Discuss about the Engineering Management.
The operations in a company are based on certain organizational principles that are followed in order to maintain ethics and standards of operation. The principles contain certain guidelines regarding employee behavior and operation management. Generally, there are 14 principles that are followed for the management of the organization and the employees involved in it (Fahad, 2014). The terms of the principles are not same in all companies, rather different companies use different terms of the principles based on the operations and management requirements.
SABIC is an organization that has always valued the customers and have always aligned towards the requirements of the customer. Again, for making promises to the customer, the company analyzes the performance of the organization in the production and ensure that always, the best quality of products are sold to the customers. As a result, they have successfully built up a strong customer base and grown to be one of the most dependable organizations in the country. Moreover, there is a strong integrity among the employees of the organization that enhances their performances and growth of the organization in terms of business excellence. In this report, the organizational structure of SABIC (Saudi Arabia Basic Industries Corporation) has been analyzed and the management policies followed by the company have been discussed.
The chosen organization, SABIC (Saudi Arabia Basic Industries Corporation) is a chemicals manufacturing company based in Saudi Arabia. Prince Saud bin Abdullah bin Thenayan Al-Saud is the chairman of the company whereas the CEO is Yousef Al-Benyan. Based on the organizational principles, the company provides high fundings for technical research that will enhance the operations of the company. As the company has grown significantly with time, there are currently a large number of employees working them. In order to manage the behaviors and activities of the employees, the company follows the 14 principles of sound management.
Discussion of the 14 Principles
The company follows the 14 principles of strategic management that enables it to manage the employee behavior and operations as well as drives it towards organizational excellence. The 14 principles followed by the company are briefly discussed below.
Alignment – Although there are two approaches towards this principle, SABIC follows the strategy of alignment of employee mindset with the strategic direction prepared by the management team following the vision and values of the company. Accordingly, there are certain sub policies based on this principle that are as follows.
Values – Values is an important aspect of any organizational policy. According to this policy, the company follows a strict set of guidelines that set a standard of moral values for supporting the achievements and efforts of the workers and employees. The standards are set such that the company can gather a group of employees who are happy to work for the company and are willing to maximize their efforts to enhance the quality of the outputs (Galliers & Leidner, 2014). Moreover, the values allow the employees to excel in their duties to reach the organizational goals within any significant losses. SABIC also has a set of values that allow their employees to gain a huge number of benefits from the company based on the quality of their works.
Strategic Direction – A specific strategic direction is necessary in order to drive the organization towards a specific goal. Moreover, a strategic direction helps the employees to understand the exact strategic requirements of the company that in turn enables the employees to get committed to the organizational goals in order to make them successful. Again, a specific strategic direction implies that the company is moving in the right direction that encourages the employees to enhance their performance (Sarkis, De Bruijn & Zhu, 2013). Similarly, SABIC has a specific set of strategic ideas and directions. Accordingly, they have notified their employees regarding the strategic direction and the employees have enhanced their performance in order to reach the organizational goals following the specified strategic direction.
Value Chain – A value chain is a set of organizational guidelines that require all the departments including promotion, sales, marketing and development to work as a chain for enhanced operational output. In any organization, the departments act as a chain and hence, the performance of a department depends on the output of its predecessor. The departmental excellence that helps the enhancement of performance of the next department helps in enhancing the value chain of the organization (Skibniewski, 2015). SABIC has a specific set of guidelines for maintaining the value chain of the organization. As the company deals with the production of chemical products, there are different departments for production, supply, marketing and sales. Unless there was a specific value chain, the company would not have been able to grow and become one of the largest companies in Saudi Arabia.
Support Functions – The value chain of an organization will not be successful without support functions that help running of the connected departments of the organization. The support functions help in the communication between two departments as well as allow one department to check progress of the other so that it can function accordingly (Völter et al., 2013). For example, the support function helps in communication between accounting and information department so that the accounting details are promptly recorded by the information department. In SABIC, support functions have been implemented in order to connect the departments of the value chain so that the operations are executed based on the value chain and supported by the support functions.
