Case Study Questions

1. Elaborate on why leading social justice and environmental groups and the American
government are concerned about Exxons conduct?
Ans: Leading social justice and environmental groups along with the American government are
worried about Exxon Mobils operations, because they are of the opinion that the companys
business operations are posing a great threat to the environment. They believe that since Exxon
Mobil is an oil and gas company, they are contributing to global warming and climatic change in
a big way, which is harmful for the society and the world as a whole. The groups also blamed the
company for hiding the risks of climate change from the American public, and not revealing how
the company may be playing a part in climatic change. They accuse Exxon of concealing these
facts as a means to protect their profits.
2. Why is Exxons use of internal company research compared to American tobacco
companies? In your opinion, is this a fair comparison?
Ans: In the case of the tobacco companies, the company conducted internal research and found
out the risks of smoking to health, but they chose to hide the facts from the public. In the 1950s
and 60s, they spent money on internal research and the scientists found that there were
significant health hazards from smoking, but launched campaigns that propagated otherwise.
They mislead the public for almost 50 years.
But in the case of Exxon Mobil, the company spent huge funds on internal scientific research
about the effects on climate change, and published the correct findings to the public. They did
not deceive the public or mislead them in any manner. Company scientists also published dozens
of papers and explored the possibilities of stringent policies to curb climatic effects. Exxon
Mobil has made its research findings public right from the 1970s.
Therefore, in my opinion, it is not fair to compare the tobacco company issue with the Exxon
Mobil case.
3. What type of legal liabilities might Exxon face from the American government regarding its use
of its own internal research?
Ans: The American government could impose legal charges on Exxon based on the fact
that it helped fund organizations that promoted climatic denialism. Exxon could also be
held liable about the statements it made about the Kyoto treaty and government policies.
A course of legal action might also be taken if the American government finds proof that
Exxon knew much more facts about the harm of climatic change, and they published only
a part of it to the public. Under these circumstances, Exxon might be held liable.
4. How is this case study of Exxon regarding its business research similar to the case studies we
explored last week in class (New Coke, Kodak)? Are there any patterns that could you detect
regarding these companies use of their business research?

Ans: In the case of Coca-Cola, the company introduced a new formula for the age-old world
famous soda, and they faced huge criticism from the public who demanded that the original
formula of Coke be bought back. The researchers at Coca-Cola developed the new formula
without taking into consideration public views and opinions. What the research tests failed to
show the company was the bond that consumers felt with Coca-Cola, and they did not want the
company to tamper with it.
Similarly in the case of Kodak, the internal research team found out that the future of
photography and cameras would be digital photography. Yet the company ignored this and
continued mass production of their original cameras. After a few years, the company filed for
bankruptcy.
Similarly, the internal researchers at Exxon informed the company about the harmful climatic
changes that would occur in the near future, but Exxon ignored it and continued focusing on
profits.
We can derive a pattern in all 3 companies that despite their internal research teams informing
the companies about change, all 3 organizations continued performing their operations with a
view of generating profits, which lead to their downfall in the near future.
5. What have been some of the long term consequences of Exxons decisions regarding both the
science and economics of climate change? (For our world, the company etc)
Ans: Although Exxon spent billions of money researching about climate change, the fact
that they found so many details and chose not to disclose it, is upsetting. All they focused
on were short term shareholder profits, ignoring the long-term effects it might have on the
environment, such as global warming. In turn this affects the companys profits. If the
CEO of the company had taken action and published the findings early enough, they
would not face a procrastination penalty. If a company cannot take into consideration the
safety of the environment and does not take measures to protect the environment, in the
long run it will lose its customer base and market share, which will lead to the doom of
the company.