Innovation & Risk: Chevron Corporation - Assignment Example

Innovation & Risk (Chevron Corporation) Table of Contents Introduction 3 The Organisational Analysis 4 Analysis of the Effects of Innovation Strategy Development on the Chevron Corporation 4 Analysis of the Innovation Process within the Company and On the Business Environment 6 Identification of the Weaknesses of the Innovation Strategy Undertaken By Chevron Corporation 8 Critical Analysis of the Innovative Strategies Undertaken By Chevron Corporation 9 Summary Conclusion 10 Reflective Log 12 Bibliography 14 Appendices 17 Introduction The term innovation within a business environment is often referred to as, the creativity through which a business process ensures its survival by taking the competitive factors in mind. Since the entire concept of innovation is related to development so apart from just the beneficiary aspects, multiple risk factors can also remain associated (Chevron Corporation, 2014). Thus, this report will gradually be focussing towards evaluation of all the associated risks that can emerge out due to the undertaking of innovation strategies by Chevron Corporation, which is a well-known energy generating multinational, currently operational within the United States. (Chevron Corporation, 2014). In terms of functionality, this organisation can be stated to be dealing with every possible aspect of the oil and natural gas exploration along with production. Chevron Corporation also deals with aspects regarding generation and harvesting of geo-thermal energy along with manufacturing of industrial grade chemical product, which gives it a competitive advantage over other players which are relied upon the extraction and refining of crude oil sources (Young, 2012). Apart from these, the oil manufacturing giant has also been facing issues, which in turn can be linked up with other aspects such as environmental degradation, incapability of meeting the increasing power demand and deterioration of the climate within that geographical area in which it is operational. Therefore, taking into consideration these issues, Chevron Corporation will have to bring about innovation within its functionality and manufacturing procedure, which in turn will ensure the growth opportunity of this oil manufacturing giant within multiple domestic and international markets in the long run (Young, 2012). In this provided context, steps to protection of the surrounding environment can be considered as the background of the strategic innovation within the corporation. This entire report has been structured by taking into consideration the secondary available data including websites, online journals and news articles. Additionally, the scope of this analysis will be stretched to multiple areas, which are related to fuel production and power generation. The details of these mentioned analysis has been elaborated in the discussion section (Helman, 2013). The Organisational Analysis Analysis of the Effects of Innovation Strategy Development on the Chevron Corporation Chevron Corporation, being the third rank holder within the fortune 500 companies in the year 2013, still face the risk of losing its ground if the legal charges against the environmental degradation done by this organisation gets verified. As a result, it can be stated that the effects of innovation strategy on the overall development of this organisation will be immense. For now, it is a mandate that this oil producing giant brings about high level of improvement within its manufacturing procedure and organisational structure so as to survive the increasing level of global competition (Young, 2012). An appropriate critique analysis of the issues faced by this organisation has brought about multiple facts that can find its relevance in terms of hampering the overall image of the organisation. For instance, in accordance to the news reports projected by Young (2012), in the ‘International Business Times’, it can be stated that Chevron Corporation has attained drastic loss within their share prices due to its incapability of paying back the promised dividend rates to its shareholders and investors (Young, 2012). The organisation appeared to have suffered significant level of reputational damage due to the acquiring of ‘Texaco Company’ which is an American oil retailer organisation. Multiple lawsuit obligations have also been filed against Chevron Corporation, on the grounds of oil spill cases that seem to have hampered the environmental and oceanic life balance (Chevron Corporationk, 2014). Taking these issues into consideration, it can be stated that the effectiveness of the innovation strategies should be towards structuring of effective human resource policies, through which Chevron Corporation can bring down all the humanitarian obligations that has been raised against it (Helman, 2013). Moreover, the organisation also needs to bring about multiple environmental protection policies through which it can attain a better stance within the society. In simple words, the organisation needs to implement the concept of sustainability within its functionality through which it can attain high level of global preference. Introduction of innovative marketing strategies by this organisation can also be considered as the key, through which it can gain back the confidence of the investors and the shareholders in terms of better growth plans and high rates of dividend provision (Helman, 2013). These goes for the marketing and the humanitarian development. However, taking technology into consideration, it can be stated that Chevron Corporation also needs to bring about subsequent level of improvements within their oil extraction and transportation procedure so as to prevent anomalies such as oil spills in the oceanic bodies (Helman, 2013). Through innovation within technology, the organisation can gradually bring down the claims that have been raised against it, in terms of polluting the environment. In