Challenges Facing The Internationalization Of Chevron Management Essay

Ch every last(predicate)enges Facing The Internationalization Of banding Management Essay grade insignia f exclusivelys among the dry lands top leading force companies. Its headquarters ar in San Ramon, California, and it boasts of numerous branches and divisions in mevery countries oecumenical. Its nerve center business is oil and gas, and the drilling and yielding of the same from oil reservoirs tout ensemble over the world. stripe can trace its origins back to 1879, when oil was spy at Pico Canyon, California. Because of that breaky, the Pacific Coast oil colour Company was formed, and it later became exemplification anele Company of California. With the 1984 merged with Gulf Oil Corporation, Standard Oil Company then became stripes, as it is kat oncen today. The merger with Gulf Oil corp. almost doubled stripess reserves of oil and gas, and went a long elbow room in the making grade insignia the faculty giant it is today (Biographiq vexation Profile 2008, p.4 ). However, band was not done yet, and continued to wave its purpose through further mergers. In 2001, stripe merged with The Texas Fuel Company, which was as well known as Texaco, of Beaumont, Texas. In 2005, it alike acquired the Unocal Corporation, and affirmed its position as a leader in the energy industry. Their raw(a) gas and complete(a) oil reserves had keenly change magnitude whole over the world through these acquisitions (Qontro 2008, p.12).In the light of such success in the oil industry, stripe expanded its influence into other industries like coal, petrochemicals, technology, and advocator generation. bar Mining Inc., a subsidiary company of grade insignia, ope place three coalmines in Berry, Alabama, McKinley, natural Mexico and Wyoming and a mineral mine in Questa, New Mexico in the joined States. Chevron Mining Inc. is headquartered in Englewood, Colorado and supplies molybdenum and coal to customers all over the world. In the industry of petrochemic als, Chevron combined with Phillips Petroleum Company, now ConocoPhillips, to form Chevron Phillips Chemical Company LLC (CPChem, p. 2).CPChem is a leading manufacturer of products like Olefins and Polyolefins, Aromatics, Alpha olefins, and Styrenics. CPChem has 35 manufacturing plants in the United States, Colombia, Brazil, China, Singapore, Saudi Arabia, Qatar, southwestward Korea, and Belgium and employs over 4500 employees. In the power generation industry, Chevron soon has 13 power-generation facilities in the United States and in Asia that bugger off the use of geothermal, wing and natural gas to produce electricity. The wind-powered facility is yet one, and it is located in Casper, Wyoming. It began operations in 2009. In Asia, Chevron facilities are importantly geothermal 2 of these are in Indonesia, at the Darajat and Salak fields in West Java. It to a fault has facilities in the Philippines, where it manages steam fields that supply geothermal energy to the Mak-Ban and Tiwi power facilities.Chevron, in light of the evolving global energy industry, also invested in seek and technology. It was seeking alterer solutions, and more than affordable and more reliable energy than the solutions the energy industry had to offer. In seeking these solutions, Chevron specialized in bio-fuels and emerging energy applications, and formed the Energy engineering Company, Information Technology Company, and Chevron Technology Ventures to assist it to accomplish its terminuss.Presently, overall, Chevrons nedeucerk stretches over 28 countries in six continents in the world. These nations are Angola, Argentina, Azerbaijan, Australia, Bangladesh, Belgium, Brazil, Canada, Chad, China, Colombia, Kazakhstan, Indonesia, Kuwait, Netherlands, New Zealand, Nigeria, Philippines, Russia, Saudi Arabia, Singapore, southernmost Africa, South Korea, Thailand, Cambodia, Trinidad Tobago, United Kingdom, United States, and Venezuela.Internationalization StrategiesChevron has had to use variant strategies to enter into international markets that it has considered lucrative. In some nations, it has used the principle of contrary Direct Investment (FDI) to gain favor with prospective nations whose markets it has wanted to explore, or whose resources it has desired to harvest.Angola is one example of a nation in which Chevron penetrated and established roots.Presently, Chevron stands as one of the outstandingst producers of oil in Angola. Chevron discovered considerable reserves of oil and natural gas, thus, in tack to be accepted by the Angolans, it committed itself to working closely with the local communities to empower and equip the volume with skills and knowledge that they could use to create last social evolution and economic growth. This was shown in the introduction of the Angola Partnership Initiative, which was initiated in 2002. The goal and purpose of this initiative was to help build capacity of presidency development agencies and no ngovernmental organizations, and to assist in alleviate poverty through the development of small and medium sized enterprises. Chevron invested an initial amount of $25 million in this project, and multilateral and national development programs later matched that by $31 million.In healthcare, Chevron committed funds towards the reduction of mortality, particularly in women and children. In 2009, combined with several(prenominal) partners, it gave to the Cabinda Tuberculosis Program drugs outlay $185,000 as well as consumables and x-ray equipment. According to statistics, the program toughened 110 patients, and 73 of these were cured. Between 2008 and 2011, Chevron also boosted the governments efforts in combating malaria by giving $5 million, towards this purpose, to the Global Fund. As at 2009, more than two million individuals and over 70 institutions had benefitted from programs funded by Chevron. These institutions included schools and hospitals.This kind of confederacy deve lopment was done not just in Angola, but also in other countries into which Chevrons invested, and it has created good name for Chevron. Unfortunately, other countries were also victimised by Chevron, so that good name did not stick.Joint VenturesChevron has made several correlative imperils with several companies both locally and worldwide that learn enabled it to tap into markets that it would not comport been able to tap into alone. It involves the get unitedly of assets surrounded by two or more companies for a specific goal or task (Vonortas, 1997). The joint ventures that Chevron got into came with several advantages, namely1) They enabled it to expand its market coverage. For example, when Chevron merged with Phillips Chemical Company LLC to form CPChem, it gained price of admission to the international market stretch of Phillips Chemical Company. The Phillips Company had establishments and investments in society countries worldwide. Chevron products were now sold a longside the products of Phillips Chemical Company in those countries.2) Access to new technologies In the joint ventures, Chevron and the companies involved came together and combined their technological knowhow and research to come up with a hypernym product. Both Chevron and the other company owned this product. The objective of this was to make products that were more appealing to customers, as opposed to their own individual products. In the end, both companies got a product that was better received by the public, thus, it increased profits. Chevron and the companies also all benefitted from learning new technology from severally other that they did not have before.3) Reduced costs of production in the joint ventures, the companies shared the cost of manufacturing, distribution, transport, technology and all other compulsory production components, which ended up being of great benefit to the companies. 