A Case Study For Vertical Integration Commerce Essay

A Case Study For Vertical Integration Commerce Essay The word  vertical integration  describes a style of  management control. The oil industry has always been fertile ground for analysis of the reasons and effects vertical integration. One reasons of this popularity is that the stages of production are easily differentiated. The general perception is that Integration is a prerequisite for success of the company as the oil industry is populated by large Integrated companies that makes excessive profits. Vertically integrated businesses in a  supply chain  are united through a common owner. Vertical integration may also be a merger of two companies that are in various stages of production, (for example, an upstream company (ONGC) and a downstream company (HPCL) . Thereby merger with a company which is at a later stage in the production process (and therefore closer to the consumer end) is known as forward integration. Vertical integration may be contrasted with horizontal integration, the merger of companies that together are at the same stage of production, for example, merging of two upstream companies or two downstream companies. Joining further back in the process (if a downstream company merged with an upstream company, for example) is known as backward integration. An example of backward integration in India is of Reliance Industries Limited that started with textiles to polyester to petrochemicals and now refinery and exploration production. The integration of two organizations that are in completely different business lines is sometimes referred to as the conglomerate integration. Companies are downstream or upstream of the other depending on whether they are closer or farther from the end consumer (the sea, so to speak, to the river flowing production). The benefits of vertical integration come from the higher capacity that gives organizations control access to inputs (and to control the cost, quality and delivery of inputs). Some of the best examples of vertical integration have been in the Oil Industry. In 1970 and 1980, many companies that were principally engaged in the exploration and extraction of crude oil refineries decided to acquire downstream distribution networks. Companies like Shell and BP came to control all the steps involved in bringing a drop of oil from North Sea or Alaska to the fuel tank of the vehicles. . Reliance- A Case Study: The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is Indias largest private enterprise, with businesses in the energy and materials value chain. Groups annual Revenues are in excess of U.S. $66 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the foundation of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration from polyester to fiber intermediates, plastics, petrochemicals to petroleum refining and oil and gas exploration and production to be fully integrated along the materials and energy value chain. The Groups Activities span Exploration and Production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles, retail and special economic zones Infotel. Reliance enjoys its Global Leadership in Businesses, being the largest polyester yarn and fiber producer in the world and among the top five to ten Producers in the world in major petrochemical products. Key Milestones in the history of Reliance Group: 1958- Dhirubhai Ambani started Reliance Commercial Corporation in Mumbai. 1966- Reliance entered the textile industry and set up a mill at Naroda, Ahmedabad. 1975- World Bank team visits the mill and declares that it is as modern and well-managed as those in the developed countries. 1977- Reliance went public with Indias first IPO 1985- Reliance total assets: $227 million. 1986- Reliance Capital, a merchant bank was created. 1988- Reliance Industrial Infrastructure, a petroleum pipeline provider, came into line. 1988- Reliance sales exceed $404 million. 1991- Hazira petrochemical plant commissioned. 1992-Reliance became the first Indian corporation to raise capital from international markets through Global Depository Receipts offering, and sets a record with a Reliance issue that received over 1 million investor applications. 1993- Reliance Petroleum went public in Indias largest public offering to date. Sales exceeded $909million, making Reliance Petroleum Indias largest publicly traded company. Also Reliance offered the first Euro Convertible bond issue. 1994- Awarded Companion Membership of the Textile Institute (UK). Award is limited to 50 members who have substantially advanced the fiber industry. 1994- Reliance offered the second Euro issue of Global Depository Receipts. 1995- Reliance net profit exceeded $242 million. 1995- Reliance Mutual Funds, an asset management and mutual fund provider launched. 1997- Reliance became the first corporation in Asia to issue 50 to 100 year bonds in the United States. 1997- Worlds largest multifeed cracker commissioned in Hazira. 1998- Reliance revenue tops $3 billion and total assets approach $8 billion. 1999- Worlds largest petroleum refinery complex commissioned at Jamnagar. 1999- Reliance Infocomm, a mobile service provider is launched. 2000- Reliance revenues exceed $4 billion, and total assets are $11.8 billion. 