Goals and Measures – Alignment between performance measures and organizational goals is an important aspect in order to enhance the operational outputs and performance. The performance measures are used to analyze the operational output based on the employees’ performances and the organizational goals are set based on the performance measures. If the organizational goals are not set according to the performance measures, the goals become unrealistic and hence, cannot be met with the existing performance output of the employees (Galliers & Leidner, 2014). SABIC is an organization that has reached operational excellence based on the high performance measure of the employees. However, initially, SABIC did not follow the alignment between the goals and measures and hence, some unrealistic goals was set by the company that could not be met by the employees. Gradually, they aligned their goals based on the performance measures and slowly grew to be a top business organization in the country.
Suppliers – Suppliers are important parts of business operation of a business organization that is mainly based on production. The production process requires certain resources and ingredients that are procured from the suppliers. The quality of the finished product also depends on the quality of the ingredients provided by the suppliers. Hence, it is necessary for the organization to align with the suppliers’ benefits in order to ensure the suppliers provide them with the best possible materials at the best possible prices that benefit both the supplier and the company (Sarkis, De Bruijn & Zhu, 2013). SABIC maintains a healthy relationship with the regular suppliers who provide materials for the chemical manufacture of SABIC. SABIC also provides long term contracts to the suppliers that provide best quality of materials in order to align towards a partnership with the suppliers.
Customers – Customers are the most important factors in determining the business success of an organization. Unless the customers are satisfied with the products of the company, it can never achieve success in business. Moreover, lack of customer alignment results in loss of competitiveness in the market. Hence, the organization must ensure they meet the customer requirements and provide the best quality products so that the customers are satisfied and new customers gather interest in dealing with the company (Skibniewski, 2015). SABIC has always aligned towards customer requirements meaning they take the customer requirements very seriously. In addition to their business set up, they have an additional customer review system where the customers are to write what do they expect from the company and which products are to be modified and placed at a more affordable price. Based on these reviews, the company modifies the production of the goods and provides best quality products to the customer (Völter et al., 2013). As a result, the company has grown to be one of the leaders in the Saudi Arabian market.
Rewards – Although rewards are not the most necessary aspects of an organization operation, rewards ensure the employees, suppliers and customers are motivated to be associated with the organization and always support the organizational needs. Rewards for employees ensure the employees are motivated enough to enhance their performances in the organization. Rewards for suppliers will ensure the suppliers always provide best quality materials. Finally, customer rewards in terms of discounts, loyalty offers and others ensure they remain associated and loyal customers of the organizations (Skibniewski, 2015). SABIC has rewards structure at various levels that ensure all the associates involved with the organization are motivated enough to drive the organization towards business excellence.
Distributed Leadership – Distributed leadership often acts as the most beneficial aspect for the excellence of a large organization. Single leadership may not be successful when the one leader runs out of ideas. Hence, distributed leadership helps in continuous inflow of ideas and outcomes that are decided from the leadership team meeting. SABIC has a distributed leadership structure that enables the organization to constantly apply new strategies in the business system. SABIC has several working departments in each of which, there is a departmental head. All the departmental heads are the members of a common management team (Galliers & Leidner, 2014). Once every week, all the departmental heads meet together to discuss about the organizational policies and strategies and they all propose new ideas that are being assorted to prepare a common organizational strategy. Due to the variety of the ideas, the organization does not have to rely on a vague and orthodox organizational strategy and hence, gains significant market competitiveness.
Integration of Effort – Most of the leading organizations in the world have taken care in redefining the scope and work functions of all their employees in order to unite them reap results of joint effort. It has been seen in many organizations that there are “silo” mentality and functional barriers that have led to the lack of unity among the workers and the employees. As a result, the outcomes and productions have been dealt with a serious blow. However, at SABIC, there are no such functional barrier. The employees have their own independence and their duties are segmented and distributed among a number of employees so that they can work together and enhance their performances (Sarkis, De Bruijn & Zhu, 2013). This in turn enhances the quality of the output that is required by the company. Moreover, the work scope at SABIC is such that there is a sense of purpose and a strategic direction among the employees so that they motivated to produce maximum effort for their duties in the organization.
