Premium Essay

Environmental Risk Management at Chevron

In: Business and Management

Submitted By divyayadav1989
Words 1366
Pages 6
Methodology:-
Before deciding whether Chevron should implement their new analytical process “Decision Making (DEMA)” across the organization we decided to check whether DEMA will align with the company policies.
In 1997, Chevron spent around 2.1% of its revenues and 9% of the total cost to their environmental risk strategy. In the same year, Chevron’s major competitors Exxon and Mobil spent 1.1% and 0.9% of their revenue respectively on environment risk strategy. This was due to Chevron positioning itself both publicly and internally as a company that was responsible steward of natural environment. Furthermore, we analyzed their Internal and External Risk Management tools and compared them with the Quantitative Risk Management tool (DEMA).
Internal Risk Management:-
Traditionally, risk management decision making at Chevron was more judgmental than analytical. Their risk management across the organization relied on managerial judgment which followed Policy 530. There were ten key elements which were part of Policy 530 such as compliance assurance, community awareness and outreach, energy and resource conservation etc. All these elements were to be implemented through adherence to the managerial practices.
Incentive compensation was one of the major savings plan used by 98% of the employees within Chevron but it was largely based on profitability of the corporation and not majorly linked to the attainment of safety or environmental objectives. But senior management was required to review the overall environmental performance. There were no penalty in place but if the senior manager did not adhere to the environmental goals they could lose their jobs.
External Risk Management:- Chevron followed a general corporate strategy of self-insuring only up to a certain limit. But the amount of deductible varied in different areas of the organizations. Unlike their...

Similar Documents

Free Essay

Strategic Management

...ELECTRONIC ASSIGNMENT COVERSHEET | | Student Number | 32695016 | Surname | Zhang | Given name | Ming | Email | Zhangming_90@hotmail.com | | | Unit Code | BUS317 | Unit name | Strategic Management | Enrolment mode | | Date | 4th Oct 2015 | Assignment number | 1 | Assignment name | Short Eassy | Tutor | Frankie Yee | Student’s Declaration: * Except where indicated, the work I am submitting in this assignment is my own work and has not been submitted for assessment in another unit. * This submission complies with Murdoch University's academic integrity commitments. I am aware that information about plagiarism and associated penalties can be found at http://www.murdoch.edu.au/teach/plagiarism/. If I have any doubts or queries about this, I am further aware that I can contact my Unit Coordinator prior to submitting the assignment. * I acknowledge that the assessor of this assignment may, for the purpose of assessing this assignment: * reproduce this assignment and provide a copy to another academic staff member; and/or * submit a copy of this assignment to a plagiarism-checking service. This web-based service may retain a copy of this work for the sole purpose of subsequent plagiarism checking, but has a legal agreement with the University that it will not share or reproduce it in any form. * I have retained a copy of this assignment. * I will retain a copy of the notification of receipt of this assignment. If......

Words: 1571 - Pages: 7

Premium Essay

Organizational Planning

...2013 Dr. Rosa Osuoha Organizational Planning According to Small Business Chron.com, “Planning is a key management role in any organization, whether a private business, a nonprofit organization, a corporate business or a government agency. Managers engage in different types of organizational planning to strategically steer their companies towards profitable and successful futures. Effective planning relies on a thorough understanding of the range of variables involved in each decision and collaboration with employees from different levels of an organization” (Small Business Chron.com, 2013). Within Chevron’s organization structure, the organizational planning is based on the strategic and operational plans of the SWOT Analysis. How these plans will achieve the related goals Achieving goals and results is important in Chevron’s Organizational Structure. According to Chevron, 2013, the Chain of Command is part of Chevron’s organizational structure. It promotes teamwork, which works toward a common goal (Chevron, 2013 and Small Business Chron.com, 2013). The effect of planning decisions on the internal and external stakeholders identified According to Chevron, 2013, “the Strategic Plan sets direction, aligns our organization and differentiates Chevron from the competition. It guides Chevron’s actions to successfully manage risk and deliver shareholder value” (Chevron, 2013). This is done by the Enterprise Strategies which consists of people, execution, and growth.......

Words: 574 - Pages: 3

Premium Essay

Marketing Manager

...would I suggest the company needs to look at to further advance the company. There are many opportunities existing in today’s business marketing worlds. To take advantage of so many of these market opportunities. When we start looking , we need to look at the right area for investing our time and money to be productive in project a good image. The three companies I have selected are Chevron Lummus Global, Staples and Tiger2 Productions. Now let’s look at Chevron Lummus Global. Chevron Lummus Global (CLG) as the most completely integrated source for hydroprocessing technologies and services, CLG provides incremental efficient oversight at every step in oil refining. CLG's technologies are recognized and are being used by refiners worldwide to improve their refining profitability. (Chevron Lummus Global Ilc., 2011) A well-developed product portfolio would be good for this company. Staples’ is a large office supply company serving the world. This company strives every day to meet their customer’s needs. (Staples, 2011) Company should invest in marketing its sourcing and environmental friendly practices, as it is an opportunity for the company to show its advances into green technology and manufacturing. Tiger2 Productions is a company that supplies military surplus over the internet. This company provides wide range of military clothes and memorabilia from different eras in U.S. history. I have selected this company for research due to its providing military......

