ADNOC Distribution Company - Assignment Example

Name Course Tutor Date ADNOC Distribution Company Company description Abu Dhabi National oil Company (ADNOC) is an oil processing and distribution company based in Abu Dhabi in the United Arab Emirates (UAE). ADNOC is a state owned oil company that commenced business in 1973 and has grown rapidly to become the world’s fourth biggest oil company that has large access to oil and gas reserves. It has about fourteen subsidiary companies that have specialized in various sections of its operations (Adnoc.ae 1). It has two oil refineries at Ruwais and Umm al Nar, this company has over 7,000 employees working in all of its subsidiaries. Moreover, ADNOC receives revenue of about $3 billion annually. As the first government owned company of the petroleum products in the UAE, it has grown to become a national institution that is the backbone the UAE economy. The main products of ADNOC are divided into three categories we have; crude oil and oil products such as petroleum, kerosene, diesel, lubricants etc. The second category is the natural gas such as liquefied natural gas (LNG) and liquefied petroleum gas (LPG). Then the last category is the petrochemical products fertilizers such as Urea, ammonia, ethylene, polyethylene, etc. Apart from the products this company processes, it offers great services to many industries within and outside the UAE (Adnoc.ae 1). Some of the services include; transportation of crude oil and refined products, distribution of the oil products to various parts of the world, storage, marketing of the oil products and refueling aircrafts at various airports. In addition, it offers services such as material handling services, chemical blending, and waste management. With long experience and diverse skilled work force, ADNOC offers high quality products that compete effectively on the world market. These quality products coupled with high quality customer services results to customer satisfaction (Adnoc.ae 1). Moreover, it offers fulfilling career and training opportunities to its employees, this enhances individual career growth. As one of the highly regarded state owned companies in the UAE, ADNOC’s products are exceptionally respected for their good quality and reliability (Adnoc.ae 1). Since it offers a wide variety of petroleum and natural gas, it is known for its commitment to the provision of services to its customers. As that is not enough, it has collaborated with other companies within in ensuring the corporate social responsibility. Due o its large scale and diverse operations, ADNOC faces several challenges in carrying out its business. The first challenge is that supporting the management of more than two million both oil, gas transaction per month is technical, and indeed, it requires competent and highly experienced employees (El-Siddiq 1). Secondly, ADNOC has the task of increasing the speed of the daily database operations for it to maintain 24-hour business crucial operations. This is quite demanding in terms of time and resources. Thirdly, it faces a challenge of simplifying the data management without interfering with the company operations, this needs experts who sometimes demand a high pay (El-Siddiq 1). Lastly, it has the challenge of improving data analysis of the sales orders, stock inventories, smart cards transactions and the daily sales to enhance efficiency in its operations. Products description As mentioned earlier, ADNOC manufactures and processes many kinds of products. These products are processed in different forms using different ratios of elements to suit the specific work meant for that product; these forms include liquid, semi-liquid gases and solids. Some of the liquid oil products that are processed from the crude oil include Murban, lower Zakum, Umm shaif and upper Zakum (Adnoc.ae 1). These are some liquid oil products that are processed from the crude oil; they are used in different ways such as road construction. The loading terminals of these products in Abu Dhabi are; Jebel Dhanna, Das Island and Zirku Island. Still under liquid products, many refined products are processed and grouped into light distillate, middle distillate and fuel oil (Adnoc.ae 1). The light distillate products include paraffinic naphtha, LS naphtha, splitter naphtha reformate and unleaded gasoline. The middle distillate products include jet 1 with additive and without additive. Then under the fuel oil, we have M.S fuel oil 180 and 380. Products in this category are majorly used for fuel in industries, aircrafts and automobiles. The third categories of products are in gas form. Some of the gases that are processed by this company include ethylene, propane, butane, sulphur, liquid sulphur. These gas products are used in many kinds of ways (Adnoc.ae 1). Most of them are used in laboratories, hospitals and in the manufacturing of other products. Some gases are flammable thus; they are used for lighting cooking and even in welding. There are two terminals where these gas products are loaded, we have the Gasco LPG and at Ruwais Sulphur stations. Then the last category of the ADNOC products is the solid form, which include petrochemical fertilizers. ADNOC manufacturers various kinds of fertilizers from oil products. Some of the fertilizers include Ammonia and Urea; some chemical products include chlorine, mud chemicals, waste treatment chemicals etc (Adnoc.ae 1). Most of these products are manufactured from the byproducts after the processing of the refined products. This means that this company is quite innovative enough in that it does not waste any materials; it ensures that it utilizes every material. Environmental forces that affect contemporary companies Contemporary companies tend to struggle to overcome the environmental forces that are directed linked to them. Company’s environmental forces emanates from different variables (Ucs, ac.uk 1). These include, social cultural aspects, technological, legal, political and international aspects. For any company to perform well, it needs to understand all these forces so that it may know how it can carry its operation effectively. The management of any company should know how well it could blend the internal and external environmental factors to make the company more viable (Ucs, ac.uk 1). When these forces are balanced well, a firm can easily attain its full potential and can maintain high performance for a long period. The environmental forces generally are those forces that originate outside the company and the company itself cannot control them. The first environmental force that tends to affects the modern corporations come from the social-cultural dimension. The socio cultural aspects consist of the customs of the people