A company profile is drafted with the aim of communicating a company’s products and services and disseminating information that helps stakeholders better understand the company’s open system and how different parts contribute to the success of the company. It details the company history from inception to the current position, its human, financial, and physical resources, as well as its macro and microenvironments, its outputs, throughputs, and inputs. Exxon Mobil’s company profile shows that it is a publicly traded company and also in terms of revenue it’s ranked seventh largest company. It is the leading oil and gas refiner worldwide and is responsible for producing over 3% of the total oil and gas products worldwide. The company’s open system is made up of three segments which are the upstream segment, the downstream segment and the chemical segment which play different roles towards the profitability of the company.
Company History/Overview
Exxon Mobil Corporation is a multinational oil and gas company with headquarters at Irvin Texas and was founded in 1999 following the Merger of Exonn oil and Mobil oil (Anon, 2017) . The oil corporation is among the most successful companies worldwide and traces its roots back to John Rockefellers’ standard oil company. In 1859, Rockefeller and Maurice Clark founded their first business called Aptly, Clark & Rockefeller which dealt in merchandising goods like grains, meat, salt and other food products (Beyazay-Odemis, 2016) . The business partners, later on, ventured into the oil business in 1863 and started the Andrews, Clark & Co an oil refinery bringing Samuel Andrews, an oil specialist on board (Bi.galegroup.com.ezp.slu.edu, 2017) . Despite his name being absent in the company’s name, Rockefeller remained a partner and bought out the Clarks for $72,000 in 1865 to start another company Rockefeller & Andrews, one of Cleveland's biggest refiners (Devold, 2015) . The Exxon Mobil Corporation, therefore, originated from this partnership making it an essential part of the company's history.
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By 1867, the company had risen to become the biggest oil refiner in the US and beyond which facilitated the expansion of their production capacity leading to the generation of sixty carloads daily (Bi.galegroup.com.ezp.slu.edu, 2017) . 1870 was the year that the incorporation of Standard Oil Co. happened in the state of Ohio by John D. Rockefeller, William Rockefeller, Henry Flagler, and Samuel Andrews a move that was aimed at increasing the company’s productivity (Beyazay-Odemis, 2016) . In 1871 the oil sector was hit by an economic downturn due to overproduction and decline in oil prices a problem that Rockefeller fixed by unifying all refineries into one company through stock ownership and buyouts (Bi.galegroup.com.ezp.slu.edu, 2017) . Thirty-four Cleveland companies and three of America’s largest oil refineries then had sold out by 1872 and their assets absorbed by the Standard Oil Company increasing its daily production from sixty carloads to ten thousand barrels
Standard oil Co was incorporated in 1882, and it was the company from which Exxon Corporation one-half of Exxon Mobil was founded (Bi.galegroup.com.ezp.slu.edu, 2017) . Over the years the Standard oil company made several foreign acquisitions including 40% share ownership in a German firm in 1890 increasing their profitability to $830 million by the 1900s since inception (Beyazay-Odemis, 2016) . In 1911 the Standard Oil Co had grown into a monopoly which was overturned by a supreme court ruling leading to the separation of thirty-three subsidiaries from the parent company reducing the company's net value from six hundred million dollars to two eighty-five million dollars (Bi.galegroup.com.ezp.slu.edu, 2017) . In 1972 the standard oil co was renamed Exconn and in 1999 merged with Mobil to form present-day Exxon Mobil Corp. Exxon Mobil was ranked the leading publicly traded company in 2007 and is currently the world seventh largest company based on revenue as well as the seventh largest publicly traded company based on market capitalization (Bi.galegroup.com.ezp.slu.edu, 2017) . The company owns thirty-seven oil refineries and subsidiaries in twenty-one countries around the world and is the biggest oil refiner worldwide. Their subsidiaries include Mobil, XTO Energy, Imperial Oil, Tengizchevroil, Gas Terra, Aera Energy, ExxonMobil Chemical Company, ExxonMobil Development Company, ExxonMobil Pipeline Company and ExxonMobil Marine Ltd among others. Like every other company, the ExxonMobil Company's success depends heavily on the micro and the macro environment it operates in (Devold, 2015) . Its market position and internal capabilities are what have propelled the company to the top oil refiner position.
Environmental Profile
A SWOT analysis sheds light on the internal environment of the ExxonMobil Company by exploring the strengths, weaknesses, opportunities, and threats in the company's operations (Beyazay-Odemis, 2016). The company’s brand value is among its key strengths since it is valued at $19.227 billion making it the fourth largest company in the Oil and Gas sector based on brand value. The company also enjoys a huge market share in the oil and gas sector since they have thirty-seven subsidiaries in twenty-one countries all over the world with a daily production capacity of 3.921 million barrels of oil equivalent (Bateman, Snell & Konopaske, 2016). The capacity and big market share enable the company to increase its profitability and increase their production capacity while realizing economies of scale. The company's diverse project and product portfolio are also strength since it enables them to spread risks dealing in fuels, lubricants, wax and white oil, base stocks and other different ventures. The weaknesses, however, include weak brand equity due to the company's association with litigation and lawsuits, the decline in revenue over the years and heavy debts (Pedersen, Venzin, Devinney & Tihanyi, 2014). The opportunities for the company include the rising demand for energy while the threats include competitors, environmental regulations, and economic uncertainties.
