13 Best Taper Shank Drill Bits

List Updated June 2020

Bestselling Taper Shank Drill Bits in 2020


Drill America DWDTS Series High-Speed Steel Taper Shank Drill Bit, Black Oxide Finish, 3 Morse Taper Shank, Spiral Flute, 118 Degrees Conventional Point, 1-1/16" Size (Pack of 1)

Drill America DWDTS Series High-Speed Steel Taper Shank Drill Bit, Black Oxide Finish, 3 Morse Taper Shank, Spiral Flute, 118 Degrees Conventional Point, 1-1/16
BESTSELLER NO. 1 in 2020
  • High-speed steel tools are good for most general purpose applications, offering a combination of hardness and toughness for wear resistance
  • Black oxide treatment adds lubricity and creates small pockets on the surface of the tool that act to hold coolant near the cutting edge
  • Morse taper shank allows the tool to be inserted directly into the machine's spindle to facilitate high-torque applications such as large cut diameters
  • When run in a counterclockwise direction (right-hand cut) spiral fluted tools evacuate chips up and out of the cut to reduce clogging
  • Designed to perform in a broad range of materials in the iron and steel families

TOYOTERU Socket Adapter & Bit with Bit Extension Holder (16pcs),Hex Quick Change Chuck Socket Adapter, Impact Hex Shank Drill Bits Bar

TOYOTERU Socket Adapter & Bit with Bit Extension Holder (16pcs),Hex Quick Change Chuck Socket Adapter, Impact Hex Shank Drill Bits Bar
BESTSELLER NO. 2 in 2020
  • 3pcs(60mm,100mm,150mm )Magnetic Bit Extension Holder can accept :Screwdriver Bits, Drills and Handheld Drivers. Great for working with hard to reach screws
  • 3pcs1/4" Hex Shank adapter (1/2",3/8",1/4") are suitable quickly change 1/4" chuck systems or directly into drill chuck. Change your hand socket set into a driven socket set
  • 10pcs 1" Bits with holder can meet any household job: Construction, Fixing, Repairing, Assembling etc.
  • 1/4" hex shank parts are suitable for hand tools and power tools
  • This set can great to use at home, in the workshop or warehouse for hobby, hardware, auto repair, and so much more

Eagles 5pcs #5 #6 #8 #10 #12 HSS Countersink Drill Bit Set with free Quick Change Hex Shank-GOLD

Eagles 5pcs #5 #6 #8 #10 #12 HSS Countersink Drill Bit Set with free Quick Change Hex Shank-GOLD
BESTSELLER NO. 3 in 2020
  • 1. 5Pcs Woodworking Countersink Drill Bits set, Woodworking Chamfer, drilling pilot holes for screw sizes #5,#6,#8,#10 and #12.
  • 2. Special designed steel counter sleeve countersinks or counter bores pilot hole,can drill the countersink hole and counter bores pilot hole and keep both on the same axis.after the screw is screwed on, the screw cap is below the plane of the board!
  • 3. Adjustable counter sleeve depth with a wrench,drilling length can be adjusted for #5 #6 #8 #10 #12 screws length simply by use a wrench to remove or adjust the setscrew.
  • 4. Drill and countersink can be used for wood and plastic without changing bits
  • 5. We are professional sellers,all of our self-centering drills strand come with 14-month warrantyand after-sales service, for any reason you are not satisfied with your purchase, please contact us freely

Cleveland 2410 High Speed Steel Taper Shank Drill Bit, Black Oxide, #3 Morse Taper Shank, 135 Degree Split Point, 1" Dia. x 11" Lg (Pack of 1)

Cleveland 2410 High Speed Steel Taper Shank Drill Bit, Black Oxide, #3 Morse Taper Shank, 135 Degree Split Point, 1
BESTSELLER NO. 4 in 2020
  • With 30 degree helix
  • With 135 degree drill point, allowing for a cleaner drill hole and less slippage when starting
  • High-speed steel tools are good for most general purpose applications, offering a combination of hardness and toughness for wear resistance
  • Black oxide treatment adds lubricity and creates small pockets on the surface of the tool that act to hold coolant near the cutting edge
  • Morse taper shank allows the tool to be inserted directly into the machine's spindle to facilitate high-torque applications such as large cut diameters
  • Made in the USA