who are leaving around that particular organization, the life style of the people around, and the values of the society (Thomas 1). The socio-cultural factors include anything that that is within the context of the society that has an influence to the firm. These socio cultural forces influence the ability of a firm to acquire the resources that are within the locality. They also compel the firm to manufacture goods that are acceptable and utilized by the society (Ucs, ac.uk 1). Some of the socio-cultural variables that tend to alter the socio-cultural aspects of a particular society include the population within a society, the education levels, the norms and the attitudes that are directed towards the social responsibility of the firm. The socio-cultural environmental forces that affects ADNOC include the population pressure where many people are unemployed are ever looking for job opportunities (Thomas 1). UAE countries are densely populated; this means most of the young people are unemployed. In such an environment, companies offering employment such as ADNOC tend to get cheap labor from the available human resource (Ucs, ac.uk 1). Education levels among the citizens in this countries is also rising rapidly as the economy tend to increase. Many of the young people are taking studies in different colleges specializing in various fields (Thomas 1). This indirectly affects the performance of the companies around ADNOC in inclusion since the work force in all these firms are well-educated individuals. This means that the management of the firms would be good because individuals would be assigned to the tasks they have the knowledge and skills to perform. The second environmental force that affects the current companies emanates from the technological aspect (Thomas 1). When a firm is developing its strategic plan, it is advisable for it to put into consideration the changes in technology (Ucs, ac.uk 1). Over a few past decades, technology has changed rapidly and has transformed every activity in the operation of the firms. Technology has changed the life styles of people in the societies consequently has changed the buying patterns of the consumers on the market. The demand has kept on shifting due the technological advancement (Thomas 1). Technological advancement can open opportunities for a firm, for example a company that has good storage facilities such as refrigerators to store perishable goods for a long time can transport these goods to far markets and sell them at good prices than at home. ADNOC has widened its market worldwide due to good storage and transportation facilities. The changes in technology has also influenced the production process, new production techniques due to technology has increased the volume of production of goods and services (Thomas 1). Improvement in technology has technically caused unemployment since the employers prefer to use the machines other than the human labor, one automated machines can do many tasks, which could be done by several individuals. In some cases, this cause friction between the employees and the employers since the employees view new technology as a threat or a competitor who can easily replace them. ADNOC faces such a challenge because it is located in countries that have a large population of people who are unemployed. Therefore, this is an environmental force caused by technological aspect, which ought to be taken care of. Therefore, environmental force from the technological dimension is one of the biggest forces that every company considers as it makes its strategic plan. Another external force that affects companies comes from the political and legal factors. Generally, the political and legal environment of a particular country tends to affect the business activities (Thomas 1). Normally, governments set some business laws that ought to be observed by the business firms operating in those countries. These laws in one way or another tend to interfere with the operations of these companies. The philosophies of the political parties in power greatly influence the business operations. On the other hand, the legal environment what the firm can do or cannot do in a particular place and time. Nowadays, the legal environment encountered by the business organizations are becoming more complex and tend to affect business firms even more directly (Thomas 1). Actually, it is difficult to for any business entity to do a particular thing without encountering a law that restricts it. Some of the common areas that have laws that govern businesses include; employee relation, consumerism, competitive practices and environmental conservation. It is the government or the federal governments that passes laws and ensures legislation in the whole country. Sometimes, actions by these governments tend to pose a great influence to many firms; therefore, environmental analysts of the firms should not ignore the actions by both the state and those of the local governments. ADNOC is based in countries that has numerous business laws that government the business operations within the UAE. Thus, it encounters many obstacles presented by the laws that have been set by the governments. The last external environmental force comes from the economic aspect (Thomas 1). The economic factors refer to the nature and the direction of the economic system of a given country. Some of the economic factors include the balance of payment, which is the net difference of the goods and services exported and imported into a particular country. It is a common practice by various governments to create barriers to entry of the imported goods. This makes the imported goods to appear expensive to the local customers. Consumer avoids buying them hence the locally produced goods appear to be cheap and get market. Such barriers are created to stimulate the domestic producers or firms to produce more. Income distribution is another economic factor where the environment force that affects the company’s operations originates (Thomas 1). In a country where there is uneven income distribution, companies find it hard to sell its commodities since few people can afford them. Such countries are those that have few rich people and many poor people. This means that few people have gathered all the resources and the majority have none. Contrary to countries that have average income distribution where majority of the population have almost the same resources, companies would be able to sell their products in large quantities because there would a ready and enough market to market the commodities (Thomas 1). Like in the case of the ADNOC Company, UAE has big population of people who have little income and we have few rich people who have their wealth from