Question:
Questions to be addressed in completing the Assignment Task: (Wordings in brackets after the question denotes the assessment criteria pertaining to the question. The Assessment Criteria are given only for general info; the student should concentrate and answer only the questions given below).
Choose any organization of your choice (preferably the organization where you worked before (or) are currently employed). Understand the organization’s objectives, strategic plan, vision, mission, goals and understand the working operational processes of the company, with special reference to undertaking a full strategic review of company activities. The review will include an assessment of the organisation’s external environment, a review of its existing plans, consideration of strategic options, the development of a strategic plan, an examination of core values and, finally, the development of a schedule for implementation of the plan, including how it will be monitored and evaluated.
You are required to make a strategic plan of your chosen organisation, by specifically answering the questions given below. Before answering these questions, give out a brief introduction of your chosen organisation. Your strategic plan should be made in the form of a Formal Report.
Questions:
1. Explain and examine the external factors affecting your chosen organisation? How important are they for a company’s sustainability and survivability?
2. Give out the important stakeholders of your chosen organisation, analyse the needs and expectations of these stakeholders, including how they can influence strategic decision making in the organisation.
3. Use appropriate tools, for e.g. value chain analysis, Porter’s Five Forces, Boston growth-share (BCG) matrix, SWOT analysis, etc. to analyse and review where your own organisation is positioned in the marketplace with respect to its current business plans? Thereafter, evaluate the competitive strengths and weaknesses of your chosen organisation’s current business strategies.
4. Use any two modelling tools to develop strategic options for your chosen organisation, for e.g. you can choose Ansoff matrix strategies; vertical, backwards and forwards integration; horizontal integration; differentiation; cost leadership; Mintzberg’s strategies (deliberate, emergent); leadership and differentiation; etc. (Assessment Criteria 3.1 – use modelling tools to develop strategic options for an organisation).
5. Develop comparative activities between your chosen organisation with another competitor in the market.Thereafter, create options to form the basis of future organisational strategy of your chosen organisation.
6. What are the key factors you would consider while constructing a strategy plan for your chosen organisation. Based on the key factors identified, propose a suitable structure for a strategy plan that ensures appropriate participation from all the stakeholders of the organisation.
7. Explain the core values (ethical, cultural, environmental, social and business) of the chosen organisation and compare these with the current business objectives of the organisation?
8. Based on core values alignment with business objectives, as stated in Q.7, develop appropriate vision and mission statements of the chosen organisation.
Answer/Solution:
Table of Contents
1.0 Introduction to Abu Dhabi National Oil Company (ADNOC). 3
1.1 Importance of External Factors affecting ADNOC organisation. 3
1.3 Major Changes in External Environment Influencing Strategy. 5
1.2 Needs and Expectations of Stakeholders in ADNOC. 6
2.1 Use of Appropriate Tools to analyse the Effects of Current Business Plans. 8
2.2 Review of the Position of the Organisation in its Current Market. 10
2.3 Competitive Strengths and Weaknesses of ADNOC Current Business Strategies. 11
3.1 Use of Modelling Tools in Developing Strategic Options for an Organisation. 13
Porter Generic Modelling Tool 13
3.2 Comparative Understanding of Activity from Organisations in the Market. 15
3.3 Creating Options for forming the basis for Future Organisational Strategy. 18
4.2 Developing Criteria for Reviewing Potential Options for Strategy Plan. 20
4.3 An Agreed Strategy Plan Inclusive of Resource Implications. 22
5.2 Appropriate Vision and Mission Statements for ADNOC. 24
5.3 Agreed Future Management Objectives for the Organisation. 25
5.4 Measures for Evaluating Strategy Plan. 26
6.1 Schedule for Implementing a Strategy Plan in ADNOC. 29
Task 6.2 Dissemination Process for Gaining Commitment from Stakeholders in ADNOC. 31
6.3 Designing Monitoring and Evaluation Systems for Implementation of Strategy Plan in ADNOC. 32
1.0 Introduction to Abu Dhabi National Oil Company (ADNOC)
The Abu Dhabi National Oil Company (ADNOC) is a world-leading energy producer established in 1971 and headquartered in Abu Dhabi (Abu Dhabi Project, 2018). Its operations are anchored in the overall hydrocarbon value chain through a network of fully-integrated businesses with diverse interests ranging from exploration, production, storage, refining and distribution of a wide range of petrochemical products. The company objectives are creating improved efficiencies through benchmark performance, integrating a balanced scorecard approach in the entire group and aligning with their key performance indicators. The company vision is working collaboratively in harnessing energy resources in services for the nation. Similarly, their mission is operating through partnership, innovation and a relentless focus on high performance and efficiency in maximising value for energy resources. Through a focus on ADNOC Company, this report would provide a detailed review of their external environment, a review of their existing plans, available strategic options, a strategic plan development, core values and a schedule for an implementation plan for the project including its monitoring and evaluation.
