Opportunities And Challenges For Managers Operating In The Global Environment: BP Case Study

First: International challenges and possible opportunities that face managers in a global environment

Discuss about the Opportunities and Challenges Confronting Manager’s Operating in the Global Environment.

Firstly, this essay will critically discuss the opportunities and challenges confronting manager’s operating in the global environment, as external factors impact the organizations when they globally operate. Management seeks special skills and knowledge to enable them to operate in the host country with regard to culture constrains. Global challenges may relate to one or group of factors represented in acquiring resources, culture, population, technology, environment, regulations and many other factors. Natural resources are limited, the ecological system is unbalanced, climate is changing, there is an increased rate of pollution and advancement in technology (Virakul, 2015). Leadership is considered a dominant factor in global operations to manage the cross culture operations. Leaders in global missions should enjoy special traits as transformation, trust, communication and empathy with employees from different cultures (Aarseth, Rolstadås, & Andersen, 2013).

Secondly, this essay also discusses the global challenges and opportunities that face Bp in its global operations. The global direction towards low carbon is considered a challenging factor to Bp, although, the company enjoys technological capabilities that enable it from exploring the future of the oil and gas industry. Also, it develops the capabilities of its employees in partnership with academic entities through extensive training programs to be able to compete in the global market (O’Regan & Ghobadian, 2010). The PESTLE analysis of the global environment of Bp is critically discussed to shed the light on the most dominating factor of its business.

Finally, this essay, declares the challenges and opportunities that faces Bp in its operations in the Australian market and its new initiative of the BPMe app to the consumers in the retail market and its usefulness.

Challenges confronting managers operating across the border

The intention of this paragraph is to critically discuss the challenges confronting managers operating across the border. As business is highly influenced by globalization and there is a growing number of organizations is operating in the international market, concerning the key competencies of international management and staff and the cross culture challenges. Accordingly, managers and employees of multinational organizations are exposed to cross-cultural and global decisions on a daily basis. One of the challenges for organizations which operate globally, is the readiness of managers and their effectiveness to take global strategic decisions that match the international diversity and complex business environment. Many organizations enhance their managers’ capabilities through training. Management in globally operating organizations need certain competencies to succeed in solving problems and handling conflicts.  Global management competencies, are also mentioned as global leadership competencies which are discussed heavily in the literature. Leadership competencies include, skills, personality and other personality traits (Bücker & Poutsma, 2010).

Challenges confronting managers operating across the border

Cross-cultural competencies and diversity management are not completely analyzes as there is no agreement among researchers about the factors shaping cross- cultural competencies.  Although Johnson et al. (2006) as cited in Bücker & Poutsma (2010), argue that the cross culture competencies refer to the effectiveness of individuals’ skills, personal traits and knowledge in doing business within different cultures. Johnson, also defines the cognitive, behavioral and effective components as the main components of the cross-cultural competencies. He argues that researchers did not differentiate between the knowing and the doing gap.

The aim of this paragraph is to critically discuss the global challenges that managers may face when they operate in a different world country. These challenges could be represented in the driving factor of globalization to business and the growing number of organizations operating in the international market, the need for highly qualified management, to effectively lead people in multiple countries and employ workers with different culture backgrounds. Regarding the various cultures challenge, the multinational organizations aim to succeed in its business and achieve operational excellence. Organizations should select the best talents to adapt to the requirements of the global business.

Some of the multinational organizations tend to use the common scheme of retaining and rewarding managers in the same way they act with local managers. Many managers are nationally oriented as a sort of standardization. This requires applying talent management and developing skills across borders. Although, many evidences that managers act in a national oriented manner and focus more on employees with similar nationalities. It is essential to engage all of the employees from diverse multicultural. Leaders should be sure that their leadership style is matching the multicultural workplace.  There is a challenge represented in the quality of the offered training programs to the global employees. Accordingly, HRM has to regularly check the quality of the offered training to the global employees to develop their skills according to the required qualifications of the new job tasks (Cerimagic & Smith, 2011). The mobility of the global talent of senior executives, as most of multinational organizations like to select high performance management of global operations to lead their global operations in other world countries. It is considered a good career opportunity for leaders operating beyond country borders, although, leaders face many complexities as tax and compensation. Expatriate career development may be neglected by the home country (Woollard, 2010).

In conclusion, it is important to train the global talent on how to manage activities in the global environment and act within the best fit leadership style that matches the host country business environment.

Opportunities that face managers operating across the border

The intention of this paragraph is to critically discuss the opportunities that face managers operating across the border. Global business organizations deal with the world as if it is a single market and seeks opportunities that exist outside the border of the home country. The global business opportunities include the culture and processes of the business environment (Sealy, et. al., 2010)

Preparation training gives the opportunity to employees to gain knowledge through training programs relevant to the new community, dynamic and related to the latest events in the host country. Through the appropriate training, employees would be able to feel familiarity with the new community (Cerimagic & Smith, 2011).

Characteristics of the global business organizations could be stated according to Sealy, et. al (2010), as follows:

• The development of a management system is irrelevant to the home country as it develops its new management system.
• Redesign of the organizational culture and structure to match the global business environment as the matrix organization.
• Big organizations are able to develop their capacity much more than small sized organizations.
• Global business operations enable the organizations to discuss different cultural issues to find proper solutions to business problems. Face to face discussions facilitate the exchange of thoughts and enriches discussions within open environments (Prager & Such,, 2010).

In conclusion, operating in a host country enables a culture sharing and enriches the opportunity of exploiting and exchanging business ideas which enable the management to take proper decisions with regard to the host country culture.

