Exxon Mobile Merger, Globalization, natural oil
There was a tendency in the economical world between 1994 and 2000. This movement was the result of business and technological changes and the globalization of markets. (Weston, 2002. pp.1.) With the development of technology worldwide, it is evident that technical development and operations management improvements were behind the Exxon Mobile merger as well. The size of the market increased continuously, and to keep their positions on a highly competitive industry, companies decided to create a larger organization and cut production and technology costs alike. In the below review we are going to review the legal background and stages of the merger, to provide a viable framework for similar transactions and changes in the industry. The Exxon-Mobil merger was created in 1998, and since then there were different criticisms expressed. The first one is that while back in 1993 the five largest US oil companies controlled about a third of the domestic oil refinery, by 2003, this number has increased to 50.3%. (Public Citizen. 2004. pp. 4.)
As most of the natural oil reserves today are located in the Middle East, there are certain political and legal risks to be taken into consideration. (Weston, 2004. pp.1.) Mergers are considered to be some of the advanced adjustment responses to these challenges and oil price shocks in the past few decades. Although a number of merger activities between 1980 and 1985 were completed in the oil industry, they did not prove to be viable.
[...] the commission examined whether the mergers provided any evidence to antitrust violation. They found that companies that delayed or withheld shipments back in 2001 for market consideration did not violate antitrust law, and firms acted in their own interest to protect their profits. However, Weston (2004. pp. 5.) argues that the report clearly states that there was an evidence for withholding reserves, the government did not do anything to prevent this behavior in the summer of 2000. In 2004, the top 8 oil refining companies controlled 71 percent of the domestic market, and one of the eight firms was Exxon-Mobil. [...]
[...] and Richard A. Posner “Market Power in Antitrust Cases,” Harvard Law Review (No March), 937-996. Salame, R. (2006.) Why Do Mergers Fail? What Can Be Done to Improve their Chances of Success? [online] Retrieved: http://www.peoplemix.com/documents/articles/Why%20Do %20Mergers%20Fail.pdf Exxon-Mobil Website. Operations Integrity Management System. [...]
[...] As the merger resulted in the redundancy of thousands of employees, a new policy and support system had to be created. The legal background had to be created for the successful exit of some companies, and as there were people losing their position from both Mobile and Exxon, a standardized procedure had to be created regarding final pay, redundancy payments and re-employment. The company also had to plan a balanced process regarding the closure of thousands of petrol stations, making sure that they would have enough funding for the process. [...]
[...] Exxon Mobile Merger - The Impact of Globalization Abstract There was a tendency in the economical world between 1994 and 2000. This movement was the result of business and technological changes and the globalization of markets. (Weston pp.1.) With the development of technology worldwide, it is evident that technical development and operations management improvements were behind the Exxon Mobile merger as well. The size of the market increased continuously, and to keep their positions on a highly competitive industry, companies decided to create a larger organization and cut production and technology costs alike. [...]
[...] (Exxon-Mobil OIMS pp. Work permit processes had to be reviewed by the company's legal operations team; checks and authorizations had to be consistent with the new operational and mechanical risks. Mechanical integrity programs were also developed to merge the two company's assets and technologies to create a more effective way of operation and cut costs. All operating requirements had to be documented and communicated, while continuous compliance had to be checked prior to checks by the authorities. We need to note that a proper long-term shutdown procedure had to be developed for the permanently abandoned facilities. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
