(Solution) CIPS Occidental of Oman Commercial Management Assessment
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Description
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Executive Summary
In this business report, an evaluation of Occidental of Oman global commercial strategy has been carried out. For Occidental of Oman to be appropriately positioned to leverage on competitive advantage and dominate production of energy and essential products for sustaining and improving life in the planet. From this report evaluation, the findings evidence that there is a correlation of strategy and corporate business and their functional structures. Also, analysis of supply chain is best done by applying tools such as predictive and descriptive. Through a leverage on different tools which include PESTLE generic strategies, Mendelow Matrix Analysis and Risk Register, resources demands and stakeholders inclusion in commercial strategy is pursued. This is at the same time enhancing management of cost overruns and supply chains management effectively. The future global corporate strategy development has been noted to be successful to manage costs-overruns, improved business practice and dominating energy industry internationally. These findings have been obtained from the Key Performance Indicators (KPIs) evaluation influencing contract management and supply chain volatility. The rationale of this has been identified in this report to be informed by the existence of immense costs which need to be incurred and financing the supply chains to ensure there are no gaps in their implementation. Any challenge either internally or externally is successfully controlled by engaging all stakeholders.
Finally, in line with the different gaps and findings in this report, different recommendations have been obtained which are;
- Occidental of Oman ought to ensure they have invested in modern technologies including Artificial intelligence, Blockchain technologies and cloud sourcing for improved practices
- Initiate the application of flexible and open-based book pricing for collaborative and partnerships with their suppliers which are sustainable
- Engage their PS&M in prediction and satisfaction of their clients’ needs
- Consistent update of supply chain for managing risks
Table of Contents
1.1 Organisation Background. 3
2.0 Strategy Relationship with Corporate, Business and Functional Structures. 4
2.1 Occidental of Oman Organisation Structure. 5
2.3 Strengths and Weaknesses of Current Structure. 7
3.0 Supply Chain Analysis Methods. 9
4.0 Management of Resources to Support Development and Strategy Implementation. 14
4.1 Stakeholders inclusion in Corporate Strategy. 16
4.2 External Factors Impacting Organisation Strategic Aims. 18
5.0 Costs and Finance Impact on Supply Chains. 20
6.0 Conclusions and Recommendations. 21
Figure 1:Occidental of Oman Business Portfolio. 5
Figure 2:Organisations Strategy Pyramid. 6
Figure 3:Occidental of Oman Organisation Structure. 6
Figure 4:Red and Blue Ocean Strategy. 8
Figure 5:Supply Chain Analysis Methods 10
Figure 6:Oxy Organisation Descriptive Analysis of their Supply Chain. 11
Figure 7:Stages of Success outcomes Measures 12
Figure 8:CIPS Resilience Assessment Model Summary. 13
Figure 9:Oxy Supply Chain Alignment with Corporate Strategy. 15
Figure 10:Competitive advantage sources and scope. 16
Figure 11:Management Information System Summary. 17
Figure 12:Categories of different stakeholders 18
Figure 13:Stakeholders Matrix Analysis; Mendelow Tool 18
Figure 14:Summary of the Pricing Arrangements. 21
Figure 15:Volatility Causes. 22
Table 1:SWOT Analysis for Oxy Organisation Structure. 10
Table 3:Oxy Organisation STEEPLED Analysis. 21
1.0 Introduction
A commercial strategy is defined as an undertaking pursued to think on the overall strategy adopted to ensure procurement and commercial activities generate optimum stakeholders gain (CIPS, 2021). The rationale of developing a relevant global commercial strategy is to ensure an organisation is well placed in risks management, capability and efficiency of managing any uncertainty. Hence, according to Moosavi et al. (2022), through an evaluation of disruption level of COVID-19 pandemic on the global commercial strategies, relevant findings were obtained. In the report, it was hypothesised that commercial strategies entail the commercial agreement alignment with the organisation objectives reflected on commercial risks managed by the organisation and incentives granted in the overall commercial lifecycle. In line with this background information, the current business report focuses on evaluating the global commercial strategy of Occidental of Oman organisation. This is through an evaluation of the corporate, strategy, organisation and structures link, supply chain, resources management to support the establishment and strategy implementation . Further, costs of financing supply chains impacts have been pursued with relevant SMART recommendations provided.
1.1 Organisation Background
Occidental of Oman (Oxy) is an oil and gas sector organisation in Oman. In the past years, according to Oxy (2022), the organisation has been involved in development of multiple assets, infrastructural development, expertise and technology to fuel their progress and lives quality improvement internationally. For over 100 years, the organisation has been developing extensive projects. All the projects are informed by need of ensuring that the organisation solve the most pressing global environmental challenges. By actively working in their business environment, organisations take part in production and important products for sustainability and improvement of the quality of life globally. Also, the organisation ensure they explore oil and gas wells in Oman and internationally. In figure 1, the different areas of the organisation operations is summarised;
Figure 1:Occidental of Oman Business Portfolio
By embracing Oxy global commercial strategy, they are appropriately positioned to achieve all goals. Therefore, due to their position, global commercial strategy is important to be evaluated and generate relevant findings for this report. These areas are importance since the organisation has been operating globally in United States (USA), Middle East, Africa and Latin America (Oxy, 2022). Being a leader in the energy sector, the organisation assume a holistic role of leading to the manner in which vigorous pursuing of viable, future-looking carbon management internationally.
