Sample Paper on Crisis Management of Chevron Oil Corporation

Preparedness Process in Crisis management

Chevron Oil Corporation has its headquarters in San Ramon, California. It started under the name California star oil works before being acquired by the pacific coast oil company. The name chevron was first used in 1977 when all the company’s oil and gas products were given one brand identity. The company’s mission is to conduct all its businesses The Chevron Way, which translate to attaining outcomes in the right way(“Company profile”).

The vision of the Chevron Corporation is to be the most admired energy company globally for its performance, partnerships, and people(“Company profile”). The vision therefore aims to provide energy products in safer ways to promote human development and economic progress all over the world. The vision also infers that Chevron Corporation has superior commitment and capabilities and is the best choice for business investors.

The company has values, which drives it towards achieving its vision and mission. The values that are emphasized by the company include maintaining high integrity levels to ensure honesty among all the stakeholders(“Company profile”). Trust, support, and respect are also given priority for stronger community. The company is very committed to ensuring that all its partnerships are successful and that all the partners enjoy the working relationship with the company. Diversity among the stakeholders has brought respect among all the players. Chevron Corporation also places more emphasis on protection of its people, assets, and the environment.

The corporation has a highly skilled workforce spread all over the world. The employees are approximately above 64,000 including the 3200 employees in service stations (“Company profile”). In 2013, the company’s net production nearly hit 2.6 million barrels per day. Approximately 75% of all the production was achieved outside the United States

Crisis Management

Crisis management refers to all that a company does to prepare and respond effectively in case of occurrence of the identified potential threats (“crisis management”). Chevron Corporation has emergency preparedness program which focuses on prevention, measures of preparedness, response strategies, and the recovery. The company also has system and tools in strategic positions to enable effective management of emergency response. Tiered approach is the main strategy used by the company for its emergency management. The emergency response team has the responsibility of giving guidance and training on the emergency response. It also provides guidance on the crisis management and on business continuity plan. Chevron has been an active member and contributor in the global cooperatives on oil spills(“crisis management”).

Program Management

The company has built its preparedness programs around its commitment, management, financial support, and leadership (“Plan, prepare, and mitigate”). Without these five factors, it would not be easy to have an effective program, regular updating of the program and even the maintenance and management of the resources used in the program. The corporation has realized the importance of investing in preparedness programs (Halibozek & Green, 2008). Both the human-caused and the natural disasters could have adverse effects on business and lack of investment on preparedness programs would lead to closure of many businesses.

Preparedness program also enable businesses to continue supplying its customers with the needed products immediately. Lack of such program would mean that the company would lose of its customers during disasters. Preparedness program forms a competitive advantage because some big business partners make the program one of the requirements before any business agreement. The insurance company does not always cover all the losses incurred. The compensations also would not replace the lost customers(“Plan, prepare, and mitigate”).

Preparedness Policy

The emergency response team and the coordinator always ensure that the policy used in preparedness program is in line with the vision and mission of the company. The goals and the objectives of the program aim at protecting the safety of contractors, visitors, and employees to the company(“Plan, prepare, and mitigate”). The policy also considers the needs of the people living with disabilities.

The program policy would aim at maintaining the customer service through the reduction of disruptions on the operations of the company (Cantoria, 2011). The policy must ensure protection to the physical assets, the facilities, and online information of the company. Prevention of contaminations to the environment must by on the centre stage of the policy implementation and it would give protection to the reputation, brand the image of the company(“Plan, prepare, and mitigate”).


Companies would always be prepared for the uncertainties like the disasters. The planning process must ensure that all kind of hazards are considered and the possible prevention methods identified(“Plan, prepare, and mitigate”). This approach is very important because there are many types of threats out there and the company cannot easily determine or predict which of the threats the company could face any time soon(Mullich, 2013). The difficulty in determining this probability therefore makes it very important for any company to consider all the possible threats its likelihood of occurrence.

