is the largest publicly traded international oil and gas company in the world. Over the next decade ExxonMobil Endeavors to remain the industry leader by developing alternative sources of energy that are affordable and of the best quality. The company also desires to reorganize its business strategy to meet the needs of 21st century consumers. The mission of the company is to provide the Global Community with the energy needed to power their daily lives. Overall, the company has solid leadership and management However, the company has to be sure not to become overconfident and by doing so fail to prepare for the future. At the current time oil reserves have decreased while at the same time there is a greater concern for the environment. This increased concern for the environment has led to the development of hybrid vehicles, solar energy, wind energy, and alternative fuels. This means that in the years to come there will be a decrease in the demand for oil (this decrease in demand is already evident). A decrease in demand results in a decrease in costs and this will ultimately effect ExxonMobil's profit margins. In the future there must be more research conducted on the reluctance of traditional company's to develop new models.

Table of Contents

Chapter I Introduction

Aim

Method

Outcome

Analysis

Chapter II Literature Review

The Oil Industry

ExxonMobil Merger

Troubles for ExxonMobil

Chapter III Strategic Plan

Company Background

Analysis and methodology

Mission and Vision Statements

Quality and management initiatives

Organizational behavior

Leadership and Management

Organizational Structure

Grouping and Teamwork

Organizational culture

Information Systems

HRM issues

Resourcing and legal issues

Skills, training and development

Coaching and mentoring

Performance and Motivation

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Future directions

Change management plan;

Organizational Development

Success Factors

Recommendations

Chapter IV Conclusions and Future Research

Chapter I

Introduction

The oil industry is amongst the most profitable in the world. Although this industry is profitable recent economic hardships and future changes in the way people will consume oil, means that there will be many changes in the oil industry in the years to come. There are several companies that compose this industry, Exxon Mobil is one of them. ExxonMobil is one of the largest company's in the entire world. The discussion to follow will explore several aspects of ExxonMobil's business strategy. The research will be used to develop a strategic plan for ExxonMobil.

Aim

The purpose of this discourse is to provide an overview of the current and future business trends as it pertains to Exxon Mobile. The Strategic plan will outline some of the issues that ExxonMobil will need to face over the next five years if it is to continue its success for years to come.

Method

The research will involve the use of the library, the JSTOR and EBSCO Host databases and the official website of ExxonMobil. The information will be compiled and analyzed in a manner that assist the researcher in coming to succinct conclusions about the current state of the company and what can be done to improve the condition of the company.

Outcome

The outcome of this strategic plan should demonstrate that ExxonMobil is an extremely strong and profitable company. However, there are some changes that need to take place to propel the company even further. These changes will assist the company in adjusting to the different climate emerging in the oil industry.

Chapter 2 Literature review

The oil industry

According to Weston (2002) there are many global changes that the oil industry is confronting. These changes include globalization, technology, entrepreneurial developments and industry changes. The author also explains that the iol industry also has some unique characteristics, For instance, the global oil market is responsible for the 53% of volume traded internationally. In addition the oil industry is responsible for 10% of world trade which is greater than any other type of commodity. The author explains that "While the oil market is world in scope, oil varies in quality and the requirements for pipelines and other specialized distribution and marketing facilities cause geographic market segmentation (Weston, 2002)."

One major issue effecting the oil industry is climate change. Many oil companies including ExxonMobil have been vehemently opposed to emissions standards because they threaten to reduce the profitability of oil companies (Skjaerseth, 2003). This si a serious problem in the industry that must change in the near future.

Exxon Mobil Merger

In 1999 Exxon under went a drastic change when it merged with Mobile. Weston (2002) reports that

The motivations for the Exxon-Mobil merger, completed on 11/30/99, reflect the industry forces described earlier. By combining complementary assets, Exxon-

Mobil would have a stronger presence in the regions of the world with the highest potential for future oil and gas discoveries. The combined company would also be in a stronger position to invest in programs involving large outlays with high prospective risks and returns (Weston 2002) .

