Environmental Risk Management at Chevron Corp. Case Solution & Answer

This case is about ORGANIZATIONAL STRUCTURE

PUBLICATION DATE: March 10, 1999

Environmental Risk Management at Chevron Corp. Case Solution

Chevron Corp., headquartered in San Francisco, manages a worldwide, vertically integrated value chain from the oil well to the gasoline station. Mishandling petroleum at any phase of creation can damage human well-being, the natural environment, corporate profitability, or all three. However,at exactly the same time Chevron must be prudent about the sum of money it spends on measures to handle these risks, and environmental programs within the firm can conflict with a longstanding tradition of decentralized management.

In order tomanage risks more efficiently, Chevron executives are considering the use of quantitative decision tools that enable managing supervisors to compute rough benefit-cost ratios for various alternative risk management endeavors. The case concentrates on the advantages and disadvantages of using such tools within the context of the overall system for environmental risk management of Chevron.

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