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Change management initiatives at the global oil &gas company
One of the largest global energy company with a vertically integrated oil exploration, natural gas and petroleum product marketing companies.
With the collapse of oil prices and having production cost doubled between 2004 and 2008, an economic model of the company was challenged. As part of the response measures, more pressure has been imposed on supply chain and reduction of the supply cost in particular. A new leader of global procurement & supply chain function was apponited in April 2009, whose role was to regenerate effective work within PSCM (Procurement & Supply Chain Excellence) globally and to reduce supply chain cost. Taking into account the different imperatives of global and local PSCM teams, the change were not communicated well. Moreover, the creation of dual accountability for North Sea PSCM and stressing the importance of hierarchical reporting system have created tensions between two teams, resulted in employee’s resistance to change.
To develop a solution and possible recommendations for overcoming existing organizational challenges the following areas were analyzed:
The step-by-step analysis in the following areas was carried out:
Step 1: Mobilise commitment through joint diagnosis of business problems
Step 2: Develop a shared vision of how to organize
Step 3: Consensus, competence and cohesion
Step 4: Spread revitalization without pushing from the top
Step 5: Institutionalize
Step 6: Monitor and adjust
In this case, the original attempt of their change was not yet embedded due to improper operations in step one and two. The failure resulted in having unsatisfactory results in the following steps.
Recommendations were accepted by the client for further implementation.