Case Summary
Exxon Mobil is considered as one of the largest private oil company in the world today with total revenues of more than $230 billion annually, which has been on a steady rise, and over 69,000 employees working in more than 50 countries around the world. The company, which was founded in 1999 after the merger of Exxon and Mobil, has experienced a rapid increase in the demands for its products with the view that this creates a higher margin for success when compared to some its key competitors. According to Fortune 500, which examines some of the most profitable companies in the world, Exxon Mobil was listed as the second most profitable company in 2014; thus, suggesting that indeed the company had established itself as one of the major players in the oil and petroleum industries (Alhouti, Johnson, & Holloway, 2016).
One of the key aspects to take note of is that Exxon Mobil has been involved in the oil production industry for an extended period considering that both companies had operated in the sector individually. Currently, the company produces approximately 3.921 million BOE (barrels of oil equivalent), which accounts for about 3% of the total oil produced in the world today (Ni & Van Wart, 2015). On the other hand, Exxon Mobil controls some of the most abundant oil reserves in the industry today in different parts of the world including the Middle East, Northern and Western Africa, and the American continent. That has played a vital role in elevating the company as one of the key players that define this industry significantly. The company is viewed as a critical stakeholder on matters associated with oil and petroleum products production.
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A historical review of Exxon Mobil, as individual companies, indicates that both companies had been founded in the 1960s and 1970s with the focus being towards taking advantage of the increased demand for oil and petroleum. The expectation for the companies was to enhance their ability to produce oil that would match the demands among consumers in different parts of the world. The decision to merge these two companies can about as a result of the significant shift in expectations touching on enhancing capacities for the companies to advance their capacities regarding their reach within the oil consumer industry. Additionally, this was driven by the need to create a new avenue through which to improve on the daily productions for the company as a way of ensuring that it would be able to meet the oil needs and demands set out in the world today.
Both Exxon and Mobil can trace their roots to 1882 during which time Jon D. Rockefeller founded Standard Oil with the focus being towards advancing overall capacities for exploitation of the oil reserves in the world. However, it must be noted that both companies experience a major challenge as a result of the Arab oil crisis, which occurred in the late 1970s, affecting their capacities to produce adequate oil in the Middle East. Thus, this forced the companies to embark on an oil exploration project that would target other areas such as North and West Africa; thus, paving the way for oil production in countries that include Nigeria and Cameroon. The overall projections for the companies were that the new explorations would have opened the way for newer avenues through which the companies would be able to match set out expectations in matching consumer demands.
In 1999, both Exxon and Mobil were involved in one of the largest mergers for any corporate entities in the world today in which both companies merged their assets worth approximately $87 billion. The merger meant that the shareholders from Mobil would control at least 30% of the shares for the new company formed while the shareholders from Exxon would control the remaining 70%. The merger has been seen as one of the critical aspects that paved the way for enhanced capacities for increased production considering that it created a new structure of performance for the companies. The ultimate result of this is that it ensured that the companies would be able to reach a more significant market share while reflecting on the overall expectations in meeting projected profit margins.
Exxon Mobil has been involved in a wide array of initiatives focusing on the areas of leadership and environment conservation taking into account the impacts that the company’s oil exploration is having on the environment. On the territory of administration, the company has been involved in the training and mentorship of youths in different parts of the world with the focus being towards building that positive avenue through which to achieve future growth capacities. The mentorship programs are seen as crucial CSR approaches for the company with the view that they help in providing skills and experience to the youth that is important towards elevating them to different career positions. The programs are undertaken in the 50 countries within which Exxon Mobil operates as a way of meeting its CSR objectives.
The fact that Exxon Mobil seeks to define its position as a market leader means that it focuses much of its attention towards creating a somewhat useful framework or platform through which to maximize on its CSR efforts. That can be seen from the fact that the company projects more of its approaches with the view that this would help youths understand the changing dynamics in the professional industries today. The expectation of this is that the company, within its capacity, can project itself as a company that understands the value of embracing its social responsibility. The hope of this is that it seeks to pave the way for a somewhat proactive platform through which the company would be able to build on the area of leadership with the view that this would match set out goals and objectives. For Exxon Mobil, this means that the company finds itself in a position where it can define specific standards that it would be able to achieve as part of its CSR objectives.