Out Front – Being out front is defined as the organizational status when it leads in literally every fields of business in the market. In order to be out front in the market, an organization must be the leading member in terms of customer satisfaction, market competitiveness, environmental policies, maintenance of industry standards, quality of products or services, design of the products and others (Völter et al., 2013). Judging by this factor, SABIC is clearly the leader in Saudi Arabian market. As the most leading company in the country, SABIC leads in the quality and prices of products, competitiveness in the market as well as all other aspects of their business. Hence, it can be said that SABIC has a strong out front stance in the market.
Up Front – The main principle of up front is the honesty and integrity of the organization in terms of business. According to this principle, no business organization should make unrealistic promises to the customer they know they cannot meet. The promises must be based on organizational capacity and output performance. Moreover, integrity inside the organization is necessary in order to ensure the customers that the organization is running in the right direction and they should be encouraged to continue their association with the organization. SABIC is an organization that has always valued the customers and have always aligned towards the requirements of the customer. Again, for making promises to the customer, the company analyzes the performance of the organization in the production and ensure that always, the best quality of products are sold to the customers. As a result, they have successfully built up a strong customer base and grown to be one of the most dependable organizations in the country. Moreover, there is a strong integrity among the employees of the organization that enhances their performances and growth of the organization in terms of business excellence.
Resourcing the Medium Term – Instead of emphasizing on short term benefits and developments, SABIC promotes developments that will ultimately benefit them in the long run. They have certain sets of policies that define the long term benefits and the reasons why the shareholders should not look for immediate monetary benefits (Skibniewski, 2015). This also helps in increasing sustainability of the company.
Time Based – SABIC is strict in terms of production and delivery time. Since SABIC values the importance of the customers, it is always ready to deliver the products to the customers within a fixed deadline. Moreover, SABIC has also appointed sufficient workers so that there are no delays in the production of the deliverable goods.
Bias for Action – Every good organization should have bias for actions that will help them in the long run (Sarkis, De Bruijn & Zhu, 2013). Similarly, SABIC is always ready to take bias actions that are beneficial for them even if it means some extra expenses or appointment of new employees.
Learning Focus – Learning promoted addition of new ideas. SABIC has ensured that there is a learning culture within the organization so that the employees can always learn for experiences and mistakes and use them in enhancing their future performances and teach the newcomers so that they can also work according to the company’s standards.
Discipline – Discipline is important in every sector including business, education, sports and others. SABIC does not allow any kind of chaos within the organization (Galliers & Leidner, 2014). Rather, it has taken suitable steps for standardization of the organization that has no place for anarchy or chaos. The employees have to follow a certain set of standards and rules and maintain discipline of work and behavior within the organization.
Measurement and Publication – SABIC has sufficient resources for the measurement of the variable business parameters and publish them in forms of business reports. This helps the management team to keep tabs on the business progress of the organization and modify the business process in case something goes wrong.
Customer Value – SABIC has always respected and maintained customer values meaning they take the customer requirements very seriously. In addition to their business set up, they have an additional customer review system where the customers are to write what do they expect from the company and which products are to be modified and placed at a more affordable price. Based on these reviews, the company modifies the production of the goods and provides best quality products to the customer.
Capabilities Creation – In order to maintain sustainability, a company has to value its capabilities and invest in order to enhance these capabilities or create new capabilities. SABIC is yet to invest significantly in capabilities creation and mainly relies on the existing organizational capability.
Micro to Macro – SABIC has a distinct platform that connects the micro to macro – i.e. internal operations with the larger picture of organizational business (Amick et al., 2016). This has given the employees more exposure on the external activities of the organization so that they understand the organizational goals and the requirements that they have to meet.
