Organizational Communication for leaders & digital forensics

XOM is committed to its vision of being premier petroleum & petrochemical company in the world to be achieved by strict adherence to the business code of the conduct with the ultimate goal of realizing operational efficiency and strong financial results. Further, its mission statement is aligned to vision the firm where it commits itself to the production of the safe, affordable and reliable energy in its effort to improve standards of the people globally. The firm depends on its mission and vision statement to develop business and corporate strategies which are a continuum of the success to the firm (Braun et al…, 2012).

In alignment with the vision and mission of the firm, it has established basic tenets on how to create value and better use of customers, employees, stakeholders and communities in which it operates. For stakeholders, it concerned with creating high value to them through engaging in profitable business activities that will lead to a high return to stakeholders. For employees, the firm creates a conducive working environment, hires qualified workers and offers training and development to its employees which lead to low employee turnover. For the case of the customers, it provides petroleum and energy product that meet preferences of the customers, a strength made possible by great use technology to produce innovate petroleum at affordable prices. Lastly, for the case of the communities, XOM carries its business activities ethically and socially respecting local communities, their values and cultures and adhering to clean environment standards and guidelines (Exxon Mobil Corporation, 2018).

XOM segments its business strategy into 3 segments which are upstream, downstream and chemical integration. The 3 segments have made a significant contribution to the long-term success of the firm. Upstream segments deal with the exploration and production of natural oil. Upstream segments sustain diverse growth portfolio in the exploration and development opportunities. A careful investment decision is made when pursuing new exploration and production, where fundamental strategies govern the selection of the investments to ensure continuous maximization of the value and welfare of the shareholders in any pursuit. Development of the employees and use of the innovative strategies is paramount in the establishment of the new oil production field. In the year 2018, XOM recorded a total of $14,079 million earnings from the upstream segment.

In the case of the downstream segment, it deals with manufacturing and selling of the oil products. It is such a large segment in the firm with 25 refineries which are located in 25 countries which are capable of distilling 4. 7 million barrels per day and manufacturing 128 thousand barrels per day. Refined oil is determined by the number of factors such as market prices of the products which have been produced such as gasoline, diesel oil whose prices are influenced by the global prices of the oil and also the price of the raw materials. Innovative technology is one of the core competencies which used by the XOM to ensure that refining is cost-effective and oil products are of the superior quality that is pleasing to the eyes of the consumer. In the year 2018, XOM recorded $6,010 million earnings from the downstream earnings which shows the significance of this segment (Exxon Mobil Corporation, 2018).

In case of chemical segment, it deals with production and selling of the petrochemicals. XOM forecast that in the next 20 years, demand of the chemical products will grow by 45% which result to higher demand than the production capacity. As result of this, XOM continues to expand its operation in the chemical segment where it has opened 7 of its chemical facilities and is working in the plan of the opening the next 6 stations soonest possible. Chemical segment is such important segment to the XOM where in the year 2018, it reported $3,351 million earnings from the chemical segment (Exxon Mobil Corporation, 2018).

XOM faces stiff competition in the energy and petroleum industry with its main competitors being Chevron Corp, ConocoPhillips, Shell and Total. XOM operates in the oligopolistic market structure. This basically means activities of the XOM have greater influence in the market. Further, because of the nature of the market structure, XOM should and continues to produce superiors’ products at affordable prices so that it can edge out its competitors. The firs have long-term look in the energy and expect demand for energy continue increasing which progressively makes the firm to commit investing in the long-term project in the energy which leads to value addition to the people in the global context.

Section 2: Demand Analysis Concepts:

The oil, gas, and petrochemical businesses are fundamentally commodity businesses. This means that they are consumed on a daily basis. Additionally, it is good to note that population is on the increase rate and also a number of the people owning vehicles and motors are on the increase. Further, industrialization is progressively growing which means the demand for petroleum products is on the continuous increase.

In the wider context, discoveries of the oil has been on the decline and not in position to meet the ever increase in the demand. In the year 2017, it is reported that only 3.5 million barrels were discovered that met only 10% of the demand (PWC, 2019). Economically, when the demand is not met, it means that there is excess demand than available supply. This leads to increase in the prices. Increase in the demand for the energy and related products more than the available supply, could be the reason why there has been consistent fluctuations in the price of the petroleum products. XOM is committed in addressing excess demand in the petroleum products by investing heavily in the upstream. It has made several discoveries in the Guyana with hope of recovering 5 billion barrels of the oils. It commits investing in the its employees, innovate technology and finding more oil field globally to help increase its oil production capacity in bid to meet growing demand in the oil, petroleum and petrochemicals.

There are demand-related factors which affect the demand for petroleum products. Some of these factors include change of the consumer preferences to alternative sources of energy such as electric vehicle and wind energy could really affect the demand for petroleum products. People are becoming sensitive to the environmental protection which is causing innovate technological manufacturing of the electric vehicles. This is expected in future to affect the demand of oil products which are produced by Exxon Mobil Corporation. As result of this, the firm is focused in innovative technological development and production of the clean fuels which have less impact on the environment.