2002- Reliance Industries Ltd. and Reliance Petroleum Ltd merge into Reliance Industries. The new firm is named to the Forbes Global 500 in 2003, entering at position 306. Backward integration of Reliance Industries Objectives of the Study The objectives of the proposed research are as follows: To study the various activities that can be successfully integrated in oil and gas companies. To study the effects of vertical integration on diferrent oil and gas companies. To analyze the effects of vertical integration on Reliance Industries. Research Methodology Collection of Secondary Data Secondary data will be collected from already integrated oil and gas companies and it will give an insight on the various activities which can be successfully integrated. The data would then be simulated to analyze the effect of vertical integration on Reliance Industries. Literature Review: Oil companies, both national and multinationals have often adopted a vertically integrated structure. Some of these companies are: Exxon Mobil: it was formed in 1999 by the merger of two companies- Exxon and Mobil. Before the merger, Exxon was an upstream major while Mobil was a Chemical Company and its chief products included basic olefins and aromatics, ethylene glycol and polyethylene. After the merger, the company has been operating in the following areas: Upstream ExxonMobil Exploration Company ExxonMobil Development Company ExxonMobil Production Company ExxonMobil Gas and Power Marketing Company ExxonMobil Upstream Research Company ExxonMobil Upstream Ventures Downstream ExxonMobil Refining and Supply Company Sea River Maritime ExxonMobil Fuels, Lubricants Specialties Marketing Company ExxonMobil Research and Engineering Company International Marine Transportation Chemical ExxonMobil Chemical Company ExxonMobil is an industry leader in almost every aspect of the energy and petrochemical business. Its activities range from the exploration and production of oil and gas to coal and copper mining, from the refining of petroleum products to the marketing of fuels (under the Exxon. Mobil and Esso brands). waxes. asphalt and chemicals. In addition. ExxonMobil is active in electric power generation. ExxonMobil Chemical is one of the largest petrochemical companies in the world. Its products include olefins, aromatics, synthetic rubber, polyethylene, polypropylene and oriented polypropylene packaging films. The company operates its 54 manufacturing plants in more than 20 countries and markets its products in more than 150 countries. Shell: Shell has vertically integrated its structure which has helped it develop commercial expertise in all stages of this vertical integration, from the initial search for oil (exploration) through its harvesting (production), transportation, refining and finally trading and marketing established the core competencies in the company was founded. Similar competencies are also developed for natural gas, which has become one of the most important businesses in which Shell is involved, and which contributes a significant proportion of the profits of the company. Royal Dutch- Petroleums subsidiary, Shell Oil, acquired Pennzoil-QuakerState, the largest producer of motor oil. The vertical acquisition, which included over 2000 Jiffy Lube oil change centers, was consistent with Shells parent companys strategy to acquire a company that complements its lubricant and oil-products businesses and Shells gas station chain. Royal Dutch-Shell was international from its earliest days. Formed in 1907 as an Anglo-Dutch alliance between Shell Transport and Trading and the Royal Dutch Petroleum Company, the Royal Dutch-Shell group was, at that time, the only serious international rival to Rockefellers Standard. By the time that Anglo-Persian was formed in 1909 Rockefellers Standard and Royal Dutch-Shell had already established powerful positions in the international oil industry. But although Anglo-Persian was a latecomer, it had the unique and crucial competitive advantage that it was the first mover in developing the oil reserves of the Middle East, where its first oil field at Masjid-i-Suleiman in southern Persia (later Iran) was a giant, containing vast reserves of crude oil which could be produced in great quantities at low cost. From these different beginnings, the firms that would become international majors, acting at times as rivals, at others as allies, proceeded to establish their mastery of the international oil industry Each of them set out to produce its own crude oil for processing at its own refineries, and to sell the resultant products to the final consumer through its own market outlets. Each also sought to achieve, as far as was possible, a balance between these successive stages in its operations. By this policy of operational vertical integration, each major was able to co-ordinate the flow of oil, under its own control, from its oil fields to its markets. In practice, no major was able to achieve a perfect balance between its upstream (producing) and downstream (marketing and refining) operations. Majors with more markets than production could not find new oil fields at will, while others with more production than markets risked fierce competitive battles with their