Exxonmobil: Social Responsibility in a Commodity Market
ExxonMobil: Social Responsibility in a Commodity Market
1. Consider and discuss the impact of the rising price of petrol on as many other products and services as possible.
Petrol is one of the most demanded products on earth. Because of this, not only the petrol prices are rising, but also the prices of those products, that are petroleum related products. In the service sector, the costs for transportation (trucking, air cargo, sea and rail carriers) are rising because of the rising costs of petrol. This makes the transported products also even more expensive. And this is almost every product in the world. So the rising fuel prices affect almost every product we buy.
Also the fact that it is a finite material, makes it more difficult and puts the consumer under pressure. The whole world depends on petroleum and that is why it is hard for consumers to do without it.
2. How does the information in this case relate to the common criticism that marketing causes prices to be higher than they normally would?
In this case I can not find a reason why marketing is causing a higher price. Marketing is only a small percentage of the cost of crude.
I think that the cause for the higher prices is due to oil price futures, which are traded on the commodities futures exchange. Depending on what investors think the price of oil – what later will become petrol - will be in the future. When traders think oil will be high, they bid it up even higher.
3. Is ExxonMobil acting responsibly with respect to pricing its product? Can it keep its prices stable (or even lower them) when the market price is increasing? Should it even try?
In the text it was explained that there was no evidence found that any wrong doing or anything illegal price manipulation took place. So ExxonMobil is acting with a social obligation - the obligation of a business to meet its economic and legal responsibilities and nothing more.
Obeying the law is fundamental but it is not sufficient
1. Consider and discuss the impact of the rising price of petrol on as many other products and services as possible.
Petrol is one of the most demanded products on earth. Because of this, not only the petrol prices are rising, but also the prices of those products, that are petroleum related products. In the service sector, the costs for transportation (trucking, air cargo, sea and rail carriers) are rising because of the rising costs of petrol. This makes the transported products also even more expensive. And this is almost every product in the world. So the rising fuel prices affect almost every product we buy.
Also the fact that it is a finite material, makes it more difficult and puts the consumer under pressure. The whole world depends on petroleum and that is why it is hard for consumers to do without it.
2. How does the information in this case relate to the common criticism that marketing causes prices to be higher than they normally would?
In this case I can not find a reason why marketing is causing a higher price. Marketing is only a small percentage of the cost of crude.
I think that the cause for the higher prices is due to oil price futures, which are traded on the commodities futures exchange. Depending on what investors think the price of oil – what later will become petrol - will be in the future. When traders think oil will be high, they bid it up even higher.
3. Is ExxonMobil acting responsibly with respect to pricing its product? Can it keep its prices stable (or even lower them) when the market price is increasing? Should it even try?
In the text it was explained that there was no evidence found that any wrong doing or anything illegal price manipulation took place. So ExxonMobil is acting with a social obligation - the obligation of a business to meet its economic and legal responsibilities and nothing more.
Obeying the law is fundamental but it is not sufficient