4) lot of risk the risk of the failure of the project was shared equally by all the companies in the merger. 5) Increased timber of product the products that came because of the joint ventures were of great quality. The shared cost of production allowed the companies to spend more on perfecting the products, thus, the quality of the joint venture product was superior.An example of a joint venture that Chevron undertook was the joint venture company called Catchlight Energy LLC- formed by Chevron and Weyerhaeuser Company in 2008 it also formed joint ventures with protagonist Petroleum Refining Company of Thailand, Petrobas and Venezuelas PDVSA Company, TPAO for Black sea exploration, and many more (Vonortas, 1997).FranchisingThis is mode of internationalization has been most used by Chevron and all other oil producing and supplying companies. According to Franchisehelp Inc. (1998, p.11), petrol stations have been set up under Chevrons name in uncountable countries all over the world. Having a globally recognized and respected name, chevron franchises have been greatly sort after. This number of franchises has continued to grow steadily, and will continue to grow, as Chevron continues to conquer new global territories.Challenges facing the internationalization of ChevronChevron, as well as many other oil producers, has had challenges in the area of acquisition of rights to drill for oil in international countries. there are several areas around the world where oil has been discovered, and Chevron has attempt to come in and seal the deal for these reservoirs, but has not managed to do so. This is because the host countries have not been willing to give up their oil, fifty-fifty though have not been in a position to harvest it. It has not been easy for countries to give up their oil, which has been considered a national treasure. Chevron has had to give extremely generous compensation packages for the opportunity to drill in these countries. Again, in the countries that Chevron has been given the go ahead to harvest oil, great t ension has remained over agreements, mainly due to the large amounts of money that have been involved in getting the rights to drills.environmental challengesAnother challenge that has hindered Chevrons happen in internationalization is the authority their operations have affected the environment. A specific case of this was in Ecuador, in the Northern Amazon. In 1964, Texaco, which is currently under Chevron, came to the area and began prospecting for oil. It was the first company to come to the area and discover large quantities of oil that could be harvested commercially. Texaco, working in a joint venture with Petroecuador, commenced operations in the area. According to a 1993 report called Crudo Amaznico, by an environmental lawyer by the name of Judith Kimerling (1993, p.90), Texaco had dumped more than 19 meg gallons of toxic waste in the area between 1972 and 1992. It was also prudent for the spilling of a further 16.8 million gallons of crude oil into the forest from th e main pipe. This dumping and spilling of oil was said to have contaminated the soil and seeped into the ground water reservoirs, and subsequently, it affected the health of the pile of that region greatly. Statistics shown that cancer rates went up.Another study by the International Journal of Occupational and Environmental Health attributed a high abortion rate in the people living in near the contaminated streams to the spillage. This has served to discourage many countries from allowing Chevron to operate in them (Rubovits 1991, p.30). In Chevrons operations in Nigeria, Prince Gabriel B. Atsepoyi laments at the way the Nigerians expected so much from Chevron in terms of electricity, schools, and clean water, which was its duty (Atsepoyi Sep 2010, p.9). Instead, since 1963, Chevron came and exploited the resources of crude oil, and caused daily spills and general pollution from waste. In all of this, the people did not receive any benefits. Atsepoyi also stated in his book Chev ron and Ethics (Atsepoyi 2010, p.41), how Chevron never used to pay the Nigerian workers.Another challenge that Chevron has come across is the issue of government regulations. Governments of some countries, having set taut conditions concerning air pollution, demanded a superior grade or quality of the throttle produced. Gasoline that was more refined meant higher production costs for Chevron in that country. Another thing that the government controlled and still controls is the pricing of the accelerator pedal or petroleum products. It would normally control this through taxes. When taxes were high, it meant that Chevron would not make as much sales as it would have wanted. ace additional challenge was issues with workers. In the countries that Chevron penetrated, it would set up large facilities that required a lot of labor. The governments of these nations required of Chevron that majority of its employees are of the indigenous ethnicity of the country in wonder. Chevron woul d have to educate them and revile them sufficiently so that they could work in the facilities. It proved to be sooner a challenge to work with these people if the country in question did not previously speak English.ConclusionThere were also eer those nations whose people considered the giving of drilling rights to foreigners as wrong. In these countries, they felt that the wealthiness of the country should remain in the hands of the ethnic people of that country. commonly these countries had been colonized. Because of the exploitation and torture that they had experienced during that time, they formed a dislike and blush hate for westerners. Thus, they were not willing to allow them to manage their resources. Having foreigners come to pass on over their resources, especially those similar to their colonizers, also worried them of being interpreted advantage of again.In considering all things ethically, Chevron did well in several countries like Angola, investing heavily in th e wellbeing of the men, women, and children of that country, in all areas. One could argue that Chevron did this kind of community investment only in the countries where it had the largest financial interests. This argument seemed to be justified because the contrast between the countries that it supported financially and others that it abandoned like Ecuador. It left the Ecuadorian people suffering serious medical complications because of the spills and the toxic waste they dumped.