ORGANIZATION

THEORY
CASE STUDY : SHAKING UP EXXON

PRESENTED BY :
A.K ANCHAL (22202006)
AKANKSHYA LENKA (22202007)
DEBADATTA BRAHMA (22202023)
JEEVAN JYOTI DAS (22202027)
JYOTIRMAYEE SAMAL (22202028)
LAMYA NAZIR AHMED (22202030)
PIYUSH VISHWAKARMA (22202039)
LOPAMUDRA MOHANTY (22202359)
Exxon Corporation was a major American oil and gas company
founded in 1882.

The company was headquartered in Irving, Texas and had

operations in over 50 countries.

Exxon was known for its exploration, production, transportation,

and sale of petroleum and natural gas products.

The company was one of the largest publicly traded companies in

the world.

In 1999, Exxon Corporation merged with Mobil Corporation to form

ExxonMobil Corporation. EXONN
ExxonMobil remains one of the world's largest oil and gas
companies today, with operations in over 70 countries and a wide
range of products and services.
 INTRODUCTION
Rawl's Leadership Style: An Unconventional Approach to Addressing Exxon's
Lagging Performance
➔ Rawl had an unconventional leadership style that differed from Exxon's traditional
formality and tradition.
➔ Rawl's style was seen as necessary to address Exxon's lagging performance.

Changes at Exxon: Making the Company Smaller and Focused on Energy and
Chemicals
➔ Rawl's changes included disengaging from non-energy and chemical businesses,
making Exxon smaller, and cutting costs.
➔ Rawl focused on energy and chemicals and bet heavily on rising oil prices.

Criticisms of Rawl's Changes: A Difficult Transition

➔ Rawl's changes were criticized for hurting morale and the company's ability to groom
future leaders.
➔ There were concerns over job security, and senior management jobs had been cut in
half.
Exxon's Investment in Synthetic Fuels: A Bet on the Future
➔ Exxon abandoned its investment in nuclear and solar energy but invested up to $25
million a year in lab work on synthetic fuels.
➔ In five years, Exxon cut the cost of producing synthetic fuels from $60 to $30 a
barrel.
 Environment 1968 1988
conservative no more
company conservative
company
mechanistic organic structure
1) Contrast Exxon’s structure
Vertical high low
environment in 1968 differentiation
and 1988. Formalization high low

Centralization high High

Complexity high low

Job security high low

 Spatial
Inverted
Open System
Differentiation
Pyramid

What, if anything, can

Exxon do to manage its
environment?

Wide Span Spatial

of Control Differentiation
● He carried out downsizing activity in the
organization by 30% hence making it a simple
structure. How did Rawl carry out his
● The underperforming employees were fired from change program?
organization.
● Pay raises and promotion were on the basis of
performance.
● Brought down vertical differentiation by cutting
down senior management position to half.
● More emphasis given on chemical and energy
business.
● He abandoned company’s investment on solar and
nuclear energy.
● Decisions were made decentralized and non
consensual.
● Reassigned and redefined job.
 ● Critics argue that Rawl’s cut too deep and imposed
changes too autocratically, leading to low morale among
employees concerned about their future with the
company. Rawl's downsizing has also impacted the
company's bench-strength in management talent. With
fewer high-level slots and regions to send executives to,
Do you think his approach
Exxon's grooming of future leaders will be more difficult.
could have been Therefore, Rawl's approach could have been improved
improved upon? upon by implementing more transparent communication
and involving employees in the change process to avoid
negative impacts on morale and talent retention.

09
 4. In downsizing Exxon, what problems did Rawl face that could have
been predicted based on research on declining organizations?

● Negative impact on ● Loss of institutional

employee morale knowledge and reduction in
bench strength

BREAK SECTION
BREAK SECTION.
BREAK SECTION.

● Potential decline in
● Autocratic leadership quality and Potential loss
of innovation
1
 Measures RAWL
could have taken
To mitigate these issues, Rawl could
have conducted research on best
practices for managing organizational
change and downsizing, including
organizational diagnosis, stakeholder
analysis, employee surveys, competitor
analysis, and financial analysis,strategic
alliances and outsourcing which brings
into play transaction cost and population
ecology theory. These methods could
have helped Rawl identify areas
needing improvement, engage with
stakeholders, assess employee
attitudes, understand industry best
practices, and make informed decisions
regarding the downsizing process.
 ❖ In conclusion, the response of ExxonMobil
under Lawrence G. Rawl's leadership to
external pressures related to climate change
and cultural dynamics within the organization.

❖ Rawl's leadership style was characterized by a

focus on short-term profits and a reluctance to
change course in response to external
pressures. This led ExxonMobil to miss
opportunities to address growing concerns
about climate change and to resist cultural
changes within the organization, resulting in a
CONCLUSION
"survival syndrome" that stymied innovation
and growth.

❖ In light of these challenges, Rawl's decision to

take a climate and cultural survey was a positive
step, indicating a willingness to engage with
these issues and to explore new strategies and
approaches. However, the downsizing and
"survival syndrome" that followed suggest that
10 these efforts were not fully embraced by the
broader organization.
THANK YOU….