The other key focus for Exxon Mobil’s CSR initiatives has been on the area of environmental conservation taking into account that the company operates in an industry that is seen as having significant impacts on the natural environment. The company has been involved in some of the worst environmental disasters in the world including the 1989 Exxon Valdez oil spill in Alaska. The occurrence of such disasters creates the need for the company to put in place its CSR approaches that would seek to define the company’s position concerning dealing with the environmental impacts associated its business approaches as a way of making the environment better for the community.
Exxon Mobil has been involved in a wide array of environmental conservation efforts including the restoration of areas and regions that have been affected by its oil exploration efforts while ensuring that the companies can benefit from the same. Exxon Mobil believes in its mandate towards the community and the society as part of its CSR approaches with the view that this would help protect the people from the challenges associated with its business model (Ho, Li, Tam, & Tong, 2016). When dealing with issues such as oil spills, Exxon Mobil finds itself in a position where it spends billions of dollars with the intention of having to deal with the impacts while putting in place measures that would see the company avoid such occurrences in future with the sole aim of protecting the community.
Regardless of the CSR strategies that the company has put in place, one of the critical problems that it is facing revolves around communication of its CSR approaches in the community as a whole. The challenge has been on the fact that the company finds itself failing while trying to engage in effective communication considering that it is not in any position that would enhance its capacity to put out an effective communication approach. The outcome of this problem is that the company has faced criticism from different organizations and government agencies for failing to take proactive steps towards dealing with the environmental issues that its business model is causing. Most of the organizations and agencies offering criticism fail to recognize the fact that indeed Exxon Mobil has been involved in a wide array of cleanup efforts. Additionally, the organizations and agencies fail to realize the position that Exxon Mobil has taken concerning advancing its CSR strategies.
Case Analysis
Definition of the Problem
Over the years, companies have continued to focus on the implementation of CSR programs with the aim of enhancing their abilities to deal with various issues affecting the running if the companies. Dealing with questions concerning the effective running of the organization plays an essential role in ensuring that the company capitalizes on positive performance. The Exxon Mobil Company has also focused on the implementation of CSR programs with the intentions of dealing with issues concerning the stakeholders in the company thus providing an avenue for positive growth and development (Elliott, Grant, & Rennekamp, 2017). The implementation of the CSR programs in the Company experiences a major problem that concerns external CSR communication thus influencing the effectiveness associated with the program. According to Du & Vieira (2012), an interface is a significant aspect that helps in enhancing any given operations undertaken regarding the implementation of CSR programs within a company.
Considering that CSR programs require companies to capitalize on making financial investments to enhance effectiveness, it is necessary to capitalize on proper communication to ensure that different departments within the company have the essential information and knowledge concerning the implementation of the program. Lack of appropriate communication strategies within the company to deal with issues of external CSR communication results in the increase in the use of financial resources. In this case, this results in problems associated with accountability within the company, which is a primary issue that influences positive performance within the company. Although the implementation of the CSR programs has had a positive impact on the company by increasing the value of the company, the problem associated with the external CSR communication has influenced the ability of the company to remain competitive within the industry.
Causes of the Problem
Lack of proper CSR communication strategies and channels within the company has resulted in the development of the problem of external CSR communication thus affecting the implementation of the CSR programs (Lanis & Richardson, 2015). The management of the Exxon Mobil Company has failed in the development of proper avenues and communication channels that aid in the actual implementation of the program. According to Michael, Min, Ling, & Kai (2015), a company's management requires to establish the proper avenues that would help in ensuring that the implementation of CSR programs is undertaken effectively with the intentions of promoting the positive development of the company's projects. Another critical factor that causes the problem associated with external CSR communication entail lack of accountability during the process of implementing the programs. In this case, the company has failed to establish measures that ensure the responsibility of individuals engaging in the implementation of the programs.
Alternate Solutions or Approaches
Exxon Mobil must recognize the fact that it has a crucial responsibility towards its stakeholders, who include its consumers of oil and petroleum products, as well as, the communities within the environments in which the company is engaged in oil exploration and production. That means that the company would be expected to focus much of its attention on trying to build its capacity on defined expectations touching on the stakeholders. That would mean that the company would concentrate on adopting approaches that would help towards making trust among its stakeholders. The strategic hope for the company involves the idea of having to set out its CSR message in an effective manner.
