This paper will discuss the summarative learning that encompasses the topic of organizational behavior. It will tackle a real organizational behavior problem and how important rules, concepts and theories will be applied to correct the problems of an specific organization chosen by the student. This paper will also try to provide solutions and other remedies that can be initiated by the company or business organization chosen by the student. Lastly this paper will formulate a reliable SWOT analysis of the chosen company.
I. INTRODUCTION
The chosen company and business organization for this task is the Royal Dutch Shell Company. The Royal Dutch Shell Company is a British-Dutch company that provides oil, natural gas and petroleum products in the world. This company is one of the largest companies around the world that maintains and supplies the world with its fuel and oil. Royal Dutch Shell Company also has significant investments in the petrochemicals business while developing its renewable energy sector.
Royal Dutch Shell Company or simply Shell as it was called by every person around the globe, earns a revenue of about 8 billion in 2004 making it the fourth largest corporation around the globe while its profits soared to about .18 billion makes it the second largest profitable business in terms of gross profits (2005). Shell is a global corporation that has 140 branches in different parts of the world and its products and gas stations can be located in every street and avenues of major cities and urban centers (2005). Its products range from industry oils to petroleum products to fuel lubricants. The company has also started explorations with the particular aim of looking for new oil reserves in regions such as the North Sea, South America and Siberia (2005). The company has also significantly invested in the fuel and oil distribution business with its gas stations and oil refineries in many parts of the country.
Although this company is enjoying healthy profits and huge return investments in its line of business, it has experienced a major slump in its profits and supply. The company is now currently facing formidable challenges and outside factors that hinders its development and progress. Royal Dutch Shell Company has been largely overtaken by other oil and petroleum companies like Exxon Mobil which is based in the United States because these pressing issues have not been properly addressed.
II. FINDINGS
There are three identifiable problems and issues inside the company that can be clearly highlighted and must be solved to give the company its competitive advantage when compared to other companies. The first problem is the shorter employment time that is contributed by the employees to the company. To further clarify the problem, this certain issue refers to the employment time of employees that are working for the company. In recent years namely 2000 to 2005 there was a sharp increase of employees that were leaving the company in favor of other employment positions in other oil and petroleum companies that are competitors of Shell. Although this phenomenon does not encompass the whole global operations of the company, there is still a negative impact on the performance of this business organization since these events happens in costumer rich regions such as Asia, India and the Middle East (2004). The company is also at a disadvantages because these shifting of employees will result in lower performance and operation due to the skills and technical knowledge that will be lost if certain employees leave the company. The company is also encumbered since it will need to train new personnel for job positions that are highly technical while its past employees are trained and schooled through company resources. This effort of training new personnel will cost funds and resources and will burden the company since important positions and post will not be filled or will be incompetently manned while these new employees are trained. The movement of employees is also disadvantageous to the company because its previous employees are hired by other competitors such as Exxon Mobil, Petronas, PetroChina and other local oil companies (2004). These employees while going to these companies will therefore bring with them the training, knowledge and expertise that they got from Shell company.
Another major problem that is being faced by the company is its eroding supply base in the Middle East and other oil producing regions due to the ongoing friction between the United Kingdom and oil producing countries in the Middle East such as Iran with regards to topics such as the war on terror, the occupation of Iraq and the on going negotiations on the nuclear ambitions of Iran. Since Shell Company is partly British owned, these contemporary issues and news can directly affect the supply and logistical train of the company. Due to the support given by the British government to the United States with regards to the occupation of Iraq and the war on terror, the company has been losing the influence and prestige when it is viewed by Arabian and Middle East producing companies (2005). This animosity against the corporation stem from the fact that it is a British company in the eyes of an Arabian or Iranian. This company has also supplied fuel, oil and other petroleum based products to the occupying forces in Iraq and Afghanistan which are wholly composed of the British and American Armed forces (2005). Because of perceived biases of the company when viewed thru an Islamist point of view, the company can suffer from higher oil prices when it purchases its oil and petroleum based oil products from Saudi Arabia, Iran and other members of the OPEC (Organization of Petroleum Exporting Countries) (2005). The company can also experience lower supply ratio that will be allocated because of its bias and prejudice on the mentioned on going issues.