Words: 1016 - Pages: 5

Premium Essay

Risk

...Summary Chevron commits huge resources to tackle environmental risks; this report studies the viability of doing so. We find that (1) it is using a right combination of internal and external tools to increase workers’ awareness, diversify environmental risks and mitigate moral hazard at the same time; and (2) the Decision Making (“DEMA”) system is valuable to the company in providing a systematic framework to quantify environmental risks. Introduction Chevron operates in the business of petroleum and natural gas exploration, production, refining and marketing, and as such faces huge environmental risks such as oil spills and exhaust emissions. Throughout the years Chevron has honoured its claim in “Protecting People and the Environment” by committing a higher proportion of revenues to environmental spending than its competitors. However, environmental risks and the benefits of managing them are by nature hard to be quantified, while the costs are obvious and substantial. This report studies the viability of Chevron’s investments in two steps. First, it examines the tools Chevron uses to manage environmental risks, and explains why they are different from those used to manage other risks. Second, the report will analyse the pros and cons of the novel DEMA system, an attempt by Chevron to systematically quantify environmental risks. What tools is Chevron currently using to manage environmental business risk? We have categorized the tools currently adopted by Chevron as......

Words: 2821 - Pages: 12

Premium Essay

Chevron (Value Chain + Core Competencies)

...Table of Contents Introduction 4 The Value Chain 4 Operations 5 Outbound logistics 5 Technology 6 Core Competencies 6 Conclusion 7 References 9 Introduction Chevron Corporation is multinational energy organization engaged in every facet of the oil, natural gas and thermal energy industries. Its downstream operations include selling products such as fuels, lubricants and petrochemicals to the global market. Chevron’s success is greatly driven by their vision ‘to be the global energy company most admired for its people, partnership and performance’ (Chevron Corporation, 2015), reflecting their initiative towards being socially responsible as well as their ambition towards exceeding expectations. Despite growing concerns towards using more renewable forms of energy, Chevron has been able to maintain its competitive position of #3 on the Fortune 500 by establishing new joint ventures internationally and undergoing mass long-term projects to ramp up their production growth. The Value Chain Operations One of the key elements to Chevron’s growing success is their planning towards making long-term decisions such as multiple billion-dollar takeovers and projects, as well as Chevron maintaining their core operations around refining crude oil into petroleum products. Doing this helps the company to remain results oriented, rather than confirming to the demands of lobby groups (Corddry, 2015). Chevron’s long-term exploration and production......

Words: 1409 - Pages: 6

Premium Essay

Caltex

...provides information about the Caltex Group’s corporate governance practices for 2014, including compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations for the year ended 31 December 2014 and as at the date of this Annual Report. A graphical representation of Caltex’s Corporate Governance Framework (CG Framework) is set out below. Delegation MD & CEO Board Independent Advice • Independent legal or other professional advice Audit Committee • Audit Committee Charter OHS & Environmental Risk Committee • OHS & Environmental Risk Charter Oversight through reporting • External auditors External Auditor Policy • Internal Audit • Board Charter • Board Tenure Policy • Board Composition, Appointment, Induction & Election • Charter of Director Independence • Delegation of Authority • Performance Evaluation Process • Policy for Transactions with Chevron • Risk Management Summary • Continuous Disclosure Policy • Securities Trading Policy • Shareholder Communications Policy • Code of Conduct • Diversity and Inclusion Policy Human Resources Committee • Human Resources Committee Charter Delegation Accountability Accountability Assurance Delegation 4 Caltex Leadership Team (CLT) Nomination Committee • Nomination Committee Charter The CG Framework is regularly reviewed and updated in response to changes in Caltex’s business, Australian corporate governance......

Words: 6973 - Pages: 28

Free Essay

Challenges in the Global Business Environment

...Environment Bus 457 11/25/2014 Chevron Chevron, one of the oldest energy companies in United States, was first founded as Pacific Coast Oil Company in 1879 and was named as Chevron Corporation in 1984. Several companies were established after Standard Oil’s split during 1980s’ and Chevron Corporation was among those big energy corporations who merged with those companies. The company is publicly traded on NYSE, Dow Jones Industrial Average and S&P 500. Chevron is involved in petroleum and natural gas industry. It does almost anything related to the industry from exploring to generating power. With over 60,000 employees Chevron operates business in 84 countries; Angola, Australia, Gulf of Mexico, Kazakhstan, Nigeria and United States are regions where the cooperation mainly operates primary exploration and production. Other than oil and natural gas, Chevron is engaged to biofuel, geothermal, hydrogen, solar and wind energy production. According to the official website for businesses Chevron offers following goods and services: * Additives * Aviation Oils * Base Oils * Chemicals * Fuels * Lubricants * Marine * MSDS * Specialty Products * Technology And for consumers it offers goods and services listed below: * Fuels and Stations * Gift and Credit Cards * Pay Bill * Motor Oils and Fuel Additives Code of Ethical Conduct Chevron relies on values such as integrity,......

