Assessment ID / CIPD_5CO01_23_01 5CO01 Organisational performance and culture in practice
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Briefing paper Questions
| (AC1.1) Evaluate the advantages and disadvantages of different types of organisation structures, including the reasons underpinning them.
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 500 words |
| A divisional structure is a prevalent organisational structure that categorises business operations according to products, services, geographical locations, or markets (Young, 2023).
Advantages and Disadvantages A divisional organisational structure has numerous benefits that an organisation can consider. Firstly, it enhances flexibility. This flexibility is achieved since each division can quickly adapt to market changes, enhancing responsiveness. Secondly, divisions concentrate on specific products or markets, improving customer satisfaction; for example, Saudi National Bank (SNB) could create separate divisions for retail banking, corporate banking, and wealth management to cater to distinct customer needs. Thirdly, each division’s clear profit and loss responsibility fosters accountability (Taylor & Woodhams, 2022). Lastly, divisions operate semi-independently, making achieving innovation and creativity easier. However, this type of structure has some disadvantages. The first disadvantage is duplication. Resources and functions may be duplicated across divisions, leading to inefficiencies. Secondly, maintaining multiple divisions can be expensive due to increased administrative costs. Thirdly, ensuring alignment and communication between divisions can be challenging. Lastly, divisions might compete for resources, potentially harming overall organisational cohesion. Reason Why a Divisional Structure is Appropriate Firstly, SNB operates in diverse regions with varying financial needs and regulations. A divisional structure is appropriate since it allows each regional division to tailor its services and strategies to local market conditions, enhancing customer satisfaction and competitiveness (Young, 2023). Secondly, each division can focus on specific financial products or services, leading to improved expertise and efficiency in those areas. Lastly, clear profit and loss responsibility for each division ensures accountability and performance tracking, which is crucial for a large financial institution like SNB. A matrix organisational structure is an organisational design that integrates aspects of functional and project-based organisations (Young, 2024). Advantages and Disadvantages The matrix structure allows SNB to utilise its resources more efficiently by assigning employees to multiple projects and functions. This ensures that expertise and skills are optimally used across different areas, reducing redundancy and improving overall productivity. In addition, SNB can quickly adapt to changing market conditions and project requirements. The matrix structure facilitates this by allowing employees to shift between projects and functions as needed, ensuring that the bank remains agile and responsive to new opportunities and challenges. However, the dual reporting lines in a matrix structure can create confusion and conflicts among employees (Stuckenbruck, 1979). At SNB, this might lead to misunderstandings about priorities and responsibilities, potentially causing delays and inefficiencies. Additionally, the process can become slower with multiple managers involved in decision-making. For SNB, this could mean critical decisions take longer to finalise, impacting the bank’s ability to respond swiftly to market changes. Reason Why a Matrix Structure is Appropriate The matrix structure fosters collaboration across different functions and projects. For SNB, expertise from various departments can be pooled together to innovate and solve complex financial challenges, leading to more comprehensive and effective solutions (Taylor & Woodhams, 2022). In addition, by allowing employees to work on multiple projects, SNB can optimise the use of its human resources. This ensures that the bank can efficiently manage its diverse portfolio of financial services without constant restructuring. |
| (AC1.2) Analyse connections between organisational strategy, products, services and customers.
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 400 words |
| Organisational Strategies
Digital Transformation Strategy: This strategy leverages advanced technologies to enhance customer experience, streamline operations, and introduce innovative financial products and services ( Peters, 2023). Investing in digital platforms, mobile banking, and AI-driven customer service allows SNB to provide seamless, efficient, and personalised banking experiences. This strategy aligns with the Vision 2030 initiative, emphasising technological advancement and modernisation. Sustainability and Social Responsibility Strategy: This strategy involves implementing environmentally friendly practices, supporting community development, and promoting financial inclusion (Jajkowska, n.d). SNB has established a Sustainable Finance Framework to issue sustainable bonds and engage in environmental, social, and governance initiatives. Programs like the Ahalina Social Investment Program empower various societal groups, contributing to economic development and social well-being. Link to the Organisation’s Strategic Goals and Objectives. The digital transformation strategy directly supports SNB’s goal of becoming the leading digital bank in the region. By investing in advanced technologies, SNB aims to enhance customer experience, streamline operations, and introduce innovative financial products. This aligns with the strategic objective of increasing market share and customer satisfaction by offering seamless, efficient, and personalised banking services. In the same way, the sustainability and social responsibility strategy aligns with SNB’s commitment to Saudi Vision 2030, which emphasises sustainable development and social responsibility (SNB, n.d). By implementing environmentally friendly practices and supporting community development, SNB aims to promote financial inclusion and contribute to economic growth. This strategy enhances SNB’s reputation and ensures long-term sustainability by addressing the evolving needs of society and the environment. The Extent to Which the Strategies Meet Customer Needs The digital transformation strategy ensures SNB’s services meet customer needs by providing seamless, efficient, and personalised banking experiences. For example, introducing AI-driven customer service and mobile banking apps allows customers to access services anytime, anywhere, enhancing convenience and satisfaction. This approach caters to the tech-savvy customer base, ensuring SNB remains competitive and relevant ( Peters, 2023). In addition, by promoting financial inclusion and supporting community development, the sustainability and social responsibility strategy allows SNB to address the broader needs of society. Programs like the Ahalina Social Investment Program empower various societal groups, ensuring that SNB’s services are accessible and beneficial to a wider audience. This strategy meets customer needs and builds trust and loyalty. External Contexts Impacting the Success of These Strategies Economic fluctuations can affect customer spending and investment behaviours, impacting the success of SNB’s digital transformation and sustainability initiatives. For instance, a recession might reduce the demand for new financial products. In addition, rapid technological advancements require continuous investment in new technologies (SNB, n.d). SNB must stay ahead of tech trends to maintain its competitive edge in digital banking. |
| (AC1.3) Analyse external factors and trends impacting organisations to identify current organisational priorities.
