Describe about the Global market by concentrating towards the strategic decision-making process?
Importance and Scope of this Assignment
To be a professional manager, it is essential to concentrate towards designing, operations and improvement related aspects for a company, which may ensure the clarity of the management operations. At the same time, appropriate operation management may also enhance the business competencies for a company within the competitive business environment. On the other hand, the strategic decision is also one of the most crucial constituents, which usually assist a company to make better decisions for future. In this context, Tomar and Reeves (2009) argued that outsourcing is one of the most essential aspects which usually assist an organisation to enhance its business performance. The term outsourcing signifies a specific process through which global organisations may transfer their goods and/ or services to the external country/ party for providing administrative services for that specific goods and/ services (Troaca and Bodislav, 2012).
British Petroleum (BP) is one of the renowned oil and gas manufacturing companies amid the globe. The company was established in the year 1908 and it has renamed as a BP plc in the year 2001. Over the years, the company has provided its estimated services in the global oil and gas industry. In this context, more specifically it can be claimed that BP has emphasised towards exploration as well as production, refining, distribution and marketing of petroleum, with an aim of enhancing the market share amid the operating market. At the same time, during the production of renewable energy the company also has remained conscious regarding the environment with an intention of ensuring its command among the competitive marketplace. According to the annual report of BP plc (2015), the company has enlisted its name in the ‘London Stock Exchange’ market as a constituent of ‘FTSE 100 Index’. Currently, more than 162,000 people are engaged in the operation of Royal Mail. According to the recent financial report, it is witnessed that the company has gained $3.8bn revenue during the financial year 2013-14. Moreover, the company has traded 1.7 million barrels refined oil/ day in the financial year 2013-14. Additionally, it can be also mentioned that approximately more than 85,000 people usually employed under the BP in around the globe.
Over the years, for ensuring and enhancing the business performance the company has established varied strategic alliances with the other foreign companies. Additionally the company also has concentrated and investigated on certain aspects such as costs, pricing power and logistic as well as supply chain management for ensuring its future growth and profitability prospects (BP plc, 2015).
In this particular assignment, the aim is to identify the factors that may influence the decision of the company in case of outsourcing and kept in-house. In this context, the study will aim to identify the five performance objectives of the BP. Simultaneously, the study will evaluate the risk involvement i.e. strategic decision making on the basis of evidence.
The strategy is one of the most crucial constituents for a company. The concept of strategy has been introduced in the business in the year 1960s, with an aim of enhancing the business performance and it has been also emerged in the business context as an intention of ensuring the long-term sustainability for an organisation. On the other hand, principles of operations management are considered as one of essential aspects for a company, which may influence internal and external aspects of a company. At the same time, it also may influence a company to meet the needs and expectations of the stakeholders. Thus, it can be stated that operations management is an integral part of an organisation’s strategy, which may assist a company to make better decisions for future (Tomar and Reeves, 2009).
The corporate level strategy is recognised as the chief level of strategy, which is usually used by the company with an aim of ensuring the long-term direction in the business context. More specifically, it can be also stated that through emphasising towards corporate level strategy an organisation may ensure the utmost utilisation of its resources in the operating marketplace. Moreover, the corporate level strategy is also used when a company comprises more than one business. In this regard, more specifically it can be stated that BP has more than one business unit such as bio fuel, crude, Air BP, franchising, gas trading and industrial lubricants. Thus, through using corporate level strategy BP may ensure a positive relationship between varied domestic as well as an international corporate centre and business unit. At the same time, through incorporating corporate level strategy, BP may also ensure the mission and vision of the organisation (Pearlstein, 2010).
Similarly, the business level strategy is also considered as one of the essential aspects, which usually assists a company to reduce its internal as well as external challenges. At the same time, through incorporating business level strategy an organisation also may enhance its business efficiency as well competencies within the operating market place. In this context, more specifically it can be stated that BP has a variety range of products and/ or services within its operating marketplace. Thus, the organisation may reduce its internal as well as external challenges through incorporating business level strategies. At the same time, appropriate utilisation of business level strategy may also ensure long-term sustainability for the organisation (Borowik, 2010).
