The Strategy of the Abu Dhabi Department of Transport - Research Paper Example

Personal Development As a Strategic Leader Introduction This paper examines the strategy of the Abu Dhabi Department of Transport (referred to hereafter as DoT). The paper examines key components of the strategy of the DoT from fundamental perspectives like the mission and vision of the organisation. It goes on to examine the key elements of the strategy of the organisation like the components of the DoT's strategic plan. The paper also evaluates the strategic options and strategic choices available to the top level management of the DoT. It views the various components of strategic choices in relation to the factual situation that exist in the internal, intermediate and external environments of the Abu Dhabi DoT. Review of DoT's Core Mission and Vision The Abu Dhabi DoT was set up to co-ordinate transportation and related activities in the Emirate of Abu Dhabi (Abu Dhabi STMP 7). The DoT has the full backing of the government and it is an authority or arm of the Emirate's government that seeks to enforce and monitor several elements and aspects of transportation within the boundaries of the emirate. The DoT's activities naturally demand that it co-operates with major stakeholders in the transport industry to meet the obligations and requirements expected of them. Also the DoT has to link up the development of transportation arrangements and infrastructure with regional bodies (the GCC) and with other international and global standards. Johnson, Scholes and Whittington identify that strategy is a long-term plan made for the whole organisation over a considerable period of time by top level management (7). Their conception of strategy is based on the premise that strategy is built on the core mission and vision of an organisation. In other words, a business formulates its strategy to attain its vision and mission in the best possible way or form. This means that strategy is a means through which an organisation will attain its fundamental end – its mission and vision. Thus, mission and vision spell out the true purpose for an organisation and what it exists to attain. This implies that a public organisation like the DoT has its mission and vision at the core of its primary purpose. The mission and vision forms the basis for the objectives and aims of the Department and defines the actual foundation on which the strategy can be built. 1.0 Objectives & Aims of the DoT According to the Department of Transport's recent documents, the Department exists to attain five main aims and objectives. They are 1. Streamlining the Activities of the Ministry of Transport: This means that the DoT exists to undertake planning and performance management in order to carry out the policies and directives of the Ministry of Transport. 2. Integrate Planning & Performance Techniques to establish transport policy and strategic plans and targets: As the government authority on the ground with professional expertise, the DoT is expected to put together all the elements of transport policy to advise the government. 3. Enhance the Ethihad Airlines & Abu Dhabi International Airport to meet appropriate standards: This means that the DoT exists to act as an authority of the Emirate's airports. As airport authorities, the DoT needs to ensure that local and international standards are met so that all passengers and cargo coming into Abu Dhabi are given the required assistance in dispatching their passengers and goods. 4. Expanding and Maintaining the Sea Port that serves Abu Dhabi and international shipping routes: This means that the DoT needs to ensure the proper running and management of the Abu Dhabi harbours and other sea points. It also has the obligation of ensuring that the ports are expanded according to international standards. All the management efforts of the DoT over the Abu Dhabi Sea Port needs to be done in harmony with the national policies of the government of the Emirate. 5. Ensure the efficient operation of public transport systems: The DoT needs to monitor and implement appropriate policies that will ensure that public transport systems support the development of the Emirate. This is because the laws of Abu Dhabi gives power and authority to the DoT to carry out various activities in relation to the public transport systems of the Abu Dhabi Emirate. This include co-ordination and other planning activities that relate to buses and taxis. The objective is to ensure safety, efficiency, health and environmental compliance. 1.1 Strategic Framework for the Attainment of the Objectives and Visions of the Abu Dhabi DoT. The strategy of the Abu Dhabi DoT is steeped in two main elements: Policy Drivers and Stakeholder Constraints. The Policy drivers are the main ideas and concepts that are put before the Department by the government of Abu Dhabi. On the other hand, the stakeholder constraints refer to the realities on the ground that determines the practical implementation and monitoring of the propositions and ideas of the government. It defines what can and cannot be done in each and every context and situation. The main policy drivers include (STMP 7): 1. The government's plan to attract three million tourists by 2015. 2. Industrialisation of the Abu Dhabi economy and the need for transport planning to complement the industrialisation plan. 3. Longer term planning to meet needs and desires of the Emirate into the future. 4. Integration of environmental concerns into the transport system of Abu Dhabi 5. Linking up of Abu Dhabi's industrial infrastructure and systems with the transport strategies and systems of the UAE, GCC and other international partners in Abu Dhabi's development. The stakeholder requirements involve the various interest groups in the transport industry of Abu Dhabi who determine the success and otherwise of the policies and plans of the DoT [discussed in Section 2 below]. 