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Chevron Corporation’s Global Business Challenges Essay


Chevron Corporation is an international energy company that undertakes wide-ranging and wholly assimilated petroleum, chemical, mining, and power generation activities in the United States. Chevron’s major upstream operations encompass exploration, development, and production of crude oil and natural gas. Owing to the nature of Chevron’s business activities, the company has encountered various challenges in the global business atmosphere in terms of environment and safety. This state of affairs has compelled the company to engage in a number of business ethics in an attempt to alleviate the challenges in the global business environment.

The Nature, Structure, and Types of Chevron’s Products and Services

Chevron’s commodities range from numerous oil and gas products to extensive services such as refinery, storage, and transportation among others in domestic and global markets. The oil and gas company obtains its merchandise through a chain of processes that include exploration, mining, refining, and energy production (Hurst, 2004). Oil and gas activities have devastating social and ecological implications on terrestrial and marine ecosystems.

The oil and gas company also offers multifarious services such as processing, storage, and conveyance services throughout the globe. Its plentiful products include fuels such as gasoline, diesel, and jet fuel, gas, motor oils, lubricants, industrial coolants, and bearing greases among other fossil fuel products. The nature and structure of the company’s merchandise have led to intense debates concerning their effects on the environment and the steps the energy company has taken to engage in ethical business activities.

Chevron’s key ethical issues that are critical to its success include respect for diversity, decision-making, and compliance with governance (Escobar & Vredenburg, 2011). The company has developed a high value for diversity. Chevron enjoys comprehensive talents, ideas, and experience from its diverse workforce. In turn, the company offers a comprehensive work atmosphere that promotes involvement and support to its activities in an attempt to accomplish global oil and gas interventions. Secondly, Hurst (2004) reveals that the company’s decision-making processes encompass the needs of the diverse workforce to avoid conflicts of interest.

Chevron’s decisions are founded on sound business ethical principles that are in line with the of employee responsibilities to foster integrity and certainty within the company’s business environment. Lastly, governance also influences the company’s success. The company has strived to maintain a good corporate governance to meet the interests of its stakeholder groups. This state of affairs has heightened the company’s sensitivity and compliance with social corporate issues that affect the company’s performance.

Comparison of Chevron Corp with Royal Dutch Shell PLC and Exxon Mobil Corp

Chevron Corp can be compared with other oil and gas multinational companies such as Royal Dutch Shell plc and Exxon Mobil Corp in terms of business ethical issues. Du and Vieira (2012) reveal that the two oil and gas multinational companies compare with Chevron Corp since they believe that success demands exceptional standards of business ethics. Further, Du and Vieira (2012) confirm that Shell has a great value for diversity and inclusion in its oil and gas interventions. Similarly, Exxon Mobil Corp has maintained a high value of different cultures through its diversity and inclusion philosophy to support local, regional, and global employee networks.

According to Du and Vieira (2012), just like Chevron Corp, Shell recognizes the importance of corporate decision-making process to balance the interests of various stakeholder groups. Shell has a provision for criticizing decisions that develop conflicts of interest between the company’s employees, management, and other stakeholders. This provision within the Shell’s codes of conduct has promoted the company’s relationships with consumers through adherence to professionalism, competitiveness, and impartiality. On the other hand, Exxon Mobil has no provisions for external influence in its decision-making processes (Du & Vieira, 2012).

Despite Exxon Mobil’s pledge to acknowledge its presence to the local communities, the company lacks an executive commissioner to superintend matters of the stakeholder communities. As a result, external stakeholder groups do not participate in making decisions of the company as it is witnessed in Royal Dutch Shell plc and Chevron Corp.

Finally, governance is a crucial factor that has had a significant influence on the success of the three oil and gas companies. The companies operate in an industry that world’s governments and international communities have developed a keen interest owing to the effects of gas and oil activities on the environment. Commonly, Chevron, Shell, and Exxon Mobil have developed a high sense of responsiveness and compliance with corporate governance issues due to the nature of their products, services, and general operations.