Indeed, the merger of Exxon with Mobil was a pivotal development for the companies. By combining the resources of the two companies. Although the companies were once competitors they understood that by combining the companies would result in higher profitability and better outcomes.

Troubles for Exxon

Like other companies in this economy Exxon Mobile is confronting some difficult issues. Levine (2009) reports that even though Exxon Mobil has expanded rapidly, enjoying a $45 billion profit in 2008 -- the largest profit from a single company in history, there are some serious problems facing the corporation. Namely, dropping oil prices threaten to greatly diminish the profitability of the company in 2009. Levine (2009) also states that even though the company is sure to experience smaller profit margins in 2009, a decrease in profits may provide the business with a substantial opportunity. This opportunity is present because Exxon has so much cash and shares that may permit the company to purchase rivals. The author further explains that even there is a global recession ExxonMobil has been able to maintain a decent stock price (15% compare to 22% for competition). The article also explains that if any company can weather the current economic storm it is ExxonMobil. Even though the company is strong, there are some problems that appear to be approaching, particularly as it pertains to oil reserves and production. The article reports despite its seeming invincibility, Exxon is surprisingly vulnerable. Interviews with industry analysts, consultants, and current and former employees cast doubt on its strategy and growth prospects. Most immediately, Exxon's oil reserves and production are shrinking, and it is relying on less valuable natural gas to replenish them. Worse, it is getting much of that gas from a single country--Qatar -- that could change the terms of their deal at any moment (Levine, 2009).

The author further states that the company has failed to change its business plan to better position the company to overcome the changes that are on the horizon. The author points out that the company has been hesitant to take risk which has caused it to reject certain exploration projects. These exploration projects could have increased the company's oil reserves and as such production (Levine, 2009). The author even refers to ExxonMobil as prideful and arrogant in some of it business dealings. The pridefulness and arrogance is apparent in that the company spent many years rejecting the idea of alternative energy. As such it is behind the bandwagon on these alternative energies at a time when such alternatives are not only popular but also necessary (Levine, 2009). The article also reports that the company has strained relations with many foreign governments. These problems have caused ExxonMobil a great deal of business in recent year s (Levine, 2009).

The author further posits that all big oil companies are confronting the problem of size. Because ExxonMobil is the largest company in the industry, the problems they face are even more incredible (Levine, 2009). The author explains that because ExxonMobil is such a large company that it is difficult to put mechanisms in place to expand the company further (Levine, 2009). The author points out that since Exxon merged with Mobil a decade ago its oil reserves have remained at the same level but production has fallen (Levine, 2009). With this understood even if the company is able to purchase one of its competitors it will still not have the ability to expand independently (Levine, 2009).

Chapter III

Strategic Plan

Company Background

ExxonMobil was founded 125 years ago. Today it is one of the largest corporations in the world. In fact it is the largest publicly traded international oil and gas company in the world. The company supplies energy throughout the world. This energy is necessary for the growth and sustenance of living standards and economies throughout the globe. At the current time ExxonMobil has a presence in most countries through brands such as Esso, Exxon, and Mobil. The company is responsible for producing products that allow various types of transportation to operate. ExxonMobil's products also power cities and allow industry to function (Our History).

Additionally the company is increasingly concerned with meeting the energy needs of people and organizations throughout the world ("Company Profile"). To this end Exxon Mobil is committed to "exploration and production of crude oil and natural gas; the manufacture of petroleum products; and the transportation and sale of crude oil, natural gas, and petroleum products ("Company Profile")." In addition Exxon Mobile is a primary producer and marketer of both commodity and specialty petrochemicals. The company is also involved in the ownership and management of electric power generation facilities. The company is also involved in several areas of research that allow the company to support operations, experience constant improvement ("Company Profile"). The company has four distinct business spheres through which it operates. The sphere are referred to as upstream, downstream, chemical and technology.

