ExxonMobil: Social Responsibility in a Commodity Market

Fall 2011

1. Consider and discuss the impact of the rising price of gasoline on as many other products and services as possible.
Drivers realize that the price of gas is tied to the market value of crude oil, and has a direct impact to their daily commutes, errands, and vacations. However the reality is that the price of fuel has implications much grater than most consumers realize. Fuel prices affect nearly everything we purchase. For example, the price of farm commodities and food increase because farmers pay more for the fuel for their farm equipment and trucking firms pay more for fuel to get the commodities to market. These shipping “fuel surcharges” impact all goods
5. How would you “fix” the problem of rising gas prices?
Although dramatic in scale, the easy fix is to eliminate demand by outlawing gasoline and diesel powered vehicles. Obviously, this would destroy commerce and our standard of living. So I consider “fixing” the dilemma of raising gas problems as a wicked problem that has no short term solution. Within the case, rising gasoline prices are outlined as a function of supply and demand. The growing economies in China and India had created additional demands for gasoline, and the supply chain was more of less nearing capacity. To rectify this, my regional solution aligns with the majority consensus to reduce gasoline consumption here within the US. Having been in the automotive industry for nearly twenty years, the historical focus has been to create drive trains with more horsepower, while maintaining the 18 mpg status quo. From my perspective, installing more gasoline producing capacity to feed more vehicles is not the correct or sustainable solution. In recent years, the auto makers and their marketing firms have started to successfully market vehicles with 40 mpg or better fuel