StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Royal Dutch Shell and Innovation - Assignment Example

Cite this document
Summary
The paper "Royal Dutch Shell and Innovation " states that generally speaking, if the new management promotes the values, culture, and beliefs of the company, then the employees will continue to develop new ideas that will propel the company to grow. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.5% of users find it useful
Royal Dutch Shell and Innovation
Read Text Preview

Extract of sample "Royal Dutch Shell and Innovation"

? Shell is a multinational company dealing with oil and gas. The Headquarters of the company is in Hague, one of the cities of Netherlands. It has a registered office in London, and by 2011, the company was second largest company in relation to revenue growth, and profitability. In the oil and gas sector, the company is second to ExxonMobil in terms of operations and its capital base (Bruijn et al, 2002). The company is grouped among the six most influential oil companies in the world. The other five are Chevron, Exxon Mobil, B.P, Conoco Philips and Total S.A. The company operates in all areas of oil and gas industry, these areas include exploration of oil and gas, supplies and distribution, marketing, production, refinery, petrochemical development and power generation (McIntosh, 2001). The company is also concerned about environmental conservation, and it has invested heavily on the production, and distribution of renewable energy (Carroll, 1999). It supports initiatives of developing and distribution bio-fuel energy, wind and solar power, and hydrogen energy. Shell has branches in 100 countries, and operates an approximate number of 44000 service stations. The company producing more than 3 million barrels of oil per day, and this makes it second to Exxon Mobil. Due to its massive size, and huge capital base, the company is an important player in the international system. It has the capability of influencing world leaders to enact policies that will encourage capitalism, and liberalization of their economies (Carroll, 1999). Due to its size, and the complex business activities the company engages in, the company operates under four main divisions. These are projects and technology, upstream international, upstream Americas, and downstream (Bruijn et al, 2002). The role of upstream international is to manage business operations of shell that are outside the American continent. The division is responsible for identifying new oil and gas fields. It refines crude oil, liquefies it and transports the gas. The division creates the necessary infrastructure required to supply and deliver the oil products of the company to the target market. The division operates through geographic locations, and each location has its own CEO. In some instances, the upstream international unit collaborates with all its geographic units to deliver a service considered essential and important (Bruijn et al, 2002). This only applies when the geographic unit of the company does not have the necessary skills to deliver the service. The Projects and Technology department is responsible for developing new and technological innovative systems, for purposes of improving the efficiency of the organization. The Unit concerns itself with the distribution of the organizations major projects, and it is not restricted to regions (Carroll, 1999). It supplements the technological innovations of Upstream and Downstream divisions of Shell, and it is responsible for providing leadership and advice on the areas of environmental conservation, health, safety, and procurements and contracting. The downstream division is responsible for the production, manufacture, marketing, and distribution of the products and services of Shell Company. The unit refines, distributes and transports crude oil products (Green, 1985). The upstream America is responsible for the business activities of the organization in North and South America. In this region, the organization looks for new sources of oil, and gas. It also creates an infrastructure that has the capability of efficiently transporting the products of the company to its target markets (Jordan, 2001). The division is responsible for extracting bitumen from oil sand. It converts them to crude oil, and thereafter refines them to produce energy. The main objective of the company is to search for oil and gas, and thereafter produce the product, manufacture it’s, and deliver the product to the market. The company also explores for gas, refines it, and transports the product to its target market. The company also produces chemical products, and an example is the shell lubricant used to service the spare parts of motor vehicles (Carroll, 1999). To effectively sale petroleum, the company operates more than 44000 thousand petrol stations all over the world. The company operates oil refineries, and their objectives are to convert crude oil to finer oil particles that can be used. The company produces renewable energies. And it does this by developing solar panels that have the capability of transforming sunlight into electric energy (Bruijn et al, 2002). The company has