Change in Saudi Basic Industries - Case Study Example

Date Saudi Basic Industries The Saudi Basic Industries group of industries the leading company in Saudi Arabia. It has the highest number of shareholders, controlling the country stock market. The company has the largest production of chemicals and metals in Saudi Arabia. It was established in the year 1953. The company has developed to be one of the biggest companies. It was first established in 1976. In its area of specialization, the company is the third largest in the word. The Saudi Arabian government controls 70% of the share. 70% is a significant proportionate meaning that the government has the control over the company. The private sector controls only 30% of the company’s shares (Prince Saud, 2014). Later the company acquired Huntsman petrol chemicals, a company based in UK. The company is undertaking expansion strategy, where it is investing $20 (Wilson, 2001). Why choose SABIC. The company has put measures, where the motivation of employees is paramount. An enabling environment is in place. With a proper workplace relations are enhanced, one is comfortable dealing with anyone in the company that brings productivity. Integrity framework has also been put in place. Resources are assumed to be scarce, and it is our responsibility, therefore, to ensure we fully use the so as to maximize on profitability (economics). The company is much aware of the view, so the management has put in measures of avoiding financial leakages. Client relationship has been enhanced meaning that trust is not a problem. The majority of Saudi Arabia has an account in the man, saying that they have embraced it as part of the change (Jasinka-Walc et al, 2015). The need for change The Company being the largest in Saudi Arabia has to put measures of enhancing continuity. A significant group will result in immense production. The company is going to face both the economies of scale and the diseconomies of scale. Wastages may come up due to the problems associated with running a big group. The external environment is also going to affect the company, take an instance of the high corporate taxes that will come up. High profits that the company is making will act as an attractive mechanism, giving way to other firms to come and invest in the petrol chemical sector postulated by the head of human resource (Said Bin 2015). It is good for the company to practice change management. Change management is highly considered; rigidity to old measures may contribute to lower performance. What are the challenges Saudi basic industries? Culture issue was one of the biggest problems that faced the company. The Middle East has many tribes, and many tribes come in, therefore, the company has to be careful in marketing. Cultural awareness is important when designing marketing strategies (Jasinka-Walc, 2015). Communication is also a discouraging factor. There exist a language gap between the employees and the client making work very difficult. The language barrier is controlled by hiring employees in the native country of operation. Where activities are based on Europe, it will the residents. The gap of the language barrier is filled through the strategy. Corruption and untrustworthiness are also a limiting factor in Saudi essential industries. The employees feel that they are being undermined. The kind of unhealthy relationship contributed negatively to the transformative change. Measures of change Change is inevitable. There is a need to keep diversifying the company’s product. It doesn’t necessarily mean producing other product but includes competing globally with other multinational corporation. The change will involve a proper coordination between the management and the employees. There must exist a mutual understanding between the management and the subordinates. Change is a process (Williams 1975). Anybody in the group must play a part in building proper coordination for the better productivity. The seniors were to supervise the junior employees. Strategies for enhancing change. Change requires both time and money. During the process of change, the company was advised by its financial consultant on the need to invest a big portion of its budget on this process. The employees were well paid. Notably the salaries went up by 20%. New contract forms were signed, and, there was a reshuffling of various departments. Motivation led to better productivity it very easy for the shift. 3 stage model of change. The theory of change is common to every company. The duty of the top Management is to formulate the best techniques for an easier transition. Handling of these changes depends on the character of the employee. The top leadership supervises the juniors. Kurt Lewin came up with a model involving 3 stage model (unfreeze, change, refreeze).Using an example of the national commercial bank that is the leading commercial bank in Saudi Arabia. The three-stage model can show how change can be managed. The first step is unfreezing, where the corporation realizes that change is necessary. The Advantage plus the disadvantages realized. An official discussion is carried on by the top management. The employees are informed of the benefits of change and a picture of results. Communication is necessary. The employees should be educated (Kotter, 1996). A picture of what is required to be done should be given. The conviction and the desire by the employees to undertake various duties accorded should be paramount. Work should be organized into different departments. The operators should beware of their field and performance contract clearly outline and signed against The second step in this model is change. Change is the most vital substance of the whole model. Communication and timing are an important