The Chevron Corporation places more effort to establish the best strategies that would be used in the prevention and mitigation of risk during its planning process(“Plan, prepare, and mitigate”). The hazards that are identified to have a more likelihood of occurring, and those that would cause injuries, damage properties, disrupt business operations and cause negative impact on the environment must be addressed immediately. The planning process would therefore require the emergency response team to identify hazards that are more likely to occur, assess its vulnerabilities and its potential impacts on the company, employees, and the environment(Poston, 2012)

The threat assessment would enable the company to identify hazards the avenues for deterrence, prevention, and mitigation of the risks (“Standard on Disaster/Emergency Management and Business Continuity Programs,”2013). The company also looks at some of the scenarios that might apply to it in case a disaster or hazard happens. It carries out business impact analysis, which would help it predict the possible consequences of disruptions on its business operations. BIA would also allow the emergency response team, at the corporation, to collect valuable information that would be needed in developing recovery strategies(“Plan, prepare, and mitigate”).

The BIA would enable the company to predict the time and the possible duration that the disruption to its operation would take. The team can use questionnaire to question employees and other stakeholder, who have detailed knowledge on the company’s business operations. These people would be requested to determine the effect that might be felt when a disruption occurs in its areas of operations (“Two Examples of Organizations’ Successful—and Unsuccessful—Crisis Management”).


Implementation process in the disaster preparedness program includes the identification and the assessment of the resources to be used and writing of plans. It would also involve the development of system that would be used in the management of the incidents and the employees’ training on the execution of the plans(“Plan, prepare, and mitigate”).

Implementation process would look into all the resource necessary for emergency response during incidents. The resources are mostly from within the company like the trained workers, systems for safety and protection, communication machines and other owned or leased facilities. The resources could also come from outside the company like emergency services, contractors, vendors, and business partners.

Implementation process would also consider the emergency response to the identified scenarios. The response plan would include all the initial actions like the immediate warning to employees to evacuate the faculty could help in saving many lives (“ Examples-of-excellent-social-media-crisis-management”, 2004). Making a call to the emergency services provider would help the providers know which personnel to send for the kind of hazard that has taken place. Employees with detailed knowledge of the facility would be valuable in detection of leaks and damages that might cause a disaster.

The company would also consider the communication plan to use during crisis. Communication would remain very important because customers would want to know if the products they ordered would be still be delivered. The regulators and the officials of the local government would also need to be updated on the situation(“Plan, prepare, and mitigate”). The families of the employees would also want to know the status and whereabouts of its people. The crisis communication plan would enable a company to respond fast, accurately and with confidence to the inquiries from all quarters. The various quarters of the audience must be supplied with the information that is in line with its interested even during disaster incidents.

The implementation process would need to cover the recovery strategies that would be very essential for the continuity of the business operations. The expenses from the disaster incidents and the lost revenue would definitely reduce the profits of a company(“Plan, prepare, and mitigate”). A continuity plan is very important, as it would ensure that the company does not close down after the incidents

Business continuity plan would consider analysis of the business impact, which would aim at identifying very critical processes and functions, together with the resources needed to support them. It would also include the identification, documentation and implementations needed for recovery of the important processes and functions a company(“Plan, prepare, and mitigate”). The plan would also require organization of continuity team that would be responsible for the compilation of continuity plan.

Companies would have a strategic plan on how to retrieve electronic information, connectivity and the computer hardware in case of disaster incident(Crenshaw, 2012)  Employees and its families would also be encouraged and educated on the need to have its own preparedness plans and steps taken to ensure that employees are accorded support in case of disaster incidents. The company would put a system in place that would ensure that responsibilities are clearly defined and coordination measures well lay out to ensure smooth recovery from the incidents(“Plan, prepare, and mitigate”). Employees also need to be trained on the preparedness program and assigned tasks, which they would carry out incase of disaster incidents.

The risk management process is used to offer oversight on how  to identify all the potential risks the corporation is prone to and the suitable mitigation plans put in place. The company carries out risk review every year that enables it to identify all the risks covering areas like finance, politics, and market among others(“Plan, prepare, and mitigate”). The issues in the greenhouse gas  and climatic changes are all incorporated in the  corporation’s strategy.

