(FORTUNE Magazine) – ENERGY/Cover Stories 46 THE FUTURE OF BIG OIL The Alaskan oil spill is being compared to Bhopal and Chernobyl. Tragic as the loss of wildlife has been, it's not of that magnitude -- not yet, at least. The environmental wounds in Prince William Sound will heal. If Valdez ultimately weakens the nation's determination to develop oil, then it will become a major disaster. by Peter Nulty

50 RAWL: IN TEN YEARS YOU'LL SEE 'NOTHING' That's what Exxon's chief executive says will be left of the spill. He hopes a ''super job'' of cleaning up will overcome Congress's new coolness toward exploration.

EXECUTIVE LIFE 58 MAKING OVER MIDDLE MANAGERS When a large company tries to reform itself, the toughest and most important task is getting the bosses down the line to catch the vision. Few companies have done it well. Here are some tips on smoothing the process. by Kenneth Labich

CORPORATE PERFORMANCE 66 IS BIGGER BETTER FOR PHILIP MORRIS? The cigarette giant has yet to prove it can manage nontobacco acquisitions. In an interview, CEO Hamish Maxwell concedes some disappointments, but he insists that Kraft was a good buy.

75 APPLE COMPUTER'S RISKY REVOLUTION An era is ending. John Sculley wants to tone down the sassy California style. He wants more predictable, less dazzling products. Is he tampering too much? by Brian O'Reilly

78 . . . AND NEXT FROM STEVE JOBS

84 COMPANIES TO WATCH Gillette got sharp fighting off two takeovers. Profits rose 17% last year. Plus: Stanhome, Moscom Corp., Silk Greenhouse, Safety-Kleen Corp.

MANAGING 89 CAN FRED JOSEPH SAVE DREXEL? If the embattled investment bank is to stay on top, its chief executive doesn't have much time. The junk bond market has jitters, the company's market share is slipping, clients are restless, and employees are unhappy. by Monci Jo Williams

MONEY & MARKETS 99 HARD ROAD AHEAD FOR AUTO INSURERS Consumers are angry, costs are spiraling upward. To survive, insurers will have to -- guess what? -- serve their customers better, and hunt for profitable niches. by Sylvia Nasar

POLITICS & POLICY 106 WHAT TO DO ABOUT TRADE POLICY Here are helpful hints for Ambassador Carla Hills: Don't try to devalue the dollar, do take a new look at dumping laws, and do retaliate -- but only when necessary. by Ann Reilly Dowd

SELLING 114 THE ABC'S OF MARKETING TO KIDS They're hard to fool. They want to be cool. And their $248 billion of buying power is not just pocket money. by Patricia Sellers

ENTREPRENEURS 145 HOW TO GET RICH OFF PERESTROIKA A Soviet surgeon has built an eye-care empire based on his pioneering operation for myopia. Presiding over nine clinics, he could be a model of Gorbachev's new manager. by Pierre Pean

FORTUNE BOOK EXCERPT 150 'THE ENIGMA OF JAPANESE POWER' Can't understand Japan? Author Karel van Wolferen says outsiders are confused because they start with the wrong assumptions.

DEPARTMENTS 4 EDITOR'S DESK

6 INDEX

8 NEWS/TRENDS Fusion in a bottle and what it means, T. Boone Pickens goes shopping in Japan, and more.

15 FORTUNE FORECAST Will inflation ease as the economy slows down? Don't bet on it. by Maureen F. Allyn

33 PERSONAL INVESTING Bad days for Exxon, good times for the other major oil stocks. by Andrew Evan Serwer

Also: Seeking Spain's Wal-Mart. Portfolio Talk with Julian Robertson of Tiger Management.

156 FORTUNE PEOPLE William E. Simon heals his heart on a 125-foot ketch equipped with a fax, Robert Fomon does LBOs from Palm Beach, and more.

157 ON THE RISE

159 BOOKS & IDEAS Was socialism a mistake? Of course, argues economist Friedrich Hayek, 89, but intellectuals still won't give up on it. by David R. Henderson

161 OFFICE HOURS When the headhunter calls, make sure you talk to the nice man or woman. by Walter Kiechel III

164 LETTERS TO FORTUNE Harsh words for workaholics, comments from the son of tough boss Harry Figgie.

165 KEEPING UP by Daniel Seligman

COVER: John S. Abbott photographed Chairman Lawrence Rawl at Exxon headquarters in New York City.