2.0 Strategy Relationship with Corporate, Business and Functional Structures
For modern entities, strategy anchor entire decisions which need to be made and integrated to the organisation operations. The rationale of this is what CIPS (2022) identify as inappropriate strategy affecting success of staff in their operations. In line with figure 2 summary, a strategy can be categorised into corporate, business and functional.
Figure 2:Organisations Strategy Pyramid
2.1 Occidental of Oman Organisation Structure
The importance of evaluating an organisation structure is to manage people and departments holistically, flexible and an autonomous people practices (CIPS, 2022a). In figure 3 organisation structure, by use of functional organisation structure, they are able to ensure that their different departments work in collaboration to achieve their intended goals.
Figure 3:Occidental of Oman Organisation Structure
For Oxy organisation, corporate objectives are to ensure right assets are in the hands of remarkable people guided by passion of outperforming. In Oxy (2022), their operations border from profits acquisition to establishing viable, cost-efficient strategy to limit the challenges with energy and protect their environment for their future populations. In this regard, for Oxy flat structure, they clearly stipulate staff roles in their organisation. This is with elimination of many management levels therefore having an improved coordination and engagement. Further, Oxy management capitalise on efficient decision making with entire costs of operation reduced considering Middle-Level Management is eliminated.
Further, the corporate aim of Oxy is to ensure sustainable energy is accessed by their clients. This is while assuring affordable and sustainable operations in their different markets globally. The organisation mission is driving change to achieve an appropriate, green future through quality installing energy technologies both in the companies locations and also individual homes. Therefore, in line with Nwachukwu and Vu (2020) recommendation, strategic aim is important for ensuring their alignment with their mission and vision. Considering Oxy company, the importance of their strategy is establishing a roadmap to inform and guide success in navigating on mission and strategies set.
2.2 Organisation Corporate Strategy Influence and Impact for Corporate, Business and Functional Structures
Corporate Structure
A corporate structure is comprised of different departments/business units influencing their operations According to Wang et al. (2020), for Oxy corporate structure, it include directorship, commercial teams, supply chain networks and logistic. Hence, their strategy mist be aligned to supply chain and corporate structure. Their corporate strategy of developing sustainable energy, Oxy organisation make sure their practices in corporate structure is mirroring their strategy. Also, an active collaboration of different stakeholders is assured. This directly influence the need to ensure successful supply chain network with structure appropriately aligned.
Business Structure
For Oxy organisation, business structure impact on their capacity of leveraging on competitive advantage and dominating Oman energy sector. From the CIPS notes provided, to note the extent in which corporate objectives influence Oxy business structure, business evaluation and external environment is important. This is identified by CIPS (2021a) as corporate strategy influencing business structure in Oxy as illustrated in figure 4 Blue Ocean/Red Ocean approach;
Figure 4:Red and Blue Ocean Strategy
In figure 4 summary, Oxy organisation use blue ocean strategy since it facilitates the corporate strategy to include development of uncontested business environment. According to Nelson and Bohanon (2019), this is at the same time being able to create and capture new demands and break value-costs trade-offs. The strength of this include organisations failing in exploiting prevalent demands and competition in their market.
Functional
For Oxy, functional structure include marketing, HR teams, Production and R&D teams. Their corporate strategy for Oxy influence the departments practices in improving their practices successfully in the departments. As evidenced in Liang and Renneboog (2020), in this form of a plan, corporate objectives impact products provision to their appropriate audience with good marketing strategies used for ensuring products and services are acceptable. The decision making process to pursue corporate strategies is operational and not unique.
2.3 Strengths and Weaknesses of Current Structure
For purpose of evaluating strengths and weaknesses of their structure, SWOT analysis is relevant. According to CIPS (2021b), this is applied to evaluate strengths, weaknesses, opportunities and threats. For Oxy organisation structure, strengths and weaknesses influence internal organisation with their opportunities and threats externally. In Oxy flat organisation structure, the SWOT analysis is summarised in table 1;
Table 1:SWOT Analysis for Oxy Organisation Structure
Considering table 1 summary, by the organisation flat structure, immense opportunities are evident for effective decisions made. This is supported by Erić-Nielsen et al. (2019) identifying Flat structure as lacking middle-level management. The situation is evident in Oxy organisation where their structure is a cost savings area for the organisation. Their communication structure is appropriate in their entire changes. For example, my placement in the organisation include ensuring flow of information across the entire hierarchical structure with zero distortion of the information being shared. Also, in regard to Oxy organisation, collaboration of all employees has a positive increase in motivation and satisfaction level. For a long-term strategy, Oxy staff collaboration harnessing motivation and satisfaction scope. In a long-term basis, Obeng et al. (2021) argue on the need for improving morale and productivity with turnover reduced. On the other hand, considering Oxy is undergoing rapid growth and currently in more than 100 countries, their structure is substantially being ineffective. The rationale of this is what Mazorodze and Buckley (2019) identify the strategy as being best when applied in small organisations. Further, retention rates for senior management and directors in Oxy has lowered considering the likelihood of staff to increase in management levels.
For ensuring flat organisation structure in Oxy goes through an improvement, CIPS notes recommend ensuring simple structures are evolving to become complex (CIPS, 2021). To allow naturally evolving structure, this imply an alignment with corporate objectives and supply chains.
3.0 Supply Chain Analysis Methods
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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. |