Fluent Essays

The critical assignment Principles of Management and Leadership is one of a series of assignments designed to demonstrate students have achieved the learning outcomes established for the majors in the College of Business and Management. This, like the other four critical assignments, is an integral component of the college’s capstone course Business Strategy, and serves to measure whether or not the College is successful in achieving the overall learning outcomes for the program.The specific objective of this critical assignment is to conduct a managerial examination of a company. This exercise will provide students with the opportunity to integrate and implement theory into practice.For the purpose of this exercise, students will choose a company and conduct the following analysis:Using information from news articles, company websites, digital library searches, etc. analyze the company’s internal environment as it relates to its mission, values, and vision. See chapter two in the course’s multi-touch book.Using information from news articles, company websites, digital library searches, etc. analyze the company’s internal environment as it relates to its organizational culture. See chapter three in the course’s multi-touch book.Using information from news articles, company websites, digital library searches, etc. analyze the company’s internal environment as it relates to its strengths, weaknesses, opportunities and threats. See chapter five in the course’s multi-touch book.Using information from news articles, company websites, digital library searches, etc. identify the company’s corporate strategy, competitive strategy, &/or strategic initiatives). See chapter five in the course’s multi-touch book.Using information from news articles, company websites, digital library searches, etc. identify the company’s initiatives on social innovation, corporate social responsibility, &/or diversity for cultural awareness. See chapter four in the course’s multi-touch book.Format:The written paper is to be a minimum of 15 pages, with 1-inch margins, Times New-Roman or similar 12-point font, with correct spelling and grammar, organized with headings, proper citations, references, cover page and reference page. . APA style formatting. critical_assignment_2.docx Unformatted Attachment Preview Format: The written paper is to be a minimum of 15 pages, with 1-inch margins, Times New-Roman or similar 12-point font, with correct spelling and grammar, organized with headings, proper citations, references, cover page and reference page. . APA style formatting. Mission mission. vision (weak analysis) what you might do is state whether you believe that they are living up to this vision - be critical if they aren’t values & organizational culture Another area of critical analysis which you briefly make reference to is some legal action in California and some issues in financial performance. You might dig into these areas, as further evidence of critical analysis, which may shed light on their ability to maintain their vision and values (for example) Andrew, this Analysis should have some summary/conclusion which pulls together the essential parts of the paper and your own personal perspective as to some essential aspect of Chevron’s Way and whether what they say and actually do is true!! Critical Assignment 1 Chevron is a “Major” North American refining and marketing company based in San Ramon, CA and is engaged worldwide in upstream exploration and drilling activities, as well as the development of crude oil and natural gas reservoirs, pipeline ownership and operation, refining technologies and refinery operations, refined products activities (both wholesale and retail) midstream liquids production and consumption (via its petrochemical facilities) and distribution, as well as retail operations and real estate management (Chevron, 2019). Its mission is enabling human progress through the development of energy that improves lives and powers the world forward. “The Chevron Way” is “at the heart” of its vision … “to be the global energy company most admired for its people, partnership and performance (Chevron Policy, 2019).” The company states that “We develop the energy that improves lives and powers the world forward (Chevron Policy, 2019).” It establishes a common understanding not only for us, but for all who interact with us (Chevron Policy, 2019).” The Chevron Way embraces diversity and inclusion, high performance, integrity and trust, partnerships and the protection of people and the environment. Where will Chevron aim itself in the future? In that there is rising demand for Natural Gas in not only the US, but around the globe, and that peak oil demand is expected to occur in the early/mid 2030’s (Per I.H.S. Markit), Chevron is likely keen “to be the global energy company most admired for its