The Importance Of Continuous Changes In Management For Energy Corporations: A Case Study On Exxon Mobil

Identify a company. Identify a management problem. (Note: not a market research nature). Specify research questions which address the management problem/decision. Design a research program. Carry out the research. Sourcing from ONLY secondary data. Analyse the findings. Identify alternatives and make recommendations to improve the performance of the organisation.

The Management Challenges Facing Exxon Mobil

The global business today is increasingly becoming a very competitive environment for businesses to cope with. This has majorly become a significant challenge for the requirement in a change in management in energy corporation.  The main focus of this report will analyze the lack of continuous management changes in Exxon Mobil company where it has been considered as one of the overall management challenges in the company. Through the industrialization and globalization effect today, the growth in management quality is one of the main aspects of every multinational company, especially in the energy sector, must be able to utilize and sustain (Drucker, 2012). Therefore, the main research question will focus on what is the importance of continuous changes in the management structures of energy corporations.

The main management issue in Exxon Mobil company is lack of continuous improvement in managing change which has led to the increase in numerous arising issues such as unethical management practices, poor logistics and supply chain planning, and unresponsive engagement between the management and the shareholders (Strbac, 2008). The objective of this report will be to identify the required management application in Exxon Mobil company and how to effectively improve the management strategies of the company. With respect in improving the standard level of the company, the application of new management will also focus on the improvement of innovation and sustainability approaches which will help the company to improve the competitive advantages of the company.

Exxon Mobil is one of the largest multinational energy corporations in the world. Over the past few decades, Exxon Mobil has received a series of criticism in the management processes and operation. An example is the lack of the company being able to offer sustainable approaches in trying to create a cleaner management operation. Also, Exxon Mobil has faced a series of accusation against human rights issues where it has reflected very poorly in the management strategies of the company. This can be considered as a very significant challenge in the public relation concern especially with the management of over 69,600 employees (Bartlett & Beamish, 2018).

The company main operational objectives include oil, natural gas, and petroleum production and transportation. According to the 2017 financial report, a net income of US$19.71 billion. This strategizes the company as one of the biggest profitable companies in the US and the entire energy industry in the world. Despite the change in management in 2017, to Daren Woods after the of former CEO Rex Tillerson, Exxon Mobil change in management has been characterized as very poor. With the application of the new management strategies in the company, the changes and improvement in the management system of the organization will significantly help to minimize some of the challenges facing the company today.

Improving Management Strategies in Exxon Mobil

Environmental sustainability is one of the main issues that face most of the energy companies today which also has a considerable huge impact on the public image of most companies (Christofi, Christofi, & Sisaye, 2012). With the continuous increase in technology and competition in the market, critical areas such as safety of local community, community, and majorly employees, are some of the major issues that every manager should be to implement and/overview for effective change in the management. The technology changes in multinational companies such as Exxon Mobil can be considered as one of the most challenging issues in direct relation to cost.

Exxon Mobil management has been criticized for bureaucracy where it has been reported the company has a very poor management of its employees. The company has been reported to disregard most of the American foreign policy where human rights cases have continued to occur (Strbac, 2008). The employees of the Exxon Mobil have been reported to be mistreated, working in poor environmental conditions, and treated like replaceable ‘logs’. This reflects very poorly on the entire Exxon Mobil management and despite the high risk of cost the company has to focus in strategizing its entire management structure. Apart from the poor public image, the bureaucratic organizations have been described to have very poor management innovation and sustainability.

Another challenging issue facing Exxon Mobil in managing change in its structure is the poor organization culture. The company culture is one of the main hindering issues in improving the management problem where over the years the main key focus of Exxon Mobil has been described as profit oriented. Through the approach of profit gain, Exxon Mobil has increasingly neglected the emphasis in managing change which has led to various the legislative issues and poor management practices (Naphade, Banavar, Harrison, Paraszczak, & Morris, 2011). With the continuous demand for green approaches in industrialization development, issues such as corporate social responsibility and governance have become one of the major concerns for most of energy companies’ performance.

Exxon Mobil operates in over 200 countries and with over 69,600 workers the company social responsibility is significantly important. In order to achieve this, the management of Exxon Mobil must be fully re-strategized in line with the change in the company main priorities and goals to the society. On the same note, the management system of the company is one of the major issues that should be changed thus to allow the improvement and responses required by the company (Starik & Kanashiro, 2013). The remedy and prevention measures are also some of the few important details that the Exxon Mobil management system should be able to re-strategize to protect the entire management operation and social sustainability.

