Blazer and Ashland Oil

Blazer and Ashland Oil: A Study in Management

JOSEPH L. MASSIE
Copyright Date: 1960
Pages: 280
https://www.jstor.org/stable/j.ctt130jfg3
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  • Book Info
    Blazer and Ashland Oil
    Book Description:

    Tracing the evolution of the Ashland Oil & Refining Company whose growth was phenomenal even in a rapidly expanding industry, author Joseph L. Massie attributes the success of the company to the flexible management policies of Paul G. Blazer.

    eISBN: 978-0-8131-6356-7
    Subjects: Business, Management & Organizational Behavior

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. PREFACE
    (pp. vii-x)
    J. L. M.
  3. Table of Contents
    (pp. xi-xii)
  4. EXHIBITS
    (pp. xiii-xiv)
  5. ILLUSTRATIONS
    (pp. xv-xvi)
  6. 1 THE SETTING FOR SUCCESS Ashland Oil’s Place in the Petroleum Industry
    (pp. 1-21)

    ALTHOUGH THE petroleum industry in the United States recognizes its beginning in 1859, when Edwin L. Drake drilled the first commercial oil well, near Titusville, Pennsylvania, its modern character dates from the early years of the twentieth century, when a series of events transformed its structure. The opening of the southwestern oilfields, announced spectacularly by the Spindletop gusher near Beaumont, Texas, in 1901, and the mass production of automobiles, initiated by the Model-T Ford in 1908, established a new supply-and-demand relationship for petroleum which resulted in a vast and rapid growth of the industry. In 1911 the old Standard Oil...

  7. 2 WILDCATTER IN KENTUCKY The Operations of Swiss Oil Corporation
    (pp. 22-41)

    OIL PRODUCERS in the United States looked forward to a very prosperous year in 1918. The wartime demand for petroleum products had jumped the price of crude oil from less than $1.00 a barrel in 1915 to approximately $2.50. Too, the number of motor-driven vehicles on the highways was expected to exceed six million. Gasoline had already replaced kerosene as the chief product of crude oil, and the thermal cracking process discovered in 1912 by Dr. William M. Burton was beginning to show its importance for automobile fuel.

    The promise of easy money encouraged wildcatting-speculative drilling in unproven oilfields—during...

  8. 3 ECONOMIES OF OBSOLESCENCE The Operations of Ashland Refining Company
    (pp. 42-67)

    THE ALMOST offhand manner in which the board of directors of Swiss Oil Corporation decided to integrate forward into refining belies the careful work in preparation for this action. It reflects, however, the directors’ trust in Paul Blazer, who was named general manager of the newly organized Ashland Refining Company.

    Blazer and Ashland more than fulfilled the board’s expectation of substantial returns on its investment in the refinery. Although the initial operations of Ashland Oil & Refining Company were in Swiss’ production of crude oil, the stable foundation for its future growth was laid in 1924 with the refining activities....

  9. 4 RELUCTANT ENLARGEMENT Ashland Oil–A Medium-Sized Company
    (pp. 68-92)

    ASHLAND OIL & Refining Company was the consequence of the legal consolidation of Swiss Oil Corporation and Ashland Refining Company on October 31, 1936. Several factors made this consolidation desirable; however, the proximate cause of the amalgamation was a Kentucky law passed in 1936 which would have increased the taxes of the two companies if they had remained separate.

    Although not stated in print at the time, the death of Thomas A. Combs in 1935 should be included as a reason for the consolidation. Combs had lived in Lexington while acting as president of Swiss Oil Corporation from 1922 until...

  10. 5 RAPID GROWTH BY MERGER The Transformation to Large-Scale Operations
    (pp. 93-116)

    PROBABLY THE most astounding period in the history of Ashland Oil was the time of its rapid growth from 1948 to 1950. In this short period, as Exhibit 14 shows, the company’s assets increased from $24,000,000 to $104,000,000. Although, as the previous discussion implies, Blazer had built a firm foundation for future growth, this expansion was not the result of a conscious program. In fact, in numerous comments through the years after 1938, he seemed to apologize for becoming larger. The 1947 annual report included one example of such a comment: “Growth, as such, is not an objective but because...

  11. Illustrations
    (pp. None)
  12. 6 PIPELINES AND TOWBOATS The Transportation of Oil and Its Products
    (pp. 117-144)

    THE SERIES OF mergers in 1948-1950 not only quadrupled the value of Ashland’s assets, but broadened its marketing territory from a circle extending roughly 200 miles from the city of Ashland to include all of the Ohio Valley and a substantial part of the Great Lakes area. This geographical expansion brought with it an increased problem in transporting crude oil and finished products.

    The Ohio River remained the key to Ashland’s transportation system, and towboats with oil barges now extended their trips upstream to Freedom and downstream to the Mississippi, which they plied from Louisiana to Illinois. On the Great...

  13. Illustrations
    (pp. None)
  14. 7 JOBBERS AND BRAND NAMES The Pressure for Markets and Promotion
    (pp. 145-169)

    THE PRINCIPAL products which are refined from petroleum—gasoline, domestic fuel oil, diesel and gas oil, asphalt, lubricants, kerosene, and industrial fuel oil—are sold in fairly distinct and separate markets and often through different channels. The integrated refiner uses the refinery gate as a reference point from which he considers each product and each market on a marginal basis. “Netbacks” on products to different locations offer him quantitative data for making his complex decisions. These decisions are based primarily upon two factors: the price level in each local market, and the transportation cost for the refined products to each...

  15. 8 OBJECTIVES OF MANAGEMENT Concepts of the Role of the Chief Executive
    (pp. 170-189)

    PAUL BLAZER was chief executive of Ashland Oil & Refining Company and its predecessor, Ashland Refining Company, from the incorporation of the latter in 1924 until January, 1957. The refining company was organized only after Blazer had accepted the executive position. The members of the board of directors maintained such confidence in his decisions that he enjoyed complete and relatively unchallenged operating authority throughout the period; consequently, the organizational structure and the managerial processes developed during these years were primarily the result of the opinions and the actions of the chief executive.

    This chapter and the next summarize the objectives...

  16. 9 FLEXIBILITY AND INFORMALITY Blazer’s Concepts of Business Management
    (pp. 190-227)

    UNDERLYING THE concepts and practices of management which evolved in Blazer’s mind, the idea of flexibility has been pervasive and fundamental. Flexibility in this context refers to the quality of adaptability to external changes, susceptibility to modification of actions, resilency of policies, and responsiveness of the entire organization to meet new problems; it is the antonym of rigidity, unchangeability, inflexibility. and inelasticity.

    The idea has been that a small growing company in Ashland’s position in an expanding industry requires adaptability in place of the advantages of the technical concept of bureaucracy important to the large firm. Dimock defines bureaucracy in...

  17. 10 SUCCESS AND SUCCESSION The Evaluation of Policies and Practices
    (pp. 228-242)

    THE PROCESS of evaluation is the measurement against certain standards considered to be valid by the appraiser. In the theory of management there are many proposals for such standards. Most depend upon their logical appeal and their mutual consistency for their proof. Concepts are said to be “good” when they agree with these defined standards, and “bad” when they differ. At their present stage of development, these standards are inadequate as a basis for evaluation. Often they result in ambiguous and contradictory recommendations. The student of management, therefore, must use an evaluation procedure that measures in terms of objective results....

  18. INDEX
    (pp. 243-253)