The Upstream business sect refers to Exxon Mobil's asset base ("Company Profile"). This base is significant, involves several geographic locations and is economically healthy within the context of different business environments. In addition the upstream business sector is responsible for the production and exploration property that exist in 36 nations ("Company Profile"). During 2007 seven large upstream projects began. Additionally the company is committed to the sell of natural gas in the majority of developing nation. This natural gas is utilized by industry, power companies and distributors ("Company Profile").

The Downstream sector of Exxon Mobil Concerns its self with handling the company's network of manufacturing plants, distribution access points and transportation systems ("Company Profile"). This network is essential to Exxon because it affords customers throughout the globe access to lubricants, clean fuels and other valuable products ("Company Profile"). This sector of ExxonMobil governs the interests of nearly 40 refineries throughout the world. It also markets the company's products to over 30,000 gas stations ("Company Profile"). Additionally about 1 million customers are served through various business segments including Aviation, Marine and Industrial and Wholesale ("Company Profile").

Exxon Mobil's third business sector is Chemical. The company is the leading enterprise in the petrochemical industry ("Company Profile"). The company has interest in 49 solely owned and joint-venture facilities ("Company Profile"). In addition the company has

"strong positions in many of the largest-volume and highest-growth petrochemicals in the global economy. The company is one of the largest producers of olefins, the basic petrochemical building block. We are also one of the largest producers of polyolefins, which include polyethylene, the largest-volume plastic, and polypropylene, one of the fastest-growing polymers. More than 90% of chemical capacity is employed in businesses where we rank first or second in worldwide market position ("Company Profile")."

The final business sector is technology. This sector is needed because there are many oil and gas resources that are only found in remote places around the world. This remoteness necessitates the need for technologies that assist the company in gathering these resources in the most precise way imaginable. To meet the technological needs of the company there has been an investment of nearly $4 billion towards development of technological systems. The development of new technologies are important because they allow for fast deployment of value capture. The success of ExxonMobil can be attributed to the manner in which it has dedicated resources to the creation and implementation of new technological systems into its business model.

Analysis and methodology

The analysis of the Strategic Plan is based on information about ExxonMobil available through the official website of the company. This data includes information about the organizational structure of the company. The (Situation, Target, Path) STP method will be utilized in the development of this strategic plan. During the situation phase of the process the current information about the company will be gathered and analyzed ("What is the STP"). During the target phase goals and objectives for the future are defined ("What is the STP"). Finally during the path stage, a map is presented as pertains to the attainment of future organizational goals ("What is the STP").

Vision and mission statement of the company

Vision Statement: Over the next decade ExxonMobil Endeavors to remain the industry leader by developing alternative sources of energy that are affordable and of the best quality. The company also desires to reorganize its business strategy to Mission Statement: To provide the Global Community with the energy needed to power their daily lives.

Quality and management initiatives

Over the next 5 years ExxonMobil must make a concerted effort to improve the quality of its products. Namely the company must be proactive in formulating ways to create fuel products that are more efficient as it pertains to protecting the environment and decreasing the amount of pollution caused by fuel products.

Along with quality initiatives, management initiatives must also be taken. Although Exxon Mobil is a well managed company, there must be a greater emphasis placed on preparing the company for the future. ExxonMobil cannot continue to rely upon past strategies of the 20th century in the 21st century because the context of business has changed drastically. With this understood, management must lead the company in formulating new and aggressive policies geared toward the development, manufacture and sell of alternative forms of energy. Managing this aspect of Exxon Mobile seems to be the most urgent concern of the company.

Organizational behavior

Leadership and Management

Leadership and management are always concerns that a company has. For ExxonMobil Leadership and Management have thus far been quite sufficient. However, room always exist for improvement. One of the areas of improvement should be repairing relationships with foreign leaders so that Exxon Mobile has the capacity to expand further. Repairing such relationships are necessary because ExxonMobil may need access to the resources that exist within some of these countries as it pertains to oil reserves.