factor that should be put into consideration. The manager has to be cautious about the timing of the change (Lewin,1951). The best time it can happen is when everyone is aware of what is going on. The change brought into action should be that which the employees and the client love and appreciate it. There should be bureaucracy, meaning everything should be with the utmost good faith at heart. The third step of the three-stage model is refreezing. Refreezing happens after a change has occurred. That is, and the implementation is over and the system is in place. After this, now the company can relax and watch the system run the business. Refreezing can take permanent or temporary depending on the results. If all doesn’t turn up well, then it is the duty of the management to contain the situation fast. If not then the management can sit back and relax Training the employees. The company following the transformative process had to train employees. It was done as very many things had now come up in the organization. A new brand had been developed. The brand simply was to give a different outlook. The new outlook in the short run instilled faith on the customers and the employees according to the then corporate director (Mohamed, 2012). Training can be formal or informal way. The official way is where the company through the human resource department trains the employees on new ways in which the company will operate. It s implies that no classes are taken but rather the employees observe the new trends of the business and embrace it. Remember this is a multinational corporation, any employee working in the said company has to be disciplined and with a passion for being the best in operation and research (Mubarak, 2015). The three-stage model will be reinforced by the use of training for quicker results. The national commercial bank put this in place. Training made the adjustments quicker and the transformative process swift and efficient. Training acts as a reinforcement of the three-stage model. Should wage be increased? Motivation is also crucial as we try to give both the intrinsic and extrinsic benefits. When a company is undergoing some transformation change, there are many things happening in the enterprise. There will be new duties and tasks to be carried on by the employees. By having operations, it means productivity will also rise. The employees need to be motivated in return by paying them good salaries. Motivation is vital when it come to the transformative process. In the Saudi underlying company, for example, the employees got a payment increase by 20% that paid off well as there was motivation. The revenue of the company shot up with over $ 230,000 after the transformative year 2012. How can operations be enhanced? The company maintained the improved state of operation through the following. One the company laid a structure on how the salaries would be retained and increased. The employees were required to sign performance contract. The company being multinational corporation had no room for errors therefore everything was under strict control. Performance appraisals were maintained as the employees had a duty of being more accountable. Working hours were reduced which in return lead to higher productivity [Human resource department]. The same case can be applied by other companies to sustain their development after a transformative process. The leadership of any corporation has to put stringent measures. The policies formulated have to be in the mind of the employees. The employees also have to carry themselves in the way the brand of the company expects. The company capital is in Jeddah Saudi Arabia. The largest population here is Muslim. The board of the director wants to formulate a brand where it has a whole world outlook. To have that outlook, everyone must go against the customs and norm of the company. It is notable that particular behavior must be put to enhance productivity. Accountability should be put to promote productivity. There should be a proper coordination of events and management of the highest caliber. Through the measures formulated transformative process will be achieved, and then sustainable growth will be in place. Summary The transformative process as realized, in the case of Saudi Basic Company, is a gradual process. The company profitability cannot be boosted in a day either but requires the continuous formulation of policy. The right policy that suits the business will lead to higher productivity. Productivity will result in growth. Systems should be in place, a clear blueprint formulated. Researches done in the past has to be kept in place, researchers give a more sophisticated insight of what has been happening. Take an example 3 stage transformative model. The insight obtained from the model is applicable to any company. Many say that it is very simple but even with its simplicity much can be obtained from it for the sake of a business. Branding and follow up has been discussed in the text. Explicit measures that promote efficiency should be put into action for the sake of the company. There should be no laxity, and the timing plus communication should be well thought off. From the example of the Saudi Basic company, I think the performance appraisal y discourages productivity. The best way to enhance quality is by giving the employees the free will to do what is correct. I think it should be done differently from the example of the commercial bank. In conclusion, it can be noted any company can experience growth provided a proper mechanism in place. Transformative roles are paramount and should be taken very seriously. Employee spirit has to be kept high by ensuring that everyone is paid well and equitably. 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