operations in Africa, Asia, Europe and the Americas, and therefore there target market is anybody using automobiles in the countries of their operation. Shell Company has various innovative challenges, and opportunities. The chairman of Royal Dutch Mr. Jorma Olila states that the success of the organization is because of its innovation in technology, market research, customer relations and production. The company invests heavily in research and development, for purposes of developing products that will stimulate the market, and give them an edge over its competitors. The management of Shell realizes that business organizations are under pressure to innovate (Carroll, 1999). This is because of the recession happening in Europe and America, the growth of the Chinese and other developing economies, an increase in the population of the world, advanced technological developments, and changing trends at the international business environment. On this note, shell identifies three opportunities on which it needs to develop innovative ideas. These are, investing heavily in research and development, initiating measures to quickly commercialize their ideas, and looking for ways of effectively working with external partners (Bruijn et al, 2002). The growth of the Chinese economy and of other developing countries presents a challenge to the objectives of Shell Company. This is due to the fact the market conditions in this countries call for low cost products. These markets also insist on the different lines of production. This is a challenge to shell because it will require the organization to revamp its business strategy, so that they can penetrate through these markets. However these markets present a lot of opportunity in relation to energy requirements, which is an essential element for the growth of an economy (Jonker, 2007). It therefore calls for an innovative mind, to penetrate through these markets, and shell has done exactly that. Shell recognizes China as an important market, and center for research and development. To penetrate the market, shell involves the various universities, and institutions of higher learning, in researching on the various energy products that is sufficient for the Chinese market. An example is the relationship between the company, and Qingdao institute of Bioenergy, and Bioprocess technology. The two are working together to develop biofuel energy for the Chinese economy. Advances in technology, and new gas and oil finds which are difficult to extract presents the company with an opportunity to innovate, at the same time it is a challenge. For instance the company projects an increase on the demand of energy products, by the year 2050. To satisfy these demands, the company must adopt an innovative culture, and develop machineries that have the capability of extracting oil and gas from these sources (Bruijn et al, 2002). For instance, the company has identified sites that contain gas in impermeable geological formations. These gas deposits are found in United States of America, and to extract them, it requires it requires innovative drilling techniques and extraction methods. On this note, the company looks for other sources of gas and oil, so that they may extract them, and distribute the products to the market. On this note, the company projects to find new energy sources in China and Australia, and unlock them for purposes of developing energy products (Jordan, 2001). The company does not only involve innovation in the extraction of oil and gas. Technological innovations are also depicted on the products of the company. The company has among its staff talented engineers and scientists whose role is to create and develop petrochemical products, and their related energy products. There other role is to advice the business organization on the impact of various technological innovations. They device strategies that will help the company overcame its technological problems, giving it an edge over its main competitors. Through the hardwork of these engineers, the company developed products such as, Shell Rimula, an heavy duty diesel engine oil (Jonker, 2007). The lubricant has the capability of withstanding unfavorable temperature from the outer space, while performing its function. On this note, it is the culture of the organization, for its engineers to develop products whose main aim is to satisfy the needs of the customers. The company identifies the need of the energy efficiency, the need of minimizing lubrication costs and the various legislations that govern carbon emission as the driving force of their lubricants innovations (Carroll, 1999). On this note, the company invests heavily on lubrication research, and it uses an approximate amount of $ 1.3 billion annually. The company involves its own customers in the research and testing of the lubricants. This makes the company to develop products that are needed in the market, increasing its revenue and profitability. The company does not only focus on technology, but also on business strategies. For instance Shell Company managed to acquire Arrow energy, an Australian energy company. The deal was worth 3.2 billion dollars, and the objective of this venture