the exploration of the oil. Thus in such an environment, few people would be able to buy its products due to low income. Elements of the cultural web The cultural web is a structure that is composed of the interrelated elements that helps one to understand the cultural environment of a particular firm. Once an individual analyzes the characteristics of these elements, he can be in a position to tell the culture of a particular firm. The first element of the cultural web is stories. The stories said about a particular firm from the people within and outside the company can enable a strange individual to know the culture of that particular organization (Polosku 1). One easily knows the culture and values of an organization by looking at the people who have been associated to the organization in the past. Their success or failures can be a good pointer to what kind of culture that exists in that organization. Therefore, the success and failure stories are one of the cultural web elements that define the organization culture. Secondly, we have the rituals and routines. These are the daily behaviors and actions exhibited in the organizations (Polosku 1). The daily behaviors are acceptable norms by everyone in that organization; they determine what is expected to happen in specific situations and what the management of the organization values (Hofstede 1). This means that when a strange person visits a particular organization, he can easily tell the culture of that organization after observing the daily routines of that organization. If he/she is a new employee, he will not need to be taught the culture of that firm, but he will just observe what normally happens after some few days he would have known the culture of that organization. The symbols found or used in an organization is another cultural web elements that educate the stranger about the culture of a firm (Hofstede 1). Companies tend to have several symbols that can be used to identify it and its products. Some o the symbols include the logos. Trademarks, flags, colors, plants images, animal images, book images etc. Each of these symbols implies something in the cultural practices of the organization. Some symbols imply the values of a particular organization; therefore, one can easily identify the culture of the firm just after looking at the symbols used in the organization (Polosku 1). ADNOC Company has many symbols that it has used on many of its products; most of these symbols imply the culture of this culture. The organization structure is another element on the cultural web. This is the definition of the organization authorities from top to bottom. It includes the powers vested to every individual at every level in the organization (Polosku 1). Different organizations have different organization structures; some have given the top officials maximum powers and some have distributed the powers to even the junior official. One can easily tell the kind of the culture that exhibit in an organization after just observing the levels of powers vested to individuals in that organization. When one observes that powers are skewed to top-level mangers, he can easily conclude that this must be a dictatorial organization where top managers tend to use their powers to harass the juniors (Hofstede 1). However, where the powers have been distributed to even lower levels, one can easily deduce that it is a democratic organization where junior individuals are included in the decision making process. Therefore, the organization structure can be a good indicator of the culture of a particular firm. Control systems in a particular organization are also a yardstick that can be used to determine what kind of the culture that is found in a given firm (Hofstede, 1). Many business firms have control systems that are used to check how the organization is managed. Some of the control systems include the financial systems, quality control systems, the rewarding system, the internal control system, the payment systems etc. Actually, when one studies these control systems carefully, he can easily see the picture of the culture of that organization (Polosku 1). When the control systems are used effectively, it is obvious that the organization is an efficient one, which implies that the people who are working in such organizations are industrious. Thus, the culture of that organization is hard work and efficiency. Power structure is another element of web; it is closely related to organization structure element. Actually, power structure means that who has more power in the organization. Some companies have all its powers on two or few senior executives (polosku 1). These people make all the decisions of the company. Some have their powers rested on the a whole group of executives or down to the departments in that the departments are independent and can make their own decisions without involving he senior executives. Conclusion ADNOC is one of the contemporary organizations that deal in various kinds of products. Apart from processing the products, it also offers numerous services worldwide. Due to its strong financial base, it has been able to penetrate the international markets and even opened some stores overseas. Like any other company, ADNOC encounters some environmental forces that it strives to overcome. Some of the sources of these environmental forces include; political, economical, social-cultural and technological aspects. We have some cultural elements presented in the cultural web model; these elements can be used by anyone to ascertain the culture of a particular company even without going or staying in that company for so long. Works Cited Adnoc-dist.co.ae. Success past, dynamic present, promising future: Adnoc. 2010. Accessed on web. 4th Oct 2012. Adnoc.ae. Adnoc Corporate brochure. Accessed on web. 4th Oct 2012 Adnoc.ae. Product specification. 2012. Accessed on web 4th Oct 2012. Chapter 3: Economic challenges facing global and domestic business. n. d. Accessed on 4th Oct 2012. David, Michael. “Increased productivity can depress job growth”. 2005. Accessed on web. 4th Oct 2012. El-Saddiq, Awad. ADNOC Distribution Streamlines Data Transactions, Increasing Overall Legacy System Performance by 50%. 2010. Accessed on web 4th Oct 2012 Ghumann, Mushtaq. “Accountability towards the community.” Business recorder. 2005 Hofstede, Geert. “Cultural constrain in management theories”. Academy of management executive. 1993: pg 81-94 Polosku. The cultural web. Aligning your organization’s culture with strategy. Accessed on web 4th Oct 2012. Thomas, Joe. Macro-environmental forces. 2012. Accessed on web. 4th Oct 2012. Ucs, ac.uk. Contemporary issues in the business environment. Accessed on web 4th Oct 2012 Read More