Every large organization needs to maintain sustainability in order to survive in the market against other competitors as well as business related factors. SABIC has taken several steps and policies in order to maintain sustainability in the industry. SABIC has set a standard so that the company can gather a group of employees who are happy to work for the company and are willing to maximize their efforts to enhance the quality of the outputs. Moreover, the values allow the employees to excel in their duties to reach the organizational goals within any significant losses (Galliers & Leidner, 2014). Again, SABIC has a specific set of strategic ideas and directions. Accordingly, they have notified their employees regarding the strategic direction and the employees have enhanced their performance in order to reach the organizational goals following the specified strategic direction. SABIC also has another specific set of guidelines for maintaining the value chain of the organization. As the company deals with the production of chemical products, there are different departments for production, supply, marketing and sales. Unless there was a specific value chain, the company would not have been able to grow and become one of the largest companies in Saudi Arabia (Sarkis, De Bruijn & Zhu, 2013). SABIC is an organization that has reached operational excellence based on the high performance measure of the employees. However, initially, SABIC did not follow the alignment between the goals and measures and hence, some unrealistic goals was set by the company that could not be met by the employees. Gradually, they aligned their goals based on the performance measures and slowly grew to be a top business organization in the country. SABIC also maintains a healthy relationship with the regular suppliers who provide materials for the chemical manufacture of SABIC (Skibniewski, 2015). SABIC also provides long term contracts to the suppliers that provide best quality of materials in order to align towards a partnership with the suppliers. Again, SABIC has always aligned towards customer requirements meaning they take the customer requirements very seriously. In addition to their business set up, they have an additional customer review system where the customers are to write what do they expect from the company and which products are to be modified and placed at a more affordable price. Based on these reviews, the company modifies the production of the goods and provides best quality products to the customer (Amick et al., 2016). As a result, the company has grown to be one of the leaders in the Saudi Arabian market. SABIC has a distributed leadership structure that enables the organization to constantly apply new strategies in the business system. SABIC has several working departments in each of which, there is a departmental head. All the departmental heads are the members of a common management team. Once every week, all the departmental heads meet together to discuss about the organizational policies and strategies and they all propose new ideas that are being assorted to prepare a common organizational strategy. Furthermore, the work scope at SABIC is such that there is a sense of purpose and a strategic direction among the employees so that they motivated to produce maximum effort for their duties in the organization. SABIC leads in the quality and prices of products, competitiveness in the market as well as all other aspects of their business. All these factors and organizational policies help SABIC to maintain sustainability in the market as well as the industry.
In recent times, most of the immigrants that have moved to the Middle Eastern countries in search of jobs have complained that there is a lack of cross-cultural awareness and international environment in the organizations in these countries (Skibniewski, 2015). Due to religious restrictions and other cultural factors, these companies have lost a lot of valuable employees in the last few years. Having analyzed the reasons, SABIC has taken some measures in order to promote internalization of the organization. They have identified that without internationalization, the company will never be able to grow and spread beyond its native country and will lose competitiveness in the market (Lyons et al., 2016). Accordingly, SABIC has devised some set of guidelines that allow the employees to practice their own culture inside the organization boundaries. Moreover, they have allowed the organization to gain more international exposure by appointing foreign agents and employees who can bring sufficient information from other countries regarding global market conditions and business policies of different companies (Sarkis, De Bruijn & Zhu, 2013). From all these, SABIC can prepare a strategy path that helps them use internationalization as a mean for their global exposure and explore foreign markets as a potential new business area.
Although SABIC supports appointments of cross-cultural personnel in its ranks, there is a lack of cross-cultural awareness in the company, as in most other companies of the Middle East. All the countries of the Middle East follow one common religion and hence, do not have any policies regarding practice of other religions or cultural practices (Crowne, Cochran & Carpenter, 2014). They have a fixed of rules and regulations that must be followed by the people from other religion or cultures. This discourages a lot of people and foreign employees who are very few in SABIC. As a result, SABIC loses a lot of potential high performance employees (Galliers & Leidner, 2014). However, recently, SABIC has promoted cultural awareness among the employees and have revised their rules and guidelines regarding cultural practices in the organization. SABIC has recently implemented an international environment within the organization so that employees from other countries and cultures can enjoy their duties. This has also been an important factor beyond the rise of SABIC in the chemical products industry.
Based on the analysis of the organizational policies at SABIC and survey results, the following recommendations can be provided that will help the company to improve its management principles, practices and performance.
New Principles for Benefits of Employees – The company should prepare some policies that will benefit the employees. Addition of benefits encourages the employees to increase their association with the company and maximize their performances in order to boost productivity of the company.