Michigan Drill 203 Series High-Speed Steel General Purpose Drill Bit, 2 Morse Taper Shank, Spiral Flute, 118 Degrees Conventional Point, 1" Size (Pack of 1)

Michigan Drill 203 Series High-Speed Steel General Purpose Drill Bit, 2 Morse Taper Shank, Spiral Flute, 118 Degrees Conventional Point, 1
BESTSELLER NO. 5 in 2020
  • High-speed steel tools are good for most general purpose applications, offering a combination of hardness and toughness for wear resistance
  • 118 degrees conventional point
  • Morse taper shank allows the tool to be inserted directly into the machine's spindle to facilitate high-torque applications such as large cut diameters
  • When run in a counterclockwise direction (right-hand cut) spiral fluted tools evacuate chips up and out of the cut to reduce clogging
  • 1-inches size

Driak 3pcs 16-30.5mm,5-20mm,3-14mm HSS Taper Power Drill Bit Umbrella Step Drill Set Cone Chamfer Cutter

Driak 3pcs 16-30.5mm,5-20mm,3-14mm HSS Taper Power Drill Bit Umbrella Step Drill Set Cone Chamfer Cutter
BESTSELLER NO. 6 in 2020
  • Product Name : Umbrella Drill Bit
  • Material : HSS 4241
  • Color:Silver Tone
  • Shank Size : 8mm & 10mm
  • Used for wood, plastic, metal drilling

Cleveland C08839 High-Speed Steel General Purpose Taper Length Drill Bit, Steam Oxide Finish, Round Shank, Spiral Flute, 118 Degrees Radial Point, 13mm Size (Pack of 1)

Cleveland C08839 High-Speed Steel General Purpose Taper Length Drill Bit, Steam Oxide Finish, Round Shank, Spiral Flute, 118 Degrees Radial Point, 13mm Size (Pack of 1)
BESTSELLER NO. 7 in 2020
  • High-speed steel tools are good for most general purpose applications, offering a combination of hardness and toughness for wear resistance
  • Steam oxide finish
  • Round shanks allow use with a wide variety of toolholding systems
  • When run in a counterclockwise direction (right-hand cut) spiral fluted tools evacuate chips up and out of the cut to reduce clogging
  • 13-millimeters size

Michigan Drill 203 Series High-Speed Steel General Purpose Drill Bit, 1 Morse Taper Shank, Spiral Flute, 118 Degrees Conventional Point, 1/2" Size (Pack of 1)

Michigan Drill 203 Series High-Speed Steel General Purpose Drill Bit, 1 Morse Taper Shank, Spiral Flute, 118 Degrees Conventional Point, 1/2
BESTSELLER NO. 8 in 2020
  • High-speed steel tools are good for most general purpose applications, offering a combination of hardness and toughness for wear resistance
  • 118 degrees conventional point
  • Morse taper shank allows the tool to be inserted directly into the machine's spindle to facilitate high-torque applications such as large cut diameters
  • When run in a counterclockwise direction (right-hand cut) spiral fluted tools evacuate chips up and out of the cut to reduce clogging
  • 1/2-inches size

6pcs SAE Drill Tap Combination Bit Set Deburr Countersink Hex Bit HSS 1/4 Shank

6pcs SAE Drill Tap Combination Bit Set Deburr Countersink Hex Bit HSS 1/4 Shank
BESTSELLER NO. 9 in 2020
  • Package Included:6pcs Drill Tap Countersink Set
  • Material:High speed steel
  • SAE Size: 6-32NC(3.5mm),8-32NC( 4.2mm),10-32NC( 5mm),10-24NC( 5mm),12-24NC( 5.7mm),1/4-20NC( 6.35mm)
  • Shank Dia:6.35mm 1/4 Hex Shank
  • Suitable for soft metal tapping, such as aluminum plate, thickness of less than 3--4mm.

