All quotes below are from renamerusk's immediately previous posting:
There is no economic reasoning for not seeking a higher return on investment whatever the opportunity.
But that's not correct. Investment opportunities with a higher rate of return usually have correspondingly higher level of risk associated with them. it is very common for individual investors and companies to choose a course of action that they know will have a lower rate of return because they don't want to expose themselves to the risks associated with another course of action that has potentially higher rates of return.
Oil and gas exploration is an industry that already has a high amount of exposure to risk associated with it. It wouldn't make sense for oil and gas executives (or executives in any industry) to expose themselves to risk in areas that are too far outside their areas of expertise. If they are interested in diversification, it could very well be that they would do so in order to lower their risk exposure which would necessarily mean investing in something that is not likely to have as high a level of potential return.
In capitalism, we are taught that every action can be judged by whether the result produces the best and most efficient use of resources
But "resources" include far more than tangible assets. The single scarcest, most precious and most non-renewable resource on earth is the hours, minutes and seconds that make up an individual human being's life. For a busy executive, the single most precious resource is the amount of time and attention that is available to focus on the enterprise. Time and attention focused on one area of concern comes at the expense of the time and attention that is available for focus on some other area of concern.
Perhaps Exxon would be able to get a higher rate of return on its capital operating, let's say, a hedge fund than it does on its energy business. And Exxon certainly has pockets deep enough to go out and find the very best, most talented hedge fund guru available and put him in charge of it. The problem is, in the end, the higher ups at Exxon would still be responsible for overseeing the hedge fund guru and for keeping the fund going in the event he does not work out as expected or quits. My guess is that is something that is way out of the range of expertise of most oil and gas executives. In the end, such a venture is probably not the best and most urgent use of upper management's time, attention or talents - i.e., not the best use of scarce resources.
In capitalism, we are taught that every action can be judged by whether the result produces the best and most efficient use of resources
It all depends on who is judging and in what context.
Let's define what capitalism is. Capitalism is political freedom in the realm of production and trade. it is the separation of State and economics in the exact same way and for the exact same reason as the separation of Church and State.
Economics is the social science which studies production and trade. All social sciences ultimately reduce down to the study of the behavior and interaction of individual human beings. A company or a corporation is nothing more than a large scale, organized cooperative endeavor comprised of many individuals acting in various roles and capacities.
How does one define "the best and most efficient use of resources"? That is entirely contextual. There are all sorts of things that individual human beings spend time and resources on that someone else may not consider to be the best and most efficient use. I spend money feeding and maintaining three cats. I spend a lot of time and money on my Internet radio station - I am basically providing a service that its audience gets for free and for which I don't get one dime back in reimbursement. Is spending my time and money on my cats and Internet radio station "the best and most efficient use" of my resources? There are some who might argue that it is not - that I could have placed the money I have spent on both over the years into my 401(k) and spent my free time getting paid working some sort of part time job and by now have a nice sum of money to show for it. But those who would make such a judgment don't have to live my life - I do. Life is to be enjoyed and the purpose of having money, ultimately, is the freedom it provides for one to pursue one's values. It would be a different story if I were starving and begging for charity to survive because I blew all my time and money on projects that I am not able to afford. But since I can afford it, I consider it to be an excellent use of my resources because of the joy I have received as a result. But what is "the best and most efficient use" of my resources may not necessarily be the best and most efficient use of your resources.
The same can be true for a company because, in the end, it is nothing more than a group of individuals in various roles and capacities acting towards a common objective. Obviously a major common objective for a business enterprise is a obtaining a return on capital invested. But some companies also pursue certain values which come at the expense of the bottom line financial statement - which is entirely appropriate so long as the shareholders are on board with it. There are some companies that donate large amounts of time and money to various community and charitable endeavors simply because management considers them to be important and worthy causes. There are some companies that go so far as to take stands on controversial social issues - which is something that can be risky and drive away customers. But they do it because management thinks the issue is important. Again, as long as the shareholders are on board with it, it is certainly their prerogative.
And, to use XTO as an example, was it "the best and most efficient use of resources" to so thoroughly, lovingly and expensively restore the historic office buildings they occupy? After all, XTO could have left the nasty facades that were added on in recent decades intact and just used sheet rock and cheapo drop ceilings on the interiors and had essentially the same amount of useful office space. Instead they spent a lot of extra money for no other reason that the fact that management valued the buildings' history and thought that restoring them would be a cool thing to do. And the shareholders obviously did not mind - most likely because the company was, when all was said and done, performing very well.
By way of contrast, Radio Shack built a beautiful new corporate campus because it obviously thought it would be a cool thing to do. But Radio Shack's business model was already on shaky ground when the campus was built - so that clearly was NOT the best and most efficient use of Radio Shack's resources.
The wider point is this: terms like "best" and "most efficient" are evaluative and highly contextual. What is deemed "the best and most efficient" in the eyes of the bean counter who is responsible for balancing the company's books might not necessarily be "the best and most efficient:" in the eyes of other significant stakeholders in the enterprise.
If Exxon/XTO's (EX) goal is to attract and to retain talent from today's pool of young and tech savvy workers, then EX will be competing with other large corporation who are finding that these workers are increasingly living in the downtown and near downtown neighborhoods.
My hunch is that most of XTO's workforce is a bit older than what one would find in a tech company where there are a lot of younger workers who fit the stereotype you mention. Middle aged people tend to live in the suburbs. Inner city neighborhoods are definitely popular with young workers and single workers. But the question is, once they marry and have kids and no longer have time and money for things such as nightclubs and restaurants will such neighborhoods continue to have an appeal? Or will they prefer a back yard and the fact that one can get more space for the money in the suburbs? In Dallas, many end up moving to the suburbs to escape the DISD. The nice thing about Fort Worth is it is still possible to buy a decently priced house in a safe neighborhood with what I am told are decent schools and still be close to downtown.
Providing a parking benefit to workers who drive to work from the suburbs while not providing a similar benefit to workers who use public transit, who might walk or who might cycle to work is not a recipe for harmony between these two groups.
If employees who walk to work or use transit are filled with rage and envy because the company provides free parking to employees who drive - well, then XTO has issues that are much larger and more serious than parking.
Most employers, by the way, provide free parking. It is only in downtown where this is not the norm. I used to work for a company in Los Colinas that was on a bus line. It also had parking lot. I am not aware of the employees who rode the bus being upset because the company had a parking lot and that people like me who drove to work were able to park in it at no cost.
800 workers will have parking; 1200 will not. Again this may present a morale problem.
Some years ago I interviewed for a job in downtown Dallas (which, I am thankful I did not get as the company subsequently nose dived). If I recall correctly, they had a limited number of free parking spaces which were assigned on the basis of seniority. Basically, the only way someone would get one is if someone with greater seniority left the company. The rest of the employees had a choice between significantly discounted parking nearby or a DART/TRE pass which the company provided for free. The DART/TRE pass was definitely the better deal if one could make it work. For me, it wouldn't have worked because there were occasions when I might have had to work without any advance notice past the departure time for the last TRE train to Fort Worth.