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Challenges in the Global Business Environment Essay Sample

Challenges in the Global Business Environment Pages
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Specify, in brief, the nature, structure, types of products or service of the business you selected. Examine the information within the company’s code of ethical conduct, and choose three (3) key issues from within the document that you believe are critical for success. Provide rationale for the response. In 1911 the Standard Oil of California, or SoCal was formed amid the antitrust breakup of John D. Rockefeller’s Standard Oil Company. In 1984 the Standard Oil of California and Gulf Oil merged. It was the largest merger in history at the time. Under the antitrust regulation, SoCal divested many of Gulf’s operating subsidiaries, and sold some Gulf stations and a refinery, SoCal changed their name to Chevron Corporation. In 2001, Chevron Corporation acquired Texaco to form Chevron Texaco. In 2005, Chevron Texaco announced it would drop the Texaco. Today, the Chevron Corporation is the second-largest US integrated oil company ( behind Exxon Mobil) and is one of the world’s leading integrated energy companies, with subsidiaries that conduct business worldwide.

Chevron is led by Chairman and Chief Executive Officer John Watson and governed by a Board of Directors and committees of the board that meet throughout the year. The board has four standing committees, composed solely of independent directors who monitors overall corporate performance, the financial controls, effectiveness of its legal and political compliance, public policy and social programs. Stockholders can direct inquiries to the Board of Directors at any time and they may cover a range of topics or issues( Chevron Corporation, 2012). In addition, the board oversees risk management policies and practices as well as management and succession of key executives and Chevron’s strategic and business planning process. The San Ramon, California based company is involved in virtually every facet of the energy industry.

The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels, manufactures and markets performance-enhancing additives for lubricating oils and fuels and other energy products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. The three (3) key issues from within the company’s code of ethical conduct document that I examined and think are critical for success are: (1) The human rights policies for their suppliers and contractors to treat their employees respectfully and to interact with communities in a manner consistent with our Human Rights Policy and the International Labor Organization’s core labor principles. I believe that if these type of practices degrade the value of people and should not be tolerated anywhere. I believe we should have the same dignity and respect in our business practices that we have here as well as abroad and these behaviors are unethical and unjust. (2)

The company policy that no one at Chevron should ever be subject to discrimination. It is my opinion that discrimination in any form is unacceptable. I believe it erodes the fabric of our great nation and it is harmful because it affects the economic outcomes of equally productive workers. Discrimination also tarnishes equality and fairness for all. (3) Bribery is always prohibited. My rationale for choosing for this response is the fact that bribery is an unfair business practice and it can have a very detrimental effect on a nation’s economy. It also creates an unfavorable business environment by encouraging unfair advantage and anti-competitive practices. Using the three (3) key issues you selected as a benchmark, compare and contrast the codes of conduct of two (2) similar companies within the same industry as your chosen company.

On the issue of human rights policies for their suppliers and contractors to treat their employees respectfully and to interact with communities in a manner consistent with our Human Rights Policy and the International Labor Organization’s core labor principles. By comparison and contrast of ConocoPhillips and ExxonMobil, I found both were consistent with the human rights philosophy expressed in the Universal Declaration of Human Rights and the International Labor Organization. ExxonMobil is committed to engaging with the indigenous communities in a manner that is respectful of their cultures and customs. The company is sensitive to local community concerns about balancing their cultural heritage with the need for economic development, even after operations ceased. Also, ExxonMobil supported both local employment initiatives and cultural heritage programs through national content and strategic community investments, respectively.

By contrast, ConocoPhillips on this issue did more extensive human rights risk assessment planning ( by country) of its global operations using externally provided human rights risk assessment tools to identify countries of focus for deeper level evaluation of potential human rights issues and concerns. The company also performed impact assessments, sustainable development scorecards for capital projects and training and guidance on human rights concepts provided to identified leaders and practitioners. On the issue of discrimination, as I compared and contrast these two companies, I found in comparison, both were absent. ConocoPhillips had no anti-discrimination policy published on their website. They do reference voluntary compliance with the Universal Declaration on Human Rights, but it does not include specific language regarding discrimination on the basis of sexual orientation or gender identity.

In contrast, for the fifteenth time in as many years, shareholders of Exxon Mobil Corporation voted down a proposed resolution which would have added “sexual orientation” to their non-discrimination policy. On the issue of bribery, both ConocoPhillips and ExxonMobil by comparison were committed to compliance with regulations. In contrast, both had internal controls in place and functioning. Examine the extent to which the two (2) similar companies you researched have addressed the key issues you selected. Hypothesize two (2) potential positive outcomes for each company if each addresses the key issues in question and two (2) potential adverse effects if each company fails to address these issues. If ConocoPhillips and ExxonMobil addresses the issues of human rights policies, discrimination and bribery the positive outcomes would be competitive advantage in the industry and marketplace and a more comprehensive systems approach in regards to global sustainability, since industrial, social, and ecological systems are closely linked.

If ConocoPhillips and ExxonMobil do not address the issues of human rights policies, discrimination, and bribery the potential adverse effects will have a tremendous impact on stakeholder engagement and labor issues. Since all these issues foster an environment of trust and mutual respect among stakeholders, it will have potential to separate local stakeholders and socially responsible investors. It also has the potential to stagnate sustainable development programs and initiatives. Propose two (2) techniques that the original company you selected could use in order to ensure that its code of conduct will remain relevant through years of changing economic, political, social, cultural, and technological forces on business and society. Next, evaluate the effectiveness of two (2) methods that the company currently adopts in order to manage environment issues. The two (2) techniques that I propose Chevron use to ensure that its code of conduct remain relevant would be ethical monitoring and ethical audits.

