Corporate-Societal Relationship BUS 475 Assignment 2 Template

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Corporate-Societal Relationship

Shavonna McFarlin

BUS 475

July 29, 2023

Corporate-Societal Relationship

Valero Energy Corp., also known simply as Valero, is a downstream corporation that manufactures and sells petrochemical goods in addition to transportation fuels. Its holdings include petroleum refineries, ethanol plants, and production of renewable diesel through a joint venture with another company. The refineries owned by this corporation manufacture a wide variety of refined goods, including gasoline, diesel, low-sulfur diesel, and ultra-low-sulfur diesel, as well as distillates, asphalt, jet fuel, petrochemicals, and lubricants. Through its bulk and rack marketing networks, it sells refined products to wholesale customers in the United States, the United Kingdom, Canada, and Ireland. The company's branded stores, on the other hand, are run by partners. Additionally, the company provides dry distillers' grains, often known as DDGs, as well as ethanol and maize oil, primarily to gasoline blenders and refiners. The heart of Valero's operations may be found in San Antonio, Texas, in the United States.

The company’s primary stakeholders can influence the company’s financial performance in different ways. The shareholders play a major role in impacting the firm’s financial performance. Their investment decisions, buying or selling actions, and the expectations on the dividends as well as capital growth can impact the firm’s stock price and the aggregate market capitalization. Therefore, bringing on board these parties can help in implementing best practices like compliance to the environmental regulations and investments in the renewable energy which will positively affect the shareholders’ view on the firm and may attract the socially conscious investors. Consumers are also key stakeholders who affect the company’s financial position through their buying decisions. (Rubio et al., 2021). The demand for refined petroleum products and fuel is majorly impacted by consumer behavior, economic conditions, and the industry trends. As the consumers greatly prioritize their environmental responsibility and sustainability, the company’s ability to provide cleaner fuels, reduce the carbon emissions, and establish alternative energy solutions will give the company competitive advantage and attract eco-conscious consumers. Also, the government and the regulators are key stakeholders. The government regulations and policies largely affect the company’s financial performance. Complying with the safety standards, tax laws, and environmental regulations can result in penalties and costs while favorable tax incentives and regulatory policies can provide financial benefits.

Also, the government support for renewable energy and emission reduction programs can affect the firm’s long run investment and strategy decisions. Changes in Government and Policy Despite shifts in control, there remains continuity in the formulation of public policy from one administration to the next. The second step is for all governments, regardless of party affiliation, to honor the agreements that were made by earlier administrations. Regarding International Trade as well as Other Treaties, the nation has a proven track record of honoring the international treaties it has signed with a variety of other countries throughout the world. Because the current governments of each party have ensured that the treaties established by their predecessors are adhered to, there is coherence in both the rule of law and the rules.

There are key variables in the company’s external environment that impact its success. One is the energy market volatility since the firm functions in a highly volatile energy market. The industry experiences fluctuations in the crude oil prices which are key and impact the firm’s profitability. Supply-demand imbalances, the global economic conditions, and the geopolitical tensions affect the oil prices thus affecting the firm’s overall margins and revenue. The company’s ability to manage price risks, adapt to the market dynamics and optimize operations is key to its success story. (Scarpellini et al., 2020). Environmental regulations and climate change are a growing concern in the global economy. The pressure on the energy industry to decrease greenhouse gasses emissions is increasing and there is need for sustainable practices. Stringent environmental regulations and carbon pricing mechanism can affect the firm’s compliance requirements and operational costs. The firm’s response to challenges like investing in low carbon technologies, and renewable energy can impact its long run reputation and viability.

One of the company’s successes in recent times is its commitment to the reduction of the greenhouse gases emission and investments in renewable energy projects. The firm has set ambitious targets to reduce its carbon footprint and has made significant strides in the incorporation of renewable energy sources in its operations. For example, the company has invested in renewable natural gas projects and renewable diesel which demonstrates its proactiveness to address the environmental concerns and diversity in its energy portfolio.

On the contrary, the company has missed an opportunity where the firm delayed the response to the public concerns about the environmental impacts. The company encountered legal challenges and criticism regarding the emissions from its refineries and their impact on air quality and nearby communities. This delayed the correspondence of the people’s concerns had negative impact on the firm’s stakeholder trust and reputation. The company is committed to renewable energy and reduction of carbon emissions which has led to a positive contribution to its performance by promoting the environmental stewardship attracting a more environmentally conscious investors and position the firm as a leader in sustainability. However, the missed opportunity to address the environmental concerns raised by the public resulted to increased reputational risks and regulatory issues probably affecting the stakeholders’ view on the company and its social license to function. Levels of Investment in Research and Development: If there is a high level of investment in the technology development sector, then there is a high probability of developing an ecosystem that is self-sustaining and encourages innovation. Oil Valero can take advantage of this circumstance to hire the most qualified individuals in the industry. Cost of Production and Trends – Oil Valero needs to evaluate the following question: What is the cost of production trends in the economy, and at what level of automation are we operating? Manufacturing and production will, in our opinion here at EMBA Pro, be the industry most affected by the disruptive effects of technological innovation in the not-too-distant future. Before introducing new products, Valero must first determine the degree to which people in the society it serves are willing to embrace technological advancements. In many cases, businesses enter the market without possessing the necessary infrastructure to sustain a technology-oriented business model.

This company performance evaluation shows that the firm is functioning in a complex and interdependent environment. As a major player in the energy industry, the company has faced both opportunities and challenges influenced by the energy market dynamics, social issues, the environmental regulations, and the primary stakeholders. (Mattern et al., 2020). The company should prioritize sustainable practices, proactively respond to the environmental concerns, and stay ahead of the market trends. This way, the company will easily navigate the complex relationship with society and attain the ling financial objectives and at the same time uphold the stated values.

References

Mattern, R. J., Chan, Z. Y. B., Ondracek, J., Bertsch, A., & Saeed, M. (2020). Valero energy corporation case study.  Journal of Advanced Research in Social Sciences and Humanities,  5(1), 38-52.

Scarpellini, S., Valero‐Gil, J., Moneva, J. M., & Andreaus, M. (2020). Environmental management capabilities for a “circular eco‐innovation”.  Business Strategy and the Environment,  29(5), 1850-1864.

Rubio, F., Llopis-Albert, C., & Valero, F. (2021). Multi-objective optimization of costs and energy efficiency associated with autonomous industrial processes for sustainable growth.  Technological Forecasting and Social Change,  173, 121115.

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