Leadership Traits Required for Successful E&P Companies - Essay Example

Leadership Traits Required for Successful E&P Companies Abstract Oil and Gas exploration industry in Africa is growing at a significant rate. The continent has a lot of potential for development and growth. This potentiality is helping Africa to experience significant foreign direct investments and business deals. The leaders are considered as major growth drivers of this oil and gas industry. It is the responsibility of the leading organizations to minimize the chances of workplace hazards. It is important to ensure health and safety of the employees to attain high reputation in business market. Several leading organizations are implementing different types of leadership traits in order to meet the demand of global population. British Petroleum is one of the leading organizations around the globe. They are operating in almost 80 countries. The brand image and personality helped the organization to expand their business in global market place. Tony Hayward and John Boone took some initiatives to maintain sustainable business operation of BP in global market. But lack of pre-assumed initiatives and safety measures by Tony took the priceless lives of 11 employees in Rig explosion. The essay effectively discusses that a global organization cannot achieve success without best sustainable business practices and ability to motivate business partners and staffs. Introduction The oil and gas companies are growing on a continuous basis in Africa. The continent supplies about 8% of the total oil supply in the world which is equivalent to about 132.4 trillion barrels of oil every year. Adding to this the continent also supplies 7.0% of the oil that the entire world consumes. The continent has a shale gas potential of 15.7% of the world production and produces about 12% of the total production of oil in the world. This had led to the development of numerous oil and exploration companies in the continent and at present there are about 32 national oil producing companies in Africa. Since the continent has a lot of potential for growth and development, it experiences a lot of foreign direct investments and deals throughout the year. Most of the potential regions providing oil are in the countries of Nigeria, Libya, Algeria and Egypt (PricewaterhouseCoopers, 2013). Thus the oil and gas industry is a booming industry in Africa and the success behind the growth is the natural resources that the countries are blessed with and the leaders of the companies who channel the resources in the right direction to generate the desires outcome. Leadership Traits Required for Successful Oil and Gas companies in Africa. The leaders act as the chief drivers of the growth of the oil and gas industry. The industry is exposed to a lot of risks and therefore the leaders of the companies have to be instrumental in running the entire drilling and exploration process safe and efficient. This safety awareness in the organization is essential both at the organization level and at the individual level. Thus the leaders must practice this principle at every level of their operations. They should also maintain a safety environment for the workers of the companies. Along with this they have to be extremely committed to the work that they deliver and this attitude should act as a guiding behavior for the rest of the employees of the organization. The leaders should aim at optimizing the conditions of oil exploration by minimizing the risks and maximizing the productivity. That would enable the companies to provide welfare to the society by and large. The leaders in this particular industry often make wrong decisions that lead to several accidents and injuries without reaping any substantial benefits. Thus it is necessary for the leaders to not only provide a guideline to the people regarding the work proceedings but also to monitor and scrutinize the activities on a day to day basis. These services have to be rendered by the leader with a lot of honesty otherwise the desired results cannot be achieved. Most of the leaders in the industry work under a lot of competition to produce the oil because the world demand always exceeds the supply. The leader has to work in harmony with people across the world coming from different backgrounds and ethnicity. The junior employees who work in the production areas are susceptible to dangerous conditions because they are exposed to large pipes that are highly combustible in nature. Along with the consistent dangerous situation, the production areas are extremely polluted. The emission of continuous harmful gases may have long term ill effects to the health of the individual workers. The machines that are used to crush and process the hardest rocks may turn out to be dangerous for the workers who are engaged with the machines. Various cases of loss of human lives have been recorded over time in the industry. The leaders have to address these issues in order to have stable and successful human resources in his company. The people in the industry work in a team and the leader has to understand that each and every employee of the company starting from the people in the lowest hierarchy is indispensible for the development and success of the companies. The leaders have to make the best attempt to make correct decisions so that the loss of human lives can be avoided. The leader has to properly understand and comprehend the situations that arises in various cases and has to balance his motives in the right manner. The