YG-1 D1211 High Speed Steel Twist Bit, Black Oxide, Morse Taper Shank, Slow Spiral, 118 Degree, 63/64" Diameter x 11" Length (Pack of 1)

YG-1 D1211 High Speed Steel Twist Bit, Black Oxide, Morse Taper Shank, Slow Spiral, 118 Degree, 63/64
BESTSELLER NO. 10 in 2020
  • Morse taper shank twist drill
  • 118 degree point angle
  • Made of high speed steel

W.L. Fuller 20130140 9/64" HSS Taper Point Replacement Drill Bit for TPS-Lock Shank System

W.L. Fuller 20130140 9/64
BESTSELLER NO. 11 in 2020
  • 9/64" Drill Diameter for #6 Wood Screws
  • Replacement Bit for TPS-Lock Shank System
  • Use with QST09 TPS-Lock Shank
  • Recommended for most jobs, whether in a drill press or in hand held equipment
  • Cuts very well in both hard and soft woods

Insty-Bit 82609 9/64" Hex Shank Taper Drill Bit & Countersink for #6 Screws

Insty-Bit 82609 9/64
BESTSELLER NO. 12 in 2020
  • Drills Precise Tapered Holes In Wood
  • Adjustable Smooth Cutting 4-Flute Countersink
  • Tapered HSS Drill Bit
  • 1/4" Hex Shank (can be used with Insty-Bit quick change chuck # IB80138, sold separately)
  • Install Screws Flush or Recessed in 3/8" counterbore

Atoplee 4pcs HSS Hex Shank Tapered and Hardened Countersink Drill Cone Bit Set Woodworking Tools + Small Wrench

Atoplee 4pcs HSS Hex Shank Tapered and Hardened Countersink Drill Cone Bit Set Woodworking Tools + Small Wrench
BESTSELLER NO. 13 in 2020
  • Handle shape: Hex handle
  • Handle diameter: 6mm
  • Drill bit diameter: 001:2.5mm; 002:3.15mm; 003:3.65mm; 004:4.5mm
  • Material: the drill bit: HSS4241; Chamfering device: 45#steel
  • Package Included: 4pcs Round shank taper hole woodworking drill bits and 1pc Small wrench

Halliburton: Drilling for Profits

An analysis of the company who, among other things, does construction for the US government in Iraq.

The STEP process shows how much political influence affects the industry. For example, an article on Halliburton reads: "From 1999 through 2002, Halliburton and its employees donated almost $709,000 to federal political candidates and parties, ninety-five percent of which went to Republicans, according to the Center for Responsive Politics…the gifts were the second highest among contractors working in Iraq, trailing $1.3 million from closely held Bechtel Group Inc." (Steffy pg. 55). While donating may be common practice for large corporations, this furthers the argument that Halliburton engages excessively in political games. In the past, political barriers and sanctions on foreign countries posed a threat to Halliburton's ability to develop in those countries. With the government on their side, the easing or removal of sanctions improves business. This is especially important for ESG in, for example, Libya.

Halliburton finds itself split in the influence the economy has on the company. On one hand, in a downturn of oil prices, ESG finds lower profit margins. The ESG sector of Halliburton is the more profitable of the two. KBR benefits from a worse economy because they can pay lower wages for labor; this is supported by Halliburton's 10K which reads "the demand for skilled workers is high and the supply is limited. A significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force, increases in the wage rates that we must pay, or both. If either of these events were to occur, our cost structure could increase, our margins could decrease, and our growth potential could be impaired" (Halliburton 10K pg 60). Thus, in a down economy, the wage structure would be beneficial to Halliburton, and in effect would improve margins and increase growth.

Halliburton leverages several capabilities. Technologically speaking, new tools for well seismic fusion lithology and fluids prediction "enable fast, accurate asset prospect validation" (myhalliburton.com). In addition, Fas Drill, a new drillable composite tool, helps cut costs and time spent on fracturing and cementing operations (myhalliburton.com), and a DecisionSpace decision management system was developed to "optimize decision making that improves asset development planning and performance" (myhalliburton.com). All of these represent resources in focus of tacit knowledge.
Socially, Halliburton has been under public scrutiny. Former CEO Thomas Cruikshank said of Halliburton: "In social conversations 10 years, if you said Halliburton, nobody knew who you were talking about…That's changed a little bit" (Steffy pg. 52). With numerous news articles and politicians slamming the company continuously increasing, the opinion of Halliburton is grim. In a recent claim that Halliburton has been overcharging the government for Iraq expenses, politicians on Capitol Hill are telling the public that Americans are the ones footing the bill. With such negative views of the company held by the average American, it may be hard for Halliburton's KBR to get more large-scale contracts out of fear from political retaliation. However, CEO David Lesar believes the public tension is over, as he stated, "now that we have overcome these difficulties, it is time to look beyond…beyond politics - to the immense potential of Halliburton" (Datamonitor - Company Profile pg. 21). These issues currently create a challenge in gaining more domestic projects, save New Orleans, which would help further company growth. Presently, seventy percent of Halliburton's revenues come from overseas, so an increase in domestic projects could help sustain further growth.

