About This Item

Share This Item

The AAPG/Datapages Combined Publications Database

CSPG Bulletin

Abstract


Bulletin of Canadian Petroleum Geology
Vol. 23 (1975), No. 2. (June), Pages 324-339

Organizational Structure of the Oil Industry: (Historical Review and Theoretical Suggestion for Healthy Future Evolution)

Hajime (Jim) Fujiwara

ABSTRACT

Traditionally, we tend to categorize an industry according to its status at a given moment in its history; thus our definition of that industry becomes static. For the purpose of better understanding the basic character of industry, a dynamic model based on its historical evolution is required. An application of the familiar three-point diagram (MTK Diagram) which seems suitable to explain the basic character of industry in general, and the oil industry in particular, is introduced in this paper.

Manpower (Labour), Technology (Machines) and Knowledge (Information) are placed at the apexes of the triangle. A plotted point on the MTK Diagram indicates a quantitative (and qualitative) representation of each of these three elements.

The recognition of the interrelation between the productivity of an industry and the trend of that industry toward the "knowledge" apex is the most important result of the application of the MTK Diagram. According to the MTK Diagram, the oil industry shows a particularly strong trend toward knowledge orientation when compared with other industries.

The oil industry can be subdivided into five principal components: Exploration, Production, Transportation, Refining and Marketing. It is well known that each component of the oil industry maintains its own potential economic power and substantial organizational structure when compared to other industries.

Judging from this feature, it is possible to define the oil industry as a conglomeratic super-industry forming a unitized entity around petroleum. These strong knowledge-oriented and conglomeratic super-features explain why the oil industry has become the biggest business in this century. According to the MTK Diagram, the Exploration Group shows the most strongly knowledge-oriented character among the industry's five principal components. Public recognition of the character of oil exploration could be a key in minimizing present misunderstanding regarding the oil industry. It is vital at the present stage of conflict, characterized by political pressures toward government participation, nationalization, expropriation and so on, to make this role widely understood. To avoid diversion of our industrial society from healthy development, the destiny of the oil industry must be carefully determined. More discussions, based on the wisdom and discernment of man, are indispensable if the coming generation is to benefit.

1 This paper was prepared in October 1973 for presentation at the Economic Symposium organized by Mount Royal College, Calgary. However, this symposium was postponed indefinitely due to the occurrence of the oil crisis on the international scene, and the confusing developments both in the petroleum industry and in intergovernmental relations in Canada. The author would like to thank Mount Royal College and the Chairman, Mr. S. Hayakawa, for the opportunity to synthesize my ideas regarding the oil industry.

Petrofina Canada Ltd. allotted time and typing services for the preparation of this paper and provided drafting assistance.

The author also gratefully acknowledges G. L. Bush and E. S. Spurgeon who critically read the manuscript and provided many valuable suggestions.

End_Page 324------------------------

Pay-Per-View Purchase Options

The article is available through a document delivery service. Explain these Purchase Options.

Watermarked PDF Document: $14
Open PDF Document: $24