The last problem that is plaguing the company is its eroding consumer market. This condition can be attributed to different and myriad causes. First the company is losing its long earned consumer market due to heightened competition and rivalry with other petroleum producers (2000). These long earned costumers are attracted to other oil companies because of lower prices and better management and technical assistance to new costumers (2000). Another reason for the lost of its consumer base is the heightened awareness of other sources of energy and resources ( 2001). Companies and corporations have been established to take advantage of the public awareness of the ecological and environmental impact of using fossil fuels and petroleum based products. The public and the oil and petroleum consuming market have been shifting to renewable sources of energy such as solar power, hydroelectric power and wind power in producing their energy ( 2001). Because of technology, other forms of energy creation have been tapped and are currently being integrated in different countries around the world. A prime example of this step is the integration of nuclear energy creation in the power sector of the United States while there has also been a criticism and condemnation that oil by-products produces and emits harmful substances that can destroy the ozone layer and damage the health of the people ( 2001). Due to this perspective, more and more people and organization have been advocating the phase out and eradication of oil and petroleum products, products that have been Shell’s prime merchandise.
To remedy these pressing problems, certain issues and concerns must be addressed. Certain techniques and steps must be taken by a corporation like Shell in answering these problems. The resolution of these problems would not only help the company but would also uplift the profit and costumer base of the Royal Dutch Shell Company. The first problem to be addressed in this part of the paper is the short employment time being contributed by Shell employees wherein they leave their old positions and accept jobs and employment from other companies in the same industry. The research questions that can be asked are: why are these employees leaving the company? What are the reasons why they chose to continue their professional career at other companies except Shell? What are the factors that make them leave the company and are these factors inherent in the workplace? Can these factors be reversed in order to halt the movement of employees? What are the vital policies and managerial decision that can be implemented to stop this negative event? Does the company have enough resources and manpower to provide the solutions of this problem if the root cause is identified?
With regards to the second issue discussed above the main research questions that can be asked are: what are the necessary steps to remedy this negative publicity and perception? Can the company handle high prices being tagged on the raw products that it is buying in the Middle East? Can the company find other suppliers and organizations that would sell its oil for a lower price? Is it possible to minimize or diminish the dependence of the company on oil that is coming from the Middle East? Is there a sufficient resources and manpower to initiate a campaign to combat the bad image of the company in the view of Arabian oil executives?
In relation to the third problem which is the erosion of the company’s costumer base, the research questions that can be helpful to the company are: what are the primary reasons why costumers are leaving in favor or other companies? Can the company identify the factors that are in Shell that does not interest a customer? Is there a structure or configuration on the composition of the costumers? Can the company formulate a specific plan that would retain the loyal costumers of the company and attract previous clients and buyers? Is the necessary manpower, resources and technical expertise of this plan supported by the financial base of the company? Can the company invest in non oil/petroleum products to appease environmental groups? How can the company begin a campaign that would project the company as an environment friendly company? Are there enough resources and financial capabilities to start this campaign?
SWOT ANALYSIS of the Royal Dutch Shell Company
STRENGTHS:
· Royal Dutch Shell Company is the fourth largest company in the whole world. Its trademark is universally recognized around the globe. The company also has different branches, sub offices, oil refineries and subsidiary companies in areas such as Asia, Africa and North America. Since its inception in 1890, it has accumulated a large and wide customer base with an ideal image of integrity and honesty.
· The company markets a whole range of products that ranges from oils, lubricants, diesel fuel, jet fuel, petroleum based products and oil refinery heavy equipments.
· The company has a large network of organized and methodological supply base making the transportation and moving of its products from oil producing countries to the market faster and efficient.
WEAKNESSES:
· In looking at the company, the whole corporation is still particularly geared towards making and manufacturing products that are based on oil. This step is not only inefficient from an ecological point of view but is also ineffective since the world is not shifting to renewable sources of energy.