In addition management and leadership must look to the future as it pertains to alternative energy. Over the next five years, leadership must begin to stir the company in a new direction so that it can remain relevant in a changing world.

Organizational Structure

At the current time ExxonMobil has a functionally-based organizational structure. That is, the business-line companies are expected to direct a "focused portfolio of operations everywhere that ExxonMobil operates throughout the world ("ExxonMobil Global Capabilities…")." There is a president in charge of each division who has the authority to run the business independently of the other company businesses. As it relates more specifically to the structure it is composed of 10 primary companies that are responsible for managing various ExxonMobil businesses ("ExxonMobil Global Capabilities…"). In addition ExxonMobil Global Services (a separate company) is responsible for supplying centralized support via information services, procurement, and facilities ("ExxonMobil Global Capabilities…").

The current structure allows the company to administer priorities based on what is needed in certain areas of the globe. This gives the company the benefit of leveraging the transfer of technology throughout its various facilities around the world ("ExxonMobil Global Capabilities…"). It also allows the company to move its workforce from one place to another with ease. The chart below provides an example of ExxonMobil's global structure (taken from, "ExxonMobil Global Capabilities…").

Grouping and teamwork

At the current time ExxonMobil has employees representing different functions of the company grouped together. That is marketing employees are in one department while IT professionals are in another department. Generally these departments work independently of one another in some instances and collectively in other instances. The types of teams that are formulated is dependent upon the breadth and scope of the project. For example a project involving the implementation of a new computer network may only be composed of IT professionals. However, a project involving a broader scope may need a team of employees form different departments. In either case teamwork is important to developing synergy and finding the best ways to complete projects. Teamwork allows the company to complete projects in a timely manner and in a way that is beneficial to customers.

In the future a much more collaborative approach may have to take root. Collaboration will be more necessary because of the monumental challenges that the oil industry will face in the near future as it relates to dwindling reserves and consumers turning away from the use of fossil fuels. Working together teams can solve some extremely complex problems and assist ExxonMobil in maintaining its current status.

Organizational culture

The organizational culture at ExxonMobil is rather traditional. The company was founded 125 years ago, so many of the traditional aspects of organizational culture still exist within the company. However, there is a move toward more 21st century ideologies about organizational structure. Policies such as flexible work schedules and having the ability to telecommute are just an example of the company's changing tide. In the future it may be advantageous of the company to forge a culture tat is more conducive to the lifestyles of younger workers.

Information systems

As was mentioned previously in this discussion ExxonMobil leads the industry in technological advancements. The company has pioneered various ways to make the extraction of oil safer and more cost effective. In the future the company should concentrate on gearing their technological advances into areas of the business dedicated to exploring types of alternative energy.

HRM issues

Exxon Mobile Employees about 81,000 people in locations all over the world ("Employment policies and practices"). One of the major characteristic of ExxonMobil's Human Resources Management system is an open door communications policy. The purpose of such a policy is to encourage and foster respect fairness and effective connections between management and their subordinates. In addition HRM at ExxonMobil is informed by the company's Standards of Business Conduct. These standards forbid harassment in the workplace and discrimination. Additionally Exxon Mobil encourages the "elimination of coerced or compulsory labor, abolition of child labor, and freedom of association. We recruit our employees and provide working conditions including payment of wages and benefits -- in accordance with applicable laws and regulations. ExxonMobil employees are at, or above, the legal employment age in the country of their employment. Employees have the right to join associations and choose representative organizations for the purpose of engaging in collective bargaining in a manner consistent with applicable laws, rules, and regulations as well as local customs ("Employment policies and practices")."

Resourcing and legal issues

There are several Resourcing and legal issues that are present in the sphere of HRM. As it pertains to legal issues, safety, Equal opportunity employment, harassment, and discrimination are all issues that Exxon Mobile has developed policies concerning. ExxonMobil will continue to adhere to the policies that it has already adapted in the years to come.