a similar context, to that of Young’s (2012) statement, Helman (2013), in Forbes have also concluded multiple statements, regarding the bribery claims that have been charged against Chevron Corporation in context to turning the court’s decision in their favour. Helman (2013), statements also emphasised t on multiple aspects regarding the leak of crude oil from multiple dig sites of Chevron, which can also be considered as carelessness of this organisation in terms of installing appropriate crude oil flow containment gadgets (Young, 2012). Analysis of the Innovation Process within the Company and On the Business Environment Apparently, by taking into consideration of the above issues faced by this organisation, Chevron Corporation seemed to have structured multiple strategies regarding systematic harvesting of the natural gas as a source of fuel. In accordance to this organisation, effective production of natural gas will be appropriate in terms of serving the growing demand of energy and fuel requirement (Chevron Corporationb, 2014). The brand has also projected multiple innovation strategies regarding the development of their investment decision so as to attract global investors, which will be an appropriate support for Chevron Corporation in terms of undertaking further expansion plans. Moreover, Chevron also appears to have undertaken the construction of massive natural gas extraction facilities in 20 different nations such as ‘West Africa’, the ‘U.S. Gulf of Mexico’, ‘Australia’, ‘Central Europe’, ‘China’, ‘Argentina’ and many more, the details of which has been listed in the annual reports of 2013 (Chevron Corporationb,2014). The brand have come up with multiple innovation strategies in the areas of oceanic fuel transportation techniques so as to bring the chances of oil spills and natural gas leaks to the minimum possible level. One of such strategy includes liquefaction of the natural gas before transporting it to the oil depots. In accordance to Chevron, this procedure of natural gas transportation appears to be much safer in comparison to that of the traditional gas transportation techniques. Moreover, through appropriate investments within the areas of fuel transportation, Chevron has moved their focus in terms of projecting their concerns towards safeguarding the aquatic environment (Chevron Corporationc, 2014). These will lay a significant impact on the Chevron Corporation along with its business process in term of attaining global preference as being environmentally cautious. Additionally, the organisation has also shown interest to the entrepreneurs who appears to have multiple innovative ideas, in terms of fulfilling the rising rate of global energy demand (Chevron Corporationd, 2014). Apart from just the innovation strategy part, all the above discussed aspects can also be counted into the product developmental category. With the implementation of all these above mentioned technological advancements, Chevron Corporation has subsequently came up with new and efficient forms of fuel products that are less carbon emissive and can also be hypothetically termed as green fuel (Chevron Corporationd, 2014). This will gradually help the brand in terms of attaining a competitive edge over other major oil producing organisations within the same industry. This is due to the fact that through its fuel product development techniques, Chevron Corporation has made efforts in context to establishing a customer brand relationship through which it is giving the customers a chance of selecting superior quality of green fuel in comparison to that of the regular carbon emissive fuel. Moreover, these strategies will also act as a gradual help for Chevron Corporation in attaining the preference from the government of the nations in which it has been operating (Chevron Corporatione, 2014). Moreover, Chevron Corporation has taken into consideration two crucial factors. The first factor is that the economy of a nation depends on the consumption of diesel fuel and the second factor is that the overall global demand of diesel fuel has been on a continuous rising scale. As a result, Chevron Corporation has introduced a new concept of ‘Gas-to-Liquids’ transformational technique so as to meet the rising demand of diesel to a major extent. This innovation strategy will provide this organisation with huge strength and opportunity in context to reinforcing its growth and survival factors for the future competitive oil market (Chevron Corporatione, 2014). Identification of the Weaknesses of the Innovation Strategy Undertaken By Chevron Corporation Additively, if the above discussed innovation strategies are critically reviewed, multiple downsides can also be found that might hamper the organisation’s development rate and business process in the long run. It can be critically analysed that Chevron’s business process is dependent on the excavation and production of carbon based fuel products, which in turn is a non-renewable resource and thus is available in limited quantity (Glassdoor, 2014; Elgin, 2014). This factor confines the growth perspective of Chevron business organisation in comparison to that of the other energy production organisations that operates with renewable source of energy. The above factor can be considered as a competitive disadvantage for Chevron Corporation due to the fact that in the future time major emphasis will be provided towards the appropriate utilisation of renewable sources of power generation rather than carbon based materials that pose the threat of getting depleted (Glassdoor, 2014). As a result, the Chevron Corporation needs to establish innovation strategies in the areas of product dimensional expansion and business merger establishment with the companies that are focussed towards developing renewable power and fuel resources for the future generation (RenewableEnergyWorld.com, 2013). Although, the above statement might appear quite convincing, but the reality may be