Business Environment of the Aramco Project - Essay Example

The modern globalized business environment gives unique challenges and demands to companies. Businesses are forced to competeinternationally in terms of service delivery and product quality and as such they have to innovatively respond to the new challenges. So as to meet the challenges presented by the rapidly changing business environment, training concepts have come integral in business. Implementation of training and career development programs is therefore essential organizational success. The need for prioritizing of training and learning in organizations is brought about by many factors; competing internationally, improving efficiency, service & product quality and other factors. The Kingdom of Saudi Arabia is the largest Arabian state in Western Asia covering a land area of approximately 2,150,000 km2. it is the second largest in the Arab world after Algeria. Its neighboring states are Jordan and Iraq to the north, Kuwait to the northeast, Qatar, Bahrain and the United Arab Emirates to the east, Oman to the southeast, and Yemen in the south. Currently the Kingdom has a population of 28.7 million people and is a world leader in the production an export of oil. The country’s national petroleum and natural gas production is called Saudi Aramco. The company is Arabian American and is based in Dhahran. Saudi Aramco is among the largest integrated energy production companies around the globe. Aramco was founded in the year1933, by the Standard Oil Company of California. Saudi Aramco’s is a story of the discovery and development of some of the greatest oil reserves ever known in the world and the rapid transformation of Saudi Arabia from a once desert kingdom to the modern nation-state that we know. Saudi Aramcos value as estimated by the New York Times is approximately $10 trillion and this makes it the most valuable firm globally. Saudi Aramco enjoys more than ten percent of the global market in terms oil supply and controls 98% of Saudi’s oil reserves which in turn represent 25% of the total global oil reserves. Considering that the petroleum sector contributes about 40% of Saudi Arabia’s total Gross Domestic Product (GDP), Saudi Aramco is no doubt a cornerstone in the national economy. As such, Aramco is under intense pressure to remain competitive not only in the kingdom but also internationally. It I for this reason that the company requires a very efficient labor force. It has responded to this demand by developing and implementing a training program known as the Professional Development Program (PDP). All employees joining the company are required to pass through the program as part of training and organizational induction. But many supportive departments in Aramco have continued to register high rates of absenteeism and/or sluggishness among employees which goes unreported. My focus in this paper is to evaluate the impact of PDP in all support departments of Aramco Company utilizing an integral economic approach. II. Research Framework Many studies reveal that the kingdom of Saudi Arabia has undergone and continues to experience a fast and continuous transformation culturally & socially. According to Yamani (2000), maintaining a Saudi identity is very difficult in a setting where contact with the West is necessary for economic, political and technological growth. However, these transformations though necessary come with the inevitable clash between continuity and change. Continuity is necessary on the cultural and religious fronts as well as societal norms while the external forces of influence obliging the kingdom to compete internationally necessitate essential changes. Yamani identifies work efficiency and productivity as being major sources the clash witnessed in the kingdom, culturally and socially. Aramco is a case study, the firm’s production lines are compelled to conform and keep up with international standards whereas the administration is not significantly impacted. Combining the Neo-Classical theory of growth and Human capital theory as a framework in an attempt at explaining the process of growth in Saudi Arabia appears to find a lot of support in literature (Saddam and Keri, 2014.) PDP is therefore not only a relevant intervention but is also a viable one for achieving sustainable development. It strengthens both human capital and technology, all of which are important variables in the growth process as per the Neo-Classical theory. Efficiency requires social behaviors which contribute to creation of conditions that strengthen employee quality, responsibility and effectiveness in the entire workforce. Saudi Aramco is putting considerably serious efforts towards the development and training of their workforce. The Professional Development Program (PDP) which was launched in the mid 1970’s is one of these efforts at improving efficiency. The objective of PDP is accelerating professional growth and development among freshly recruited Saudi Arabian College graduates to enable them improve their professionals skills in a time period that is lesser as compared to what is normally required without such a program. The programed is aimed at accelerating the professional improvement through growth of experience and promotion of desirable work qualities among the freshly employed graduates joining the company from college. It is designed to offer a three year series of tailor-made developmental trainings, along with the relevant technical and management courses that meet immediate and future professional developmental needs of the employees. The training is divided into two parts and it is a requirement for all employees to pass through the program on joining the company. The two parts of the training program are; Corporate PDP Orientation and Individual Development Plan (IDP). During departmental orientation, employees are familiarized with each and every function of the various departments. This is included in the Corporate PDP Orientation whereby the Career Development Department is supposed to conduct a comprehensive orientation sessions introducing new employees to the entire major Company functions, responsibilities and challenges to be expected. The program requires that after the first three months, program supervisors responsible for the selection of appropriate assignments for each participant and come up with IDPs for all participants formulate the individual development plans. During the period both the participants and supervisors identify the strengths and personal interests of the trainees as well as their developmental needs. Core PDP Enrichment Courses typically vary in terms of themes and time periods taken to complete each course. The courses offered vary between 1 day and 4 days and are designed to be delivered over the entire three year period. The training covers sixteen different areas of competence which are then used as the basis for making decisions on employee evaluation as well as for purposes of promotion. Aramco today employs a total of 57, 283 workers in Saudi Arabia of which 40% get absorbed in supportive departments while 60% join the production lines. All Aramco employees have therefore gone through the PDP program as part preparation for the challenges ahead. Read More