Exxon Case Study

Background

Exxon was an oil and gas corporation that descended from the John D. Rockefeller Corporation, Standard Oil. Exxon was one of the largest companies in the United States in the late 1980s with sales of $80 billion. Then in 1999 Exxon and Mobil merged forming ExxonMobil. It is now the largest company in the world by revenue with 37 oil refineries in 21 countries.

 

Problem

On March 24, 1989, the Exxon Valdez oil tanker struck Bligh Reef in Prince William Sound, Alaska and spilled more than 11 million US gallons of oil. The oil spill was the worst ever in American waters.

 

Situation (SWOT) Analysis

Strength: Being that Exxon was one of the largest companies in the Unites States, it had the funds available for clean-up, fines, and hiring one of the largest public relations firms in Alaska.

Weaknesses: One of the major weaknesses was that Exxon didn’t have a crisis communications plan. The company’s CEO should have been one of the first persons at the scene, but he refused to go which made the media, fisherman, environmentalists, and the public very angry. When he finally issued a statement to the public, he still offered no apologies and showed no emotion. Exxon also failed to provide rested and sufficient crewmembers for the Exxon Valdez. They also knew the captain had alcohol problems, but didn’t do anything about it. Exxon could have avoided the collision if the RAYCAS radar would have been working, but they left it broken and disabled for more than a year before the disaster.

Opportunities: Exxon had the opportunity to prove that they were concerned about the environment and that they would complete a full-scale clean up. They also had the chance to improve the tourism in Alaska. Because of their spill, all oil companies in Alaskan waters now have crisis plans approved by the state.

Threat: Exxon could have lost a great deal of customers. Many were very angry with the CEO when he declined to go to the site of the spill.

 

Strategies (decisions and behaviors)

–       Don Cornet, Alaskan Coordinator, rushed to the scene.

–       Immediate Strategy was to focus on clean up.

–       Frank Iarossi, President of Shipping, was Exxon’s main representative at the site.

–       Exxon fired Captain Hazelwood.

–       Employees placed blame on corporate culture – cut crews to save money.

–       Cornet set up media center in Valdez.

–       Iarossi held a press conference and was verbally slaughtered.

–       Cornet asked Mason, VP of Bradley/McAfee Public Relations, to develop and implement strategies for the tourism industry and animal rescue centers.

–       Rawl issued statement telling what chemicals would be used to clean up the spill. No apology was made.

–       Exxon released full-page ads expressing concern and vowing to clean up the spill. Still no responsibility was taken.

–       CEO finally went to Alaska.

–       Exxon had equipment for full-scale clean up – was not complete until 1992.

 

Consequences (results)

–       Hazelwood was fired because he had a drinking problem and was believed to have been drinking that night.

–       Critics believed the media center should have been in New York or Chicago, a city that could better accommodate large gatherings of reporters and photographers.

–       Local fishermen were angry because clean-up efforts had not worked. They and the media were not happy about the response.

–       Media, fisherman, environmentalists, and the public were very angry that the CEO still declined to go to the spill site.

–       Some animals were rescued.

–       Tourism in Alaska was higher than it was the year before the spill.

–       All oil companies operating in Alaskan waters now have crisis plans approved by the state.

–       In 1992 some Alaskans said there was still evidence of the oil in the Sound.

 

Comments

It was obvious that Exxon was not prepared for any type of crisis, especially one of this magnitude. What bothered me most was that Exxon never made an apology or took any responsibility for the spill. I also think that the CEO should have been one of the first persons to Valdez. I agreed with the firing of Captain Hazelwood, but I also think that some of the others, especially Cousins, should have received the same consequence. One good thing that came from this is that companies operating in Alaskan waters must have a crisis plan approved by the state. I think this is very necessary. There are many times when crises can’t be prevented, but being prepared for them can make things much easier after the fact.

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3 Responses to Exxon Case Study

  1. danceadams says:

    I agree with your conclusions and came to many of the same ones my self. However did any one really believe the apology that the B.P CEO made?

  2. l992 says:

    I think that Exxon made a lot of mistakes, and could have handled themselves a little better, but I do not necessarily agree that Exxon should have fired Hazelwood. Granted he did leave his post, but I think because they fired Hazelwood, the public viewed that as Exxon blaming the whole accident on him. Granted, he did leave his post but the crew was overworked. The whole situation could have been avoided in many different ways.

  3. nnfisher2343 says:

    You did very well with this. I do believe the comments that you wrote what i believe that Exxon made many mistakes.

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