Question

After buying old, run-down refineries, Valero's CEO first steps were to assure people their jobs were secure, bring in new safety equipment, and promise employees that if they worked hard he would put them first—before shareholders and customers. Putting employees first has engendered amazing loyalty and dedication. It has given Valero a distinctive edge during an era of cutthroat global competition in the oil industry.

Answer 1

John D. Rockefeller's Standard Oil employed horizontal and vertical integration strategies to dominate the 19th-century oil industry, influencing corporate practices. Today, contrasting approaches like Valero's reflect the evolving perspectives on stakeholder theory versus shareholder primacy.

Step-by-step explanation:

The strategic business practices employed by John D. Rockefeller and the Standard Oil Company during the 19th century were pivotal in the development of America's industrial landscape. Rockefeller's approach included both horizontal integration, consolidating control of oil refining by absorbing competitors, and vertical integration, managing all aspects of production from raw materials to distribution.

This allowed Standard Oil to dominate the oil industry by controlling prices and eliminating competition. Rockefeller's aggressive strategies, which included making deals with railroads and underpricing, led to a near-monopoly and significant influence over the market. Such history underscores the complexity of balancing stakeholder interests, from employees to shareholders, in the corporate world.

Today, companies still grapple with the juxtaposition between maximizing shareholder value and ensuring stakeholder satisfaction. The aforementioned Valero CEO's decision to prioritize employee welfare is an example of contemporary stakeholder theory in practice, demonstrating a move away from the historical emphasis on shareholder primacy.