Words: 2559 - Pages: 11

Premium Essay

Busn319 Project

...Positioning * Marketing Program – Pages 18-21 a. Product Strategy b. Price Strategy c. Promotion Strategy d. Place Strategy * Financial Data and Projection – Page 21 a. Past Sales Revenues b. Five Year Projection * Organizational Structure – Pages 22-24 * Implementation – Page 24 * Evaluation and Control – Pages 24-25 * Bibliography – Page 26 Executive Summary Chevron Corporation’s (CVX) core business provides their customers with fully supportive administrative and financial management dealing with the integrated petroleum, chemicals, and coal mining segment of the Integrated Oil sector. Despite volatility in commodity prices, depressed financial and debt markets, and political uncertainties, Chevron has been able to grow the business at a healthy rate. The demands for the corporation’s products are largely a function of global economic activity, weather patterns and governmental stability. The development of projects is very crucial for a business within the energy sector in order to maintain market share and bottom line growth. Chevron Corporation’s (CVX) has many...

Words: 5430 - Pages: 22

Free Essay

Bus650

...Knowledge & Information Systems Bus 650 Spring 2013 Chervon McElroy International Business Machine better known as IBM is an American computer manufacturer that was established in 1911. IBM was formed from the merge of several companies. These companies were known as the Tabulating Machine Company which was used to count the population for the US Census, the International Time Recording Company who produced clocks and other time recorders, and The Computing Scale Company which produced commercial computing scales that provided the weight and price of a retailers products. This product was popular with butcher and dairy retailers. For a few years after the merge the company was known as Computing-Tabulating-Recording or CTR until 1924 when the company changed its name to IBM. IBM has been in many markets throughout its years. Other than taking over the vast businesses and products when the company merged back in 1911, the company has taken advantage and used the technology in earlier products to create new ones. In the 1930’s IBM started producing calculators using the technology from their tabbing machines. In the 1940’s IBM partnered with Harvard University to finance the invention of the first machine to compute long calculations automatically.[i] Although IBM did not create the first computer, by 1953 the company was producing their own line of computers. In the 1970’s IBM introduced the floppy disk which allowed customers to store and save data. IBM......

Words: 2372 - Pages: 10

Free Essay

Shell Company

...Royal Dutch Shell PLC RDS.A [pic][pic][pic][pic][pic] [pic][pic] [pic] | | |[pic][pic] | |[pic] | |[pic] | |[pic] | | | | | | | |[pic] | |[pic] ...

Words: 8278 - Pages: 34

Premium Essay

Intb 3355 Final Review

...Forces 1. Political risk Determinants of political risk a) Conflict and violence – Citizens protesting against their government, Territorial disputes, Disputes based on ethnic, racial, or religious divisions b) Terrorism and kidnapping – Unlawful acts of violence for a variety of reasons - Ransom, Overthrow government, Release of imprisoned colleagues, Revenge, Punish religious nonbelievers. Situations – Kidnapping for ransom, Paying ransom becomes counterproductive, Countermeasures by industry, Chemical and biological terrorism, Kidnapping as a means of funding terrorist groups, Business executives (local and international) as targets, Insurance, Prevention c) Property seizure - Confiscation - Expropriation - Nationalization – Reasons- To extract money if government suspects hidden profits, Profitability- the government believes it can run the firms more efficiently and make more money Ideology, Job preservation: government saves jobs by saving dying industries, Control follows money: subsidized firms often targets of nationalization, Happenstance: nationalization of German firms after World War 2. d) Local content requirements Laws stipulating that a specified amount of a good or service be supplied by producers in the domestic market. Issues to consider – cost, lower risk of confiscation and expropriation, impacting local communities 2. Privatization – Transfer of public sector assets to the private sector, Transfer of management of state activities......

Words: 893 - Pages: 4

Free Essay

Audit Project

...Simple Trend-line Regression 7 Part 2.1 Specific Risk of Material Misstatement 11 Part 2.2 An Appropriate Audit Program 12 Appendix 15 References 16 List of Key Audlish terms 17 Partner Summary In order to better understand the audit reports, we have documented academic research and existing audit standards relevant to planning stage APRs. This background information will provide a summary of professional standards and guidance directly related to APRs. First and foremost, every auditor must follow the standards called the Generally Accepted Auditing Standards (GAAS) which are set by the Public Company Accounting Oversight Board (PCAOB). Important sections within the standards required to know include: Independence, Consideration of Fraud in a Financial Statement Audit, and Communications about Control Deficiencies in Financial Statements, which includes nine rules that deal with identifying and reporting deficiencies found in financial statements. In the second part of our report, we prepared basic ARP’s and identified some key red flags for the Chevron Company. To access client viability, we used vertical and horizontal analysis, where we found information to create concern about their financial strength. We also looked at other factors such as forecast cash flow for next year, ratios, operating losses, and previous audit fees to conclude whether or not Chevron has financial stability. Three key red flags we......

Words: 3931 - Pages: 16

Premium Essay

Caltex 2014 Annual Report

...2014 ANNUAL REport Focused Performance Financial Calendar Contents Year ended 31 December 2014 1 With you all the way 2 Report from the Chairman and the Managing Director & CEO 07 MAY 2015 Annual General Meeting 4 Year ending 31 December 2015* 24 AUGUST 2015 Half year results and interim dividend announcement 08 SEPTEMBER 2015 Record date for interim dividend entitlement 30 SEPTEMBER 2015 Interim dividend payable if declared 22 FEBRUARY 2016 Full year results and final dividend announcement 08 MARCH 2016 Record date for final dividend entitlement 31 MARCH 2016 Final dividend payable if declared * These dates are subject to change. Corporate Governance Statement 16 2014 Financial Report for Caltex Australia Limited 17 Directors’ Report 62 Consolidated income statement 63 Consolidated statement of comprehensive income 64 Consolidated balance sheet 65 Consolidated statement of changes in equity 66 Consolidated cash flow statement 67 Notes to the financial statements 67 1. Significant accounting policies 76 2. Revenue and other income 76 3. Costs and expenses 77 4. Income tax expense 79 5. Dividends 79  Basic and diluted earnings per share 6. 80 7. Receivables 81 8. Inventories 81 9. Other assets 81 10. Other investments 82 11. Intangibles 83 12. Property, plant and equipment 85 13. Payables 85 14. Interest bearing liabilities 86 15. Provisions 86 16.......

Words: 61147 - Pages: 245

Premium Essay

Part 1 Caltex Australia Limited 4.Docx

...News and Disclosure Analysis 14 4.5 Analyst Coverage 17 5. Business Analysis 26 5.1 Macroeconomic Analysis 26 5.1.1 Economic Factors 26 5.1.1.1 GDP Growth 26 5.1.1.2 Exchange Rate 27 5.1.1.3 Interest Rate 28 5.1.2 Legal Factors 28 5.1.2 Market Factors 29 5.2 Industry Analysis 29 5.2.1 Rivalry Among Existing Companies 29 5.2.2 Threat of Substitutes or Services 30 5.2.2.1 Shale Gas 31 5.2.2.2 Biofuels and Renewable Resource 31 5.2.3 Threat of New Entrants 31 5.2.4 Bargaining Power of Buyers 32 5.2.5 Bargaining Power of Suppliers 33 5.3 Business Strategy Analysis 33 5.3.1 Cooperating With Woolworth 33 5.3.2 Domestic Market 34 5.3.3 Packaging Changing Plan 34 6. Management Quality and Corporate Governance Analysis 35 6.1 Management Quality 35 6.2 Internal Corporate Governance 37 6.3 External Governance 40...

Words: 8004 - Pages: 33

Premium Essay

Legal500 Ethics Asnd Corporate Resposibility Paper

...most successful pharmaceutical companies, enjoying a reputation as a caring, ethical and well-run company that produced high-quality products that saved millions of lives and enhanced the quality of life for millions of others. The company offers free and discounted drugs to low-income consumers, has a foundation that sponsors healthcare educational programs and scholarships, and its CEO serves on the PhRMA board. PharmaCARE recently launched a new initiative, We CARE about YOUR world®, pledging its commitment to the environment through recycling, packaging changes and other green initiatives, despite the fact that the company’s lobbying efforts and PAC have successfully defeated environmental laws and regulations, including extension of the Superfund tax, which was created by Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Based in New Jersey, PharmaCARE maintains a large manufacturing facility in the African nation of Colberia, where the company has found several “healers” eager to freely share information about indigenous cures and an abundance of Colberians willing to work for $1.00 a day, harvesting plants by walking five (5) miles into and out of the jungle carrying baskets that, when full, weigh up to fifty (50) pounds. Due to the low standard of living in Colberia, much of the population lives in primitive huts with no electricity or running water. PharmaCARE’s executives, however, live in a luxury compound, complete with a swimming......

Words: 3022 - Pages: 13