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Friday, April 9, 2010

Adaptations of People, Processes and Structures

The demand of oil drives the economic development of the world. The oil and gas industry is composed of the production of oil, gas, coal, and other related consumable fuels. Without the supply of oil, many business transactions will be affected which could practically shut down business organizations. The extent of the supply and demand of oil around the world cannot be ignored.

Essentially, the oil industry involves expenses which are necessary for exploration, production, refining, marketing, storage, and transportation of various consumable fuels. Due to the nature of the industry, various oil firms such as Exxon Mobil Corporation, Royal Dutch Shell (Shell), British Petroleum (BP), and Saudi Aramco are concerned with the adaptation to changes in the global environment. The rationale behind the idea is the fact that people in the society are also concerned of the effect of oil production in the environment aside from the necessity of its supply. Thus, there is a need to develop schemes in order to maximize the production of oil and at the same time avoid or limit destruction in the global environment.

In line with that, each oil firm has its own method, with the assimilation of people, processes and structures through good organization, effectiveness and modernization. There is no doubt that the rapid pace of modernization requires oil firms to discover novel ways to establish their value within the six global environments. As explained, the success or failure of a business will eventually depend on how the firm reacts to shifts within the Global Culture, Global Politics, Global Economics, Global Natural Environment, Global Technologies and Global Industry and Business. Hence, the ability of oil firms to deal with each global environment in such a way that they will establish their value and adaptation methods.

The rapid pace of change directly affects the firms being studied in this paper. In matters of global culture, British Petroleum has started to improve its infrastructure in Russia due to a total increase in energy and oil demand within this region as well as worldwide. The company decided to place a new chief executive in the Siberian territory to be in charge of these operations. With respect to Chevron Australia, the firm has newly undergone a $30 billion infrastructure project to extract natural gas from the Australian coast. The company wanted to improve its operations but many Australians are against the idea of having much of the western coast to be under control of the oil giant, as it creates pollution and eliminates potential real estate. Due to the escalated protests, this plan has not been finalized. Aside from that, in terms of global politics, Exxon Mobil was stirred by the government-related actions of Obama. It was reported shortly after the release of Obama’s new energy policy that Exxon believes oil firms have started the exodus from the retail fuel industry. Exxon Mobil even believes consumption of gasoline has peaked and demand also increased in the United States apart from other firms. Indeed, the rapid pace of change affected Exxon Mobil, Chevron Australia, and British Petroleum.

The types of activities that I believe firms must do in order to succeed in the oil industry for a long period of time are two-fold: responsibility for environmental care and protection as well as maximum production with a fair price in distribution for consumption. Primarily, the firm that plays a better role in keeping the environment protected despite the production and consumption of oil will most likely succeed in the oil industry. Besides, if there will be plans for increase of the production of oil products, the prices of its distribution for consumption must be fair enough for the whole economic system to adapt. Therefore, proper research about environmental issues related to oil industry must be made as well as implementation of policies to resolve the same are necessary together with fair control of the prices.

Based on various reports, ranking oil firms in accordance with performance would feature Exxon Mobil Corporation, Royal Dutch Shell (Shell), British Petroleum (BP), and Saudi Aramco (“Petroleum Intelligence Weekly Ranks World's Top 50 Oil Companies (2009)”, 2008, p. 1). Saudi Aramco remains in the first place, Exxon Mobil follows, British Petroluem is the third, and Shell remains in number four. Based on the reports of Energy Intelligence Group, Saudi Aramco remains number one since 2006, which is followed by the firms studied in the is paper like Exxon Mobil, British Petroleum, and Shell respectively (“Petroleum Intelligence Weekly Ranks World's Top 50 Oil Companies (2009)”, 2008, p. 1). The performance of Shell is the worst compared to the three mentioned while Saudi Aramco remains to be the best firm in the oil industry. The myriad factors affecting the performance of the oil firms may vary from one to another, yet the necessary things to improve are just the same like richness of natural resources in a country, technological development and management skills of managers in each firm.

Finally, the skills of managers in oil firms is the most easy to change and develop and control compared to technological advantage and extent of natural resources. Thus, managers must develop their managerial skills to cope up with the rapid pace of changes. These skills may include ability to motivate employees despite the recession, capability to hire best employees for the company operations amidst stiff competition and good public relations.


Energy Intelligence. (2008). Petroleum Intelligence Weekly Ranks World's Top 50 Oil

Companies (2009). Retrieved June 6, 2009, from http://www.energyintel.com/


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