The merging of Exxon and Mobil oil and gas firms led to the inception of ExxonMobil Corporation, in 1999. The firm has its headquarters situated in Irving, Texas. It is currently the world largest publicly traded firm by market capitalization according to Forbes Global 2000. However, this paper seeks to establish how globalization and technology have influenced the operations of the firm. In addition, the application of a resource-based model industrial organization model in a bid to improve the firm’s productivity will be highlighted. An assessment of how the vision and mission statement has contributed towards the success of the company help in understanding the strategies employed by the firm. Moreover, the contribution of shareholders towards the excellent performance of the firm will explain why the firm remains at the top despite market failures.
How globalization and technology have influenced the performance of ExxonMobil Corporation.
In order to transport finished gas products, the firm has been liquefying natural gas, which has influenced the way the firm transports the products to the market in a more efficient way. In addition, it started using the world’s first Q-Max LNG carrier, which also reduced ferrying charges and improved on efficiency in terms of emissions. These carriers haul 80%, more than what the conventional LNG carriers could transport. Notably, the ferrying unit has a total capacity of up to 266,000 cubic meters. Analysts observe that each unit can carry enough natural gas to meet the energy needs of 70,000 American homes for a one year (Hewlett, 2007).
The units are designed with a liquefaction plant, which re-liquefies natural gas during transits in order to reduce evaporation rates. It has been beneficial for long distance movements like from Qatar to Europe. The adoption of new technology, and its relationship with Neftegas Limited contributed towards ExxonMobil’s reduction in the cost of operation, in 2007, when Sakhalin project-1 started its operations. More than 140million cubic feet of gas were delivered to consumer on a daily basis, which saw the firm, expand its revenue base.
The participation of the firm in leading European research initiative geared towards establishing the role of Carbon Capture and Storage technology in mitigating greenhouse effects. In addition, the firm usually allocates averagely one million euros on training experts, whose role is to reduce the amount of carbon dioxide emitted by the firm during its production process. ExxonMobil adopted the use of “EM power” software, which supervise oil and gas well operations, it also disseminate information about flow of their products during the production process (Tillerson, 2011).
In a bid, to “go global” the firm launched education alliance program, aimed at donating more than $2million to local schools, in America, for eight years now. 44 states have benefited from this initiative aimed at supporting their retailers, as well as improving it brand image. In 2005, the firm took part in the summit organized by the white house on eradication of malaria. It also contributed $10million grants to African countries to empower health workers, who can aid in the fight against deadly diseases (Hewlett, 2007).
Exxon has been supporting think tanks and lobby groups, which work against alleviating effects of climate that has been undermining exploitation of resources. The Center for the Study of Carbon Dioxide and Global Change is among bodies that benefited.
The industrial organization model and the resource-based model
The firm can study the external environment in which it is operating with an aim of collecting relevant information needed in the formulation of expansion strategies; the information may be from competitors. After gathering enough information, whose characteristics suggests above-average returns, the management will formulate strategies based on the researched information or industry, for instance, the adoption of anti- wear technology in producing motor oil. Adoption and execution of the strategy is possible now that ExxonMobil has enough assets and skills to carry out the expansionary plan. The management will then implement the strategies with an aim of improving its returns to above average. After implementation of such a strategy, the firm won a contract where General motors recommended the use of ExxonMobil products due to their low level of impurities compared to other substitutes (Hitt, Ireland & Hoskisson, 2000).
The resource-based model capitalizes on the fact that the firm can record above average returns depending on its internal characteristics. For instance, in a bid to reduce the amount of impurities in ExxonMobil’s product, certain products (unknown to competitors) may be incorporated, during the production process, to add value on the final product in order to realize above average returns (Hitt, Ireland & Hoskisson, 2000). After noting this idea, the firm, can assess the capability of integrating several resources, which can add more value to the finished product rather than the suggested idea. ExxonMobil can also assess the ability of its rivals to explore such a strategy, and then, identify firms within its network, which can benefit from this initiative. For instance, European and American firms should adopt the idea of purifying the final products to regulate emissions; there is competition in this market compared to Africa. The strategy can then, be implemented in order to realize the above average returns.
The influence of the vision statement and mission statement
As the firm identifies itself with the slogan, “exploring the world’s energy challenges,” the firm has, in its vision and mission statement identified needs of each player in its line of operation. The shareholders, in the mission statement, are made to belief that the firm can be entrusted with investment funds. It assures its shareholders of high returns and hefty rewards after investment. This has made it emerge as the largest in market capitalization on security and stock exchange.
The firm, through its vision and mission statement, guarantees consumers about how the firm will meet their preferences. Consumers are also assured of stability in prices; adoption of advanced technology will help in regulating and setting prices competitively. Referring to employees, the firm, pledges to reward any exceptional quality of output, which can influence the productivity of the firm to realize its targets. Employees are also assured of job security, training and development programs, which has seen the firm improve its efficiency. In addition, the entire community is guaranteed that the firm will always take part in maintaining high standards of ethics and support cultures of different people across the world.
How each category of stakeholders’ impact on the performance of ExxonMobil
In maintaining the preferences of consumers in terms of price and quality, the firm has over the past, realized an increasing curve in its profitability due to increased sales despite economic crunches. As many firms have a culture of retrenching their employees, workers in such firms have no driving force to work; hence, no innovation. Unlike in such firms, ExxonMobil has always retained its workers, rewarded innovative and creative “brains,” which has seen it adopt the use of modern technology that has been behind cost reduction (Weijermars, 2011). The assurance given to the community, about maintenance of ethics and participation in corporate social responsibilities has helped in improving the brand image expand its operations across the world.
Hewlett, P. (2007). The Lamb: Essential 2- ExxonMobil. Retrieved on 13th October from: https://www.exxonmobil.com/corporate/files//lamp_vol89_no1.pdf
Hitt, M., Ireland, D., & Hoskisson, R. (2000). 1. Strategic Management and Strategic Competitiveness (pp. 1-32). Mason, Ohio: South-Western College Publishing.
Tillerson, R. (Director) (2011, January 6). Meeting energy challenges with oil and gas technologies. ExxonMobil Speches. Lecture conducted from ExxonMobil Corporation, Austin, Texas.
Weijermars, R. (2011). Building corporate IQ moving the energy business from smart to genius : executive guide to preventing costly crises. London: Springer.