Strategy Development in the Global Oil, Gas and Petrochemical Industry

Introduction

British Petroleum and shell are one of the six major oil companies in the world. The other competitors are Exxon Mobil, Chevron, Total and Conoco Phillips. In order to get to such positions, the former two companies have had to employ sound business strategies. However, these companies also have their fair share of challenges and mistakes. These shall be examined under the following criteria;

Question 1 - how the oil companies have addressed certain challenges Corporate Governance Issues In Shell, Corporate Governance challenges have been the order of the day. Corporate governance within Shell had been carried down from almost a century of its existence. In certain scenarios, some critics have argued that this form of structure has cost the company in a number of ways.

Business ethics

Companies need to have specified code of conduct and ethics principles that will guide their day to day practices. Shell as a company has well written down rules that assist employees in sticking to the company's goals and principles.

Corporate Social Responsibility

One of the ways in which Shell has demonstrated their commitment towards their corporate social responsibility is by introducing a program known as Livewire. This program was established with the purpose of assisting young people to create their own businesses.On such issue is with regard to its African operations in Nigeria. Many critics have asserted that Shell is not a good corporate citizen because while Nigeria is one of the leading oil resources for the company, its people are getting minute returns for it. However, Shell management did not just leave this problem hanging, they responded to the challenges by improving internal processes in that region. Additionally, they also enhanced their external communication processes. Besides this, Shell has been on the wrong side of the Corporate Social Responsibility meter because of its poor environmental record. During the 1990s, the company had been criticised for disposing Brent Spar in a manner that was not eco friendly.

Recruitment and retaining skilled workforce

Shell has really tried their best in incorporating sound recruitment procedures with their practical applications. One such example is the company's adherence to diversity endeavours. Shell firmly believes in a commitment towards people of different race, colour and gender. This is largely implemented by sourcing for employees from different parts of the world to work in separate regions from where they came from. It can therefore be said that the concept of globalisation really applies to Shell and that they have embraced it in their business practices. (Stanford, 2007) In fact in Canada, BP was ranked as one of the top one hundred employers within that country. It was therefore established that some of the reasons that could have earned BP such a position include * Community Involvement * Training and development * Performance management * Employee communications * Financial benefits * Family and health benefits * Social and good work atmosphere * Physical workplace

Question 2: Expansion in the Global arena British petroleum Plc has always considered expansion as a crucial strategy in its success efforts. Even at the very beginning, British Petroleum grew to become what it is today through expansions and strategic alliances. However, the most outstanding one amongst these alliances is the acquisition of Amoco- an American based oil company. This acquisition was done at the price of forty eight billion dollars and went down in history as one of the biggest oil company mergers that the industry had ever recorded. At that time, the deal was also known as one the largest takeovers that a foreign company could make of an American one. (BBC, 2004) However, before those benefits were realised the two companies need to have operated in the business arena for some time. It should be note that this merger had benefits for both companies. British Petroleum is well recognised for it abilities in Oil exploration, however, analysts have asserted that the company is rather poor in the process of refining or in creating other petroleum based commodities out of crude oil. Amoco on the other hand is quite efficient in the process of refining and they have been known to excel in the distributive process of these commodities as well. It can therefore be asserted that the things that one company was lacking were the ones that were highly available in the other. The BP Amoco merger was therefore fertile ground for establishing a solid structure in which two major giants could work together to provide the best products and services to their clientele. (British Petroleum, 2008)

Question 3: BP as a simpler and more efficient organisation The company Chief Executive Tony Hayward asserted that it was necessary to become much simpler and efficient. This assertion came in the wake of a new trend among various product and service providers. Such companies range from insurance providers, public sector agencies and even steelmakers. They are all interested in finding out how they can improve their company operations through the incorporation of smaller and more efficient production. A company such as Toyota has been very effective at doing this through three major approaches. The first one is the company's move towards elimination of waste. The second is its enthusiasm for variability and the third is inflexibility.