Finally, demand is determined by knowledge that consumers have towards the products. In view of this, XOM carries advertising campaign through social media platforms which are aimed to create brand awareness of its products. To create appeal to the customers, engages in the social corporate activities with aim of winning the attitude of the customers. Some of the activities include sponsoring the sport events which makes people feel that it cares about talent development which influences positively the purchasing power of the consumers.

Section 3: Production and Cost Analysis Concepts

In the process of the XOM undertaking four main business activities- exploration, production, transportation and sales of the crude oil and natural gas, there are fixed and variable cost which is incurred. Operating expenses for 12 months ending 30th of June 2019 was 64.459B which had declined by 3.78% when compared with that of the previous year (Macrotrends, 2019). Majority of the production activities in XOM are capital intensive such as servicing and maintenance of the machines. In other case, exploration activities require machines and technological devices to identify potential reservoirs. Similarly, drilling is done by the use of the machines and human capital is only required to command machines to work. Therefore, capital (machines) takes a substantial portion of the operational activities in XOM.

Cost of the technology that is used also is very high. Work of the exploration requires specialized use technologies and also process of the testing to identify if the production of the oil will be sustainable and extent of the impact is likely to cause to the fact. Further, experts and engineers which are recruited, developed and trained by the company adds to the operational cost.

Training of employees is paramount to the Exxon Mobil Corporation which is driven by mission of the firm of producing quality products and reducing errors that may arise and cost firm because of the skill deficiency. Therefore, employees training and development programs are cost incurred by the firm which are perceived to better than cost that would be incurred such as damage of the reputation of the firm which would take the firm years to recover.

Section 4: What Exxon Mobil Corporation got right and what got wrong

What XOM got right

There are several factors which XOM got right. First, focus on the people and development is skilled workforce is the right footing to the XOM which contributes to competitive advantage. In the recruitment process, XOM is keen in employing talented employees who have clear understanding of what they are supposed to do. Approach which is used in recruitment by the organization results to 96% retention rate and also causes the employees work for an average of the 30 years. High retention rate is significant because it reduces employee turnover hence saving a lot in the frequent recruitment cost of new employees. The firm exposes employees to cross-cultural assignments which helps employees to have deeper understanding of the business environment of the XOM in fullness and also increase cultural diversity among the employees. Additionally, firm uses what it calls rotational assignments and development of the employees where employees are made to away from their career pursuits. This makes XOM to have employees who understand systems of the operational of the XOM in fullness hence reducing incidences of the shortage of the workforce in any particular area because employee are exposed to various functions.

Second, got right in the choice of the integrated business model which capitalizes on three segments which are upstream, downstream and chemical. Upstream has enabled the firm to achieve long-term success and focus in the investing in the exploration activities and make new discoveries. Downstream which handles refining and marketing of the fuel and lubricants, has helped firm to refine its distribution networks and create brand awareness of its products. Currently, Exxon has the downstream operations in 25 countries which is aligned to the diversification and growth objective of the firm and lastly, chemical segment with 13 facilities marked to meet the growing demand where already 7 are operating. (Exxon Mobil, 2018).

Third, XOM got right in fundamental annual management process is used in the process of evaluation of the investment projects. Projects that are the firm would like to invest into, are evaluated on the basis of the prevailing market conditions which help the firm to invest in an advantaged project which promise to deliver higher returns and also, they are going to serve for a long time.

Finally, got right in alignment of its vision and mission. Vision and mission of the firm have been used to explore on development of the objectives. In line with the vision and mission of the XOM, the firm invests heavily in the research and development and also in the scalable technology which leads to the production of the innovative and affordable energy and petroleum products. This has helped the firm to continually meet the growing demand and also produce a product that meets the preferences of the consumers.

What XOM got wrong

There are several issues that XOM got wrong. First, it was accused of underreporting climate risk. Second, it was accused of the keeping secret of the financial books which shows that it did not commit the securities fraud. In each of the cases, Exxon Mobil Corporations contested against the accusations which required it to appoint experienced and exceptional individuals in the legal practices to represent it which resulted to high cost but all the same, XOM has been able to put up with pressure emanating from allegations involving climatic issues.

Conclusion

XOM has experienced exponential growth both physically and financially. This success is attributable to integrated business model applied to by the firm. To bigger extent, upstream, downstream and chemicam instagration approach play significnat role to the success and gwoth of the firm. Additionally, investemt in the scalable technology is also anotehr factor which has contrinuted to succes and growth of the firm. Scalable is used in the exploration, refining and also devloping technologically savvy employees who use innovatuve technologiscl skills in producing quality producst that meet ever grwoing demand. Alignment of the vision and mission of the organization with the objectives contributes greatly to the expansion of the XOM. Therefore, core competencies, capabilities and resources of the XOM define success and growth of the Exxon Mobil Corporation which strategically position it far much above its rivals.

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