These two techniques will provide accountability measures to ensure corporate policies are being adhered by all. The two (2) methods that are used effectively by Chevron are Decision Analysis and Operational Excellence Management Systems (OEMS). Because of Chevron’s OEMS efforts, the company has translated these values into corporate-wide processes, standards, procedures and behaviors to guide daily operations. In 2010, Chevron Corporation won the Decision Analysis Society Practice Award for their procedures, methods and tools it use in making major decisions (Chevron Corporation, 2012). Examine two (2) approaches that the original company you selected has taken in order to embrace technological advancements for innovation and thus improve business offerings. Anticipate three (3) potential technological challenges the company could face, and recommend one (1) strategy that the company could use in order to eliminate or minimize each of these anticipated challenges. Chevron is using its technology to drive improvements in its oil recovery.

The average oil well is only able to produce 35% of the oil that was originally in place. This means oil companies are leaving billions of barrels of oil worth hundreds of billions of dollars just sitting in reservoirs. Because the company is focusing on extracting hard-to-reach oil, technological breakthroughs are absolutely critical to its business. The world’s largest solar-to-steam generation project is another technological innovation approach Chevron has completed and commissioned. This project consists of 7,600 mirrors which focus sunlight onto a solar boiler that produces steam. The steam is then injected into reservoirs to increase crude oil production( Chevron Corporation, 2012).

Three potential technological challenges the company could potentially face. 1. Demonstrating the ability and leadership in connecting supplies with markets 2. Governments not helping create environments to apply company resources to develop 3. Sanctions and access restrictions which place off limits to supplies of energy One strategy that the company could use in order to eliminate or minimize each of these anticipated challenges are global partnerships with international oil companies. This strategy would allow the company to globally have higher levels of cooperation to maximize potential and the value of their resources( Lawrence & Weber, 2014). Also, it could enhance collaboration on policies that recognize or restrict the interdependent nature of global energy markets and complex energy infrastructure projects. In addition, this effort would dramatically cut down greenhouse gas emissions from the company’s exploration and production of crude oil and natural gas.

Specify at least one (1) lobbying strategy that the original company you selected has used in an effort to influence national or local government decisions in its favor. Summarize the issue in question, and ascertain whether or not the lobbying effort was appropriate. Justify the response. The Chevron Corporation top lobbyist, Stephen Sayle, has become a senior staff member of the House Committee on Science. This is the congressional committee that is charged with maintaining our scientific and technical leadership in the world. In 2013, Sayle was the chief executive officer of Dow Lohnes Government Strategies, a lobbying firm retained by Chevron to influence Congress. Sayle’s ethics disclosure, obtained by Republic Report, shows that he was paid $500,000 by Chevron’s lobbying firm to lobby on a range of energy-related issues, as well as Congressional and agency oversight related to offshore oil, natural gas development and oil spills.

To best summarize this issue in question, I believe the lobbying effort was appropriate because now their top lobbyist is in a greater position of influence and make decisions in Chevron’s favor. In my opinion, I believe the rapport that Stephen Sayle had with Chevron working as a lobbyist for the company, will carry over and be beneficial for Chevron in his duties in the House Committee of Science. Although I think it should be a conflict of interest, I believe Chevron will in some way or another profit from Sayle’s promotion in the future, which will affect the company’s ability to meet the growing demand for energy. Analyze two (2) global corporate citizenship efforts of the original company you selected, and assess the extent to which these efforts are effective in accomplishing the company’s goals. Examine the manner in which the two (2) global citizenship efforts could contribute significantly to the company’s sustainable development goals.

In 2005, Chevron became the first energy company to implement a global HIV/ AIDS policy and program. The company’s fight against HIV/AIDS continues not only through its workplace, but through its community outreach and initiatives. Because of its efforts, Chevron won the Global Business Coalition’s Business Excellence in the Workplace Award. Another effort Chevron champion is malaria. Because the company conducts business in countries with epidemic malaria, it has made malaria prevention a priority. Chevron is Angola’s largest foreign oil industry employer with 3100 employees and another 3500 workers under contract. When considering how to do business and best invest in their community and to combat the epidemic, Chevron opted for the employee wellness approach because it was sustainable over the long-term and they needed a malaria solution that tied in with the company’s HIV, AIDS and TB wellness programs( Chevron Corporation, 2012).

I believe these efforts tie well within the fabric of the company goals. Chevron’s goals states they are committed to meeting the highest standards of corporate citizenship by protecting the health and safety of their employees, guest, preserving the environment, conserving natural resources and creating a positive legacy in the communities in which they do business. In respect to Chevron’s sustainable development goals, these efforts contribute significantly through their thoughtful actions, shared responsibility and continuous improvements. This also place strong emphasis on the company for continuous improvements to learn from experiences and those of others, and applying scientific, economic and technical analysis to adopt and deploy best practices to sustain in the future.

References

Chevron Corporation SWOT Analysis, ( 2012). ChevronTexaco Corporation SWOT Analysis,1-9 Lawrence, A.T., & Weber, J. ( 2014). Business & society: Stakeholders, ethics, public policy (14th ed.). New York, NY: McGraw-Hill Irwin. Lin, C. P., Tsai, Y. H., Joe, S.W., & Chiu, C. K. (2012). Modeling the relationship among perceived corporate citizenship, firms’ attractiveness, and career success expectation. Journal of Business Ethics, 105(1), 83-93. Mitsch, W. & Jorgensen, S. 2004. Ecological Engineering and Ecosystem Restoration. New York: John Wiley.

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