people, partnership and performance” and exploit its existing position in the Natural Gas and LNG arenas. The low cost, high-margin and longevity of the natural gas market are likely appealing options in the increasingly environmentally demanding world. Chevron Corporation is a New York Stock Exchange (CVX) listed firm employing more than 55,000 individuals worldwide (Chevron Corporation SWOT Analysis, 2019). Chevron has a rather storied history The company has existed since the late 1800’s and has “a long, robust history, which began when a group of explorers and merchants established the Pacific Coast Oil Co on Sep 10, 1879 (Chevron, 2019).” Chevron’s predecessors at California Star Oil Works drilled the first successful oil well in California, the so-called “Pico No. 4” well and launched California as an oil producing state. The California Star Oil Works company was acquired by Pacific Coast Oil in late 1879 and within a year built California’s largest and most modern refinery, with a capacity of 600 barrels per day, at Point Alameda in the San Francisco Bay. By 1895 the company engaged in the marine side of the business – a tradition which remains to this day. Aside from early doubts, by the 1900’s the company began to employ geologists, and took a more scientific approach to its business which, again, carries on into the present day. It continued to expand, working through both WWI and WWII, and eventually began focusing on worldwide exploration, stopping initially in Saudi Arabia. Chevron diversified after the last World War into the petrochemical arena, only to see an “era of growth (Chevron, 2019)”in the 1950’s and 1960’s. By the 1970’s Chevron expanded its shipping fleet with the addition of a half dozen VLCC’s (Very Large Crude Carrier’s) while soon thereafter it endured the 1973 oil embargo, among other geopolitical issues. Having been referred to by a host of names over the previous century, in 1977 the company made a change and reformed itself as “Chevron USA” – a name which endures to this day (Chevron, 2019). Chevron has three primary business strategies: From the Upstream perspective it wishes to deliver industry-leading returns while developing high-value resource opportunities. From the Downstream and Chemicals area it wishes to grow earnings across the value chain and make targeted investments and lead the industry in returns. From the Midstream angle it is desirous of delivering operational, commercial and technical expertise to enhance results in upstream and Downstream & Chemicals. Chevron’s stated values reflect the foundation on which the company was built and which distinguish it and guide its actions to deliver results. Chevron conducts its business in a socially and environmentally responsible manner, respecting the law and universal human rights to benefit the communities where it works. Chevron is heavily engaged in charitable activities, and in the US alone, Chevron’s charitable arm, “Chevron Humankind” provided up to $20m annually for U.S. nonprofit organizations (Covéno, 2009). The program is open to any U.S. based employee and retiree, allowing them to support nearly any nonprofit group they choose. It includes company matching for employee financial contributions, grants to nonprofits for volunteer time and company-sponsored volunteer opportunities. As a publicly traded company, Chevron was expecting a six percent shareholder yield in 2019. This is based on capital and exploratory (C&E) expenditures of $19b to $22b from 20212023. The company expects three to four percent compound annual production growth through 2023 and that its Permian unconventional production will rise to 600,000bblsday by the end of 2020 and 900,000bbls/day in 2023 (Chevron, 2019). Chevron’s Chairman and CEO, Michael Wirth, said that “Chevron is in an exceptional position to deliver industry value to shareholders. Our advantaged portfolio is driving strong production growth with lower execution risk, higher cash flow and increased cash returns to shareholders”. Although peak crude oil demand is expected to be reached in the early/mid 2030’s, Chevron the world will need energy from every available source, including natural gas, crude oil, coal, renewables and nuclear (Harder, 2017). Chevron indicates that it is “committed to working safely and responsibly to help develop that energy through an unmatched array of major capital projects. Forbes Magazine, which quoted Glassdoor in an article, includes Chevron among its Top Companies for Culture and Values. Chevron’s employees speak highly of the company’s strict adherence to its principles. In other words, Chevron practices what it preaches when it talks about “placing safety first, being supportive, and looking out for your team members always (Dill, 2014)”. Chevron employs four primary enterprise strategies: The first is its people. Chevron