In this era, strategic management is an important tool to make long term policy in the organisation which is basically based on the attainment of the long term objectives. It is the process of identification and elaboration of strategy in order to achieve great performance and their competitive advantages over the others(Freeman, 2010). As it is the process of designing the structure of capabilities which enable a firm to make value to the consumers, shareholders and community while operating in the competitive world. Royal dutch shell strategy is concentrated to make a strong leadership in the oil and gas industry, while keeping in mind the product development so that company can make the low carbon energy system. Company's main focus is on labour safety and comply with environmental and social responsibility issues.
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The changes enforced by the firm during the period of 2014-2016, considering an assessment of the drivers for the changes:
Shell is the parent company of royal Dutch shell plc. During 2014 to 2016, company makes the changes in the strategy which fix a clear base for sound returns and free cash flows. As, there are much demand in this sector which are going to come in the near future and company's main strategy is to make the product development via modification in the existing products or make the new product so that company can lead to the competitors in the market(Hitt, Ireland and Hoskisson, 2012).
Strategy: Strategy is prepared by the top level management team to face the changes in the external environment it is a set of action plan. Strategies are long term in nature, as their impacts on the business is long term. So, before going to make the strategy, top level authority need to have the entire research on the external factors. Now, there is an economic slowdown in oil and gas prices, so there is a strong chance for the company to make an innovation in oil and gas products. As, Shell has an advantaged positions and affordable growth plan, that could design a way to enhanced returns and material free cash flow from around 2020, so that it can become the new cash engine.
Structured: Every company is required to be structured in an organisational structural form. As, firm is designed in so many ways which are totally based on their objectives and culture. Usually the firm is structured in a hierarchical manner and includes various divisions and departments. In such management hierarchy, each person is accountable to their own task. Various part management manage the operations of the company. Royal dutch shell is divided on the traditional hierarchy system(Hill, Jones and Schilling, 2014). And such hierarchy is divided into many parts but entire department is interlinked to the each other and their ultimate aim is to coordinate the all the day to day functions of the firm. The operational managers manages all the routine activities. One of the observations provided by the firm change expert is the large scale, radical firms restructuring could happen rarely. Shell's restructuring has addressed some of the major difficulties of shell's constitution and management system. There are some ways which might restructured by the Shell that amalgamate the two parent firms to transform Shell from a joint venture into a single entity. It may reintroduce the key authority decision making.
Style: It means clear culture and management style in the firm. Style usually covers the ruled values and beliefs which emerged over the time. It includes the manner through firm's top management involve with the employees. Traditional approachb is the military style of management and culture where rigid follow to top down management, focusing power of the centre, thereby forming obstruction which is invariably leads to time wastage and inefficiency. Firm's culture stay on the beneficial consideration in the uses of any strategy. In an attempt to keep the delicate equality of power British and Dutch arms, Shell is being known for its accordant approach to decision making(Simons, 2013). This is felt to have served it well, but investors and business analysts have emerged interest which is so bureaucratic and complex process in this business context. The company's weak performance feel the pressure to the other competitors like Mobil and Amoco.
Shared values: Entire employees of the company share some common important ideas on the basis of that organisation is structured. This can generate money or to attain expertise in a specific field. Shared value is a tool by which all the members of the company works together to alive the team spirit. Royal Dutch Shell plc's shared values discover opportunities in the social problems. On the other hand, philanthropy and Corporate Social Responsibility concentrates on donations that are perceived as without having expectations of getting back of any return to the firm. Shared values are mainly concentrates on firm leaders on making the competitive values for resolving quarries in a new consumers and markets at an utmost level. Now, many of the companies are focusing to build the good social community. Sop that It can build the brand image to the company(Hodgkinson and Healey, 2011).
Staff: Every firm is created with the help of human and they are the people who contributes in the organisation to run such firm effectively and efficiently. Without them, it can be possible to run the firm. Human resource is the key part in the company's strategy. But, unskilled human resource is irrelevant to the firm's operation. So, there is a strong need of qualified skilled staff so that they can run the firm effectively. For getting recruitment in the firm, company need to follow the certain process for hiring the most talented staff, offering them the training, development and guidance assistance, forcing their staff to fix in attaining professional excellence and also need to deliver the comfort zone in work culture so that the best talent can retain in the firm. It is the duty of the human resource management department in the firm motivating the employees while work and to make them feel associated to the firm by taking their views in the company's strategy. Royal Dutch Shell company is well planned structured employees which are appointed for different aims. It has so many departments which function elaborately to attain better sales and revenue(Poister, 2010). It is using gross route level strategy, where both senior and junior level of management authorities give their contribution to generate better outcome. Shell plc is having a great HRM policy which have several competitive advantages over the others. Few of them are mentioned below:
- Huge employee morale
- Huge employee motivation
- Talented and trained workforce
these are the attributes which company can attain after opting better HRM policy. Earlier companies did not give the attention on it as they thought that the HRM department is the wastage of time and money. As, they were mainly focused on the sales. Now, firms realised the need of HRM department for the effectiveness of the work for the betterment of the business Shell plc made strategy for the long term prospects that is why firm's HRM policy enable the employees to trained in well effective manner and functions as per the terms and conditions of the firm. After giving training in oil & exploration process to the employees, Shell plc is being able to handle to limit the level of accident to zero.
System: It is the process which assists and implement the strategy fro the effective run of routine activities. There are several methods that exist in organisations for obtaining, recruitment, advertisement, promotions, etc.. The recent trends in firms are to make easy and regenerate companies processes by creativity and implement of advance technology for fast decision making process. Royal Dutch Shell is a future oriented company and look forward of sustainable development. Company's now focusing to reduce the CO2 of liquid transport fuels via mixing of measure like better performance fuels, mixing in sustainable biofuels, less weight vehicles and high efficient engines. Apart from that, company also need to focus on providing safer electricity by enhancing the quantity of natural gas for the power sector. Without safer electricity, vehicle modernisation will not make any environmental advantages(Noland and Phillips, 2010).