established rivals if they tried to break into new markets. To rectify the imbalances, and to mitigate the rivalries, the majors adopted a combination of measures they contracted to sell each other crude and products, sometimes in very large quantities; they joined in market-sharing agreements, most famously the 1928 Achnacarry Agreement to share out markets by a quota system; and they formed regional alliances in which majors with surplus upstream capacity joined forces with others with surplus downstream capacity, so that they could balance their joint operations without engaging in competition. By these arrangements, the international flow of oil came to be channeled, not through open, transparent markets for crude and products, but through the closed circuits of the majors vertically integrated systems. There were, both then and later, differences between those who argued that vertical integration was the economically most efficient means of organizing the international flow of oil, and those who saw vertical integration not as an economic necessity, but as a way of suppressing competition and of enabling the majors to control the industry. To a large degree, however, vertical integration was historically determined by Rockefellers early dominance. Once he had established a high degree of monopolistic control, it became a competitive necessity for later entrants such as Royal Dutch Shell, and later Anglo- Persian, to integrate vertically in order to avoid having to negotiate on uneven terms with established competitors for purchases and/ or sales of oil.

The Work of Langston Hughes Essay example -- Poetry Langston Hughes Au

The Work of Langston Hughes Langston Hughes is considered by many readers to be the most significant black poet of the twentieth century. He is described as  ³...the beloved author of poems steeped in the richness of African American culture, poems that exude Hughes ¹s affection for black Americans across all divisions of region, class, and gender. ² (Rampersad 3) His writing was both depressing and uplifting at times. His poetry, spanning five decades from 1926 to 1967, reflected the changing black experience in America, from the Harlem Renaissance to the turbulent sixties. At the beginning of his career, he was surrounded by the Harlem Renaissance. New York City in the 1920 ¹s was a place of immense growth and richness in African-American culture and art. For Hughes, this was the perfect opportunity to establish his poems. His early work reflects the happy times of the era. However, as time progressed he became increasingly bitter and upset over race relations. Except for a few examples, all his poems from this later period spoke about social injustice in America. The somber tone of his writing often reflected his mood. Race relations was the shadow of his career, following him from his first poem to his last. The tone and subject matter of Hughes ¹s poetry can be linked to certain points in history, and his life. The youth of Hughes is brought out by his poem  ³Harlem Night Club ², a piece which describes living in the moment. Often children do not consider the consequences of their actions; they act on instinct and desire. Hughes might have been 27 when he wrote this poem, but the feisty, upbeat tempo of a school boy is present in his style.  ³Harlem Night Club ² is unique in that it describes the integration of blacks and whites in an optimistic tone. The vigor and spirit of his youth is reflected in the energy of the writing,  ³Jazz-band, jazz-band, ­ / Play, plAY, PLAY! / Tomorrow....who knows? / Dance today! ² The repetition of the words, and the increasing emphasis on the word  ³play ² bring out the excitement to the reader. More evidence of Hughes ¹s youth comes from the very focus of the poem: the interracial couples. The entire poem can be summed up as  ³...a single-glance tableau of interracial flirtation against a background of heady jazz. ² (Emanuel 120) This festive relationship between the two sexes can rarely be seen in any of Hughes ¹s later poems. At th... ... civil rights movement had peaked, Hughes is left feeling worthless. The bitterness he faced during his lifetime built up to a dull apathy that appears in this piece. Despite the fact that Hughes is  ³...among the most eloquent American poets to have sung about the wounds caused by injustice ² (Rampersad 3), he thought his poems made no impact on society. On the contrary, Hughes ¹s poems had a tremendous influence on African-American society. Although scholars and critics throughout his career dismissed his poetry as too  ³simple and unlearned, ² his primary audience, the black masses, and even Hughes himself viewed his work as  ³folk poetry ² which was beneath criticism. (Rampersad 4-5) His poems, when studied as a collection over the span of his life, clearly show how the tone and emphasis in the writing reflect the mood of Hughes himself as he grew old. The universal theme of racism and race relations defined all the important work of Langston Hughes. Langston Hu ghes Danny Belinkie December 23, 1999 Period 2 Works Cited Emanuel, James. Langston Hughes. Twayne Publishers, Boston, 1967. Arnold Rampersad. The Collected Poems of Langston Hughes. Vintage Classics, New York, 1994.