1.2Units and Components of the Strategic Plan of the DoT In order to attain the objectives and aims of the DoT, it is divided into several strategic business units that are responsible for the attainment of various elements of the strategy of the DoT. The core functions of the DoT include four core units that focus on important aspects and elements of the strategic objectives of the DoT. These core units specialise in their respective functions and this enables them to undertake some day-to-day activities which come together to meet the objectives, aims and strategy of the Department. They are: 1. Aviation Sector: This unit is responsible for the international and governmental directives in relation to the Airports and Etihad Airlines. 2. Maritime Sector: This sector controls the maritime policing of Abu Dhabi's waters. It involves the development and facilitation of maritime matters and also ensures maritime safety security and environmental compliance. 3. Land Transport Sector: This unit of the DoT is responsible for the integrated transport division which looks at the various elements of land transportation and supervises them. 4. Support Services: The support services sector provides the specialised functions that the DoT needs for the development of its plans and attainment of its objectives. Due to the unique and distinct demands of the DoT, the support services need to be provided in-house. The support services include Procurement & Contract, Account & Finance, Human Resource, Administrative Affairs, ICT, Strategic Planning, Legal, Public Relations and Organisational Development amongst others. These core units form the internal structures of the DoT. They are tasked with the attainment of the strategies and the plans of the DoT. They include the internal core and through them, all the plans and objectives can be attained by the top-management of DoT. 1.3 Elements of the DoT's Strategic Plan According to the DoT website, the following plans form the core and centre of the Department of Transport's Strategy : 1. Streamline the Department of Transport: Under take changes that provide efficient and effective administration and attainment of plans through modernisation. The streamlining is done through policy and strategic planning as well as regulation as well as programs for the attainment of strategic objectives in Aviation, Maritime, Public Transport, Road Safety and Highway Management. 2. Formulate Workable Policies and Plans: This will involve the definition of practical and realistic plans and policies that will be implemented by the Department in the various units. This will be done by the identification of Key Performance Indicators and targets. 3. Oversight and Accountability of Departments: Undertake integrated planning and performance management in all the strategic business units of the DoT. Undertake internal audit to identify the progress made by each department from time to time. 4. Reporting and Measurement: The Department will undertake the collation of annual reports on the activities of each sub-unit. This will provide the background for further planning and improvements throughout the transport sector of Abu Dhabi. 5. Expansion of the Etihad Airlines and Abu Dhabi International Airport: This involves the attainment of the expansion drive launched in 2003 to improve the Etihad Airlines and promote tourism and business within Abu Dhabi. The development plan seeks to ensure that Etihad flies to 70 destinations and carries 20 million passengers by 2018. The DoT committee on the Etihad Airlines needs to ensure that this plan is attained. Also, the May 2005 plan for the injection of $7bn to expand the Abu Dhabi International Airport is under the direct supervision of the DoT and they will need to see to the expansion of the infrastructure and runway according to the terms of the development plan. 6. Creation of World-Class and Integrated Sea Ports: The Abu Dhabi Seaports Authority (ADSA) seek to work with the partners in Dubai to create an seaport that enhances the trading position of the UAE. 7. Streamlining Public Transport: The current laws for the improvement of public transportation (Law 19) of 2006 gives way for the improvement of the taxi and bus services of Abu Dhabi. The DoT needs to ensure that all those laws are attained and the ends of those laws are met by all relevant stakeholders 2.0 Analysis of the Progress of the DoT's Strategy The business strategy of an organisation can best be understood by applying various tools to examine the environment within which the organisation operates (Stern 8). Through the analytical tools laid down in strategic management, important examinations of relevant factors can help to analyse and evaluate corporate strategy (Popkova 17). With this in mind, the strategy of the Department of Transport can be examined in relation to environmental factors which can be analysed through several tools. 2.1 Strategic Audit and Analysis of the DoT's External Environment (PESTEL) Johnson, Scholes & Whittington identify that the primary method of analysing the external environment within which an organisation operates is through the use of PESTEL. PESTEL involves the evaluation of the Political, Economic, Social, Technological, Environmental and Legal developments relevant to the strategy of a given business. The Department of Transport in Abu Dhabi operates within the jurisdiction of the leadership of Abu Dhabi which falls into the wider scope of the United Arab Emirates. The DoT also cooperates with many international and regional players like the Gulf Regional grouping, GCC and many other international organisations. Political His Excellency Sheikh Khalifa bin Zayed Al Nahyan, the Ruler of Abu Dhabi and President of the United Arab Emirate has shown his unconditional support for the Department of Transport. He has repeatedly stated that the building of a sustainable economy in Abu Dhabi and the United Arab Emirates is his priority. The Chairman of the Department of Transport, HE Abdullah Rashid Al Otaiba is a member of the Executive Council of Abu Dhabi which acts as the Executive Arm and cabinet of the Abu Dhabi Emirate. Due to this, the