· The company gets the majority of its oil from the Middle East and international disputes, difficulties and negatives activities in that region would tend to increase the prices of oil.
OPPURTIONITIES:
· The company can commence or lead other oil companies in exploring other potential oil fields to ease its dependence on Middle East oil. A potential exploration area are the Siberian region in Northern Russia and the Russian island of Sakhalin in the Pacific. Another potential oil field that must be fully developed is in Nigeria.
· The company must also venture on developing, researching and promoting renewable sources of energy. It must conduct studies and research with regards to techniques, materials and policies that would decrease the company’s reliance on oil while increasing its need on nuclear, solar and hydroelectric sources of power.
THREATS:
· The primary threat against Shell Company is the new oil players that are being established today in the oil industry. Because these companies are new, they can quickly adapt to market demands and needs. Since they incorporate new technologies and materials in their products, they are less likely to be affected with government legislations and regulations governing the use of oil and petroleum products.
· Another threat are lobby groups and special interest groups that try to influence government legislations with regards to strict implementation of laws and statures that would protect the ecology and the environment. These groups are considered as threats because thru publicity and press releases, they can cast a bad light on the reputation of the company.
III. CONCLUSIONS:
In this paper we have argued and identified the different problems that are being faced by a specific company and how these problems can be remedied and answered. These problems are the erosion of the company’s consumer and supply base and the phenomenon of shorter employment time of employees. Inherent in these main issues are problems related to negative publicity due to perceived bias, stringent government policies, influential lobby groups and the technological advancement towards other sources of energy. Proper human resources and allocation of financial assets are the main keys in solving these problems. Various factors and ideas in the workplace must be injected to drive and to motivate employees to work and to efficiently stay in the company. Good working conditions, incentives, rewards and promise of advancement are some types of motivational programs that can be used to solve these problems. Proper and suitable leadership qualities must also be possessed by specific employees and managers like intelligence, general charisma, social skills and confidence.
IV. RECCOMENDATION:
To effectively combat these challenges, a proper plan of action must be implemented by the company that would help address the specific problems mentioned. To prevent employees from leaving the company, a necessary study on the factors that pushes them to leave the company must be established. Factors must be identified to be able prevent this phenomenon. While the company is highlighting the reasons why employees leave the company, Shell must also implement programs that would motivate its present employees to achieve efficiency while making them happy and contented in their work to prevent short employment. Motivation must be instilled on the minds of the employees. Incentives and other programs must be started while a workable employee motivation program must be properly laid out. Motivating factors such as greater benefits, higher wages, faster advancement, good working conditions and effective rewards and punishment guidelines can be used to be able to elicit a quality of work that is acceptable. These steps towards motivating the employee can also boost the job performance of an employee and the whole company as a whole.
To combat the negative publicity that is being shed against Shell in the Middle East countries and the loss of the preferential treatment previously offered by Middle East countries to the company, an appropriate campaign must be launched to erase this negative perception about the company. This publicity campaign will not only be geared towards Islamic oil producing countries but will also focus on other Islamic countries. Reconciliatory talks and discussions must be established with the members of the OPEC in relation to the current prices of oil and petroleum based products. To further reinforce these steps, the company must assign area/regional managers in these countries who have a significant understanding and immersion in the local Islamic culture and thinking to reduce the probability of misunderstanding and miscommunication that would add another injury to the present situation. The manager must also have leadership qualities and characteristics to inspire his/her subordinates to respect Arabic customs and traditions. He must exude motivation, self confidence and necessary skills that are suitable for the job at hand.
Lastly, the company must set up two programs so that it can remedy the last problem mentioned in this paper. First, to capture the new market, it must redefine its products to comply with strict government and environmental standards. The process of using, mining and manufacturing its products must be free from any pollution and contamination. These vital steps will not only please a government and a lobby group but would also earn the sympathy and recognition by the public. The company must also take steps in reengineering its internal structure to accommodate renewable sources of energy. It must train personnel and employees so that they would be ready to research, experiment and to test various sources of energy that is being developed by the oil industry.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment