(Solution) ICS Learn CIPD Level 5 Organisational Performance and Culture in Practice (5CO01)
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Description
Solution
1.1 Organisation Structures Analysis
Divisional
This is a type of an organisation structure which main features include organising different divisions/departments independently for developing specific products, offering services or practice area (Miskiewicz, 2017). An example of an organisation using this structure in Saudi Arabia is the Saudi Aramco (my employer organisation).
Advantages
For organisations embracing this structure, they succeeds in operating in large scale. For example, Saudi Aramco with their operations onshore and offshore use this structure in their active operations addressing the demand for oil and gas in Saudi Arabia.
Further, with divisions being autonomous, there is an easier use of resources as there is no need for approval by the head or manager as it happens in other organisation structures (CIPD, 2024). This means it is easier to track misappropriation of funds in these departments.
Disadvantages
The roles duplication is the major drawback of using this structure. The duplication occurs since some of the roles are repeated in the different divisions. Also, operations of the different departments is cost intensive since all have their budget to run their operations (Wong et al., 2020). For example, in Saudi Aramco (My employer), a single accounts division would serve all departments rather than having one in each division.
Appropriateness of use– The divisional structure is best used in organisations which are large in terms of capital and complex in their operations (Miskiewicz, 2017). A large organisation can divide itself into different divisions which ease the process of evaluation, monitoring and tracking different departments performance.
Matrix
This is established through employees having a direct or indirect answerable to two different levels of management. According to Raziq et al. (2020), the first level include functional manager with the second level being made of the product/services manager. The outcome of this is team-based working on assigned roles while aligning themselves to a particular function or department. A case example is using the matrix structure is the existence of finance teams, HR, and research and development.
Advantages
By embracing the matrix organisation structure, it becomes possible to improve collaboration amongst the different specialists. Considering the quality expected of services delivery, different people work in their roles for mutual overall outcomes of the broad organisation. Also, CIPD (2023) identify a matrix organisation structure as associated with prompt decision making and performance since there is not a lot of bureaucracy.
Disadvantages
Through the embrace of matrix structure, confusion and conflicting parties would be a common occurrence. This is amongst the management hence reduced pace of the entire decision making strategy (Raziq et al., 2020). Also, coordinating the operations in a matrix structure is a challenge owing to the inter-linked nature of their operations in this structure.
Appropriateness of use– in the organisation with multiple specialist products or services, matrix organisation structure is the most preferred (Raziq et al. (2020). The rationale of this is informed by the need for tight control of the organisation operations. This structure similarly enhance different teams discussing on various issues impacting on the organisation with relevant improvement put into account. 1.2 1.2 Connection of Organisation Strategy, Products, Services and Customers
An organisation strategy is defined in CIPD (2023) as the set of actions and investments made in an organisation for success in achieving short and long-term goals. For example, for Saudi Aramco, their strategy include;
Increasing specialisation in oil and gas sector– This represent an organisation strategy intended to ensure that they offer good quality of oil and gas products in Saudi Arabia and internationally.
Custom-made oil and gas products depending on usage– For Saudi Aramco, with multiple organisations interested with their products, they deliver them based on use. These are institutions, individual organisations and public sector.
Linking Strategic Goals and Objectives
The identified organisation strategies have a direct correlation with the goals of the organisation. The goals include dominance of oil and gas sector in KSA and also accrue on increased profits (Bryson & George, 2020). As a result, the organisation has been exploring to operate more drilling wells while expanding their operations beyond oil and gas. The success of this include ensuring existence of resources (human and financial) to succeed in their business environment. This is amidst the growing demand of oil and gas products in locally in KSA and internationally in Middle East.
Ensure customer needs are met
Considering an organisation such as Saudi Aramco (My Employer), exploring more onshore and offshore oil and gas sources means that demand and supply would be met. This is with high-level quality oil and gas offered to their customers on time and in right quality. The outcome of this would be to increase their revenues hence edging out their competitors and increase profits (Lambert et al., 2021).
Also, with Saudi Aramco strategy including reduction of carbon emissions with 90% by year 2025, this has a direct implication on sustainability of their operations. According to Malik et al. (2020), this has a positive implication to development of the society and meeting the expectations of all employees. Hence, they are in a position of engaging recurring customers who are loyal and trusting the brand.
External Context impact
The economic landscape has a significant implication on the identified strategy. With Saudi Aramco a government institution, reduced budgetary allocation would mean challenges to execute their functions. This is with specialisation of their oil and gas products offered being a challenge.
Another factor is the technology change which has a direct implication on success in exploring oil and gas both onshore and offshore. This is for ensuring that they reach out to their customers demanding the products and services. According to Vrontis et al. (2023), with modern technology growth in AI and robotics, engaging competitors is easier and capitalising on broad market of operations. As such, to remain competitive, investing in technology is relevant for modern organisations.
1.3 External factors and Trends
Interest Rates
This factor is identified in Bauer and Rudebusch (2020) as the extra costs incurred or earned from loans or deposits respectively. The impact of this factor is either increasing costs of the loans (money given) or increase earned intertest rates from deposits. For example, in Saudi Aramco (My employer organisation), this has an impact on their ability to get financing used for their operations in oil and gas industry. Post COVID-19, in Saudi Arabia, the interest rates have increased with 7.54% (Khan et al., 2021). This has impacted on ability of organisations to access affordable credit and being competitive in their business environment. With the rates of interests fluctuating, the overall profitability of an organisation also fluctuate.
Priority– In light of the growth interest rates, the priority would be to restructure their operations. According to CIPD (2024a), through a successful restructuring, the organisation would reduce the incurred costs which reduce the resources available for their expansion and operations. Also, by engaging the KSA government, the organisation would gain in terms of availability of resources for their active operations. This is while ensuring they transition from a fully oil and gas organisation to other sectors which would generate them alternative revenues.
Inflation Rates
According to Eldomiaty et al. (2020), the inflation rates represent the overall increase of costs of products and services as an indicator of economic growth. The inflation rates are noted to have a direct influence on the customers purchasing power either being a challenge to source the products and services or good purchase power. For Saudi Aramco (my employer), inflation rates which have increased in Saudi Arabia post COVID-19 with 1.68% influence their ability of employees remuneration, utilising their available resources and administration costs. Hence, this directly influence the organisation ability to accrue profits while leveraging on competitive advantage.
Priority– For an organisation such as Saudi Aramco, the priority would entail improving costs management and operation efficiencies for managing increasing inflation rates. According to CIPD (2021), this positively ensure that the organisation has sufficient resources for their operations in oil and gas industry. The priority outcome would include enhanced cost saving strategies, optimisation of resources provision and embracing innovativeness in their operations. According to Eldomiaty et al. (2020), through a reduction of operation costs and improved efficiencies, an organisation is able to manage the implications of inflations maintaining their profits and being stable financially.
Social Factors
This is defined from the PESTLE Analysis as including the lifestyle aspects, cultural norms, and expectations including career attitudes and work-life balances (CIPD, 2024b). For Saudi Aramco, they are majorly impacted by factors of culture expectation and clients based engagement. The scope of influence is for Saudi Aramco to enhance oil and gas clients satisfaction and being loyal. Further, considering demographical change in Saudi Arabia which is increased Generation Z and Millennials representing 40% of the labour market impact on the organisation resourcing strategies in place. With this group having their preference on non-financial rewards, organisations are investing on total rewards (CIPD, 2024c).
Priority– To respond to the identified social factors, the priority for Saudi Aramco need to include customising their rewards to align with the expectations of Generation Z and Millennials. This is while as noted in CIPD (2024b) investing in modern technologies for recruitment of the changing cultural and social dynamics in the modern society. The outcome of this would be attracting and retaining loyal clients and making sure sustainable growth and development in their markets is attained.
1.4 Scale of Technology in Organisations; Impact on Work
In the modern business environment, Statista (2024) note that the value of AI amount to $53.7 billion and projected to increase with more than 30% by 2024 to $71 billion. The popularity of the different AI strategies have a significant implication on organisations and workplace practices. The examples of these AI include;
Robotics Processing Automation (RPA)
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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. |