Consequently, functional level strategy is also considered as one of the most essential aspects of a company, through which it is possible to ensure the operations of a company in a significant manner such as marketing, finance and production among others. At the same time, it can be stated that through concentrating on functional strategy, a company may meet its predetermined strategic objectives. In this context, more specifically it can be claimed that BP has emphasised towards its functional level strategy with an aim of ensuring its operational efficiency, which may assist the company to extend its business performance in an extensive manner (Chevalier, 2010).
According to the report of ACCA (2015), operations and strategy are essential aspects for a company through which a company may ensure its survival in a competitive marketplace for a long-term period. At the same time, it also may ensure growth for the company. In this context, more specifically it can be mentioned that operations and strategy are the most crucial constituents, which is usually helping a company to make better decisions to improve the business performance. Apart from this, through emphasising towards operations and strategy, a company may utilise its resources and may produce a significant outcome. In this context, more specifically it can be stated that five operations performance objectives usually help a company to secure its position in the operating marketplace (Hauglie, 2010).
Those five operations performance objectives are discussed below:
In order to analyse the operations performance objectives, it can be stated that cost is one of essential aspects, which is usually helping a company to ensure its current position as well as future prospects in an effective manner. Thus, most of the global companies usually emphasise towards manufacturing cost of its products as well as services for enhancing the ability of the company in the operating marketplace. In this context, more specifically it can be argued that BP has highly emphasised towards its manufacturing/ production cost for enhancing its business competencies in the operating marketplace. At the same time, through reducing the cost involvement during the oil and gas manufacturing the company has also enhanced its competitive advantages within the operating market (Kim and Hahn, 2010).
Simultaneously, quality is also considered as one of the most crucial aspects for a company that is also helping a company to attract the attention of the consumers. At the same time, it can be stated that through emphasising towards quality related aspects a company also may enhance its market share within the operating marketplace. Moreover, better quality products may enhance brand recognition for a company. In this regard, more specifically it can be stated that during the manufacturing of crude oil and petroleum, BP has highly emphasised towards the specification of the products. At the same time, BP has highly concentrated towards its quality related aspects with an aim of developing error-free products. Thus, it can be stated that quality assurance related decisions help a company to gain better competitive advantage in the operating marketplace (Langdon, 2010).
For ensuring the growth of a company, it is highly essential for an organisation to concentrate towards the operation process, which may enhance operational efficiency for the company. At the same time, it may also enhance customer demands towards the product, which will ensure the long-term success for the company. In this regard, more specifically it can be stated that BP always has provided its highest attention towards the speed of the business process along with its operations, for making better strategic decisions. At the same time, quick response of the company may reduce challenges for the organisation by enhancing customer demands and it also has led the company towards better success in future (Liu and Mance, 2009).
Dependability is also considered as one of essential aspects for a company, which usually helps an organisation to fulfil the needs and expectations of the customers. In this context, more specifically it can be stated that through emphasising towards dependability organisations also may enhance the ability to deliver products as well as services amid the customers. In this context, it can be mentioned that BP has enhanced its dependability on the customers by extending its overall range of product and services. At the same time, for ensuring the dependability amid the consumers, BP has always concentrated on its strategic decision-making approaches, which has influenced the dependability of the organisation in an extensive manner (Marques, 2008).
Additionally, it can be mentioned that flexibility is also considered as one of the essential aspects in the case of making business decisions. In this context, more specifically it can be stated that through emphasising towards the flexibility a company may enhance the quality of its operations. Moreover, the terms flexibility denotes changing the ability of a company. In this regard, more specifically it can be stated that flexibility denotes the ability of a company to change its production, procedure, services and decisions of a company. In this context, more accurately, it can be argued that BP has always emphasised towards its flexibility related aspects with an intention of extending its business performance in around the globe. At the same time, for enhancing competitive advantages, BP also has concentrated towards its business flexibility (Pearlstein, 2010).
Thus, to analyse the operations performance objectives, it can be evidently stated that BP may enhance its competitive advantages within the operating marketplace by considering above stated aspects. However, through considering these factors BP may also identify appropriate strategic decisions for its outsourced as well as kept in-house products, which may ensure customer requirements and also may ensure business excellence around the globe (Phillips and Phillips, 2010).
