Analyzing Exxon's Communication Problems Following Alaska Oil Spill

This case study examines Exxon Corporation's communication failures in handling the Alaska oil spill. It identifies inadequacies in the communication process, including slow response times, failure to communicate the full story to the public, and neglecting the importance of middle-level staff in maintaining effective internal communication. The study also pinpoints key receivers, such as the chairman, the spokesperson, and customers, and suggests appropriate communication channels. Furthermore, it highlights barriers to communication, including the company's failure to communicate promptly, the dissemination of misleading information, and internal communication problems among employees. The analysis underscores the detrimental impact of these communication breakdowns on Exxon's reputation and financial performance. Desklib offers this and many other case studies and solved assignments to aid students in their academic pursuits.

Case Study – “Exxon’s Communication
Problems”
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Table of Contents
Q.1 What parts of the communication process did Exxon Corp neglect, or deal
inadequately, in its handling of the Alaska oil spill?..................................................................3
Q.2 Identify at least four ‘receivers’ with whom Exxon Corp was attempting to
communicate. Describe the most appropriate channels of communication that Exxon
should have used with each of these receivers.............................................................................4
Q.3 What barriers to communication might have hindered Exxon in its attempts to
communicate?................................................................................................................................5
References.......................................................................................................................................6
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Q.1 What parts of the communication process did Exxon Corp neglect, or deal
inadequately, in its handling of the Alaska oil spill?
Loopholes in the communication process which are neglected by the Exxon Corp. are listed
below. Ignorance of these problems or lead to communication mistake as a result of which the
Exxon Corp had to face communication mistake.
 Exxon Corp. responds slowly to the Alaska spill and as a result become inadequate in its
cleanup attempts. As a result, Exxon Corp had to face a criminal suit and incurred penalty.
This brings bad reputation to the image of the overall business of Exxon Corp. Besides, it
had to lose market share in the industry (Juma’h, 2014).
 Due to steadfastly defend by the concerned Exxon Corp. it incurred a huge expenditure
amounting $ 7.9 billion. Besides, the net income generated was only $ 5.3 billion. Thus the
Exxon Corp faces a net loss amounting $ 2.6 billion. Incurring such a huge amount lead to
huge cash outflow which ultimately Exxon Corp had to pay (Kerr, 2013). Payment of such
massive and unexpected cash outlay was the major disaster for the company. The chairman
of the Exxon Corp did all the things that he could do at that time to save the Alaska spill
project.
 Exxon Corp failed to communicate the rest of the world the whole story. The company
should have informed the world through the media what had actually happened. This is the
prominent and major reason for the inappropriate image of the Exxon Corp in the overall
market as a result of which its rival firms outperform its business operations (Kristensen,
2015). The wrong or inappropriate communication with the outside world became the major
reason for the communication process.
 Exxon Corp. has been continuously reducing the middle-level staff members due to which
it failed to maintain an effective relation and communication with the lower level
employees. The management of Exxon Corp. forgets the general philosophy that middle-
level employees maintain an effective link between the workers working at the top level
and lower level since they act as a mediator between the both.
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Q.2 Identify at least four ‘receivers’ with whom Exxon Corp was attempting to
communicate. Describe the most appropriate channels of communication that Exxon
should have used with each of these receivers.
The major four receivers are explained below that can provide a competitive advantage to Exxon
Corp by improving the communication process:
1. The chairman of Exxon Corp did not make any public announcement for six days even after the
Alaska spill took place. He led his staff members to make the comments or announcement. This
is the major problem that the face since the shareholders and other persons involved in the
business affairs of Exxon Corp or other business enterprises relies on the statement of
Chairman of the respective company as he is the responsible person to interact or communicate
with the stakeholders.
2. Another receiver could be that where the concerned spokesperson of the Exxon Corp informs the
wrong news to the general public. He claimed that the loss occurred was minimal (Kristensen,
2015). However, the actual position was far different from the statement given by the
spokesperson. In reality, thousands of birds were found dead. Besides, the beaches and rocks
were covered from oil and get destroyed. Presenting wrong information to the general public
highly dissatisfied the existing and prospective customers.
3. Since the picture presented by the spokesperson on the behalf of the Exxon Corp is fake and
misleading, the Exxon Corp would have to face errors, delays, and contradictions (Kerr, 2013).
All these incorrect parameters portrayed the image of Exxon Corp as arrogant, untruthful and
uninformed about the things taking place in the world.
4. The customers of Exxon Corp returned credit card of the concerned company to it and also
threatened a boycott against the company. This is done because the customers are not satisfied
with the commitments and services of the company. All these factors created a bad image in the
minds of customers towards the operations and functions of Exxon Corp (Juma’h, 2014).
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Q.3 What barriers to communication might have hindered Exxon in its attempts to
communicate?
The communication mistakes or errors arise due to improper communication and the
communication gap between the Exxon Corp. and customers and the shareholders and the other
persons involved in the business or corporate affairs of the concerned business enterprise or
organization. The communication barriers faced by the Exxon Corp. are listed below:
1. The company has failed to timely communicate with the general public due to which public
made an opinion about the Exxon Corp. that it is arrogant and is uncared about the feelings and
requirements of the society as a whole (Kerr, 2013). This opinion or view is not acceptable to
any company functioning in any industry, whether profit oriented or working for the welfare of
the common public.
2. Due to high pressure being faced by the Exxon Corp., the spokesperson of the concerned
company come into the light. But again, it passed the wrong and misleading information to the
customers and the general public. However, the public came to know about the actual facts and
position through the news broadcasted and telecasted on the television and another medium.
3. Later on, it was found that Exxon Corp. is facing communication problems and errors because
the employees working in the Exxon Corp. are facing such communication problem
(Kristensen, 2015). This is because there is lack of coordination and accordingly
communication between the employees working at all the levels in the Exxon Corp. Lack of
coordination and understanding between or among the departments or segments functioning or
operating results in poor or ineffective communication (Ratanasongtham & Ussahawanitchakit,
2015). If there is lack of communication within the organization, then it is hard to assume that
the company can maintain an effective communication with the outside environment or the
components prevailing in the outside environment.
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References Juma’h, A. H., 2014. The Materiality Concept: Implications for Managers and Investors.
Edición Especial - Economía Regional.
 Kerr, D.S., 2013. Fraud-risk Factors and Audit Planning: The Effects of Auditor Rank.
Journal of Forensic & Investigative Accounting.
 Kristensen, R.H., 2015. Judgment in an auditor’s materiality assessments. Danish Journal
of Management & Business.
 Ratanasongtham, W., & Ussahawanitchakit, P., 2015. Strategic audit planning and audit
quality: an empirical research of CPAs in Thailand. The Business and Management
Review.
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