THEORY AND PRACTICE IN THE OIL INDUSTRY

This has resulted in Pemex trying to improve the government's position in order to attract foreign investment, an work led by Pemex's director general, but he has only two years remaining in his role, and the gains that he has made may be lost in a new political climate. This example illustrates the significance of gaining political influence outside in addition to inside the firms in order to lead to required adjust (Malkin C8).

Ideally, decisions inside businesses are made from a rational and quantitative basis. Choice support systems (DSS), for example, are used by a wide number of firms to support during the decision generating process. DSS evolved within the potential of computers to analyze big amounts of details effortlessly and provide the info in an organized fashion, just like in spreadsheets. As pc technology progressed, it was common for functional areas of companies to implement systems that met their certain requirements whilst these pc systems have been always isolated from other areas with the organization. The objective of thdse systems was to create it possible for choice makers to generate far better decisions by utilizing data that have been refined from accessible data.

The capacity of any business to build decisions is based in large part on a quality on the facts that they receive. If firms do not have very good information, they cannot make very good decisions. That is real at the staff level as well as the executive level, and right after the scandals at Enron and WorldCom, there is new emphasis on the board of directors to preserve manage over management .

Unfortunately, this kind of systems have not been deployed to help the choice makers of oil generating nations determine how they are able to most effective use the large revenues that occur into their nations once oil prices are high. In 1998, oil sold for $10 a barrel; in 2004, oil prices reached over $50 per barrel. Nations for example Saudi Arabia and Venezuela, which received critical oil revenues inside 1970s, are faced from the problem of how to allocate those revenues mainly because oil organizations in these nations are generally nationalized. Despite the big revenues received by Venezuela, for example, per capita dollars truly fell by 15 percent during the 1980s. Oil-rich governments must buy infrastructure projects that make sense for the economy and support lessen the nations' dependence on oil, but this can be politically unpopular. Using political expediency rather than rational decision doing could put countries for instance Venezuela at risk yet once again if oil costs fall ("Tackling" 18).

 

 

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