Share
Explore BrainMass

Contemporary Issues in Financial Management

I need help in this area and suggestion if this is the right company to research the selected contemporary issue? Thank you!! How many credits will i need to answer following questions?
evaluate the impact of mergers and acquisitions on Exxon/mobile In your evaluation be sure to address the following items:Describe your selected contemporary issue.
2. Describe the financial strategy that your selected organization has created to manage your selected contemporary issue.
3. Assess the impact of corporate governance and ethical issues on the organization's strategy.
4. Evaluate the financial situation of the organization prior to any action taking place.
5. Assess the financial situation after the action was taken.
6. Was the organization successful in managing the selected contemporary issue? Why or why not?

Solution Preview

1. Describe your selected contemporary issue.

The selected contemporary issue faced by both Exxon and Mobil at the time of the merger was to sustain revenues and profitability in the oil industry which was suffering problems due to falling oil prices. Exxon defended the deal citing price pressure on crude oil, the need for greater efficiency and new competitive threats overseas. The new merged entity expects savings of about $2.8 billion per year as a result of the merger, which would allow these two standalone entities to capture significant benefits due to merger.

2. Describe the financial strategy that your selected organization has created to manage your selected contemporary issue.

Some of the key strategies pursued by Exxon Mobil to deal with issues related to sustain margins, profitability and revenues after the merger include:

Exxon Mobil expected to capture the full market value of the assets identified by the regulators for divestment. Sales proceeds from these assets were estimated to be in the range of $4-$5 billion. Further, the two companies'
base business efficiency efforts were expected to yield $1.2 billion reduction in cash operating costs in 1999 compared to 1998. As a result of the merger and other identified organizational efficiency steps, Raymond staffing requirements were expected to decline by almost 16,000 people between year-end 1998 and year-end 2002. About 2,000 of that
reduction already occurred in 1999, prior to completion of the merger.

Reference: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/12-15-1999/0001097101&EDATE=

3. Assess the impact of corporate governance and ethical issues on the organization's strategy.

Exxon Mobil has kept a low profile on 'macro' CSR issues. Most of the company's external communications and internal management procedures are directed at local communities. Until very recently, Exxon Mobil had never issued specific reports on social responsibility.Exxon Mobil's main message is that the company achieves the greatest good for society by doing its job well. 'That job is producing oil and natural gas and providing energy and chemical products - such as fuels, lubricants and plastics - at competitive prices in a safe and environmentally responsible manner' .

Exxon Mobil does not have management systems directly related to "macro" corporate social responsibility. All their efforts in this area are geared towards the community level. Community awareness is part of Exxon Mobil's Operation Integrity Management System (OIMS) ...

Solution Summary

Describe the financial strategy that your selected organization has created to manage your selected contemporary issue.

$2.19