Exxon

In: Business and Management

Submitted By reneemagritte
Words 7821
Pages 32
ICMR Case Collection

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ICFAI Center for Management Research

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BECG 045

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The Exxon Valdez Oil Spill

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This case was written by Jaya D. Sangtani, under the direction of Vivek Gupta, ICFAI Center for
Management Research (ICMR). It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.  2005, ICFAI Center for Management Research. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means- electronic or mechanical, without permission.
To order copies, call 0091-40-2343-0462/63/64 or write to ICFAI Center for Management Research, Plot # 49,
Nagarjuna Hills, Hyderabad 500 082, India or email icmr@icfai.org. Website: www.icmrindia.org

BECG/045

THE EXXON VALDEZ OIL SPILL
“ExxonMobil’s tactics are well-known, and this is a classic case of deny, dupe, and delay. Just as it denies the science on climate change, it denies that oil from the spill is causing damage in the
Prince William Sound. And on both issues it is running campaigns to dupe the public into thinking it is an environmentally and socially responsible corporation.”1
- Anita Goldsmith, Greenpeace International Campaigner.
“Exxon would meet its obligations to all those who have suffered damage from the spill.”2

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INTRODUCTION

Lawrence Rawls, Chairman, Exxon.

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On March 24, 1989, one of the worst ever environmental disasters occurred in the US. Exxon3 owned oil tanker – Exxon Valdez (EV) spilled 11 mn gallons of crude oil into Prince William
Sound (PWS).4 The oil spilled over 1500 miles of the Alaska coastline and affected many islands in PWS (Refer Exhibit I for the map of the…...

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Exxon Valdez

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...Risk Associated in the business in the business diversification activity 1. Creation of a new or common corporate culture between Exxon and Mobil 2. Retention of key employees with the right knowledge and expertise 3. Meeting regulatory and anti-trust requirements to prevent dissolution and maintain competitiveness Merger Risks Unfortunately, any merger between two established companies creates challenges that must be overcome in order to achieve the projected benefits. These include creating a new/common culture as opposed to the distinct cultures of the independent companies, meeting regulatory and antitrust requirements to assure the continued functioning of a competitive marketplace, and retention of key personnel to reap the benefits of their knowledge and expertise. The companies have significantly different corporate cultures. Exxon is a conservative company with a strong ethic of following the rules handed down from above, while Mobil is more liberal and expects individuals to think for themselves and develop their own solutions to the problems that arise. On the regulatory front, as the top two U.S. oil companies, there are many markets throughout the United States where Exxon and Mobil dominate the sale of gasoline, either through directly-owned filling stations or through franchisees. It is highly probable that regulators will require divestiture of some filling stations and release of some franchisees from their contracts in order to......

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