Tells story of company operations
EXXON Corporation has been in business for more than 90 years, tracing its origins to the very beginning of the oil industry. For almost all of those years, the corporation has been an acknowledged industiy leader. It built a worldwide business enterprise long before the word “multinational” came into common use.
Today Exxon does business in more than 100 countries. It explores for oil and gas on every continent and far out into the continental shelves. It is the largest of the major companies in petroleum production, with a 1974 output of 2.3 billion barrels of oil and natural gas liquids and more than 3.5 trillion cubic feet of natural gas. It manages or has an interest in 67 refineries in 34 countries and owns or has a share in 35,600 miles of crude and product pipelines. It operates one of the world’s largest ?eets, with 22 million dead weight tons of tankers and other ships owned or under long-term charter. About six million motorists stop each
day to fll up at the 73,000 service stations where Exxon products are sold.
While it is primarily a petroleum enterprise, the corporation is active in developing other energy sources, including coal, tar sand deposits, uranium ore and a fabrication plant for nuclear fuel.
It is in the chemical business, an important supplier of chemical raw materials, solvents, plastics and other chemical products. It has investments in a number of other fields related to its primary business, ranging from real estate to an affiliate which manufactures the gasoline pumps used in service stations.
These broad outlines sketch the dimensions of a worldwide, fully integrated petroleum company, an enterprise involved in every phase of the oil business.
As large as Exxon is, its facilities make up a relatively small segment of the supply system involved in developing the world’s energy resources and delivering them to consumers. Exxon competes with many private companies intemationally as well as other companies operating in limited areas or markets.
It competes with government companies, some of which are intemational in their own right. The number of competitors has increased over the years, so that even as Exxon expanded its operations its share of the world market has been reduced. This share, excluding Communist countries, now amounts to about 11 per cent,
The efficient functioning of this competitive system depends on its flexibility as well as its sheer size. Oil and gas are generally found in places far removed from their ultimate markets. Because there are practical limits on the amount that can be stored, there must be an almost continous flow of supplies all the way from the wellhead to the consumer. Developments anywhere in the world may have repercussions elsewhere on the long petroleum supply line. A tax increase or production cutback in the Middle East can radically change the economics of re?nery operations in Europe.
New air pollution requirements in Japan, a switch to smaller models by U.S. car buyers, or a new oil discovery off the African coast can have worldwide impact.
Petroleum companies must adjust their operations to respond to such changes. This task has become rnore and more demanding today, as oil-exporting countries have increasingly assumed the direct ownership of their petroleum resources, as consumer countries have increased their regulatory authority over energy companies, and as investment costs have increased tremendously.
An enterprise of this scope and complexity, in a condition of continuous growth and change, requires human resources equal to its challenge. In Exxon’s case, this involved some 130,000 employees at the end of 1974, of whom 100,000 were working outside the U.S. More than 98 per cent of these were nationals of the countries in which they were employed.
But Exxon’s work force is notable not so much for its size as for its skills and experience. One-third are in managerial, professional or technical positions, most of which require higher education. Exxon people include geologists, physicists, every
conceivable variety of engineer, marketers, research scientists, writers, economists, financial experts and specialists in dozens of other fields, as well as generalists with a business background. Apart from the supervisory and technical organization, it takes a wide variety of skills to operate and maintain the oil?elds, refineries, truck and tanker fleets, pipelines, laboratories and other facilities that play a part in company operations.
To carry on its business, Exxon relies on a number of corporate divisions and affiliated companies. Each has certain special functions or operates in a particular geographic area. But, taken together, the divisions and affiliates, are components of a single enterprise, dependent in some measure on efficient support from other parts of the corporate whole.
Broad policy guidance and financial assistance for the entire enterprise are provided by corporate headquarters in New York, under the general supervision of the Board of Directors. Corporate management is headed by a chief executive who is advised and assisted by a management committee of senior executives. It is the responsibility of these executives to coordinate Exxon’s worldwide activities, review capital investments and furnish the various divisions and affiliates with assistance and counsel.
They review and evaluate the management performance of the major operating units with special attention to the and capital budgets, operating results, and managers’ ability to find and develop new executive talent in their particular areas of responsibility.
Corporate headquarters includes a number of staff departments specializing in various phases of the petroleum business, as well as these other departments: finance, controller’s, taxation, economics and planning, science and technology, investor and
employee relations and public affairs.
In an era when more and more problems cut across regional and functional lines, basic investment strategy must be planned at the top. But managers at the operating level design their plans and programs to it the special conditions in their regions or branches of the business. The authority vested in line managers is perhaps the most important single attribute of the corporation’s stnicture and management philosophy. Each division and affiliate has substantial operating freedom and at the same time enjoys
the advantages of being part of an integrated national or oganization.
Source : Esso Singapore News December,1975.