Just like Chevron, Exxon Mobil recognizes that upright corporate governance is crucial for fostering a sound economic atmosphere to create further investment opportunities. Similarly, Shell has complied with corporate governance guidelines as a first step towards the development of local communities and promotion of its investment plans in diverse localities of the globe (Lawrence & Weber, 2014).

Extent to which Shell and Exxon Mobil have addressed Key Ethical Issues

Shell has achieved respect for diversity and inclusion through fortification of its workforce to value diverse cultures with respect, integrity, and honesty. This step has seen the company benefit from multifarious talents, ideas, and experiences from its diverse workforce. The establishment of numerous local employee networks such as Black Employee Success Team (BEST), Women’s Interest Network (WIN), and People for Respect, Inclusion, and Diversity of Employees (PRIDE) among other groups around the globe that foster awareness and respect for diverse cultures distinguishes Exxon’s dedication to diversity and inclusion. Secondly, Shell has gone to an extent of implementing the Decision Expert (DEX) system that supports the process of decision-making by enabling a decision-based online platform to engage both internal and external stakeholders.

On the contrary, Exxon Mobil does not consider the decisions of external stakeholders, as the company plays a key role to formulate and execute decisions that emerge from within the organization. According to Hurst (2011), both companies have committed their efforts to embrace corporate governance that has improved the relationship between the energy business and local communities. Failure to address the aforementioned ethical issues can lead to conflicts of interest amongst stakeholders in both companies. Secondly, poor ethical business practices have the capacity to lessen corporate governance efforts. This situation amounts to a loss of investment opportunities in potential oil and gas reserves.

Techniques to Sustain the Relevance of Chevrons Code of Conduct

The relevance of codes of conduct lies within certain dynamics within the societies or organizations in which they are applied. Therefore, the viability of Chevron’s code of conduct in a dynamic business environment is dependent on the application of numerous techniques. Firstly, the company has to uphold a robust board of directors to maintain a relevant ethics program within its business environments.

There is a need to conduct regular evaluations of the prevailing business conditions to seek changes in economic, political, social, cultural, and technological factors that have profound influence on the success of businesses. The second technique that Chevron can adopt is a periodic refresher training of staff. The company should provide new information with reference to new energy rules and regulations through periodic training sessions, which are perhaps organized by the board of directors, to foster a self-regulating code of conduct in all aspects of its oil and gas interventions (Du & Vieira, 2012).

Chevron Corp adopts a number of methods to manage environmental issues. Firstly, the company has developed an Operational Excellence Management System (OEMS) that executes and manages a number of tenets to provide ethical guidelines for accomplishment of sustainable oil and gas operations. Hurst (2004) confirms that Chevron’s Operational Excellence (OE) tenets are founded on two basic philosophies, which include ‘Do it safely or not at all’ and ‘There is always time to do it right’.

Based on these key guidelines, the company’s operations are bound within certain limits that promote environmental health, safety, and functionality. Secondly, the company conducts impact assessment through Chevron’s Environmental, Social, and Health Impact Assessment (ESHIA) process (Escobar & Vredenburg, 2011). This practice promotes sustainable gas and oil interventions since the ESHIA process enables the company to envisage any probable impacts on the environment by taking into account the sentiments and judgments of various stakeholders.

Technological Approaches for Advanced Innovation at Chevron

Chevron has incorporated numerous technologies through its private technology companies in an attempt to deliver inventive products and services. First, the company has embraced digital oilfield technology that has enabled it fetch superior firsthand data that facilitates the formulation of decisions. Escobar and Vredenburg (2011) reveal that the energy multinational uses proprietary water-flood surveillance and diagnostic equipment to monitor oil and gas reservoirs for sustainable operations. Secondly, Chevron uses seismic technology to monitor and evaluate the impacts of its activities on both terrestrial and marine ecosystems. These technologies have supported its oil and gas operations by ensuring that it balances between environmental impacts and business requirements.