was to supply liquefied gas to the Asian markets (Jonker, 2007). These innovative tendencies by the company are meant to improve their business activities, and to develop new technologies that will help in opening up new markets for the company (Jordan, 2001). These innovations have an adverse effect on the organization, in relation to the perspective of change. The company advocates for innovation, and a change in my management might try to influence new cultures within the organization (Marcel et al, 2006). They might face resistance in the process of changing the culture of the organization. In case the new management might want to continue with the policy, it will take time before they are oriented with the innovative practices of the company. A change in the management will create inconsistencies, in the innovative tendencies of the company. A company that responds best to a change in management is one which is prepared for such a change (Jonker, 2007). It is better to psychological prepare employees for a change in the management, and establish structures that will mitigate against inconsistencies that might arise from such changes. Inconsistencies will arise if the new management shows some signs and symptoms of inconsistencies to the culture, value and norms of the organization. However, if the new management promotes the values, culture and beliefs of the company, then the employees will continue to develop new ideas that will propel the company to growth. The following are the organizational cultural barrier of innovation at Royal Dutch Shell (Bruijn et al, 2002). 1. The four divisions of the company are independent of one another. They only work together in special circumstances. This is a barrier to innovative practices in the organization, because the divisions of the company have to coordinate together, to identify the various needs of their customers. 2. Another cultural barrier to technology is the bureaucratic channels of decision making. Before any important decision is made, the board of directors has to approve it. They may either reject or approve the idea. 3. Even though the company encourages ideas on its business strategy, its main focus is on technology, and it invests heavily on technology, at the expense of other divisions of the company, such as marketing, distribution and transportation. Despite these barriers to innovation, there are cultural values in the organization that encourages innovation. These values are (Carroll, 1999), 1. The desire to satisfy the customer’s needs. 2. The desire to improve profitability and growth of the company. 3. The desire to capture new markets, and exploration sites. It is possible to address the mentioned barriers to innovation at Shell Company. One of the ways of addressing the problem is to integrate the four divisions of the company, by creating a communication liaison office. The responsibility of this office is to share information on the performance and operations of the four units to various heads of the units under consideration. This will enable the organizations to develop ideas that are convenient, and applicable to the four divisions under consideration. Another method is to increase the number of days that the board of directors should sit, and deliberate on the ideas on offer. This will result to a quicker implementation of an idea, therefore increasing the efficiency of the organization. The company should also invest on other areas of its operations, such as marketing, transport, and distribution. By doing this, the company will not only use technology to develop products, but it will also ensure that the products are effectively distributed, and sold to the market. Bibliography: Bruijn, T. J., & Tukker, A. (2002). Partnership and leadership: building alliances for a sustainable future.. Dordrecht: Kluwer Academic Publishers Group. Carroll, P. (1999). Rebounding, rebuilding, renewing at Shell Oil: a former CEO reflects on large-scale change. Waltham, MA: Pegasus Communications, Inc.. Greene, W. N. (1985). Strategies of the major oil companies. Ann Arbor, Mich.: UMI Research Press. Jonker, J. (2007). A history of Royal Dutch Shell. Oxford: Oxford University Press. Jordan, A. G. (2001). Shell, Greenpeace, and the Brent Spar. Houndmills, Basingstoke, Hampshire: Palgrave. Marcel, V., & Mitchell, J. V. (2006). Oil titans: national oil companies in the Middle East. London: Chatham House ;. McIntosh, M. (2001). Royal Dutch Shell. London [u.a.: Routledge. Top of Form Bottom of Form Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Module project Assignment Example | Topics and Well Written Essays - 2000 words”, n.d.)
Module project Assignment Example | Topics and Well Written Essays - 2000 words. Retrieved from https://studentshare.org/finance-accounting/1463024-module-project
(Module Project Assignment Example | Topics and Well Written Essays - 2000 Words)
Module Project Assignment Example | Topics and Well Written Essays - 2000 Words. https://studentshare.org/finance-accounting/1463024-module-project.
“Module Project Assignment Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.org/finance-accounting/1463024-module-project.
  • Cited: 0 times