leaders have to implement stringent rules for the maintenance of safety in the company. The humanitarian aspects of the business should be aligned in the same level with the political, economic and legal motives of the company. The mission, vision and goals of the companies should not remain limited to the strategic levels of the company. The leader has to ensure that it is implemented across the verticals. Thus, there should be a uniform organization culture in the entire business. Traits of the leaders of the International Oil Companies like BP, Exxon, Shell, Total etc that can lead to successful start-up or smaller independent oil companies with newly acquired licenses to explore and develop oil The leaders who head the oil and gas companies need to have a particular set of skills that would enable them to carry out the duties towards the business and the society. The economic uncertainties of the company have brought a challenge for the top management of the oil drilling companies. The companies have to face a lot of competition in respect of finding the supply of oil. This has made the work of the drilling more challenging. The operations have to be expanded to the distant locations where the employees find it more difficult to work. The regulatory authorities have exercised extensive caution in the post Gulf of Mexico oil spill issue. In the earlier days the leader necessarily had to have technical knowledge of engineering. But now a day along with the specific knowledge of exploration and production, the leaders must necessarily possess knowledge of the management and leadership. It is part of the duty of the leader to deal with the legal and regulatory aspects of the business. Since most of the companies at the present day are facing cash crisis the companies have adopted the cost cutting strategies in order to contribute a greater part of their revenue to the net operating income. The leaders have been forced to cut the employee strength in these companies and reduce their costs. But they need to make sure that the employees who act as assets to the companies should not be lost in this manner. They should continue with their best efforts to retain the strength of the employees. Most of the surveys have shown that most of the CEOs in the African oil and gas companies are men whose average age is 47 years (EYGM Limited, 2012). Hence the leadership is mainly young across most of the companies. Most of them are trained in the disciplines of Engineering, Management and Business Administration, Operations management or Finance. It is necessary for these leaders to have soft skills and leadership qualities to drive the business in a successful manner. The leaders have excellent negotiation skills because they need to fix several deals regarding the acquisition of areas for exploration or the setting up of new drilling units. Records show that the leaders in this industry get into various deals once in every four days which proves the frequency of such events. The leaders need to be extremely good team players because of the fact that they have to coordinate with the various other department and the top executives on a day to day basis. These character traits are exhibited by the top executives of the oil producing companies in Africa. BP, a multinational oil and gas company has operations in over 80 countries across the world. The oil that the company produces caters to different needs of the global population. The company has tried to create a value chain over hydrocarbon the main element that they deal with at different stages of production. The leadership role in the company is allocated among different individuals who take care of a variety of functions like Refining and Marketing, Exploration, Finance, Safety measures and operational risks, Production, human resources, corporate business activities and so on (BP Plc, 2013). These leaders are assisted by the junior managers in the day to day affairs. ExxonMobil is the largest oil and gas company in the world. The company has an international presence and has the largest inventory of resources. The company is also involved in the refining and the marketing of the petroleum products in the world. The company is headed by the CEO along with three more senior Vice Presidents (Exxon Mobil Corporation, 2013). The leaders of this company have make sure that the most advanced technology is used in the production process so that the output of the company is maximized and the safety needs of the employees at all the levels are ensured. The leaders are self motivated and highly committed towards achieving the goals of the company. Shell is also an oil and gas company that has a global presence. The company aims at making a dominant place in the oil and gas segment in the industry. The management tries to make an attempt to provide benefits to the society in an economic and environment friendly manner (Shell, 2013). The leadership in the organization is delivered in a flat hierarchy. The management adopts various strategies that boost up the productivity and reputation of the brand across the world and particularly in Africa. The leaders want to contribute to the society by minimizing the impact on the environment and thereby reduction in the levels of pollution. Technology and strategies are adopted in such a way that the activities are energy efficient and successful value chains are created. Since the customers are the main focus of the company, the leaders devise policies that cater to the increasing demand for oil in different