The corporation uses the global energy demand when carrying out an evaluation on the parts of the world, where carbon is restricted. It also considers the role which fossil fuels, which are the source of carbon energy plays in the whole cycle(“Plan, prepare, and mitigate”). Evolutions of climate policies, energy, and the latest innovations that are. Chevron ensures that the implementation of its emergency response plan does not consume more energy than its normal business operations.

Testing and Exercises

The company carries out testing and exercises with aim of examining the effectiveness of its program. The management has put in place measures to ensure that all employees are aware of what would be done to reduce chances of disaster occurrence(Poston, 2012). The training also includes giving clear guidelines on the roles employees are supposed to play in ensuring safer environment.

The written plan is also tested to establish its effectiveness in case of an incident. The continuity plan is test to see if it would world even after an incident(“Plan, prepare, and mitigate”). The response of the members of staff is also tested to see how they can respond to a disaster. The exercises are also needed to ensure that the laid out program is updating regularly. Exercises are done to evaluate the program and what is needed to incorporated for maximum level of preparedness.

Program Improvement

The company always use the lessons learnt from disaster incidents from other companies in the oil and gas industry and the few ones within the company. The emergency response team assesses the response made by the staff members during the incident then make corrections on areas that were not responded to effectively(“Improving performance”). The lessons learnt from other players in the industry also help in making improvements on the disaster preparation, prevention, and alleviation. The team then uses the findings to address the gaps identified. The findings of the reviews are then documented and kept in well-marked files.

In Chevron Corporation, a number of metrics are used to evaluate performance and improve chances of operations from incidents. It has the operation excellence guideline for planning all its operations. The OE is used to direct all the company’s operations and other units within the business to come up with good plans that ensure continued improvement on the performance and safety in the company (Poston, 2012). The management system of the operation excellence is based on the risk-based approach to evaluate the positive steps made on the objectives of the OE. The data collected from the review of the plans is then used by the management to prioritize areas that need immediate effort.

The emergency response team liaises with other committees with the organization to set clear priorities, which guides them in  approving the processes and standards of operation in the organization. They also evaluate the performance together so that the operation excellence is achieved(“Improving performance”). The management and other group leaders always  monitor all possible risk areas. The monitoring process is done in all the departments and the business units in the company.

How The Company Reduces Risks

The management system of the corporation  enables it to  carry out identification of environmental, health and safety risks that the corporation is vulnerable to and then address according to their order of immediacy(“Reducing the risk of incidents”). The system also helps the organization to make regular evaluation and improvement on the written down plans. Every business unit at Chevron is mandated to analyze its own business operations  so that it would identify any potential hazard.

The organization has detailed procedures and processes that are put in place for the management  and evaluation of risks in the gas and oil industry(“Reducing the risk of incidents”). The company is committed to ensure that safety measures are highly observer in all its drilling operations. There is a thorough in-house training of the staff members  in the drilling department. All the employees in the drilling department are required to be certified and that they are qualified enough to effectively handle any unusual situation that may occur during the drilling exercise.

The qualification should also enable the staff members to make accurate verification on the skills of the contractors in the field(“Reducing the risk of incidents”). In the drilling process, the organization puts in place clear contingency  and risk management plans in all their operations around the world. In the manufacturing department, the corporation has placed more emphasis on the process and the personal safety to ensure that there is increased levels of safety and reliability in the company’s operations(“Reducing the risk of incidents”). The company has a system, which enables it to carry out effective  identification, management, and risk reduction exercise. The system also ensures frequent checkups on the  manufacturing equipment and evaluation on the processes of identifying hazards in the company.

As much as the risk management exercise has always been part of the Chevron Corporation, it has never stopped looking for more ways to increase process and personal safety(“Reducing the risk of incidents”). In the recent past, the company carried out a complete improvement initiative, which covered all parts of the system and was focused on the areas of the reliability and safety during the  plant startups and shutdowns. The company also ensures that after every disaster incident, the lesson learnt is shared to all its global employees.


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