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 450 words |
| Impact of Interest Rates on SNB
Higher interest rates can reduce the demand for loans, as the increased borrowing costs may deter customers from taking out new loans (Bank of England, 2024). This can potentially impact the growth of SNB’s loan portfolio, as fewer customers may seek financing under these conditions. In addition, when interest rates rise, SNB can benefit from improved loan profit margins. The higher rates allow the bank to charge more for lending, enhancing overall profitability, provided the loan demand remains stable. SNB should prioritise developing new financial products customised to different interest rate environments in response to fluctuating interest rates. This could include adjustable-rate loans, high-yield savings accounts, and investment products that hedge against interest rate risks (Bank of England, 2024). By diversifying its product offerings, SNB can better meet customer needs, attract new clients, and maintain profitability despite changes in the interest rate landscape. Impact of Inflation on SNB Higher inflation can erode the purchasing power of customers, making it more difficult for them to repay loans. This can increase the risk of defaults and impact SNB’s loan portfolio quality ( Oner, 2019). In addition, inflation can lead to higher operational costs for SNB, including increased expenses for salaries, utilities, and other administrative costs. This can reduce overall profitability if not managed effectively. SNB should prioritise enhancing cost management and operational efficiency in response to rising inflation. This could involve implementing cost-saving measures, optimising resource allocation, and using technology to automate processes (Boys, 2024). By reducing operational expenses and improving efficiency, SNB can mitigate the impact of inflation on its profitability and maintain financial stability. Impact of Social Factors on SNB Social factors, such as cultural expectations and norms, significantly influence SNB’s operations. The bank must align its services and customer interactions with the cultural values and practices prevalent in Saudi Arabia to ensure customer satisfaction and loyalty ( Battista, 2024). In addition, changes in demographics, such as a growing youth population, impact SNB’s product offerings. The bank must develop innovative financial products and services catering to younger generations’ preferences and technological savviness. In response to demographic changes and cultural expectations, SNB should prioritise developing new financial products customised to the younger generation’s preferences. This could include digital banking solutions, mobile payment options, and investment products that align with younger customers’ values and technological savviness. Focusing on innovation and cultural alignment can help SNB attract and retain a growing customer base, ensuring long-term growth and relevance in the market (CIPD, 2013). |
| (AC1.4) Assess the scale of technology within organisations and how it impacts work.
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 350 words |
| Examples of AI Technology
AI-Driven Learning and Development Platforms: These platforms can personalise training programs for employees at SNB by analysing their skills, performance data, and career goals. AI can recommend specific courses, modules, and learning paths customised to individual needs, ensuring that employees receive relevant and effective training (CIPD, 2020). These platforms can significantly enhance employee skill development by providing personalised training programs. This ensures that employees at SNB receive relevant and effective training, leading to a more skilled and capable workforce. However, there is a risk of data privacy concerns as sensitive employee information is analysed. Ensuring robust data protection measures is crucial to mitigate this risk. AI-Driven Employee Engagement Platforms: These platforms can enhance employee engagement and satisfaction at SNB by providing personalised feedback, monitoring employee sentiment, and suggesting customised development programs. AI can analyse employee interactions and feedback to identify trends and areas for improvement, enabling HR professionals to proactively address issues and foster a positive work environment (CIPD, 2013b). However, over-reliance on AI might overlook the human element in employee relations. Balancing AI insights with human judgment is essential to maintain genuine employee connections. Impact of AI Technologies on Working Practices The AI-driven learning and development platforms customise learning paths to the individual needs of employees, significantly enhancing skill development and supporting career growth. This ensures that each employee at SNB receives training that is directly relevant to their role and aspirations. In addition, by automating the identification of skill gaps and training needs, these platforms save considerable time for HR professionals (CIPD, n.d). This allows them to focus on more strategic tasks rather than manual assessments. However, over-reliance on AI might reduce the emphasis on human judgment in training decisions. On the other hand, AI-driven employee engagement platforms can identify and address employee concerns early, significantly improving overall satisfaction. By monitoring sentiment and providing timely feedback, SNB can create a more responsive and supportive work environment (CIPD, 2017). However, ensuring seamless integration with existing systems and processes can be complex. Effective implementation requires careful planning and coordination to avoid disruptions and maximise the benefits of the new technology.