parts of the world. Similar leadership traits can be noticed in the French Oil and gas Multinational Total. The company promotes diversity in its workforce and it a well known employer that provides equal opportunity to all the people irrespective of caste, creed, sexual orientation or gender. The leaders attempt to achieve a sustainable environment while challenging the issues that arise in this energy sector. Can leadership in the E&P industry be achieved without the best expertise and the ability to influence staff and business partners etc? It is important for the organizations within the E&P industry to implement effective leadership style to enhance effective business performance and positive business output. The organizations within this industry should ensure the development and implementation of sustainable business strategies. Leading organizations within the oil and gas exploration and production industry are looking for sustainable strategies and business practices in order to avoid several organizational and legal issues. Recent financial crisis and global economic recession affected the global economy. Negligible economic growth of several developed and developing country is affecting the growth of oil and gas exploration and production industry. Leading organization like BP is trying to implement change strategies in order to overcome these problems. An organization cannot attain significant growth without effective leadership style and strategies in this volatile economic environment (Garfinkle, 2011). It is important for the organizations to develop sustainable policies that can influence the employees and business partners of the organizations. Skilled and experienced employees are considered as the major growth drivers of an organization. Therefore, it is highly essential to motivate employees for better performance. Employees always demand better workplace environment and supportive policies against their hard work (Brown, 2002). On the other hand, business partners always try to make sure effective deal and sustainable business policies to continue the partnership for a longer period of time. It is true that global oil and gas exploration and production industry is facing several types of operational, technological, strategic and operational challenges. The industry should have the leadership with more sophisticated and broader set of skills. Sustainable commercial deal making, large scale project management, end-to-end value chain project optimization and significant strategic change management can enhance leadership style of an organization within the global oil and gas exploration and production industry. Effective performance management and performance evaluation of entire team is the major responsibility of the organizational leaders in order to enhance significant business performance. The organizations should give priority to the aspect of employee satisfaction. The management of the organizations needs to focus on workplace safety as there is lot of risk factors associated with the workplace. Effective training and development process can help the organizations to increase the skills and competencies of the employees. In addition to this, the organizations should develop policies regarding compensation, bonus, performance evaluation, and health and safety of the employees. Only sustainable policy development and implementation process by the organizations can help the organization to keep their employees motivated towards professional goals. Low carbon footprint and controlled carbon emission level can influence the business partners of the organization to continue the relationship for the longer period of time. Sustainable policies and effective governance can motivate the business partners to maintain long term relationship with the organization. Clear and transparent financial disclosure and high employee engagement activities can help the organization to maintain effective relationship with business partners. It is essential for the organizations within the oil and gas exploration and production industry to implement effective leadership style by influencing all the external and internal stakeholders. Does the image and personality of a leader play a driving role in deal making or new acquisitions? Strong personality and image of a leader plays driving role in new business acquisitions and deal making. It is highly important for a leading organization to experiment new things in business in order to expand its business practices significantly in global market. Expansion of business in global market can be done through several processes, such as franchising, joint venture, partnership, merger and acquisition. All of these processes are highly risk associated. Therefore, it is important for the organizational leaders to implement effective leadership styles and strategies in order to get success through these strategies. It is the image and personality or great individuality of a leader that help an organization to get success through these expansion strategies. First of all, it is the valuable trust on a leader that motivates a business entity to make an important business deal with that organization. Personality or image of a leader actually defines his or her leadership style. Leadership style varies from an individual to another due to different behavior, thinking process, attitude and nature of an individual. Each and every leader tries to make effective solutions to the problems based on his or her personality and behavior. Leaders generally