1.1 Importance of External Factors affecting ADNOC organisation
From a general perspective, García-Morales et al. (2012) observed that there are several factors influencing the growth and performance of an organisation. The factors influencing the organisation can be controllable by entity management with some of the factors being beyond the organisation management control. This is as shown in figure 1 below;
Figure 1: Internal and External Environmental factors for Strategic Planning
The controllable factors are internal with the ones beyond control being the external factors which include the political, economic, social and technical factors.
- Political Factors- The primary working environment for ADNOC is in Abu Dhabi. As one of the Emirates in UAE, it is relatively politically stable. This factor has positively influenced the ADNOC operations. As a consequence, in their Upper Zakum field, it has been awarded to the Zakum Development Company (Zadco) which is ADNOC subsidiary. It is projected that this project developed as a consequence of a harmonious political environment would lead to an increase in the field production by 50% up to 750,000 AED.
- Economic Factors- The global economic crisis that occurred in 2008 had a significant implication on the operations of ADNOC Company. This has been as a consequence of the decline of the oil prices from $147 to a barrel. This was followed by the Abu Dhabi economic suffering from the debt and high unemployment leading to a slow development action. This had a direct negative influence on the operations of the ADNOC Company. Nevertheless, the growing economy of Abu Dhabi provided an opportunity for ADNOC to engage in a joint venture with the ConocoPhillips (US oil Company) in 2009 with the aim of developing an oil field in the South West of Abu Dhabi called the Shah gas field (BusinessWire, 2018).
- Social Factors: There is a substantial lifestyle change of ADNOC clients. The changed lifestyle offers an opportunity for ADNOC to continue venturing in the new markets in Abu Dhabi. Nevertheless, the changed scope of social orientation has led to new industries being ventured from the oil industry. An alteration of the population social is an opportune opportunity for their survival.
- Technology: ADNOC is utilizing the increased number of tech-savvy generation in Abu Dhabi to employ them to operate their software and platforms in their operations. This is through integration of their onshore and offshore operations. For instance, they are using the technology in the project that is being implemented in partnership between ADNOC and Royal Dutch Shell in searching for the gas below the sea. This is a critical factor of sustainability and survivability in the oil and gas industry that is significantly competitive.
- Environment: Environmental protection is viewed as a primary objective of the UAE and Abu Dhabi developmental policies aimed at increasing the green areas, development of water resources, improving marine environment and protection from pollution, preservation of fisheries and livestock and developing strategies for protecting their biodiversity. ADNOC ensures all their operations are based on the set federal laws, ministerial decrees and executive by-laws. Hence, the company is projected to be sustainable as a best future practice.
1.3 Major Changes in External Environment Influencing Strategy
For the purpose of establishing a sound business strategy, there must be a firm and detailed evaluation of the external environmental factors in organisation operations. This is affirmed by Zhou and Li (2010) who observed that for any business to grow and prosper, the involved managers must be in a position of anticipating, appreciating and dealing with the change process in their internal and external environment. The major changes in the external environment are directly influencing the strategy adopted by ADNOC in their operations.
The recent political agreements in Asia and the Middle East region has influenced the change of strategy for ADNOC from their traditional upstream operations to downstream operations. Their strategy has been aimed at pivoting in taking a comprehensive advantage of the increasing demand for higher value refined and petrochemical products specifically in the growth economies of China and Asia. This factor has had a very significant influence to their overall strategy altering it to focus on the strategic pillars of people, performance, profitability and the efficiency to both unlocking and creating maximum value for their resources and assets.
In regard to the growing economic environment in Abu Dhabi, their strategy has not changed to ensure that the company is enhancing and optimizing their capital structure through leverage for the first time on their global capital markets. For instance, the company has issued the US $3 billion bonds against one of its large crude oil pipelines which is the biggest non-sovereign bond sale in the Middle East and successfully listing ADNOC distribution on the Abu Dhabi Stock Exchange as the largest IPO in Abu Dhabi.
For the social factors, the increased demand for gender diversity in Abu Dhabi has significantly altered ADNOC strategy. For instance, the company has altered their strategy to ensure they are reaffirming their strategy of empowering women, driving gender diversity and promotion of inclusivity in the oil and gas sector as part of their 2030 growth strategy anchored on people, profitability, performance and efficiency. As a consequence, they have included women from the top level corporate offices to their remote fields.
The changing technological scope in ADNOC business environment has a direct influence on their operations. According to Byat and Sultan (2014), ADNOC is a fundamental enabler of UAE country strategy, and they are working in ensuring that the organisation is retaining their competitiveness, sustainable growth and leveraging on a maximum advantage of their existing market opportunities. To embrace the changing technology, ADNOC is focusing on three distinct facets; developing technologies for responding to specific challenges not addressed in their traditional operations, buying already existing technology where drivers solutions in the cost-effective approach and collaborating with universities and industry partners offering them with the most promising route for future technology development.
1.2 Needs and Expectations of Stakeholders in ADNOC
According to Fassin (2009), the stakeholders are the groups of individuals in a business environment with a direct influence or are influenced by organisation actions, objectives and set policies. From a general perspective, stakeholders…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..Please contact us to receive support and guidance on the entire assessment
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