A Porter's five forces framework further examines the competitive landscape. It is necessary to note that the instability of the oil and gas market has an effect on the drilling sector. The result is lower rig utilization and day-rates for companies in the drilling industry as a whole, while US firms may not feel these negative impacts. This is primarily due to the necessary rebuilding of Iraq's oil fields, which US-led firms will get contracts for (Datamonitor oil and gas drilling industry). Despite this, contracts for drilling in the Middle East have increased, and with Asian demand also rising, the entire industry is looking at high potential growth. The average compounded annual growth rate is 4.2%, which shows a strong outlook for the next few years.

Besides Halliburton, there are no other companies that focus on both oil drilling and reconstruction; however, there are rivals that threaten either KBR or ESG on an individual basis. Since KBR is in the special construction industry, their biggest rival is the privately held Bechtel Group. Bechtel is perhaps the only other company capable of such massive projects that Halliburton can conduct. ESG's main competition stems from Schlumberger Limited, BJ Services, Aker Kvaerner, and Smith International. Schlumberger leads the global oil and gas drilling industry with 19.3% market share (Datamonitor Global oil and gas drilling industry), compared to Halliburton's 15.2% stake. Schlumberger takes a unique approach towards their concentration in remaining the industry leader. They rely on technology which they believe will give them an edge by enabling higher profits. They also believe that the oilfield services industry is the most profitable in the oil industry value chain and thus seeks to focus in this area (Datamonitor Global oil and gas drilling industry). More reliance on liquefied gas is another emphasis that Schlumberger has taken leading a continuing trend in the industry. The industry that ESG finds itself in, oil and gas drilling, is far more competitive than that of KBR. Despite this, it is interesting to note that ESG is the stronger of the two, with higher profit margins.

The Herfindahl Index of the industry provides further evidence of the competitive environment. By squaring, then summing the squares, the market share of the top five companies in the oil and gas drilling industry, and assuming that "others" contain less than 1% market share each, the resulting figure is 758.82. In summation, this number tells of an extremely competitive industry, that has many players in it. No one firm dominates the other. Thus, the threat of competition that Halliburton faces is quite high.

Entry barriers into the industry are quite high. While there are a lot of players as a whole, the financial backing to become one is substantial. The market caps of Technip, Halliburton, and Schlumberger are $5 billion, $30 billion, and $46.6 billion respectively. With market caps in the billions of dollars, the startup capital required is high (Hoovers.com - Competitive Landscape, pg 1). While capital costs are high, economies of scale are not; capital expenditures to excavate the actual oil and gas are substantial. On the other hand, KBR has extremely high barriers and economies of scale because they are only a handful of companies who can do specialized construction projects. The mixture of high capital costs and high economies of scale provide a higher entry barrier.

Buyer power is also quite high in the oil services industry. There is no product differentiation, and the supplier is at the buyer's mercy. There are a large number of suppliers with alternatives. Perhaps one downside in the buyer's power, which is substantial, is their dependence on the product. Oil, for now, is a necessity throughout the world, and until another form of fuel is found, it will be in extremely high demand. If the dependence of oil becomes drastically reduced, then ESG would be hurt. Also the frequent mergers of large oil companies consolidate the need for new drilling, construction, and exploration work (Bloomberg News pg. 56). The buyer power in the construction industry is very limited. Only a few can do large and complex jobs, Halliburton being at the top of the list; the result is a high dependence on them to complete these operations.
In addition to oil and liquefied gas being a commodity, there are a few substitutes. Oil and liquefied gas are a finite natural resource: since supply is limited, other measures need to be taken in order to reduce dependence. These include the present use of nuclear energy, and the more modern breakthroughs in hydrogen powered technology. While Halliburton and Schlumberger focus on drilling, the end product is oil and gas. If the product they find is in less demand, the value of their service decreases. In KBR's case, there is no substitution.

Supplier power varies within the industry; while their products aren't differentiated, some suppliers like Halliburton and Schlumberger have a product with limited supply and ultra high demand. With such a sharp demand curve, the prices they can charge are high, and continue to grow. Since nearly every automobile depends on their end-product, they, as a group, have high supplier power. KBR has the highest in supplier power. Since it is either them or Bechtel, and both usually get some portion of the job, they can charge for expenses incurred for the operation and a high % fee above that. In Iraq, their efforts are worth the cost of construction (expenses) plus a fee of 7% in instances (Steffy pg. 56).

Halliburton's business strategy moving forward is described by David Lesar's letter to shareholders in the 2004 Annual Report. Chairman for KBR and ESG president and CEO positions have been eliminated in an effort to create a "flatter, more streamlined reporting structure" (Halliburton Annual Report 2004 pg. 4). The result is a system in which the vice presidents of KBR and ESG report to the COO, presently Andrew Lane. In addition, Lesar and the company are reviewing KBR and its future. There is talk of separation from Halliburton, which would involve a "spin-off" or "split-off", an IPO, or a sale of KBR. Being that KBR's value to Halliburton hasn't been realized in its stock price, one of these actions are probable. KBR has continued to pioneer gas-to-liquid technology that improves their cability to serve remote markets in need of natural gas. In ESG, one of their resources are services integrated among all of their product lines, which results in "an economically optimized, total reservoir solution" (2004 Annual Report pg. 5). ESG's Geo-Pilot is helping to gain access to the logging-while-drilling market. Baker Hughes describes it: "[logging-while-drilling] services allow operators to log and evaluate formations often within minutes of being drilled, which ensures little or no wellbore alteration or formation invasion" ( pg 1). The end result is better asset utilization, less time wasted from correcting mistakes, and better efficiency. Halliburton's Digital and Consulting Solutions segment is continuing its leadership in software, while at the same time beginning a consulting group to help capture an otherwise untapped market.

Halliburton's finances have looked dim for the past two years. With KBR recently emerging from Chapter 11 Bankruptcy due to asbestos liability totaling 2.75 billion, Halliburton's net profit margins have been negative for the past two years. Although Halliburton's revenue is high, second in the industry after Schlumberger (SLB), their profit margin is negative due to a net loss incurred by discontinued operations, through which all changes to asbestos liability payments are recorded. Halliburton's initial estimates of expenses as a result of the asbestos settlement were grossly underestimated, and thus they recorded a loss of 1.364 billion dollars of discontinued operations in 2004. While their income from continuing operations is 651 million, the loss from discontinued operations, payment of minority interest, and payment of income taxes resulted in a cumulative net income loss of 979 million. In comparison, their competitors have had margins between 2-13%, and all are benefiting from the increased demand for production and exploration from the oil industry. SLB actually posted a gain from discontinued operations in 2004, and only posts a loss from discontinued operations of 15 million dollars in 2003 (SLB does not record asbestos liability through discontinued operations because they don't have any!).

Competitors' ROE have been in the high teens and low twenties, while Halliburton's have been negative 23 and negative 38 percent respectively due to the negative profit margins compounded by high leverage ratios. Halliburton's asset turnover ratio is about average with the industry; however two of the companies' competitors (SLB and BJ Services) have ratios under 1, so Halliburton can improve in this area. The rest of the industries leverage ratio is between 2 and 3, while Halliburton's leverage ratio is double that at 4.13 and 5.91. This is due to the debt incurred from settling asbestos litigation. Halliburton's total liabilities are 11.7 billion dollars in 2004- SLB's are only 4.7 billion and BJ Services are only approximate 900,000. To resolve the settlement amount of 2.75 billion, Halliburton has made payments in amount of 300 million in 2003, 119 million in 2004, issued 59 million shares of common stock, a one year interest bearing note of 31 billion with the injured claimants as beneficiaries, and opened a trust in January 2005 with the remaining amount of 2.345 billion. In general, asbestos liability has wrecked havoc on Halliburton' s financial statement, and has caused Halliburton's ratios to pale in comparison to Shclumberger and BJ Services in 2003 and 2004. Once all of the payments have been made, Halliburton's leverage ratio will return to normal levels like their competitors. Also, Halliburton's insurance companies have scheduled payments for the asbestos expenses from 2005 to 2020 (which will be recorded through discontinued operations as well), which will have a huge impact on their future net incomes. Because of this antipated reimbursement for the current expense, Halliburton will probably post record net income over SLB and BJ Services between 2005 and 2020. Leverage will also continue reducing with the improvement of operating cash flows from the restructure of KBR- "which we expect will yield between $80 million and $100 million in annual savings" (Halliburton 10K pg 30). Halliburton's record revenue of $20 billion in conjunction with their final settlement of asbestos liability and collection of insurance payments, as well as the restructure of KBR, provides a favorable financial outlook and increased market share for Halliburton if all details fall into place as planned. The current asbestos costs will eventually subside, and thus Halliburton must focus on increasing operational efficiency through examine their normal costs without this liability.

While the cost structure of the oil services industry weighs more heavily towards variable costs, Halliburton is especially so with an estimated 96% variable cost component for Halliburton versus 83% for the industry in 2004. Presumably, this deviation comes from Halliburton's second business: KBR. This is the result of the four divisions that make up ESG including a highly skilled labor force that are salaried as well as equipment for the measurement and optimization of production capacity for existing wells, which are also fixed costs. However, KBR's work is predominately done by sub-contractors, and thus almost entirely variable. KBR's larger share of revenue, 61%, naturally skews the cost structure more towards that of KBR's and less towards ESG. Unfortunately, KBR's only major competitor, Bechtel, is private, and thus inaccessible for comparison.

Comparing cost structure trends over the past several years, Halliburton has gradually increased its variable cost as a proportion of total cost, from 93% in 2002 to 96% today, as opposed to an increase from 81% to 83% by its competitors over the same time period. This effect could be the result of two changes in Halliburton over the past five years. First, KBR's share of revenue has risen by a third, from 45% in 2002 to 61% today. This would naturally raise the overall variable costs of Halliburton as a whole, because KBR's cost structure, as mentioned earlier, has a greater variable component than ESG. This large increase is due to the Iraq war and other contracts. In 2002, the Government and Infrastructure division of KBR accounted for 12% of Halliburton's overall revenue, whereas it makes up 45% today - an almost three-fold increase. The second factor that likely contributed to Halliburton's changing cost structure is the reorganization that took place in 2002. According to their most recent annual report, "as a result" of their restructuring, they "took actions during 2002 to reduce [their] cost structure by reducing personnel." Lay-offs of salaried employees - the major target of any reorganization - are considered fixed costs and thus lower the fixed portion, and raise the variable portion, of their cost structure.

Looking forward, there are several risks to their highly variable cost structure. Again, two of these seem both the most likely to occur and contain the greatest potential for a change in the cost structure. First is the upcoming sale or spin-off of KBR; as noted earlier, KBR's business has a higher variable cost component than ESG. Without KBR's high variable costs, Halliburton's average would naturally drop, probably to levels closer to the oil services industry. A second potential event, mentioned earlier, is the potential for significantly higher wages for the highly skilled labor force that they employ. Any move by their competitors to increase wages would force Halliburton to do the same, thus raising their fixed costs relative to their variable costs. Although both these future events would negatively affect the variable portion of Halliburton's cost structure, only the second would hurt their bottom line; the imminent sale of Halliburton's less profitable KBR business segment can only help their net income.

In a sense, the forces and dynamics which lead to Halliburton's success are simple to understand: they employ cutting edge operational processes that are guided by the top human resources talent in the industry. Understanding how they develop these processes and guide these people to achieving top results in a fiercely competitive industry is best facilitated by placing them within the Baldrige Framework. As is stated in the Rao-Rollag report, the framework measures "excellence" through trying to quantify leadership, strategic planning, customer focus, knowledge management, a human resource focus, process management and, ultimately, business results (Rao pg 2).

Halliburton is struggling with rapid growth in its industry; however, its organizational development is uniquely capable of handling the issues attendant to such development. As it relates to organizational structure, Halliburton is divided into the two aforementioned subsidiaries: KBR and ESG. Within KBR, there are two sectors: one which handles the construction and engineering of facilities for the oil and gas sector, from chemical plants to refineries and the other sector, which builds civil infrastructure for governments around the world. (Annual Report pg 3). The organizational framework has aggressively changed in the 2004-2005 time frame from past leadership; the model adopted by former CEO Dick Cheney has been scrapped in favor of a flatter organizational matrix which allows the President to take more direct responsibility for their actions. With the resignation of the former CEO and President of ESG coupled with the termination of the embattled Chairman of KBR, all SVPs at Halliburton report to the new Chief Operations Officer, Andrew Lang. This simplification brings a flatter organizational hierarchy and alludes to the real power portfolios within the organization: the COO, the CEO, CFO and the General Counsel's office (Annual Report pg. 4).

Consequently, Halliburton is an industry leader in the oil and gas field, however the leadership should be evaluated in a holistic manner: what are the key metrics used to determine the efficacy of their leadership capabilities, are priorities being set and matched at all levels and are these critical objectives being met? At Halliburton, from the CEO, David J. Lesar down, there is a clear and compelling vision of being an industry leader and achieving this through leveraging their awesome technological skill. The key points for HAL relate to orders placed for new equipment - such as the Barracuda prime contract in Brazil, to reducing asbestos liability - a complete abolition of such liability through a prepackaged bankruptcy or a comprehensive discussion of new technologies such as DFE (drilling and formation evaluation) or new consulting services (Annual Report pg. 4-6). Priorities are being set in a continuous manner: such priorities in 2005 were the abolition of liability from asbestos and now appear to be the protection of employee lives who are in the war-torn Iraqi areas. The ongoing priority, as stated in the Annual Report, is to continue to maintain "95 percent of its revenue in the No. 1 or 2 market share positions" (Annual Report pg 6) and it appears that the leadership has aligned the strategy around this goal. It is clear that the leadership is pressing through achievement of the critical objectives: in the 2004/2005 FY comparison, HAL has managed to increase end results in every segment except KBR's Energy amp; Chemicals arm, which is pressured by rising prices to achieve certain input goods and strategic construction commodities. (Wall Street Strategies pg. 7). This is the result of HAL's innovative use of a performance improvement initiative which is at the forefront of the industry; the PII measures improvement in quality, health and safety and the overall environment.

Halliburton's ethics and corporate culture are much maligned by the conduct of their former President and CEO, Richard Cheney, Halliburton has become an industry leader and pioneer in a comprehensive Code of Business Conduct, which all employees are required to observe. As stated in the Code of Business Conduct: "Any Director, employee or agent who does not comply with these standards and requirements is acting outside the scope of his or her employment responsibilities or agency," and would rightly be subject to punitive or corrective sanctions ( pg. 1). While Halliburton is an aggressive corporation, constantly seeking to push out the boundaries of new technology, they are mindful of the obligations of bidding Government contracts and that their reputation is at stake with every completed transaction; ethics is at the heart of HAL's business model.

The operations of Halliburton are complex and exhaustive; any effort to address them here must be, by nature, brief. Nevertheless, Halliburton applies technology in all aspects of its operations to improve its operational performance. Visiting MyHalliburton.com is a worthwhile example of just a few technological developments which HAL uses to create and extend strategic advantages in the industry. The intranet, designed by Halliburton Services, is the portal which all employees use to coordinate activities through Halliburton. For the student version, there is an emphasis on simulators in the "community toolkit;" thus, one can see the development of a NE-TRSV drill in a 3D outlook with its flapper or the deployment of a gun assembly pushing the drill head down into the oil field. Certainly, the field that is available to employees on an internal basis must be complete with even more elaborate engineering and construction specifications but this allows them to leverage technology to ensure that employees anywhere know how to build, field and deploy the technologies they are working on at hand. On the right hand side of the screen is the "Halliburton Top Ten 2005" with answers to questions that employees have like "Do you have an environmentally friendly, high-performing drilling fluid or an efficient drilling waste handling system that will contribute to reducing overall project costs?" (MyHalliburton.com). This allows employees to see the stumbling blocks other employees have and answer questions, building and maintaining the overall knowledge base that the company is fielding and developing. Finally, there is a nice little feature in the OGJ (Oil and Gas Journal) digests which are on the bottom of the page - this, coupled with the "webinars" or web-based seminars all create a Halliburton where the employees, from the bottom to the top are all working from the same growing and dynamically changing information pool. This is just one of the ways in which HAL expands and extends its engineering and technical advantage across the entire organization - by imparting that knowledge to all workers.