follow different leadership styles based on external circumstances and own personality (Annunziato, 2011). On the other hand, several types of leadership traits are highly important during making a business deal. It has been identified from several surveys that higher officials or the top management of the organizations try to appoint a leader in a business deal process who avails five different leadership traits, such as vision, passion, effective decision making ability, team building ability and positive attitude. These five traits strengthen the personality and image of a leader (Remenyi, 2001). These five traits help a leader to be open with several business partners or entities during a business deal. Without positive vision and seer passion, a leader cannot make effective and fruitful decision. As a result it can hamper the profitability of the organization. Acquisition of business or corporations in domestic or international market has become one of the most popular business expansion activities. Several leading oil and gas exploring and producing organizations are going for business acquisitions in domestic and global market place. An organization does not only take the business or company through this acquisition, but also they took the responsibility of entire workforce, organizational culture and several business operations (Allen, 2008). Therefore, it is highly important to maintain the effective workplace environment of the new organization. It is quite acceptable that the organizational culture of two organizations cannot be similar. Therefore, it is the responsibility of the managers to take care of the employee motivation and employee satisfaction aspect to avoid workplace conflicts and attain significant business performance. In addition to this, only effective managerial skills and strong personality of a leader can play an effective role in new business acquisitions. Examples of John Boone and Tony Hayward of BPs leadership styles and what should be emulated and discarded Tony Hayward became the Chief Executive of BP in the year 2007. He replaced John Browne and took the initiative to get the organization back to the basic culture and structure. The shareholders of BP were highly motivated and felt happy with the results. The rig explosion set off the most horrible offshore spill of oil in the history of United States. This explosion occurred on 20th April, 2010. Eleven people were killed due to this explosion. He always tried to swell the initiatives that have been taken by Mr. Brown. In addition to this, he tried to maintain sustainable business practices in order to motivate its shareholders. However, the accident raised several safety issues. It is known to all that several types of risks are associated with the workplaces within these kinds of organizations. Lack of pre-assumed initiatives and safety measures took the priceless lives of 11 employees (Wild, 2011). The views, opinions and personalities of John Browne and Tony Hayward can be followed. These two leaders always tried to maintain sustainability in business practices. Moreover, they tried to motivate the shareholder of the organization. On the other hand, inadequate decision making strategy and lack of effective reviewing caused the explosion that took the life of 11 employees. This leadership aspect needs to be discarded. Conclusion The oil and gas companies have received a lot of backing in the recent years from various countries especially from China in form of Foreign Direct Investment. There are several regions in Africa like Niger and Chad where refineries are getting constructed. The successful completion and execution of these businesses would add to the world production of oil and would ease the supply scenario that is existent at the present day. Proposals are there to set up refineries in Sudan, Egypt and Nigeria as well. Thus there is a lot of opportunity for growth in this particular sector. But the leaders of the companies have to ensure that all this is contributing to the social welfare of the people and the money that is reaped is not channelized to improper uses. A sustainable and safe working environment has to be ensured by the leaders. References Allen, M. (2008). Skill Acquisition in the Complex. London: ProQuest. Annunziato, A. (2011). Managing the Transition. London: Routledge. BP Plc (2013). About BP: Company Information. Retrieved from http://www.bp.com/en/global/corporate/about-bp/company-information.html Brown, M. (2002). Leading with values. London: ProQuest. Exxon Mobil Corporation (2013). Our management. Retrieved from http://www.exxonmobil.com/Corporate/about_who_mgmt.aspx EYGM Limited (2012). The DNA of the COO: An oil and gas sector perspective. Retrieved from http://www.ey.com/Publication/vwLUAssets/The_DNA_of_the_COO/$FILE/The_DNA_of_the_COO.pdf Garfinkle, J. (2011). Getting Ahead. New Jersey: John Wiley & Sons. PricewaterhouseCoopers (2013). From promise to performance: Africa oil & gas review. Retrieved from http://www.pwc.com/en_NG/ng/pdf/pwc-africa-oil-and-gas-review.pdf Ramenyi, D. (2001). Second European Conference on Knowledge Management. New York: Springer. Shell (2013). About Shell: Who we are: Leadership. Retrieved from http://www.shell.com/global/aboutshell/who-we-are/leadership.html The Ken Blanchard Companies (2011) .A Leadership Imperative for the Oil and Gas Industry. Retrieved from http://www.kenblanchard.com/img/pub/Blanchard_A_Leadership_Imperative_Oil_and_Gas.pdf Wild, R. (2011). 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