needs and expectations of the Department of Transport is an integral part of the political plans of the plans of the government of Abu Dhabi. This means that the needs of the DoT are considered in all decisions. This is in contrast to most Western nations where the government makes independent decisions and public service agencies react accordingly. The centralised nature of the Abu Dhabi political system ensures that every important component of the DoT gets the relevant attention in all decision making process. Economic In 2011, the UAE produced approximately 2.5 million barrels per day of crude oil (International Energy Agency). This means that Abu Dhabi met its major financial obligations. The government's plans to diversify the economy in wait for the exhaustion of Abu Dhabi's petroleum resources puts the expansion of transportation infrastructure at the top of the nation's priority list. This led to the allocation of funds for the expansion of transportation which kept the Department of Transport in a privileged position. Social The Dubai International Airport served about 9.02 million passengers in 2008, ten years away from the 20 million mark estimated for 2018 (Abu Dhabi International Airport). This implies that the plan of attracting more tourists and business partners is close to attainment. This shows an annual increase of about 30% per annum and indicates that the plan and objectives are truly in sight. The new runway was opened and the capacity of the Abu Dhabi Airport has increased to 12 million. This confirms the attainment of plans and strategic objectives. The DoT bus service is also in good form. The zero-bus fare policy which was in force until the end of 2008 increased the number of users of the bus service. Currently, there are many positive elements and response to the plans and objectives of the general public transport system Technological The Department of Transport has relied heavily on the most advanced technology from key manufacturers in USA, UK, Japan and other parts of the world. The 2030 Surface Transport Master Plan for 2030 outlines sophisticated systems and means to boost transportation (Abu Dhabi STMP). The Department's procurement system ensures that a strong emphasis is laid on the quality and efficiency of technology that is chosen in each and every contract. Environmental Environmental matters lie at the heart of Abu Dhabi's transportation expansion policy. The Department maintains a strong environmental compliance unit and there is serious environmental auditing from the national environmental authorities. The joint partnership and supervision means that the various units of the Department remains compliant to the relevant environmental standards. Legal The Department of Transport is compliant to the decrees and laws of the Executive Authority of Abu Dhabi. This means that the laws on how the Department must interact with other stakeholders are the main point of concern. 2.2 Stakeholder Analysis & Expectations A stakeholder is an entity that affects or is affected by the activities of an organisation (Freeman 1). The main stakeholders of the Department of Transport includes those entities and organisations that are involved in the transportation industry of Abu Dhabi. They include: 1. The Government of Abu Dhabi: A royal decree of the rulers established the Department of Transport. The government's policies and propositions are the core principles that affect the operations of the DoT. This therefore places the DoT under the direct control and influence of the government. 2. Regional Partners: Regional bodies influence the decisions of the government of Abu Dhabi and the DoT. Regional bodies like the Corporation Council for Arab States of the Gulf (GCC) provide a framework within which Abu Dhabi's government operates. Also, the DoT needs to co-operate with other players like the DoT of Dubai, other Emirates and other Gulf countries to ensure compliance and adherence to common goals and ideas. 3. International Partners: Abu Dhabi's expansion of transportation systems and infrastructure is strongly influenced by a vision to attract foreign investors. The DoT therefore needs to remain sensitive to the demands and expectations of important international partners who are likely to benefit from the transport projects. 4. Transport Agencies: This include public and private users of the transportation infrastructures like the Etihad Airlines and other international airlines like Emirates Airlines. Other transport agencies like Shipping companies, bus companies and taxis form a major part of the stakeholder matrix. 5. Staff of DoT: The employees of the DoT are a major stakeholder group. They carry out the function of the DoT. They form a major force that determine the extent to which the objectives of the Department will be met. In return, they expect to be paid and compensated by the DoT for their effort and contribution to the DoT. 6. Contractors: The external technical service providers like road contractors, civil engineering firms, electrical companies, logistics providers form an important stakeholder group. They provide the expertise, equipment and resources for the completion of various projects of the DoT. 7. Public: This represents the members of the Abu Dhabi society who use the transport infrastructure created by the DoT. They include the members of the Abu Dhabi society, people who come in to transact businesses. In the wider sense, this class of stakeholders include the unborn inhabitants of Abu Dhabi and even plants and animals that can be affected by the transportation plans of the DoT. Although this group may not be fully represented, they are an important stakeholder group. 2.3Analysis of Organisational Position (SWOT) The SWOT analysis provides the Strengths and Opportunities of a Business as well as the Weaknesses and Threats that the organisation is open to. Strengths 1. Government Support and Authority 2. Skilled Staff and hired consultants. 3. Strong financial position. 4. Growth of the Economy. 