Exxon Valdez Case Study Summary

                                       EXXON VALDEZ CASE SUMMARY.

BACKGROUND:

ExxonMobil’s history can be traced back to 1882 it came to being as a result of John D. Rockefeller ideas which gave birth to Standard Oil, and it grew up to be the largest U.S. oil company, and also the world’s largest and oldest of the seven largest oil companies in the world, it has an employee strength of 80,000 employees.

The company’s business scope has expanded to over 80 countries and regions around the world, its main business concerns are energy, petroleum, petrochemical, coal, and  minerals ,and also the world’s largest operator of oil exploration, production, transportation, refining ,processing and marketing of integrated companies.

PROBLEM:

In 1989 precisely Friday the 24th day of march, the supertanker Exxon Valdez that is measured 987-foot was under the captainship of captain Joseph Hazelwood and a 3rd mate Gregory Cousins that was at the helm when the accident happened was headed to long beach, California and ran aground on the Bligh Reef in Prince William sound, Alaska that resulted to an oil spill that was estimated to have poured out 11 million gallons of crude oil into the Prince William sound and it spilled relentlessly and spilled to 1,500 miles of shoreline with an assumption that the oil slick was 10 feet and 4 miles long. This spill was estimated to have caused 2 million deaths of animals, ranging from birds, eagles, sea otters, salmon, herring, mussels, seaweed amongst others with immeasurable toll on tourism and the fishing industry.

SITUATION:

This crisis has raised a lot of concerns on the issue of the company’s image both locally and internationally which has questioned the company’s capabilities, the general notion about Exxon is that they are a good example of how not to respond during crisis and that Exxon was synonymous with environmental catastrophe. The company was heavily criticized for refusing to acknowledge the extent of the problem, and the fact that CEO Rawl waited six days before making a statement and visited the scene of the accident after 3 weeks. Statements made to the press by high-ranking officials were inconsistent and contradictory which lead the press to question the credibility and truthfulness of Exxon. My general view about the whole Exxon oil spill saga is that they never handled the crisis in a professional and thus, there are no strengths whatsoever except weaknesses

STRATEGIES:

One of Exxon’s major strategy for coping with the threats the oil spill has done to its corporations image involved appearance at press conferences in Valdez by high ranking officials like Frank Iarossi ( President of Exxon Shipping). Also image salvaging methods which consist of efforts undertaken to convey positive impressions to the public and reduce stigma and they are listed as follows;

  • Competence enhancement- early in the emergency, in order to convey an image of competence and offset the growing impression that Exxon was not responding effectively to the spill, the corporations’ spokesperson stressed the organizations adaptability, confidence, and superior safety records. The president of Exxon also reiterated that he’s company is mobilizing all the resources available to contain the impact and stated that 67 cargo flights  brought in 1,750 tons of equipment ,that is 3.5 million pounds of the response equipments , 18 aircrafts contracted to them ,and have deployed 160,000 feet of boom and additional 120,000 feet en route to Alaska
  • Information control – Exxon tried to control the dissemination of information in 2ways ;

I.            The use of strategic ambiguity which emphasizes some information about the spill and the response deemphasizes other information and made extensive efforts to omit discrediting information to claim that they lacked specialized knowledge or expertise; this enabled them to avoid discussing potentially discrediting topics in depth.

II.            The press conference themselves were a major method; they did this by exerting control over the scheduling , frequency and duration of the contacts that took place with the press and the public.(Goffman,1959)

  • Personalization of the event – Exxon representatives took pains to create the impression that they were personally and directly involved with the crisis, both in their occupational roles and in terms of their emotions and private lives.
  • Redefining the event – Exxon officials went to considerable lengths to redefine the crisis in ways that involved less stigma for the corporation and that put the organization in the best possible light. Rather than allowing the event to be defined as a disaster involving immense quantities of spilled oil that were ruining beaches and killing wildlife.

 

CONSEQUENCES-Exxon paid the price for its actions in several different ways;

  • Cleanup cost $2.5 billion
  • Exxon was forced to pay $1.1 billion in settlements.
  • Customers cut off their credit cards and mailed them back to the CEO.
  • 54% of their customers boycotted Exxon product.

My thoughts on the pros and cons of the company’s strategies towards the oil spill is to me a show of how disorganized a company of such repute and magnitude can be , the first guiding principle should customer satisfaction and proper safety mechanism that will reduce the severity of damages to the company and its publics when unexpected eventualities occur.

COMMENT: I think other multinationals should take a lesson from this oil spill crisis by taking ensuring that adequate safety measures and standards are put in place to avoid a repetition of such a major catastrophe that has caused a lot of immeasurable damage to the environment, animals and human beings in general.

My recommendations to the company will be for them to learn from past mistakes  by instituting a viable crisis management and communications plan that will keep them get prepared in the event an unexpected crisis occur. They should imbibe the theory of apologia as a way of calming down emotions which is a gateway to image restoration in the eyes of the aggrieved publics.

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About rangmoen20

I am a 30year old male ,presently pursuing my graduate studies at Fort hays state university with concentration on International Enterprise Leadership, i love meeting people and challenges.
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2 Responses to Exxon Valdez Case Study Summary

  1. trrichmeier says:

    I would agree with you that other multinational corporations need to learn a lesson from the Exxon-Valdez crisis. This should have never happened and even though it did it was handled very poorly! A company, especially one as big as Exxon needs to step up immediately and admit wrong doing as well as taking appropriate steps to fix the distress their crisis caused.

  2. Clark Feng says:

    This is a detailed summary, I think, especially strategies and consequences. Even though I post my comment so late, I feel this crisis is worth analysing for us.

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