invests in people to develop and empower a highly competent workforce that delivers results the right way. It works towards Execution and delivers results through disciplined operational excellence, capital stewardship and cost efficiency. The company focuses on growth by growing profits and returns by using its competitive advantages. Lastly, Chevron aims for technology and functional excellence. Differentiate performance through technology and functional expertise. Our strategies guide our actions to deliver industry- leading results and superior shareholder value in any business environment In 2007 Chevron employees donated approximately 60,000 volunteer hours and contributed nearly $8m to nonprofits (Covéno, 2009). Chevron’s charitable giving includes involvement with the Breast Cancer Awareness organization, the “Esta en tus Manos” education campaign, and a partnership with Safe Kids Worldwide (Covéno, 2009). Chevron is a multinational firm and is engaged in a variety of diversified revenue streams. There are two primary divisions: US and International. It is headquartered in California but its major business operations are concentrated in the Gulf of Mexico, Colorado, Louisiana, Michigan, New Mexico, Ohio, Oklahoma, Pennsylvania, Texas, West Virginia and Wyoming. It operates in a variety of African nations, in Eastern, Southeastern and Western Asia, in the Middle East, in Western Europe, Australia, South America, and the Caribbean (Chevron Corporation SWOT Analysis, 2019). More than 43\% of its revenue in FY 2016 were derived from its US operations, while the balance – 56.5\% was generated through its international operations (Chevron Corporation SWOT Analysis, 2019).In Fiscal Year 2016 Chevron had proved reserves totaling 11.1 billion barrels of hydrocarbon assets (Chevron Corporation SWOT Analysis, 2019). Chevron’s operations consist of upstream exploration and production of crude oil and natural gas. It has refining and transportation segments, as well. The company is engaged in the liquefaction, transportation and regasification associated with LNG. There are two primary weaknesses reported by the company itself. Legal proceedings and a decline in financial performance. The company’s legal issues, which appear centered in California, are believed to have damaged the firm’s market value and hamper its reputation (Chevron Corporation SWOT Analysis, 2019). Chevron has found opportunity in rising demand for Natural Gas in the US. Natural Gas is in abundance, it is relatively cheap and it fulfills the increasingly demanding environmental requirements. Political, Economic and Regulatory instability are major threats to the company. Chevron’s operations – particularly exploration and production – can be affected by instability in any of these three areas. Actions taken by a governing body can vastly and negatively impact the company’s operations. On the basis of $60/bbl Brent crude in 2019, Chevron expects approximately $30b of cash generation to be used to fund the 6\% annual dividend increase, a ratable and high-return capital program, and $4b of expected share repurchases (Chevron, 2019).” Chevron is a long term viable investment option as it has, and continues, to display all the characteristics of a financially sound operation. Its rich history has led it to profitability, and the future is nearly ensured. Social Responsibility Aren’t living up to standards Can they compete in an environmentally friendly world (Pollution - Shale, etc…) 2. analyze the company’s internal environment as it relates to its mission, values, and vision. • Innovation • • Rewards Social Responsibility • When someone thinks of women in the workforce, the energy industry — particularly • oil and gas — may not come to mind as a place for gender parity. Only 11\% of senior leadership positions in the industry are filled by women, an EY survey revealed, despite understanding that diversity of thought and experience are key to navigating the disruption in the industry. • For Chevron, meeting the needs of the company has meant chasing diversity initiatives before it was cool, according to Lee Jourdan, the companys chief diversity officer. • • • • Performance orientation - I think Chevron is mostly Performance oriented Supportiveness Competitiveness Stability 3. analyze the company’s internal environment as it relates to its organizational culture. Organizational culture refers to assumptions, values, principles, traditions, and beliefs that are shared by “Company culture is at the heart of competitive advantage, because it points to how unique things are done, and how unique the integration of resources and capabilities affect the behavior of employees. A culture where passionate performers create an environment with a unique personality and soul is very difficult for competitors to replicate. Examples of companies that