Employee Portfolio Motivation Action Plan Essay

Determine the motivational strategy or strategies that would likely be most appropriate for each of your three employees, based on their individual characteristics. Indicate how you would leverage their employee evaluations to motivate each of the three employees. Describe one or more of the motivational theories and explain how the theories connect to each of your selected motivational strategies. Team MemberPerformance RatingSummary of AssessmentsMotivational Strategy and Action PlanRelevant Theory Edward JonesEven though theres some concern the applicant requires to care for, he is suitable for the employment The worker has got a greater employment satisfaction and he is fairly prepared. His good points are shown by confidence, hard work abilities, and greater mental cleverness. But, he isnt able to correctly acknowledge criticism and might get subjective in job-related issues. Due to his enhanced employment satisfaction and confidence, Edward Jones might not be challenging to be inspired. To do this the organization requires to make him maintain his greater employment satisfaction and confidence the organization will ensure that hes provided proper power into doing his work in order that the workers feel the authority and association to the organization. The inspiration hypothesis related to this case is McClellands hypothesis of requirements stating that authority, accomplishment, and association are essential requirements which help explain inspiration. Michael Ciross Michael Ciross is an excellent applicant for his employment.The exams demonstrate that this worker has a normal employment pleasure meaning that hes neither enthusiastic nor unhappy regarding his employment. The main good points of Michael are indigenous cleverness, fairly planned, and greater mental cleverness. On the contrary, the main weak points are lack of attention and probability of getting subjective. The truth that the worker lacks attention while doing his work implies that he doesnt have a great curiosity on getting this done and he most probably does it for the very fact that its a usual element of his survival. Due to his lack of attention he may not be inspired into doing the perfect on his employment. A usual employment pleasure shows the truth that the worker might not desire to accomplish better performances. The most suitable hypothesis in this situation is the expectancy hypothesis which will indicate the worker in case he acts in a particular better way he will just need to gain from the situation.The  expectancy hypothesis will attempt to show the worker that in case he does his work better, payment and satisfaction will most probably increase. He might be capable to be promoted. Respect and self-actualization are the need which must be focused in following the hypothesis. Jeffrey Blake Jeffrey might not be the ideal applicant for his employment. But, it doesnt mean that he can improve. Jeffrey Blake has got a reduced pleasure, requires a great deal of time to finish jobs and there are greater possibilities for subjectivity while doing his work. On the contrary a few of his good points are that he has a tendency to put emphasize on details and that he shows a more mixed style of making decisions. There are many methods of enhancing the pleasure of this worker that is the 1st step in to enhancing the inspiration. The most related inspiration hypothesis to this scenario is Theory X and in order to enhance Jeffreys inspiration the organization must decide what makes him have discontentment for his employment, take steps to get rid of this element, enhance the payment, and influence Jeffrey into enhancing output and performance.Hypothesis X, as Robbins and Judge (2011) consider, says that workers dont like job and they must be directed or even forced into performing it.