Value Management at SABIC - Research Proposal Example

Introduction to the study Value Management (VM) refers to a structured and systematic process of decision making based on teams. Its principle objective is to achieve the best value from a project or a process through definition of the necessary functions so as to achieve the value objective as well as delivering those functions at a minimum cost (resource use or whole life cost), consistent with the required performance and value. VM takes place as a series of workshops held by stakeholders held at the key stages of project development or during review of a service or a process. VM is a team based, planned, flexible and directed by a VM facilitator who is independent and is consensus driven. The stakeholder’s workshops are usually short (usually six hours to 2 days) , highly structured and intense. The VM process usually works from top to bottom starting with the strategic goals and needs, not focusing on the symptoms but on the root causes. There is development of an early consensus between the key stakeholders on matters pertaining to the need for the service or the project, key functions, scope, deliverables and risks relating to the business objectives at large. There is exploration of innovation opportunities and there is development of the best available cost effective means of implementation. VM takes into consideration the project as a whole rather than the components and the process is substantiated by consensus. Selection of team members for the workshop is critical to success since it will ensure that all issues are addressed by people with the right balance of skills, judgment, knowledge and experience. Where certain stakeholders are not in a position to take part then, specific members of the team should be given the task to represent the interest of those stakeholders. The solutions that are derived are not imposed but rather are the decisions and outcomes of team members which mean that there is total ownership by the team as a whole which in turn improves the implementation prospects. Company overview SABIC is a public shareholding company based in Saudi Arabic which represents 22 percent of the Saudi stock market and also one of the five largest petrochemicals manufacturers in the world. SABIC was established in 1976 by Royal Decree to produce fertilizers, chemical and polymers. The Public investment fund (Saudi Government) holds 70% of SABIC’s share while the remaining 30% is held by private investors. The company is the Middle East largest in terms of market capitalization and most profitable public listed non- Oil Company where it has more than 33,000 employees worldwide. SABIC’s headquarters are situated in Riyadh, with industrial sites mainly in the Eastern Province in Dammam, in Yanbu Industrial City on the Red Sea and in Jubail Industrial City on the Arabian Gulf. SABIC Europe has three major petrochemical productions locations in Gelsenkirchen (Germany), Teesside (UK) and Geleen (The Netherlands) for the production, marketing and sale of hydrocarbons, polypropylene and polyethylene. The company has more than 2, 300 subordinates. SABIC Asia pacific ltd. is located in Singapore. The company is responsible for all sales and marketing activities in Asia. SABIC Innovative Plastics, launched in 2007, is a leading, global supplier of engineering thermoplastics with a 75-year history of breakthrough solutions that solve its customers’ most pressing challenges; it has six main compounding sites based in Ottawa, US, Spain, Netherlands, and Canada. Organizational structure: After the company’s restructuring in 2009, SABIC has six strategic business units (SBU): Performance Chemicals, Chemicals, Metals, Fertilizers, Innovative Plastics, and Polymers. The following organization chart illustrates SABIC’s SBU structure: Figure 1.1: SABIC Organizational structure Problem Statement The Methodology to Carrying Out the Study The methodology to be used would specifically seek to understand the roles of members of the board of directors in various companies, and especially those in Saudi Arabia. The study would not leave out other relevant companies in other countries as this would be crucial in providing sufficient information in the general operations of a company. The methodology would encompass instrument to gather information, the recording of the findings and the analysis of the information recorded. The instruments include questionnaires, observation and interviews. Instrument one: The Questionnaires The questionnaire method would be done to important parts of the operations in various organizations. Top managers and corporate executives would be issued with written questions and places to fill which guides them on how to go about answering the questions. If some of them do not understand what is required in the answering of questions, I would be in a position to be contacted so as to give guidelines. Saudi Arabian corporate organizations would be used as example and the guide to this research, even though, a number of the questionnaires would be distributed to some other organizations in a small number of other countries. The questions would focus on on requesting for information and importance of board of directors in organizations. Some of the questionnaires would be given to some members of various boards in various organizations about their roles, and whether they have been successful in the management of the organization’s affairs. They would also be asked about the roles of the shareholders in making key decisions. Instrument Two: Observation This tool may be regarded as though it cannot work, but observation can easily give information on how people in organizations hold board of directors. Observation would not be done in isolation, as informal questions would be used to determine whether the members of the board have contributed to the management of the organization which I have targeted. This observation strategy would be done in a manner that the respondents would not know that a particular study is being carried on them. Instrument Three: Interviews This tool is of utmost importance in this study since I would be in a position to obtain firsthand information from the people I will be seeking information from. Senior managers would be interviewed about their views in regard to the roles of members of the board of directors in the particular organization and whether the management holds them as important in strategy formulation. Questions would also target whether their operations such as recruitment is done in a fair manner. Questions would also be asked some of the members of the boards in various organizations and their roles noted. Read More