Exxon and the Control of Oil

Abstract

American history texts often portray the large international oil companies as one-dimensional and unchanging agents of the dark side, exercising monopoly power here, corrupting politics there, and despoiling the environment everywhere. These companies have another important, though often-neglected dimension: they supply energy that fuels our econ omy and shapes our lives. They are hardly unchanging, having survived from the days of kerosene lamps to the days of jet airplanes by adapting their internal operations to vast changes in markets and governments. The pace of change accelerated in the last forty years, when the major oil-producing nations asserted control over their domestic reserves and created national oil companies to manage their development. A good place to start in the quest for a fuller understanding of Big Oil is the biggest of them all, Standard Oil, the predecessor of ExxonMobil. For almost 130 years, John D. Rockefeller’s company has ranked among the largest and most profitable of the major oil companies. Rockefeller left a dual legacy, making Standard Oil both the best run and the most hated oil company. Stressing the core operating principles of financial discipline, organizational innovation, and technical leadership, he created a model of efficiency that remains embedded in the corporate dna of ExxonMobil more than a century later. The behavior and the tone of his company, however, also made it an enduring symbol of cor porate excess and power. During the century since Rockefeller’s departure, the company has sought to remain true to his basic approach to internal operations while adapting to external, societal demands he did not face. 1