Skills: Skill is needed for the perfection in the work. As there are so many issues in staffing and learning outcome of the staff in the organisation. Also some weaknesses exist in staffing and there is no specified manner of training and evaluating the competency of an individual staff in project unit. As, company does not have appropriate knowledge in the staff covered for execution of the projects.
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The role of leadership in a change management process:
Change management is an important domain for the firm to embrace. There are so many firms which faces interruption from modern social forces to cope up with advance demand. To be a leader in an organisation, there main role to create a strategy to handle the change process. As, this is necessary for the leaders in any organisation for implementing the new strategy for the successful change in the management. There is a need to implement the organisational changes through four major processes. These are as follows:
- Knowing the scope of a project: There is a strong need to know scope of the projects and also need a time to understand and execute such changes in the organisation.
- Identify on a course for the changes which are happening and depict how each prospect of a firm will be affected.
- Start to execute the change process: There is a need to focus on who is going to be affected due to change processes and also need to concentrate on these affected people if they entirely wants this procedure to advancement in a better manner.
- Alter course whenever required(Keupp, Palmié and Gassmann, 2012). This is the final stage for a firm. If change management team need a change in then it has to be executed.Leaders on their part, is required to determine the change processes which are not going to work if they would executed. As leaders need to identify such alteration in the firm, knowing how their personal position could affect business performance as it would be an important factors in the long term success.
The change management procedure is the series of activities which are need to apply by the change management team and execute them in the organisation in order to confirms that the projects meets its conscious results.
How the firm can improve its change management process:
There must be a leadership quality in the leadership management team so that firms change can be made in the organisation. Apart from this, leadership management team also need to keep a good bonding with staff and confirms that they are onboard with the conversion to a new business model. That will happen when there would be key beneficial changes. There are so many qualities which leaders have. Although, there is a theme which is behind these individual attributes, and that is major thing of efficient communication(Rahm and Riha, 2012).
However, there are some elements which are useful for the successful change management process:
- Reading Assessment: This is the element which is used by the change management team to evaluate the firm's readings to change. Reading assessment covers firm's evaluation, culture and history evaluation, employee evaluation, sponsor evaluation and change assessment every assessment offers to change management team with brainstorm into the questioning and opportunities that they are going face during the change process.
- Communication and communication planning: Mangers must have the communication powers so that they can easily communicate with the employees. However, there are so many issues why employees does not find out or interpret what their managers are saying. There are three components by which effective communication can be done. These are the audience, what is communicated and at what time it is communicated.
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Like the essential stage of managing changes is to make an awareness roughly the need for change and and making a feeling for employees. Hence, beginning communication are made to create awareness for change in the business. Communication planning started with the aware analysis of the audiences, main massages and timing for these massages.
- Sponsor activities and sponsor roadmap: Firm leaders plays a major sponsor role in period of change. The change management team need to make a plan for sponsor activities and assist main business leaders to implement these plans.
- Change management training for managers: Managers plays a critical role in handling changes. However, the mangers has a great influence over workforce motivation to change than others. Unluckily, the managers could be the most challenging group to believe the requirements for change and it could be the point of resistant. It is essential for the change management team and executive sponsors to get the assistance of managers(Hair and et. al., 2012). Individual change management tasks should be applicable to assist these managers via change process.
- Training development and delivery: Training is the base for making knowledge about the change and needed skills to win in the future state. There is need to provide the training at the right time as this is the primary role of the change management. It means training must be addressed after essential steps have been taken to secure compact employees have the knowledge of the need for change.
- Resistance management: opposition from employees and managers is easy task and could be proactively addressed. However, Persistent resistance may endanger a project. The change management team is required to determine, know and assist managers to handle resistance entire firm.
- Employee feedback and corrective action: Employee interaction is an essential and coherent part of managing change. Reviewing from employees is implemented as this is the most important part of change management process.
- Identifying success reinforcement change: Change management team is required to identify the changes and try to reinforce them in the firm(Le Masson, Weil and Hatchuel, 2010).
- After project review: It is the last change management process. At this factor, team need to evaluate the entire process. Assess prosperity and failures, and determine process changes in the organisation.
From the aforementioned research, it has been found that company need to make the strategy for the effective running of the firm. Company's strategies are made for the long term and their impacts on the businesslike- 3to 5 years. Such strategies determine the critical environmental issues and others. However, sometimes company makes changes in the Strategies due to change in the external factors. In such a situation, company need to be well prepared about the change must be able to execute on it. There has been mentioned the changes in the organisation and it has been implemented by the change management team in the firm. And also pointed out how change management process can be executed in a most effective manner.
Books and Journals:
- Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge University Press.
- Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2012. Strategic management cases: competitiveness and globalization. Cengage Learning.
- Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
- Simons, R., 2013. Performance Measurement and Control Systems for Implementing Strategy Text and Cases: Pearson New International Edition. Pearson Higher Ed.
- Hodgkinson, G.P. and Healey, M.P., 2011. Psychological foundations of dynamic capabilities: reflexion and reflection in strategic management. Strategic Management Journal. 32(13). pp.1500-1516.
- Hair and et. al., 2012. The use of partial least squares structural equation modeling in strategic management research: a review of past practices and recommendations for future applications. Long range planning. 45(5). pp.320-340.
- Ackermann, F. and Eden, C., 2011. Strategic management of stakeholders: Theory and practice. Long range planning. 44(3). pp.179-196.
- Poister, T.H., 2010. The future of strategic planning in the public sector: Linking strategic management and performance. Public Administration Review. 70(s1).