complex. For attaining a better stand, in the future fuel market, Chevron Corporation might have to undergo complete change within their functionality and product manufacturing process which in turn might cost the organisation huge amount of investments (Chevron Corporationg, 2014). This can be considered to be the major issue, which Chevron might face in context to bring change within their product type. Moreover, the impact of investment issue might directly hamper the customer relationship with Chevron. The massive investment undertaken by Chevron will result in raising the prices of fuel tending customers to shift their focus to other cheaper power and fuel supplying brands. Thus, in both direct and indirect terms, the overall business process and growth opportunity of Chevron Corporation will get hampered. Apart from the above mentioned concepts, multiple other weaknesses exists within the innovation strategies that energy and oil manufacturing organisations, such as Chevron, undertakes to attain a competitive edge when facing a volatile business environment. One of such weaknesses is identifiable in terms of time and the precision factor. Illustratively, Chevron has undertaken such innovation strategies within the areas of fuel transportation techniques which might requires appropriate time and precision in terms of attaining perfection. However, vast gap in if the drastic rise in the rate of energy demanded is compared to that of the time and precision factors that Chevron might need. Critical Analysis of the Innovative Strategies Undertaken By Chevron Corporation Since, this company is already into oil production and energy generation, the purpose of critical analysis will be towards evaluating the strategies implemented by organisation towards coming up with alternate and green sources of energy for reducing the negative impact over the surrounding environment (Helman, 2013). From the above sections, a detailed understanding can be extracted regarding the new sustainability and CSR related strategies that have been undertaken by Chevron Corporation for clearing out all the negative obligations that are charged against it. Through these strategies, Chevron also aims towards attaining a better stance in the future fuel market. Moreover, through critically analysing those undertaken strategies, it can be stated that the strategies might appear effective in terms of fulfilling the needs of the current market scenario, but will gradually fail to prove its effectiveness in the future energy market (Chevron Corporationj, 2014). However, the technological advancement implemented as a step towards innovation strategy by Chevron Corporation within the areas of product transportation and environmental safety can be considered as effective and ought to maintain the existence for a long period of time. In context to the critical review, the Chevron Corporation needs to build up a new and renewable form of product base which will be capable enough in terms of maintaining the effectiveness of the undertaken strategies for a considerably longer period of time. Conversely, undertaking the strategic innovations involving the production of green fuel have subsequently benefited Chevron Corporation’s functionality and business process in the future market. This strategy has benefitted the organisation in terms of attaining support both from the government as well as from the investors. Apart from all these, the initiative undertaken by the organisation in context to running a promotional campaign against HIV aids has also help Chevron in attaining a Corporate Social Responsibility (CSR) with regards to innovation strategy (Chevron Corporationf, 2014; Chevron Corporationi, 2014). Thus, from the overall view, it can be stated that the innovation strategies undertaken by Chevron Corporation are appropriate enough in terms of helping organisation in attaining a better competitive edge over others within present and future fuel market. Summary Conclusion The above discussed aspects have been appropriate in terms of providing a detailed explanation regarding what Chevron Corporation actually is and how it has been making efforts for ensuring a secure growth opportunity. The discussion also reflects how this organisation has strategized its functionalities and business processes for projecting a better image of itself in front of the global market, customers as well as the investors. However, the above discussion also comprises of certain specific loopholes which Chevron Corporation will have to take care to protect its brand image from being legally criticised. The organisation should also maintain its current operational pace and product development process so as to maintain a competitive edge over other players within the same industry for a sustainable growth. Certain improvements within human resource techniques are also required with the prime intention of attaining better employee reviews along with appropriate implementation of the sustainability concepts. As for the final conclusive point it is to be stated that the brand should bring about continuous expansion within its product line with the intention of developing alternative forms of clean and low emissive fuel that will create a positive impact on the environment as well as the economy of the nations within which Chevron Corporation is operating. Reflective Log The learning outcome that I have attained from the above discussion is highly appreciable in terms of understanding the techniques through which large oil and power producing organisations such as Chevron Corporation maintain their competitiveness in the changing global market scenario. Moreover, from this discussion, I have also grasped the importance, of organisations, for coming up with new innovation strategies regarding product development and building up of customer base for attaining higher level of preferences. This study has also been helpful in terms of explaining why it is