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| (AC2.1) Explain theories and models which examine organisational culture and human behaviour.
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. Word count: Approximately 350 words |
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- Within six months, PS&M personnel will be provided with chances for capacity building through partnerships with educational institutions to gain knowledge and skills for implementing category management.
- The PS&M would become more motivated in the long run by providing recognition and benefits for pursuing category management implementation.
- Within a year, an effective change management strategy would be pursued, focusing on tracking the change and spotting change resistance
1.0 Introduction
1.1 ADNOC Organisation Background
In this report, the organisation of focus is Abu Dhabi National Oil Company (ADNOC). This is for understanding the impact of contract terms and conditions on distribution of risk and power with their suppliers. This is an organisation which began its operation in 1971 and today is ranked as the leader in diversified energy group which is owned by Abu Dhabi Government (ADNOC, 2022). The organisation network of holistically integrated business has based their operations across the entire energy value chain assisting their capacity for meeting overall demands of the consistently changing energy markets. For remaining competitive, the organisation has allocated $15 billion for advancing and accelerating lower-carbon solutions, investment in new energy solutions and decarbonisation technologies for lowering their carbon intensity with 25% by 2030 and successfully facilitating their NetZero by 2050 target. The company has a network of fully operational companies that operate throughout the entire hydrocarbon value chain, handling tasks including exploration, production, processing, storing, refinement, and supply in addition to manufacturing a wide range of petrochemical products. I work as a Contract Engineer for ADNOC Offshore, one of the company's divisions. The offshore division of ADNOC is responsible for the delivery and development of oil and gas resources in the waters surrounding Abu Dhabi. With OPEX and CAPEX, ADNOC Offshore spends over 3,000 million dollars annually. The organisation structure is as illustrated in figure 1; Figure 1: ADNOC Organisation Structure1.2 Identified Category Management
The deployment of the iSourcing system, a technology-focused procurement procedure, was chosen as the category management in this study. The need for oil and gas has significantly expanded in the modern era since the Covid-19 epidemic. As a result, ADNOC is forced to spend money on equipment to help them process and refine more oil and gas products. In light of this, the team leader's responsibility is to see that an iSourcing system is in place and can be utilised to purchase the new machines that the company needs to upgrade its operations. Locally in UAE, regionally in the Middle East, and internationally in Western nations, this would apply. This project aims to produce a report outlining the implementation of the change approach. This is done while ensuring the team members and leader have the necessary abilities to carry out the plan successfully. Implementing the new category management strategy is the kind of change being sought. The learner will be the team leader throughout the full category management process since a team has been chosen to oversee the deployment of iSourcing. The practical approach would be utilising various tools and strategies that demonstrate leadership and best practices in change management, along with a focus on the category management data from the ADNOC firm.2.0 Change Management Approach
2.1 Introduction of the Required Change Process
In its Procurement Supply and Management (PS&M) budget, ADNOC had allocated roughly 10 million UAEis before the COVID-19 epidemic. Up to 5,000 domestic and foreign providers are currently utilised in this. Because of the significant financial allocation in PS&M, the ADNOC sourcing method is crucial to their operations in this scenario. Logistics, equipment, and facility administration are all purchased separately by the organisation, all of which fall under the organisation's primary spending categories of computers and technical systems. As a result, they lack a centralised system that would allow all departments to be involved in aiding the procurement procedure (CIPS, 2020). The Burke-Litwin Model (Coruzzi, 2020) can pinpoint the internal and external factors that contributed to the identified change. This model ranks the many change drivers according to their importance and provides evidence of each one in figure 2; Figure 2:Drivers of Change Model When taking into account the ADNOC organisation and indicated change, these elements have the following effects, as stated in Table 1: Table 1:Summary of the Drivers of Change in ADNOC Organisation| Factors of change | Explanation |
| External environment | Supply chain networks have been significantly impacted since COVID-19. ADNOC's ability to replenish stock, equipment, and machinery has been affected. Therefore, ADNOC would participate in strategic alliances by including diverse actors and intermediates in the complete value chain through iSourcing |
| Individual and oganisational performance | ADNOC's investment in iSourcing would reduce PS&M turnover, everyone's performance, and supply chain network satisfaction. |
| Leadership | To ensure iSourcing success, the PS&M will lead and manage efficiently. This inspires and guides other organisations to iSourcing success. |
| Mission and strategy | The achievement of ADNOC's aim to provide high-quality oil and gas products would be ensured by the deployment of iSourcing. The justification for this is to quickly and effectively engage highly qualified vendors. |
| Organisation culture | Implementing iSourcing would promote the collaborative and teamwork-oriented organisational culture of ADNOC. This is due to the platforms offered by iSourcing that provide suitable options for teamwork and collaboration. |
| Task requirements and individual skills | Employees at ADNOC lack the knowledge and skills necessary to deploy iSourcing. This deficit might be filled by offering possibilities for professional advancement. Implementation of the change would be successful. |
| Employee motivation | This report's proposal suggests that providing monetary and non-monetary rewards is necessary to encourage people to adopt iSourcing. This is for employing remarkably contemporary systems of practice. |