CHECK THESE SAMPLES OF Royal Dutch Shell and Innovation

International Business: Royal Dutch Shell

This project evaluates the Royal Dutch Shell's operations on an overall basis; its international activities; geographic and product markets of royal dutch shell and historical development of its international business operations; interpretation of Royal Dutch Shell's behavior; principal goals of Royal Dutch Shell for international business; Royal Dutch Shell's adjustments to challenges of internationalization.... The evidences summarized in this paper undoubtedly states that over the years passed by, the progressions of royal dutch shell have proved that royal dutch shell is one of the most accelerating and emergent multinational corporations that the oil and gas industry has ever witnessed....
13 Pages (3250 words) Essay

History of Shell Energy and Oil Company

Shell oil and Energy Company is a multinational whose parent company is the royal dutch shell.... shell oil and Energy Company ... Through the upstream section of the company, shell is able to provide employment to people in foreign nations thus improving the GDP of the country.... shell is committed to ensuring that the methods of exploration, extraction and manufacturing used preserve the environment (Mallin 217).... The company has been in the market for a long time thus the brand name shell is strong....
11 Pages (2750 words) Term Paper

Innovation in Royal Dutch Shell

The paper "Innovation in royal dutch shell" states that lead user theory mainly focuses on the process by which commercial products resulting from the innovative suggestions of the user (Stevens).... oyal dutch shell is a trendsetter in innovation.... Lead user innovation can be seen playing its part in the innovation strategy at Shell.... innovation is the current trend in the world.... To stay ahead in the fast race of innovation and technology, practices need to be looked into, new ideas catered and old schools of thought reformed....
17 Pages (4250 words) Assignment

Royal Dutch/Shell Group

This would be achieved through active portfolio management, personal accountability, operational excellence, and cost leadership" (royal dutch/Shell Group, 2008, pg.... Growth in profits, cash generation, and a shift towards gas being the fuel of choice would be a large part of this venture which was to take place during the key time frame that was brought into question by the case study (royal dutch/Shell Group, 2008 and Kim, Park, and Prescott, 2003).... In its marketing efforts, shell sought to be the world leader in its industry....
10 Pages (2500 words) Essay

Royal Dutch Shell Plc Management Structure

The paper "royal dutch shell Plc Management Structure" states that in the last 5 years, managers in royal dutch shell have managed to keep the firm's performance at a high level – despite the strong financial crisis that has temporarily affected the firm's profitability – referring to the year 2009.... royal dutch shell Plc is one of the most powerful companies in the international market; the firm operates in the energy and petrochemical sectors and has more than 100,000 employees around the world (royal dutch shell Plc, corporate website, 2010)....
4 Pages (1000 words) Essay

Strategic Management and Leadership of Royal Dutch Shell Plc

This essay "Strategic Management and Leadership of royal dutch shell Plc" focuses on royal dutch shell PLC which is also known as Shell is a multinational oil & gas company.... royal dutch shell p.... As one of the largest companies in the world, royal dutch shell p.... This essay deals with the leadership and strategic management that has made royal dutch shell p.... royal dutch shell p.... he operating environments which royal dutch shell p....
13 Pages (3250 words) Essay

Analysis Of The Royal Dutch Shell

The main objective of the essay "Analysis Of The royal dutch shell" is to provide an analysis of the external and internal environment of the MNCs and the financial as well as operational strategies they are required to undertake to strive in the competitive market.... There are constant questions regarding the use of the technologies used by shell and whether they are environmentally friendly or not.... In terms of opportunities, shell is innovating newer technologies and low carbon solutions so as to ensure product standard and the cleaner environment....
10 Pages (2500 words) Essay

Royal Dutch Shell: Multinational Organization

This case study "royal dutch shell: Multinational Organization" analyzes royal dutch shell, a multinational firm that operates in the global gas and oil industry.... The firm achieved success and later merged with Royal Dutch to form the present royal dutch shell in 1907 (Our History 2015).... In the case of royal dutch shell, evidence points towards the common usage of three of these modes of entry.... roducts and ServicesRoyal dutch shell offers a wide variety of products and services....
6 Pages (1500 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us