Part 1: Company Selection and Analysis:
Introduction
The company selected for our management analysis is the Saudi Arabia’s National Oil Company, Saudi Aramco. This is a company that does its operations by doing an exploration and also producing of petroleum products. Moreover, the firm has a fully integrated refining plant that works in collaboration with the marketing department of the company to ensure that customers are aware of their products. The company was founded in the late 1930s after Saudi Arabia became a concerted nation ("Saudi Aramco - Profile"). After the unification was successful, around 1933, the Government was able to grant the Standard Oil of California a charter that led to the recognition of oil as a very vital revenue source in the Arabian side thus resulting in the formation of the firm. The Californian company, which was the predecessor to Chevron, formed a merger with other oil-related companies. From this mergers, a firm known as Aramco – the Arabian American Oil Company was founded.
This was now the beginning of a new era in the Saudi Arabia since the headquarters for the newly formed mergers was set up in Dhahran. Since then, things have been on a fast and progressive move since the large-scale exploitation of the product, which is oil, has led to massive exportation scales by the company.
Saudi Aramco is a firm that values prosperous and healthy practices regarding how they conduct their business that is associated with the marketing of oil and its products. These healthy business practices have made the company very successful and a world leading firm when it comes to the energy and chemical companies. This is quite an achievement for the company having started as a simple mergers business in the late 1930s. Moreover, the company believes that energy is such a crucial resources to human lives especially in the current world. The company has the belief that it is through energy that our lives become mobile and productive in nature. By this, Saudi Aramco firm is aspired to ensure that people across the globe explore the world by using their sources of energy to develop new forms of technology and also new forms of medicine.
Vision of Saudi Aramco:
The company believes that energy is a resource that offers us the opportunity to do most of the things in our lives. The company is geared towards ensuring that the full potential for a majority of the energy they produce is fully optimized. It is through such kind of energy that intellectual states are developed, and creativity is enhanced to facilitate a proper evolving economy. The company has the vision to ensure that in the decades to come, the supply of energy will be stepped up by diversifying a majority of their sources to meet the needs of the world growing population. The firm knows it that populations keep rising, and it’s up to them to ensure that such diversification is put into place to ensure the growing populations are well handled. The company believes it that by making such choices that are smart in nature, they will be able to capitalize on such kind of significant resources so that energy resources remain available to the growing population.
Lastly, the company is focussed on ensuring that the investments they make related to energy are of significant value. Moreover, serving human development is at the heart of this firm, and this makes it their primary reason for such expansions in oil provision. On a daily basis, Saudi Aramco Company tries to come up with long-lasting solutions to most of the society challenges. It is through energy that children can go to school and acquire the necessary skills that foster the growth of a majority of the economy.
Firms Current Strategic Plans & Direction:
Saudi Aramco is a company that has got a proper implemented strategic plan to assure the world of consistency in energy supply. The company is meant to shape its business. Through this strategy, the company is supposed to ensure that the management put in place will be ready to optimize the available resources intellectually for the future generation thus assuring a perpetual existence of the product. Moreover, the company is meant to ensure an enabling of the kingdom. With this, the company is expected to make sure that it works alongside the stakeholders and shareholders to ensure that proper decisions are made to ensure that the future is safe for the large population. Furthermore, the company is meant to enforce optimization of the available resources. With this strategy, the company’s management is meant to ensure that all resources available in the company, be it human resources or even operational resources, are used to be very best to ensure that wastage is not pre-eminent (Anderson p.160). Lastly, the company has a strategy to ensure that their capabilities are well built. By this, the firm’s management believes that it has the best management to ensure that the resources in the company are well-utilized, and the involvement of the stakeholders is done in an efficient manner to safeguard the future for people who will truly require the energy for most of their daily activities.
Saudi Aramco Firm’s Culture:
The company, having a group of over 500 experienced professionals, believes in being committed to their day-to-day work to bring prosperity to the organization. Moreover, the firm has it in recruiting experienced engineers into their departments, scientists, and geologists that are fully qualified to hold their respective positions. By recruiting such workmanship, Saudi Aramco embraces the culture of developing careers and motivation of young recruits who are informed and directed in the right way with an aim of instilling corporate values into them. The company’s culture is built on top of excellence, accountability, citizenship, safety and integrity ("Our Culture - Aramco Services Company"). This culture is meant to make them stand in the corporate world as a modern running entity as other firms do.
Firms Structure and Organization:
The Saudi Aramco firm has a Board of Directors, who are the major stewards of the company. It is through them that a set of activities are controlled including conducting business affairs, ensuring that the company mission and vision are followed by employing the right strategies. Furthermore, the elected Board of Directors is meant to ensure that they assess the risks that are presented to the company and enforce the right mechanisms even to handle opportunities that present themselves to the company. The Board of the company is composed of ministers from the Saudi Arabian government, the Saudi Aramco President, The Chief Executive Officer (CEO) of Saudi Aramco, the head of Saudi Academic Institutions and Senior officials from the oil, gas and finance industries.
SWOT Analysis:
SWOT analysis is very crucial since it does provide an all-inclusive image of the company and its history in relation to its business structure, budgetary structure, corporate strategy, and operations that are based on the company’s management. The Strengths of Saudi Aramco include its high rate regarding growth and a skilled set of the labor force. The weaknesses that encompass the company include that tax structures imposed on it by the government, loans it runs and debts that are given by them, management of smaller business units and the competitive market at large. There are very major opportunities that present themselves to the company though the global market is considered the greatest and most substantial opportunity that presents itself to the company. Lastly, Saudi Aramco is faced by various threats which include cash flow, the fluctuation in prices of their products, regulations that are posed to them by the government and the increased rates of interest. By performing such an analysis, you can understand the fiscal capabilities of Saudi Aramco firm as a whole.
Part 2: Article Selection & Analysis:
Article Title: The Role of National and International Oil Companies in the Petroleum Industry
National Oil Companies are viewed to hold a majority of the reserves in most of the petroleum resources worldwide. These companies in most cases do not seem to follow the actual market principles but instead choose to hold other exploitation rights. A majority of these companies have ties with the government in meeting their objectives which may include exercising economic development and ensuring that energy security is exercised.
Saudi Aramco is not an exemption to this having part of their management board as government officials in Saudi Arabia. The importance of Saudi Aramco to countries like Japan is evident and is an issue that does not require to be emphasized. Regarding its organization, Saudi Aramco is doing so much regarding its management to have a stable supply of petroleum and oil resources to them. Through this, the Japanese Oil industry is expected to foster its business relation with the Saudi Aramco, which is a firm that can bring change to how the industry is enacted.
(Robert p.9) Goes ahead to insist that it is the SWOT matrix that provides a good approach to Saudi Aramco in having the right strategies as to how they can venture into the Japanese market and prosper without any issues regarding its management. Although Robert goes ahead and insists that the Japanese firms would provide high competition to Saudi Aramco especially to matters related to engineering and the expertise needed to ensure that operations are effectively done, the managers of Saudi Aramco are up to the challenge.
Works Cited:
Anderson Jr, Irvine H. Aramco, the United States, and Saudi Arabia: A study of the dynamics of foreign oil policy, 1933-1950. Princeton University Press, 2014.
"Saudi Aramco - Profile." Gulfoilandgas.com. N.p., 2016. Web. 12 May 2016.
Robert Pirong. "The Role of National and International Oil Companies In The Petroleum Industry." SSRN Electronic Journal n. pag. Web.
"Our Culture - Aramco Services Company." Aramcoservices.com. N.p., 2016. Web. 12 May 2016.