Exxon Mobil will be expected to come up with a new communication strategy, which would seek to ensure that it passes on information touching on the fact that the company believes in its CSR strategies. Gilberthorpe & Hilson (2016) point to the fact that Exxon Mobil is expected to adopt an approach that seeks to manipulate its messages with the view that this would create a positive platform for advanced engagement concerning its CSR. That would mean that the company would adopt a somewhat effective strategic approach with the focus being towards meeting its key outcome, which is to match its CSR strategies to the objectives laid out by its stakeholders. The ultimate result of this is that it will help pave the way for enhanced performance outcomes concerning define overall performance within the consumer market.
Recommendation and Action Plan
From the problem, as identified, it is clear that the primary challenge that Exxon Mobil is facing revolves around the fact that it is not able to the community it's CSR strategies or efforts with the stakeholders. From that perspective, one key recommendation would be coming up with a framework through which the company will be involved in providing its stakeholders with information on its CSR programs through CSR reports. The reports will seek to provide a detailed analysis of the efforts that the company is taking concerning dealing with some of the challenges occurring within the community. Additionally, the reports will also seek to ensure that the stakeholders are well involved in the company's efforts towards meeting its CSR objectives while taking into account that the company aims to define its position within the consumer market.
As part of its communication plan, Exxon Mobil may take advantage of social media as one of the principal avenues through which to engage in active communication with its stakeholders. Through social media, the company would be in a somewhat active position through which to maximize on its interaction with its stakeholders with the focus being towards highlighting the efforts that the company is taking (Parra, Tremblay, & Castellanos, 2016). The ultimate result of this is that the company would be in a better position within which to establish itself as an advocate for environmental conservation while reflecting on the intended CSR objectives. Additionally, social media will also help in ensuring that the company can provide its stakeholders with valid information on efforts that it is taking towards meeting its objectives, which focus on areas such as leadership and environmental conservation.
Another critical approach that the company may take revolves around the idea of promoting one-on-one engagement with the communities involved as part of its strategic efforts towards meeting its CSR objectives. Engagement with the communities is essential, as it paves the way for enhanced interaction and participation on the part of the community with the view that this would help meet its strategic outcomes (Russell, Russell, & Honea, 2016). Additionally, this would also mean that the company would find itself in a somewhat effective position through which to enhance its capacity towards highlighting future projects that it is involved in as part of its efforts towards meeting its CSR objectives. Consequently, this will be viewed as one of the company’s communication approaches aimed at improving its capacity towards delivering on set out goals and objectives as part of its CSR expectations.
Lesson Learnt
From the case analysis, Exxon Mobil, it is clear that several lessons can be learned concerning the idea of engaging in CSR from a company or corporate perspective. The first lesson learned is that engaging in CSR approaches is one of the key ways through which companies and organizations can increase their value. That means that the companies using CSR would be in a somewhat active position through which to enhance overall capacities for having to meet set out market objectives. The second lesson learned is that for a company to achieve success in its CSR efforts, it must involve the stakeholders, as this would mean that the company would find itself in a strategic position within which to maximize on its efforts towards advancing its market position.
References
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Elliott, W. B., Grant, S. M., & Rennekamp, K. M. (2017). How disclosure features of corporate social responsibility reports interact with investor numeracy to influence investor judgments. Contemporary Accounting Research , 34 (3), 1596-1621.
Gilberthorpe, E., & Hilson, G. (2016). Corporate Social Responsibility in Oil-Rich Sub-Saharan Africa: Conceptualizing the Challenges. In Natural Resource Extraction and Indigenous Livelihoods , 2(1), 145-162.
Ho, S. S., Li, A. Y., Tam, K., & Tong, J. Y. (2016). Ethical image, corporate social responsibility, and R&D valuation. Pacific-Basin Finance Journal , 40 (1), 335-348.
Lanis, R., & Richardson, G. (2015). Is corporate social responsibility performance associated with tax avoidance?. Journal of Business Ethics , 127 (2), 439-457.
Michael, I. C., Min, W. Z., Ling, K. C., & Kai, D. Y. S. (2015). The proposition of an Interactive Process Approach in Exploring the Relationship between Corporate Social Responsibility (CSR) Strategy and Perceived CSR: Case of ExxonMobil in Nigeria's Petroleum Industry. International Journal of Business and Management , 10 (2), 186-200.
Ni, A., & Van Wart, M. (2015). Corporate Social Responsibility: Doing Well and Doing Good. In Building Business-Government Relations , 1(1), 175-196.
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Russell, C. A., Russell, D. W., & Honea, H. (2016). Corporate social responsibility failures: How do consumers respond to corporate violations of implied social contracts?. Journal of Business Ethics , 136 (4), 759-773.
