1. SHAKING UP EXXON
A Case Study Analysis
Submitted By:-
Anoop Mishra (12201005)
Chandra Prakash (12201011)
Sounak Mitra (12201037)
Suvrojit Choudhury (12201043)
Shubhakar Singh (12201042)
2. EXXON PROFILE’S
A conservative company.
Consensus was dominant decision making style.
Complex check and balance system.
Unsuccessful cost cutting strategy.
Stock was languishing.
High formalization and job security.
3. Comparing Before and After
Characteristic Before Lawrence
Rawl
After Lawrence
Rawl
Structures Mechanistic Organic
Formalization High Moderate to Low
Influence Authority Expertise
Control Centralized Diverse
4. ENVIRONMENT IN 1968
Conservative company
Vertical differentiation – High
Formalization - High
Centralization – High
Mechanistic structure, Complexity – High
Job security – High
Decision making process - Slow
Cost cutting strategy – Not up to the mark
Fear in risk taking
5. No more conservative company.
Vertical differentiation - Low
Formalization - Low
Centralization – Low
Organic structure, Complexity – Low
Job security – Low
Decision making process - Slow
Cost cutting strategy – Up to the mark and successful
No fear in risk taking
ENVIRONMENT IN 1988
6. Strategies for managing the environment
INTERNAL EXTERNAL
Can broaden its strategy to take a
generalist format.
Extensive advertising : Can reduce
the competitive pressures, stabilize
demand, set the price.
The recruitment of right people
needed to do the desired job must be
carefully done.
Long term-fixed contract with
the airlines to supply them fuel.
Can hire executives from competing
firms to acquire information about
competitor's future plans.
Absorbing organizations in the
environment : Resort to coopting
their uncertainties and threaten their
stability
Environmental scanning : Can get an
accurate forecasts of environmental
fluctuations and reduce
environmental uncertainty.
Political influence : Can operate in
multiple location
7. How did Rawl carry out his change program
Heaved through the empire of “traditional and
formality trap”.
Do away with languishing stocks of Exxon.
Doing away with the “protected coccon that exuded
arrogance reinforced by status quo” through :
I. Downsizing of employees by 30% coupled
with “uncertainty” & “insecurity”.
II. Reassigned jobs, redefined jobs.
8. iii. Vertical Differentiation
iv. Spatial Differentiation
v. Focus on Energy & Chemicals, abandoning
investments on nuclear and solar energy.
vi. Decision making was made
“decentralized”, “non consensual”.
vii. Quashing any efforts towards “technological
complexity”.
viii. An overall cost cutting strategy was adopted.
9. iii. Vertical Differentiation
iv. Spatial Differentiation
v. Focus on Energy & Chemicals, abandoning
investments on nuclear and solar energy.
vi. Decision making was made “decentralized”,
“non consensual”.
vii. Quashing any efforts towards “technological
complexity”.
viii. An overall cost cutting strategy was adopted.
10. Do you think, his approach could have been
improved upon?
Quashing down of senior management jobs, was
looked upon as “too autocratic a procedure”.
Minimal bench strength requirements preferably
could have been addressed.
Bench strength – grooming of future leaders.
“Insecurity” & “uncertainty” lurking round the
corner, may not necessarily yield excellent results.
Men: Work load ratio – decider for downsizing.
11. In downsizing Exxon, what problems did Rawl face that could have
been predicted based on research on declining organizations
Downsizing should have been done after doing an in-
depth-research on various aspects.
The general and the specific environment would have
helped decide whether or not to downsize.
If a downsizing was inevitable, entertaining a larger
portfolio would have been a brighter future
proposition.
12. Retaining some of the “rare talents” in it’s bench
strength, would have ensured “opportunistic
diversifications in future” ( Solar and nuclear energy)
Or, retaining them by way of “ inter locking
directorate” kind of arrangements etc.