Technical Upgrades and Employee Training – In order to advance with the age, the company needs to make significant technical upgrades. Technical upgrades significantly enhance the operational efficiency and gain market competitiveness. In order to maintain and run the technical upgrades correctly, the company should train the employees so that they can learn to manage the upgraded technical equipments in the right manner.
Cross-Cultural Awareness - SABIC should prepare another detailed set of guidelines that will allow the employees to practice their own culture freely inside the organization boundaries. Moreover, they should allow the organization to gain more international exposure by appointing foreign agents and employees who can bring sufficient information from other countries regarding global market conditions and business policies of different companies. This will only be possible if the company can increase its cross-cultural awareness.
Sustainability and Internationalisation – The company should promote policies that will help them maintain sustainability and implement internationalization in order to gain global exposure.
During preparation of the report and conducting the research, I faced a problem when I could not find sufficient information and internal policies of SABIC through literature survey and the internet. I only gathered a small amount of information and generic data that are mentioned in the websites and works of other researchers. In order to solve this challenge, I contacted with some senior officials at SABIC through emails and was granted with special permission to talk to them regarding their business policies and organizational standards. The senior boards members were extremely helpful towards me and the discussion with them helped me gather sufficient information for preparation of this report.
During preparation of this report, a lot of lessons have been learnt. Firstly, the existence of different organizational policies as well as certain management policy standards has been learnt. Secondly, the alignment of organizational policies with the general management standards have been learnt. The report has taught that in order to maintain a proper business function, an organization must have a suitable set of standards and guidelines that can lead them towards business and organizational excellence. Finally, it has been learnt that internationalization and cross-cultural awareness are two important factors that must be allowed by the organizations in order to gain significant growth and exposure into the global market.
Conclusion
From the analysis of the chosen organization, it has been seen that following certain sets of principles is an important aspect in order to promote organizational excellence of a company. The company follows the 14 principles of strategic management that enables it to manage the employee behavior and operations as well as drives it towards organizational excellence. Every large organization needs to maintain sustainability in order to survive in the market against other competitors as well as business related factors. SABIC has taken several steps and policies in order to maintain sustainability in the industry. SABIC has set a standard so that the company can gather a group of employees who are happy to work for the company and are willing to maximize their efforts to enhance the quality of the outputs. SABIC has also devised some set of guidelines that allow the employees to practice their own culture inside the organization boundaries. Moreover, they have allowed the organization to gain more international exposure by appointing foreign agents and employees who can bring sufficient information from other countries regarding global market conditions and b.usiness policies of different companies. SABIC is an organization that has always valued the customers and have always aligned towards the requirements of the customer. Again, for making promises to the customer, the company analyzes the performance of the organization in the production and ensure that always, the best quality of products are sold to the customers. As a result, they have successfully built up a strong customer base and grown to be one of the most dependable organizations in the country
References
Amick, B. C., Lee, H., Hogg-Johnson, S., Katz, J. N., Brouwer, S., Franche, R. L., & Bültmann, U. (2016). How do organizational policies and practices affect return to work and work role functioning following a musculoskeletal injury?. Journal of Occupational Rehabilitation, 1-12.
Crowne, K. A., Cochran, J., & Carpenter, C. E. (2014). Older-worker-friendly policies and affective organizational commitment. Organization Management Journal, 11(2), 62-73.
Fahad, M. (2014). Management evaluation using 14 principles of management.
Galliers, R. D., & Leidner, D. E. (2014). Strategic information management: challenges and strategies in managing information systems. Routledge.
Lyons, B. D., Hoffman, B. J., Bommer, W. H., Kennedy, C. L., & Hetrick, A. L. (2016). Off-duty deviance: Organizational policies and evidence for two prevention strategies. Journal of Applied Psychology, 101(4), 463.
Sarkis, J., De Bruijn, T., & Zhu, Q. (2013). Guest editorial: Sustainability in engineering Management—setting the foundation for the path forward. IEEE Transactions on Engineering Management, 60(2), 301-314.
Skibniewski, M. J. (2015). Research trends in information technology applications in construction safety engineering and management. Frontiers of engineering management, 1(3), 246-259.
Völter, M., Stahl, T., Bettin, J., Haase, A., & Helsen, S. (2013). Model-driven software development: technology, engineering, management. John Wiley & Sons.
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