As it pertains to Equal Employment Opportunity the company has developed a Policy that ensure that anyone who qualifies for a position is able to get that position ("Employment policies and practices"). The company has adapted a policy that complies with all the various laws concerning equal opportunity employment under federal and state laws. The company has also adapted certain polices to ensure that diversity is encouraged, disabled people are accommodated, and flexibility with job schedules to allow for a greater balance between work life and home life ("Employment policies and practices"). ExxonMobil has also established a policy which encourages managers to take charge of assisting employees ("Employment policies and practices"). The company recognizes that happy employees are more productive.

In addition to policies centered around equal opportunity, the company has also established a policy against on the job harassment ("Employment policies and practices"). Exxon-Mobil does not tolerate harassment in any form whether is be racial, religious or sexual ("Employment policies and practices"). There are also standards against acting in inappropriate ways within the context of the business environment. Whenever the company receives a complaint action is immediately taken to ensure that the harassment does not continue ("Employment policies and practices").

The company also has a nondiscrimination policy. This policy bans any type of discrimination against contractors, employees, customers and suppliers. Again there is a zero tolerance policy for this type of behavior. It specifically bans discrimination that has sexual orientation as a foundation. To prevent discrimination from occurring the company has actually created a program for managers to ensure that the this policy is properly implemented. Additionally the company

"provides benefit coverage to spouses -- whether heterosexual or homosexual based on legally recognized spousal relationships. We determine eligibility according to laws with respect to legally recognized spousal relationships in the individual countries where we operate. In the United States, we have adopted the definition of spouse used in federal law, which has the effect of limiting coverage to heterosexual couples only. However, ExxonMobil employees in the Netherlands, Canada, and other international locations -- where national law recognizes same-sex relationships -- are provided spousal benefits under the ExxonMobil program ("Employment policies and practices")."

Skills, training and development

Even during the recruitment stage ExxonMobil is seeking to find the best and the brightest. The company wants to attract employees that have the proper skill sets and are willing to work with other to get the goals of the company accomplished.

The company offers training and development in some areas of the business. This training and development is to assist new hires in understanding the policies and standards of the company. Development is for existing employees who need to learn new skills that are essential to their field of work. For instance, employees that work in information systems/technology have to frequently learn how to use new software and new devices. This is because of the quickness with which technology changes.

Coaching and mentoring;

ExxonMobil actually encourages employees to interact with one another. Such interaction is inclusive of mentorship and employee forums ("Employment policies and practices"). Mentorship allows younger workers in the same area of the business to learn more from someone who has been in the field for a long time. The employee forums give workers the opportunity to voice their concerns and opinions with senior management. Both of these policies assist the company in creating an environment that is conducive with productivity and creativity.

Performance and motivation

Like many companies, ExxonMobil desires to keep employees motivated. Such motivation comes in the form of various incentives that employees are presented with when they meet certain goals. Giving workers incentives gives them something to strive for and it also lets them know that their work is valuable and needed by the company. According to Maslow's hierarchy of needs, people need to know that the work they do is beneficial to others. ExxonMobil wants to accomplish this through the SWOT Analysis

Strengths

ExxonMobil has several strengths, the first of which is the size and scope of the company. ExxonMobil is the largest publicly traded company in the world which automatically gives it an advantage over competitors. This advantage is present because the company has the largest market share in just about every market where it has a presence. This makes it difficult for competitors to gain market share or realize significant problems. Another advantage that the company has is the organizational structure and managerial strength. These strengths have propelled the company to where it is today.

Weaknesses

One of the primary weaknesses confronting the company is its late response to the development of alternative fuels. This is a major weakness because some of Exxon Mobil's competitors have been work for many years to develop alternative fuels. As such they have a head start that ExxonMobil does not.

In addition, in some ways the company has failed to change its business strategy to be more inline with changes in the world. These changes include globalization, effects to save the environment. One of the major changes in the world over the last decade has been globalization. However, ExxonMobil has strained relationships with many countries that it now needs so that it can properly expand and remain ahead of the competition.

Opportunities