embody a strong culture include Southwest Airlines, Google, Zappos, and Apple. People in these organizations develop a bond, making their work unusually meaningful and rewarding. They orient themselves outward, focusing on customers and competitors rather than on internal politics. The result is that people will make the right decisions and do the right things, even when no one is watching. In a 2007 survey conducted by the management consulting firm Bain & Company, worldwide business leaders found corporate culture to be as important as corporate strategy for business success.2 The adage “culture eats strategy for breakfast” widely attributed to Peter Drucker further illustrates this truth.” Excerpt From Principles of Management and Leadership This material may be protected by copyright. 4. analyze the company’s internal environment as it relates to its strengths, weaknesses, opportunities and threats. Overview Chevron is one of the largest integrated energy companies in the world. The company is involved in petroleum, chemicals, mining, power generation, and energy operations. The company’s diversified business portfolio, geographic diversification and strong liquidity position are its major strengths, even as its limited financial leverage and declining operating performance remains an area of concern. Going forward, increase in labor costs in the US and stringent regulations may impact the company’s performance. However, increase in demand for energy and strategic growth initiatives are likely to present new growth opportunities to the company. Environment in relation to • Strengths • Diversified Business Portfolio • Strong Liquidity Position • Geographic Diversity • Chevron has an expansive geographic presence around the world operating in more than 180 countries. • Weaknesses • Limited Financial Leverage • Declining Operating Performance • Oil companies have been the worst-performing investments in US stock markets over the past decade, after leading major stock market indices in previous decades. The market value of oil and gas companies now makes up only 4\% of the S&P500 index, compared with about 28\% in the 1980s. (GUARDIAN) • • • Opportunities • Strategic Growth Initiative • Increasing Demand for Energy Threats • • Increased Labor Costs in U.S. Stringent Regulations 5.. identify the company’s corporate strategy, competitive strategy, &/or strategic initiatives). Stakeholders returns • “Chevron is in an exceptional position to deliver industry-leading value to shareholders,” said Michael Wirth, Chevron’s chairman and chief executive officer. “Our advantaged portfolio is driving strong production growth with lower execution risk, higher cash flow and increased cash returns to shareholders.” -(chevron way) • At its annual Security Analyst Meeting today, Chevron Corporation (NYSE: CVX) announced expectations to deliver leading shareholder returns through disciplined capital spending, improved cost efficiency, and continued cash flow growth over the next five years. 6. identify the company’s initiatives on social innovation, corporate social responsibility, &/or diversity for cultural awareness. Some of the oil majors have invested heavily in renewables, such as wind and solar, as they look to transition towards cleaner energy sources Due to the lockdown restrictions, GlobalData believes that if there is to be a recovery in the wind market, it will only happen towards the end of the second quarter (Credit: Wikimedia Commons/Tom Corser) Oil and gas is often painted as the dirtiest sector within the energy industry, but major companies have begun to invest in renewable technologies in a bid to clean up the economy. Of the six “super-majors” – BP, Shell, Chevron, Total, Eni and Exxon – many of them have pumped billions into clean energy projects, although question marks remain over whether they are doing enough. Despite the growth in renewables, “big oil” only spent 1\% of its combined budget on green energy schemes in 2018. References Chevron. (2019). Chevron Outlines Strategy for Disciplined Growth and Higher Returns. Retrieved from https://www.chevron.com/stories/chevron-outlines-strategy-fordisciplined-growth-and-higher-returns Chevron. (2019). Chevron History. Retrieved from https://www.chevron.com/about/history Chevron Corporation SWOT Analysis. (2019). Chevron Corporation SWOT Analysis, 1– 8. Chevron Policy. (2019). The Chevron Way. Retrieved from https://www.chevron.com/about/the-chevron-way Covéno, R. M. (2009). Chevron’s Charity Trinity. Convenience Store News, 45(2), 30. Dill, K. (2014). The Top Companies For Culture And Values. Retrieved from https://www.forbes.com/sites/kathryndill/2014/08/22/the-top-companies-for-culture-andvalues/#4262710d3b7c Harder, A. (2017, November 8). Axios: The misguided notion of peak oil demand. 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