The organization is mechanistic an aspect characterized by a well-defined hierarchy in the management chain (Devold, 2015). The decision-making process mainly comes from the top down, and the management style positively affects the organization's external environment. It has led to stability in the company with productivity being consistent and organized. The style has contributed to the organization's profitability and competitiveness in the marketplace since a clear chain of command makes decision-making faster and reduces errors in judgment in the many subsidiaries (Bateman, Snell & Konopaske, 2016). Their competitors include Royal Dutch Shell, Phillips 66, Chevron Corp, Marathon Petroleum Corp, Valero Energy Corporation and Devon Energy Corp. The company commands a substantial market share with their daily production of 3.921 million barrels of oil equivalent which accounts for over 3% of the oil produced worldwide.
Pollution is a general environmental factor affecting the oil and gas industry in which the company operates (Scott, 2017). The emission of carbon and other gases that destroy the ozone layer leading to climate change and global warming issues that have drawn the attention of environmentalists and legislators resulting in the imposition of laws limiting companies’ carbon footprint (Beyazay-Odemis, 2016). The need to comply with the laws affects the production capacity of the companies in the oil and gas industry slows productivity down. Economic factors in the global business environment affect the effectiveness of the company (El-Reedy, 2016). Factors like inflation, depression and the forces of demand and supply determine the ability of the business to produce and market their products. When the economic environment is conducive for business, the company's effectiveness and efficiency in the production process also increases (Caldwell & Hinton, 2015). Apart from the environmental factors, the availability and cost of organizational inputs also affect the effectiveness of a company.
Organizational Inputs
Organizational inputs refer to the raw materials and other contributing aspects that facilitate the production of the final product or service (Bateman, Snell & Konopaske, 2016). An organization’s inputs include financial resources, raw materials, operation inputs, employees as well as their clients. ExxonMobil’s operation inputs are split into three categories which are the upstream operations, downstream operations and chemical operations (Caldwell & Hinton, 2015). The upstream operations entail the exploration and the production of natural gas and crude oil while the downstream operations entail the refinery, distribution, and marketing of the oil and gas products (Beyazay-Odemis, 2016). The upstream-related input process utilizes equipment, raw materials and services like seismic and geological services, geosteering wells, non-invasive drilling fluids, swell packer stimulation technologies, and seismic and horizontal drilling equipment.
Exxon's chemical operations, on the other hand, convert inputs like crude oil and natural gas to final petrochemical products like polyethylene and polypropylene (plastics), rubber, and hydrocarbon fluids which are utilized in the manufacture of paint and adhesives (Scott, 2017). The financial inputs of the company for 2016 show that the company's total operating expenses for 2016 stood at 193.3 billion while the nonoperating expenses amounted to 2.7 billion dollars (Anon, 2017). The financial inputs are critical in the production process since they offset the production process by paying suppliers and the employees who work towards the production of the outputs. The organization also employs 72,700 employees in their different subsidiaries around the world in their production processes (Anon, 2017). The throughput process is critical in the production process since it ensures that production is done within the shortest time possible and efficiently and effectively (Pedersen et.al., 2014). As such, ExxonMobil have in place leadership technological and corporate administration throughputs.
Throughputs
The throughput process entails the measurement of the time required for the manufacturing process to be completed with the intention of speeding up the production process and cost reduction (Devold, 2015). Exxon Mobil has a throughput of 4.3 million barrels per day which is the highest in the oil and gas industry (Anon, 2017). Their leadership, corporate administration throughput, and technology throughput are driven by the implementation of an Operations Integrity Management System (OIMS) aimed at improving the performance of their open system to eradicate the legal hurdles that lag production behind as a result of environmental noncompliance (Caldwell & Hinton, 2015). The system encompasses risk assessment management which ensures that all the stakeholders in the company are conversant with the environmental, ethical, legal and societal regulations in their area of operation (Bateman, Snell & Konopaske, 2016). The ExxonMobil’s OIMS Framework establishes a universal guideline on how the different parts of the open system can address and avoid risks which can slow the production process.