Simultaneously, based on the report of Langdon (2010), it is identified that outsourcing is one of the most essential constituents for a business organisation, which is usually assist an organisation to maximize its business performance by increasing overall outcome of the business process. In this context, more specifically it can be argued that an organisation may witness better competitive advantages among its operating marketplace due to incorporation of outsourcing mechanism. In relation to this, it can be mentioned that outsourcing may benefit an organisation to accrue maximum workforce and it may also enhance operational efficiency for the specific business process, which may influence changes in the business performance in appositive manner. Thus, it can be asserted that outsourcing may benefit an organisation to enhance its efficiency. On the other hand, outsourcing procedure may influence the cost involvement for an organisation, which may influence changes on a business process in a diversified manner (Troaca and Bodislav, 2012).
Consequently, it can be stated that involvement of kept in-house service may assist an organisation to ensure the supervision and monitoring on the business process in an effective manner. At the same time, it may also reduce cost involvement for the organisation, which is usually assisting an organisation to maintain its competitive position in the operating marketplace. On the contrary, kept in-house service may reduce the business efficiency for an organisation due to high involvement of unskilled and lack of knowledgeable workforce within the macroeconomic level. Thus, an organisation should need to incorporate outsourcing and kept in-house service related decisions by considering certain factors of the business process more carefully (Troaca and Bodislav, 2012).
In order to highlight the outsourced and kept in-house services it can be stated that BP should outsourced its marine fuel, motor oil and lubricants in the abroad market, whereas the company may keep in-house its petrochemicals and bio fuels in the domestic market for ensuring the growth and long-term sustainability of the company for a long-term period (Tomar and Reeves, 2009). In this regard, rationally it can be stated that BP has to understand that Marin fuel and motor oil as well as lubricants demand is very high in the global market. At the same time, technological involvement is very moderate for both these above mentioned commodities. Thus, it can be evidently mentioned that outsource of those commodity may enhance the efficiency for the organisation.
On the contrary, it can be mentioned that in case of petrochemical and bio fuel management, the organisation need to highly emphasise towards the project development, service management and human resources related aspects more carefully as both petrochemical and bio fuel is recognised as most essential and expensive commodity among the oil and gas industry. Thus, in can be evidently argued that BP should emphasise/ consider towards its kept in-house services related phenomenon for identifying appropriate managerial decisions, which may enhance or influence the business performance in appositive manner (Troaca and Bodislav, 2012).
A diagram is depicted below for better understanding:
Figure 1: Logic Mapping for BP
Based on the evidence of the research, it is identified that the company has witnessed several challenges with an aim of ensuring the growth of the company has highly emphasised towards its strategic decision-making process. Thus, to highlight those strategic involvements, it can be asserted that the company may ensure its sustainability and profitability through emphasising towards cost leverage and efficiency along with innovation-related aspects. Moreover, the company also may ensure its growth, by concentrating towards outsourcing as well as kept in-house services. Additionally, paying attention towards its supply chain management may also ensure the significance of operations of the company (Villachica and Stepich, 2010).
With an aim of mitigating risk involvement during the outsourcing as well as kept in-house process, BP will need to emphasise towards certain aspects, which will ensure the efficient and appropriate procurement of its outsourcing as well as kept in-house process. In this regard, in order to recommend the organisation more specifically it can be mentioned that BP should incorporate knowledgeable and experience workforce, which may enhance the efficiency of the operational process of the organisation. At the same time, through emphasising towards business consulting as well as internal auditing process, BP may also mitigate the risk involvement during the outsourcing as well as kept in-house process. Apart from this, through incorporation of modern techniques and tools, BP may ensure the supply chain as well as procurement of its manufactured products and/ or services. Moreover, based on the above stated discussion, it can be evidently asserted that through incorporating legal as well as ethical consideration, BP also may mitigate its risk involvement and it may enhance capabilities of the organisation by ensuring superior business outcome in case of outsourcing as well as kept in-house process.
Based on the above discussion, it is identified that BP has been maintaining its competitive advantages in the global market by concentrating towards the strategic decision-making process. At the same time, the company has also practiced its operations by considering five performance objective based principles, which has influenced overall business performance of the company in a positive manner and it has also fulfilled the expectations of the global customers. After considering all these above stated facts, it can be evidently claimed that through emphasising towards clarity and accountability the company has enhanced its profitability and growth prospect in the operating marketplace.
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