of significance for an organisation to maintain an appropriate balance between their functionality and employee management. As per my understanding, I can say that employees are the base of every organisation and thus, it is the responsibility of every large scale business to implement appropriate HR strategies for effective employee management. I have also learned that organisations such as Chevron Corporation often get accused by multiple legal obligations due to certain level of carelessness within their functionality, which on later scale can cost these organisations huge amounts of punishable fines. In accordance to my thought process, I also believe that going along with the standardised safety procedure is not always easy and creates multiple complicacies in attaining appropriate outcomes. However, these standard procedures might also help in protecting the interests and the image of Chevron Corporation from being legally accused. Apart from all these, the report has also provided me with a clear picture regarding the current trend within the oil market. From the report, the pattern of change of demand can also be appropriately understood. I have learned that change and demand are the two factors that drive the process of structuring innovation strategies within oil producing organisations. I believe that Chevron Corporation has taken appropriate steps in terms of turning their interests within the natural gas production segment which for now has got a huge market demand. This is due to the fact that majority of the nations are prioritising the utilisation of gas and battery powered automobiles as a result of increasing fuel prices. Thus in this context, I believe that Chevron Corporation will attain high profitability if they pursue with their developmental trend in the areas of less emissive and efficient natural gas production. From my personal viewpoint, I also feel that this oil and power producing giant also needs to participate in the CSR related projects for developing a better organisation-community relationship. Through this relationship, Chevron Corporation can promote itself as being socially and environmentally concerned, which will gradually help in reducing the level of governmental pressure along with attaining better access to the required resources. From the report, I have also observed that Chevron has acquired multiple small oil retailing organisations such as Texaco Company with the expectation of expanding their brand levels, but in turn has ended up being a complete failure. Thus, as per my understanding, Chevron Corporation needs to analyse the past and the present trend of any organisation which they might want to acquire so as to prevent such failures in the coming future. Bibliography Chevron Corporation, 2014. Global Issues. Home. [Online] Available at: http://www.chevron.com/globalissues/ [Accessed July 18, 2014]. Chevron Corporationb, 2014. Grow Profitably. Annual Reports. [Online] Available at: http://www.chevron.com/annualreport/2012/EnterpriseStrategy/growprofitably/ [Accessed July 18, 2014]. Chevron Corporationc, 2014. Liquefied Natural Gas: How It Works. Overview. [Online] Available at: http://www.chevron.com/stories/#/allstories/lng/ [Accessed July 18, 2014]. Chevron Corporationd, 2014. Encouraging Clean Technology. Human Energy Stories. [Online] Available at: http://www.chevron.com/stories/#/allstories/bellwether/)./ [Accessed July 18, 2014]. Chevron Corporatione, 2014. Transforming Natural Gas into Super clean Fuels. Gas-to-Liquids. [Online] Available at: http://www.chevron.com/deliveringenergy/gastoliquids/ [Accessed July 18, 2014]. Chevron Corporationf, 2014. Chevron Receives Global Business Coalitions Leadership Award for Business Excellence. Press Releases. [Online] Available at: http://www.chevron.com/chevron/pressreleases/article/06242009_ChevronReceivesGlobalBusinessCoalitionsLeadershipAwardforBusinessExcellence.news [Accessed July 18, 2014]. Chevron Corporationg, 2014. Harnessing Renewable Energy for Power Generation. Geothermal. [Online] Available at: http://www.chevron.com/deliveringenergy/geothermal/ [Accessed July 18, 2014]. Chevron Corporationi, No Date. We Agree. Were Not Giving up the Fight against AIDS. Home. [Online] Available at: http://www.chevron.com/weagree/?statement=aids [Accessed July 18, 2014]. Chevron Corporationj, 2014. Turning Trash into Treasure. Biofuels. [Online] Available at: http://www.chevron.com/deliveringenergy/biofuels/ [Accessed July 18, 2014]. Chevron Corporationk, 2014. Providing Energy for Human Progress. Company Profile. [Online] Available at: http://www.chevron.com/about/leadership/ [Accessed July 18, 2014]. Elgin, B., 2014. Chevron Backpedals Again on Renewable Energy. Bloomberg L.P. [Online] Available at: http://www.businessweek.com/articles/2014-06-09/chevron-backpedals-again-on-renewable-energy [Accessed July 18, 2014]. Glassdoor, 2014. Chevron Reviews. Companies & Reviews. [Online] Available at: http://www.glassdoor.co.in/Reviews/Chevron-Company-Reviews-E13524_P2.htm [Accessed July 18, 2014]. Helman, C., 2013. Chevrons Expensive Problems. Forbes.com LLC. [Online] Available at: http://www.forbes.com/sites/christopherhelman/2013/02/13/chevrons-expensive-problems/ [Accessed July 18, 2014]. RenewableEnergyWorld.com, 2013. Oil Firms Break Promise on Biofuels as Chevron Defies California. Home. [Online] Available at: http://www.renewableenergyworld.com/rea/news/article/2013/04/oil-firms-break-promise-on-biofuels-as-chevron-defies-california [Accessed July 18, 2014]. Young, A., 2012. Chevron Corp., Long-Time Stock Favourite, Faces Legal Problems At Home, Abroad. IBT Media Inc. [Online] Available at: http://www.ibtimes.com/chevron-corp-long-time-stock-favorite-faces-legal-problems-home-abroad-847371 [Accessed July 18, 2014]. Appendices Gas-To-Liquids Transformational Technique Undertaken By Chevron Corporation Biofuels research and commercial deployment program undertaken by Chevron Corporation Read More