Leadership throughput is therefore guided by the management leadership, commitment and accountability and the risk assessment and management principles of the OIMS system (Anon, 2017). Accountability and risk assessment is the philosophy that guides the managers, and they are accountable to not only the shareholders but also to the employees under them. The throughput is likely to increase productivity, increase employee job satisfaction and motivation levels leading to increased output levels (Caldwell & Hinton, 2015). The company uses cogeneration technology throughput to improve the efficiency and effectiveness of the open system and production processes (Scott, 2017). Cogeneration technology facilitates the capturing of heat generated from the production of electricity for utility in production, refining, and chemical processing operations (Caldwell & Hinton, 2015). The technology is aimed at reducing the carbon footprint of the company and reduces green house gases emissions from the production process (Bateman, Snell & Konopaske, 2016). It facilitates environmental conservation and averts lawsuits due to noncompliance with carbon emission laws, therefore, improving the output levels and saving company resources. The OIMS system also acts as a corporate administration throughput since one of its principles details the criteria for personnel hiring and training (El-Reedy, 2016). It ensures that only competent and capable employees get the job and ensures that on the job training is offered to lead to the creation of an experienced workforce leading to high-quality output.
Organizational Outputs
Outputs refer to the end products from the production process and for ExxonMobil their finished goods include jet fuel, heating fuel, and gasoline, synthetic turbine oils, hydraulic fluids, aviation greases, industrial lubricants and greases, and waxes (Anon, 2017). The company earned $9.9 billion in 2016 compared to $16.2 billion they earned in 2015, and their share prices stood at $1.88 per diluted share (Bateman, Snell & Konopaske, 2016). The figures indicate that the net income decreased by $6.3 billion a decline that the company attributed to decrease in commodity prices and the impairment charges worth two billion dollars (Scott, 2017). The company increased their production capacity by adding two fifty thousand oil-equivalent barrels per day an addition to their previous 3.921 million barrels of oil equivalent fortifying their position as market leaders using oil equivalent barrel comparison (Anon, 2017).
Personal Reflection
Due to the high and ever-increasing demand for fuel and gas products ExxonMobil is among the most successful companies worldwide and has been a market leader in the oil and gas industry since its inception in the 1800s (Anon, 2017). One of the useful pieces of information I have obtained about the company is in its stringent management style which ensures that things run smoothly around the world from their Irvin Texas headquarters (El-Reedy, 2016). With operations in twenty-one countries around the world, the company has managed to consolidate the various subsidiaries to produce high-quality products and services by dividing their operations into three divisions. Exxon Mobil Corporation deals in exploring, developing and distributing oil, gas, and petroleum products through their upstream, downstream, and chemical segments (Furman, El-Bakry & Song, 2016). The Upstream segment deals with the production of crude oil and natural gas, the downstream segment in the manufacturing of and trading of petroleum products while the chemical segment deals with the production of petrochemicals (Anon, 2017). Through the assignment, I have learned the various business undertakings of the company, its history and their market position globally and I would invest in the company and buy its stocks.
The reasons why I would buy stocks in the company is because of the continued profitability of the company since its inception, and it has always held the market leadership position since the 1800s (Anon, 2017). The demand for clean energy is projected to increase annually by 6.6% according to OPEC a factor that will drive the demand for the company’s products by over 16% by 2040 (El-Reedy, 2016). Increased demand means more profitability for all stockholders which mean that holding their stocks will have good returns in the long run (Furman et.al., 2016). Additionally, in my research, I have noted that the company gives precedence to their shareholder's interests before employees, customers or any other stakeholder. An investment in such a company where investor's interests and increasing their profitability and returns is a wise decision since profitability is assured (Beyazay-Odemis, 2016). The diversification in their business ventures also ensures that risks are spread therefore ensuring that in case of an economic crisis in one segment the shareholders have an alternative segment to depend on (Bateman, Snell & Konopaske, 2016). Therefore, I would buy stocks from ExxonMobil due to the profitability, their investor relations, diversification and projected increased demand in the energy sector.
In sum, ExxonMobil is a publicly traded fortune 500 company in the oil and gas industry. It is the seventh largest company in the world and the biggest company in the oil and gas industry. It was founded in 1999 following a merger of Exxon and Mobil companies and it can trace back its origin to 1859 when Rockefeller started his first business.
References
Anon, (2017). [online] Available at: http://exxonmobil corp [Accessed 22 Sep. 2017].
Bi.galegroup.com.ezp.slu.edu. (2017). Saint Louis University Libraries | Saint Louis University . [online] Available at: http://bi.galegroup.com.ezp.slu.edu/essentials/article/GALE%7CI2501316979/88861334 0cc0e5633c030cfdd3a14959?u=sain44199 [Accessed 22 Sep. 2017].
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Beyazay-Odemis, B. (2016). The nature of the firm in the oil industry: international oil companies in global business . New York: Routledge.
Caldwell, B., & Hinton, J. (2015). Data Drilling: Changing the Way the Oil and Gas Industry Manages Safety and Risk. SPE E&P Health, Safety, Security, and Environmental Conference-Americas . doi:10.2118/173497-ms
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Pedersen, T., Venzin, M., Devinney, T. M., & Tihanyi, L. (2014). Orchestration of the global network organization . Bingley, UK: Emerald Group Publishing Limited.
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