Challenges Facing the Implementation of Changes in Exxon Mobil's Management

One of the main problem expected to faced be during the implementation of changes is the issue of cost. Changing the entire approach of management development will significantly require a lot of resource investment. Some of the main cost expenditure of the company include changes in new technology requirements, employees training and remuneration, and many others. Through the increase in supply chain value and standard, the cost of management change may also affect the company revenue generation before the effective adaptation and development of the entire management system. On the hand, a shift in cost may also affect consumers where the value of the commodities offered by the company which will affect the required management approach in offering cheaper and sustainable products (Dovì, Friedler, Huisingh, & Klemeš, 2009).

The culture of the company is another hindrance which will affect the implementation of change in the management. With the existence of Exxon Mobil in over 130 years, the organization culture of the company will require significant effort to be overcome and give room for more sustainable management culture (Escobar & Vredenburg, 2011). The bureaucratic issue is another that can directly be related to the poor company culture and resistance for change in the company’s management. Through the continuous increase in energy demand especially in oil and gas, Exxon Mobil management has very strong legal and market dominance which gives more bargaining power against change in management in the company (Vivoda, 2009).

The continuous improvement in the management changes in Exxon Mobil will not only enhance the economic growth of the company, but it will also improve the product quality of the company. In line with the growth in demand for corporate social sustainability, the application of healthier management changes will also improve some of the public relation challenges. Some of the main activities which contribute greatly to a change in the management practice are the care and engagement of employees (Starik & Kanashiro, 2013). Through the continuous encouragement by most of the governments to companies to approach the use of social entrepreneurship, with the change in management, Exxon Mobil will be able to enjoy some of the legal requirements and a decrease in the taxation system.

Environment sustainability is another important aspect to be considered as a reason for the change in the management of Exxon Mobil. Apart from the bad reputation of the company, environmental sustainability and development are one of the main issues which continue to evoke mixed reactions in the world today causing the respective government to take action on reckless corporations. Example, through the poor management system in the past, Exxon Mobil has lost over 15 billion dollars as penalties fines for spillage and other environmental destructions (Bunse, Vodicka, Schönsleben, Brülhart, & Ernst, 2011).

The Benefits of Continuous Improvement in Management Changes in Exxon Mobil

Despite the continuously increasing demand for energy regeneration, quality in product production is a significant factor which Exxon Management must be able to consider. This means that the company should be able to apply some of the business models such as Total Quality Management (TQM) and Continuous Improvement in implementing and strategizing the occurrence of new changes in management. Through the application of quality improvement models, the Exxon Mobil management will be able to offer more sustainable approaches both environmentally and product quality assurance (Alfred & Adam, 2009). This will also help to support the public and company relation with an increase in more profit gain by the company. Economist experts argue that customers are willing to pay almost 10% on the condition they are using sustainable products or the relation of the product with sustainable development (Du & Vieira, 2012).

According to Rainey (2010), the employee engagement is one of the main recommended implementation changes in the management process of Exxon Mobil. Employees are considered to be more effective in a situation where there more engagement between senior management level and other workers. With effective training and an enhanced remuneration process, employee’s performance rate will also significantly improve in line increasing the company competitive advantages and have more ease in managing changes in the company. This will also increase the company operation capabilities and also innovation throughout the management process and the supply chain.

Operations Integrity Management System is one of the currently used systems by the company to enhance to avoid spillage and losses. Despite its reported success stories, the system can be considered as obsolete where there has been more requirement in the development of more environment-friendly, behavior-based safety, improved leadership and management, and community-oriented system (Dovì et al., 2009). Therefore, Exxon Mobil should also heavily invest in scientific management which focuses on the enhancement of ‘individual’ management processes in the company. some of the advantages of scientific management will include continuous employee recruitment, training sessions, achieving operation integrity, mitigation of potential operation risks, and many more (McDaniel & McLaughlin, 2009). Through proper channeling of investment in the organization system, another main focus of the organization should be to invest future technology development in the approach of enhancing sustainability in the management structure and its supply chain value.

Conclusion

In summary, Despite the dominance of Exxon Mobil in the energy industry it has been considered to have very poor approaches to managing changes in its management structure. Some of the issues faced by the company include poor employee relation and engagement, criticism on human right issues, poor environmental management, and others. With current globalization changes and environment sustainability approaches, Exxon Mobil change in the management is considered very important for the future sustainability of the company (Christofi et al., 2012). The approach of shareholder engagement should one of the main key focus in providing sustainable development. Also, as a key major player in the energy industry, Exxon Mobil should enhance its corporate social responsibility in its management application changes. As per changes requirements, Exxon Mobil should restructure and focus more effort on improving the scientific management approach. With the implementation of the above recommendation, I believe Exxon Mobil will not only improve its management structure but it will also be an ‘instrumental’ in economic development and growth in the energy industry.

References

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