5. Perceived importance of the transport industry. 6. Strong and reliable development partners. Weaknesses 1. Requirement of international, cultural and language exposure for staff of DoT. 2. The excessive growth of undocumented immigrants. Opportunities 1. Government Support provides numerous exemptions and strong support from the state. 2, The Staff strength provides a great opportunity for the optimization of resources by the department. 3. The strong financial position that the DoT enjoys ensures that it attains most of its objectives fairly easily. 4. The rapid growth of the Abu Dhabi economy ensures that the Emirate requires more expansion of its transport network thereby making the DoT more useful to the Emirate. 5. The importance given to the DoT by the government means that it will continue to remain an important part of the nation's economic plans. 6. The presence of reliable and efficient development partners ensure that the department attains its objectives in a much more certain manner. Threats 1. The need for cultural and international awareness could be a disadvantage in the integration of the DoT's activities with other international partners. 2. The increase in the number of immigrants from the Indian sub-continent and other parts of the world like Africa makes it difficult for the DoT to plan to meet its actual objectives. This is due to statistical lapses faced by the Department. 3 Evaluation of Strategic Options The different circumstances provide different strategic options available to every business at any given point in time. The case of DoT provides a number of options under the major headings of the operations of the DoT. The TOWS matrix can be applied in the case of DoT to identify the main strategic alternatives. Opportunities - Expansion policies and drives that are being carried out gives DoT numerous options for growth. Threats - Internationalization could be problematic for DoT staff. - Population growth could lead to pressure on transport services. Strengths - Government's support - Strong financial position - Skilled staff and hired consultants - Growth of economy - Perceived importance of transportation to the economy. - Reliable development partners. - Optimize the use of government support and get the best of resources for operations - Train and retrain staff on the job to enable them to acquire international standards. - Streamline operations and activities of the DoT to meet international standards gradually - Increase online outlets and advertising. - Establish new branches and arrangements in foreign markets - Encourage government to sponsor exchange programs and secondment of DoT staff members. - Lobby for the government to institute proper documentation of foreigners and control of illegal immigrants into Abu Dhabi. Weaknesses - Cultural and international limitation of staff. - Growth of undocumented illegal immigrants. - Ensure a strong balance between expansion and education of DoT employees. - Try to streamline operations of DoT to ensure international tolerance and plan for foreigners - Institute a gradualist approach for the internationalization of DoT staff members. - Streamline activities of DoT with other international partners. 3.1 Alternative Strategic Options 1. Streamlining of the DoT's activities: There seem to be the choice between local standards which could be enhanced above other key global players. There is also the option of going by Gulf standards only. A third option is to go by global standards. 2. Integrative Planning: There could be a unitary planning base that would be made up of experts chosen from reputable organisations around the world. There is another option of providing a stakeholder based integrative planning that will involve a democratic choice of options in planning affairs for the DoT. 3. Internal Audit Capacity: The DoT could groom in-house internal auditors or get external auditors to undertake the audit of operations. 4. Expansion of the Etihad Airlines: Use of a specialised method for the expansion or adhere to universal standards. 5. Seaport Expansion: Provide a high degree of autonomy to the port authorities or centralise the function and control it from within the DoT. 6. Public Transport: A choice between privatisation or public control of all unions. Evaluation and Justification of Strategic Options After examination and evaluations, I will suggest that the DoT chooses global standards in the standardisation of transport activities in Abu Dhabi. Instead of isolated and localised standards, I will elect for the institution of higher quality activities where that can be attained in an international context. In terms of integrative planning, the DoT will have a best option of undertaking unitary planning led by experts hired from world-class institutions. Their careful planning will be more beneficial than public views only. Such views must only be incorporated where necessary. The internal audit function needs to remain external to ensure a high degree of independence and curb familiarity. Etihad's expansion should follow a specialised method of expansion. This will ensure that it lives above the competition on the global markets. The Seaport should also be given a higher degree of centralised supervision and control. The public transport system should however be placed under private ownership but it must be given strict public supervision. Works Cited Abu Dhabi International Airport. Welcome to the Abu Dhabi International Airport. 2012. Web. . March 25, 2012. Abu Dhabi STMP. Background. 2011. Web. . March 25, 2012. Freeman, Evans. Stakeholder Analysis. Hoboken, NJ: John Wiley & Sons Publishing. 2004. Print. International Energy Agency. "UAE Crude Oil Supply 4 year overlay". Oil Market Report. 2011. Web. . March 25, 2012. Johnson Gerry, Scholes Kevan & Whittington Richard. Exploring Corporate Strategy. Financial Times Prentice Hall. 2005. Print. Popkova Svetlana. Business Analysis. Berlin: Springer Verlag. 2010. Print. Stern Philip. Strategic Planning. Mason, OH: Cengage. 2008. Print. Read More