Thus it is clear that Halliburton is focused on quality in the development of all of their products. As evidenced by their financials in 2003, they were even running at a loss in some areas to achieve and maintain the highest levels of quality - levels of quality which are required in an industry so mission critical as the development of refineries (KBR) or through the development and implementation of an entire oil field maintenance contract (ESG). Only through the application of cutting edge technologies relating to drilling or engineering and the proper human resources policies - one focused on ethical development of employees while recruiting the top talent, can HAL be effective at maximizing their strategic advantage over competitors. The proof of this is clear: a chart of HAL versus its competitors, listed in, shows that shareholders believe that HAL is the best value in its industry, accruing a 152% increase in the past one year time frame as opposed to 72% for a basket of peers (Baseline qtd. in Edwards Report pg. 8).

From an operations standpoint, few recommendations can be made: Halliburton is the industry leader, the pioneer in new technologies and closely leverages information technologies to their base industries. From the human resources standpoint, a few changes can be made: it will be necessary to purge all officials who were responsible for any misconduct in the procurement of Iraqi reconstruction and development contracts. It is our recommendation to create an internal board of inquiry, akin to what was done to assess HAL's asbestos liability, to identify how substantial the problems run with "no-bid" contracts and the level of corruption involved - no matter how high it reaches. We must make sure that employees are fully cognizant of the code of ethics and we must make sure that our HR policies are aligned with this strategic vision.
In summation, the major strategic issues facing Halliburton are three-fold: there are ongoing issues relating to the ethical conduct of their business, specifically the KBR arm as it relates to the reconstruction of Iraq, the cyclicality of the oil service industry and a broader question of are they using their resources and capabilities to develop their competencies to the fullest dimension. All of these problems are currently of High Importance to the future of Halliburton's profitability but mostly of Low Urgency; the last High Importance/High Urgency problem which Halliburton resolved was their complex prepackaged bankruptcy in the wake of considerable asbestos liability.

The ethical conduct of the KBR arm in the vigorous pursuit of "no-bid" is worthy of exploring. As mentioned earlier, the attendant investigations into the nature of how KBR is awarded contracts and what KBR does to secure those contracts is costing the company considerably in terms of future revenue streams from other specialized construction contracts, making the business of recruiting top talent difficult and may, indeed, cost them talent whom are concerned at the direction of their business. This is the one High Urgency issue - dealing with this, before Congress or the Government changes the massive and unwieldy Procurement process, or before they lose any more key talent, is a critical issue which must be addressed.
Another consideration of high importance, but of low urgency relates to the cyclical nature of the Halliburton oil-service business. In the long-run, the possibility of a substitute for petrochemicals threatens the very fundamental existence of Halliburton and its subsidiaries. For now, however, that is not an issue. What is an issue is using the cash flow from its ESG operations in a prudent manner while the price of crude is at 63. As is illustrated by recent history, there is no section of the petroleum value chain high enough to completely withstand the pressures of a cyclical bearish pricing environment for oil. Halliburton should find a way, by using their technological capabilities and tremendously growing resource base, to effectuate a way to even out the cyclicality of their business, perhaps by relying more on long term contracts.

Paradoxically, the lack of focus at Halliburton - either on KBR or ESG, but not both represents the great strategic dilemma of their intermediate run future. No matter how slick Halliburton's campaigning is, it represents a fundamental effort to bridge across two vastly different operations. While it is true that KBR builds some refineries and chemical infrastructure, a large majority of their profits is derived from the business of specialized engineering and reconstruction projects. This is independent of the oil services arm at KBR and represents an inability to focus their resources and capabilities on one strategic goal at a time.

Thus, their major strategic issue is the fate and future of Kellogg, Brown amp; Root, their venerable construction arm and part of the core of the Halliburton Corporate regime since its foundation 86 years ago. This is a problem of the highest importance, yet a comparatively low urgency. In the future presentation, a compelling case will be made for the immediate divestiture of KBR and the potential uses for the proceeds from such a sale, including share buybacks, increasing the dividend yield or possibly acquiring a competitor, in a bid to displace Schlumberger as the #1 oil service provider.

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The Baldrige Framework for Organizational Effectiveness. (2004, August 25). Retrieved October 1, 2005, from url;=/bin/common/course.pl?course_id=_9544_1 frame;=top
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