Chevron might face various technological challenges in the future. At the outset, there is likelihood that Chevron will face problems with centralized monitoring of reservoirs. Reports that have been advanced by various energy exploration specialists have indicated that the modern intelligent surveillance equipment is not adequate to guarantee effective oil and gas interventions. To alleviate the above challenge, there is a need for energy technologists who are based at Chevron’s private technology companies to develop innovative sensing equipment for monitoring oil and gas reservoirs. Secondly, the general cost of technology equipment and services is increasingly becoming expensive.

Exploration, drilling, and refining processes might become a drawback for the gas company. Therefore, the company should envision a more robust and cost-effective development equipment to facilitate operations in remote and hostile environments. Lastly, Chevron might face shortage of technologically skilled workforce. The innovation of new technologies and energy equipment demands technically apt workforce to interpret, analyze, and present relevant information with reference to balancing predictable environmental impacts with the anticipated energy operations. Chevron Corp can alleviate this challenge by ensuring that the existing workforce offers adequate machine knowledge to entrants in the field.

Lobbying Strategy

Chevron has used integrated political strategies through direct communication with top government officials as one way of undertaking its lobbying initiatives. The integrated political lobbying strategies have cost the oil and gas multinational company billions of dollars. According Lawrence and Weber (2014), the company bears the mandate to control policies that influence its capacity to accomplish energy operations.

For instance, there is an emerging allegation that the company has continuously engaged the US Congress in its operations as a lobbying strategy to gain a competitive advantage over other oil and gas companies in an attempt to solve energy issues that the US is facing. Currently, the decision to engage the US Congress will make the company develop relevant policies to manipulate the energy markets. In my opinion, this lobbying strategy is inappropriate since it has raised incongruous debates amongst stakeholders.

Global Corporate Citizenship Efforts

Chevron has shown its corporate citizenship efforts through several corporate activities around its areas of operation. Firstly, Du and Vieira (2012) confirm that Chevron has endeavored to preserve, if not to improve, the living standards of the local communities by establishing channels to support educational and social programs whilst fostering infrastructural development. Secondly, Chevron’s Environmental, Social, and Health Impact Assessment (ESHIA) process has enabled the company make significant attempts to address ecological and societal issues that emerge from the nature of its operations.

The ESHIA process is specially premeditated to categorize, analyze, and control ecological impacts to balance between its business intentions and the interests of the stakeholder communities. These corporate citizenship efforts have enabled it balance between business interests and community needs, hence increasing investment opportunities for the company.


With the ever-increasing human needs and the technology age, the business environment has encountered multifarious challenges that have raised the need for embracing business ethics. Companies around the world have to operate under certain limits, as stipulated in their codes of conduct. Furthermore, the nature of operations has forced energy organizations to initiate corporate governance initiatives to win the interest of people in the energy business. Nonetheless, there is a need for all governments to formulate regulations to force such organizations to take account of external stakeholder decisions. This consideration will result in the formulation of holistic decisions that can enhance the organizations’ sustainability.

Reference List

Du, S., & Vieira, E. (2012). Striving for Legitimacy Through Corporate Social Responsibility: Insights from Oil Companies. Journal of Business Ethics, 110(4), 413-427. Web.

Escobar, L., & Vredenburg, H. (2011). Multinational Oil Companies and the Adoption of Sustainable Development: A Resource-Based and Institutional Theory Interpretation of Adoption Heterogeneity. Journal of Business Ethics, 98(1), 39-65. Web.

Hurst, E. (2004). Corporate Ethics, Governance and Social Responsibility: Comparing European Business Practices to those in the United States. Web.

Lawrence, T., & Weber, J. (2014). Business & society: Stakeholders, ethics, public policy. New York, NY: McGraw-Hill Irwin. Web.

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