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Managerial and Legal structures


With the merger in December 1999 ExxonMobil(*) obviously had to embark into a large corporate restructuring.

Exxon had a tradition of having a lean legal organization aimed at minimizing administrative costs, simplifying communication and reporting, avoiding unclear situations which could lead to irregularities. With the merger I felt this concept had been abandoned.




Without being specific to any actual organization it can be said that some corporations buy and sell shares of the subsidiaries in a flurry with no link to the managerial structure. The drive is of a fiscal and financial nature and it must be very significant because all these companies without an actual business objective have some costs for legal fees, books, etc..

There are countries who try to attract large corporations by establishing special tax regulations.
A large corporation with operations in several countries may see an advantage in setting up a legal structure, which exploits these benefits to minimize tax burdens. As a matter of fact some countries are ready to accept that there is just a legal entity, other countries require the legal entity to actually carry on the business defined in its statute. The map below shows how complex can be the legal structure of subsidiaries belonging to the same corporation and reporting to it through functional lines, independent from the legal structure.

What a maze!

But what's the benefit for the community of all this set up?


Note: I had to leave my job as I was moved without my knowledge and consent into the payroll of a financial company. All my attempts to get an explanation were let down, my boss told me that the letter of notification had gone lost in the mail! This reply reminded me of the behaviour of a Soviet apparatchik.

Other pages about ExxonMobil:
Introduction
Cleopatra's nose and Lee's lips
management structure
compliance with company policies.

(*) The words ExxonMobil, Exxon and Mobil are used in a generic sense. I actually worked since January 1, 1966 for Esso Standard Italiana Spa, subsequently renamed Esso Italiana Spa and Esso Italiana Srl. On April 5, 2001 I was notified that my contract had been sold on January 1, 2001 to another company named ExxonMobil Mediterranea Srl (previously a subsidiary of Mobil). Four days after this notification I left the company. Therefore I never had any direct legally binding agreement with Exxon Corporation or ExxonMobil Corporation.
(**) This chart is my own attempt to represent in a graphical way a generic structure driven by fiscal advantages (the choice of the countries does not indicate an analysis of their tax regulations).


This site is maintained by Roberto Piperno. Write to romapip@quipo.it

I had to adopt this motto (Wild with the wild ones)