This paragraph critically analyses the external environment of Bp by using the PESTLE analysis, according to Harrell (2016), the factors of PESTLE analysis are as follows:

Political:

This paragraph will discuss the political factor, which has big influence on the prices of oil. Bp faced the problem of the oil spill in the Gulf of Mexico, which put Bp in disastrous situation. Bp was accused to lack the required expertise, although other opinion accused refers the reason to lower investments in the project.  

Economic:

This paragraph will discuss the economic factors affecting Bp, as the Iraqi oil is dominated by the US, both of India and China high oil demand pushed up the oil prices. Bp has to overcome its disaster in the Gulf of Mexico, and invest more in the production of oil and gas with regard to the inflation rates and the exchange rates. The crisis of the oil spill is analyzed by experts as a failure of Bp to utilize the updated information (Brunton, 2015). This crisis obligated Bp to establish a safety fund of 20 Bn. $ as a compensation for the claims of damaging the Gulf water and the natural resources (Lin?Hi & Blumberg, 2011). Bp stock price remained constant for 10 years among the highest FTSE 100, which resulted in a weak demand for investing in the company assets (O’Regan & Ghobadian, 2010). Bp has optimistic predictions for oil demand during the period 2011-2030, as a result of increase in the real income within the same period. The energy security acts as a challenging factor to Bp, as about 60% of reserves of natural gas are located in 4 countries and about 80% of oil reserves are located in 9 countries. It is highly important to secure its supply of oil and natural gas (British petroueum, 2012). Bp also faces the challenge of lowering the carbon emissions, which represent uncertainty in the economic conditions (British petroleum, 2016b).

Second: The PESTEL analysis of BP

Social:

This paragraph will discuss the social factor affecting Bp global operations, as the marketing strategy of Bp is highly affected by increases in the oil and gas prices. The income distribution affects people’s demand for oil as the middle class can buy cars when their income rise. Social improvements increase the people’s demand for oil.

Technological:

This paragraph will discuss the technological factor affecting Bp global operations, as the demand for clean and renewable energy is globally increasing. Large investments are required by Bp to reduce the greenhouse gas emission.

Environmental:

This paragraph will discuss the environmental factor affecting Bp global operations, as the climate change affects the oil industry. Bp should invest more to maintain the infrastructure and to keep away from anticipated damages in the pipelines and wells. Bp promotes for using the nuclear power as a solution for cutting the greenhouse emissions.

Legal:

This paragraph will discuss the legal factor affecting Bp global operations, as governmental regulations towards taxation and duties on fuel affect the oil price. Also, regulations related to enforcing citizens to use bio-fuels and road pricing are examples of laws that affect the Bp operations negatively.

In conclusion, Bp faces major challenges in its global operations, the unforgivable fault of the Gulf oil spill and the changing demands and legal conversion towards the natural resources of energy are complex problems that Bp has to face the challenges through increasing its investments and doing extensive research on R&D to adapt to the new industrial changing environment.

The intention of this paragraph is to critically discuss the challenges and opportunities that face Bp in Australia. The global energy factors are changing. As the mix of energy is changing due to advancement in technology and environmental aspects. The oil industry needs to adapt to these changes. Bp will continue to adjust its strategy to adapt to the new industry requirements. Bp argue that the global oil demand is still growing and the provision of oil is big. The global supply of liquefied natural gas has grown led by the US to 19 Bcf/d, and in the second place comes Australia with growth equal to 13 Bcf/d which creates an opportunity to Bp in Australia. The Australian liquefied natural gas is mainly produced to be exported to Asian markets (British petroleum, 2017).

Bp seeks excellence in its operations and processes, accordingly it intends to make joint venture in Australia in order to increase its competitiveness and assist in the growth of the Australian production of oil (British petroleum, 2015).

Bp has many successful operations in Australia including, Bp marine, Air and shipping. Bp Air is concerned with private and corporate aviation, besides of the defense force of Australia.  Bp marine supplies marine fuel on the Australian coasts. Bp shipping transports the oil around the coastline of Australia. BP pays taxes to the Australian government represented in income taxes, employment taxes and stamps. Another challenge is represented in facing the changing behavior of Australian consumers. The consumer behavior has changed to seeking more value of their money (Petroeum, 2016b).

This paragraph discusses the cultural effect of Bp on the consumer behavior, as Bp has created a new system in order to affect the consumer culture of fuel services, Bp has introduced the smartphone payment technology to the Australian retail sector. The BPMe app provides services to the customer, including paying for their fuel, locating their closest BP service and storing their receipts electronically (British Petroleum, 2016c). This initiative was highly appreciated by customers who changes their behavior and used the BPMe app to facilitate the process of getting their needs of fuel.

Conclusion

This essay has critically analyzed the international challenges and opportunities that face managers in global environments. One of the challenges for organizations which operate globally, is the readiness of managers to take global strategic decisions that match the international diversity and complex business environment. Despite of the importance of leadership in global operations, cross-cultural competencies and diversity management are not completely analyzes ass there is no agreement among researchers about the factors shaping cross-cultural competencies.

Bp faces major challenges in its global operations, according to the PESTLE analysis. Bp has to face the challenges through increasing its investments. Bp seeks excellence in its operations and processes, that why it has meant to make joint venture in Australia in order to increase its competitiveness. Also, it diversifies its operations in Australia as it operates in aviation, shipping and marine. Taxation is considered a challenge to the Bp operation in Australia, as it pays different kinds of direct and indirect taxes. Also changing the consumer behavior through the BPMe app is considered a kind of culture sharing with the Australian customer.

References

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British petroleum. (2016b). Annual report.

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