MANAGEMENT THEORY AND PRACTICE IN THE OIL INDUSTRY
BRINGING CHANGE TO PETROLEOS MEXICANOS (PEMEX)
One of the most difficult tasks faced by organizations is implementing change. If the change is seen as only a temporary measure, employees are not likely to embrace it. If the change is not presented in such a way that stakeholders see the benefit, there is likely to be strong resistance. If the change drastically alters the way that the organization conducts business, the change may also fail in the long-term. Because of this, management theory recommends having more than one person make the decisions that lead to fundamental changes in an organization, and finding champions at various levels of the organization who can support the change and encourage its implementation (Peck 36(.
The oil industry faces change on a regular basis, whether within organizations that struggle to redefine themselves, or in the larger industry context. Petroleos Mexicanos (Pemex) is Mexican oil company that is currently the fifth largest producer of crude oil, but which runs the very real risk of putting Mexico in the position of importing oil within 10 years if changes are not made. Over the past several decades, Pemex has not invested in oil exploration, nor has it maintained its refineries or focused on ancillary businesses such as natural gas. Pemex provides substantial revenues to the government, which has prohibited the organization from seeking foreign alliances. However, without investment by foreign oil companies, it is not clear whether Pemex can develop the reserves necessary to maintain Mexico's status as a key oil exporter. This has resulted in Pemex trying to change the government's position in order to attract foreign investment, an effort 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 importa...