Abu Dhabi National Company - ADNOC: Leading Energy Producing Company

About ADNOC

Question:

Discuss about the ADNOC Oil and Natural Gas Company.

Operating for the past 45 years, ADNOC also known as Abu Dhabi National Company is one of world’s leading energy producing companies in the world. Founded in 1971, the company is responsible for the generation of maximum percentage of oil and gas in the UAE, the organization has over the years been responsible for the employment and boosting the economic growth of the country. The production capacity that has been stated by the company is 3 million barrels per day. The organization is in control of 95% of the oil reserves that are present in UAE as well as 92% of the gas reserve. ADNOC is also playing a key role in the development of a varied knowledge-based economy, as well as putting Abu Dhabi’s in the global arena. The company is focused on the three pillars of modern day management of business that is the price, planet and people. Innovation in term of technology to meet the requirements of the dynamics in the oil and gas industry as well as new and better means to improve the  nternal management of the organization is the route taken to grow in the business (adnoc.ae 2017).

To have a positive impact on the future generations as well as the economy of Abu Dhabi

The company follows the contemporary triple bottom line approach of business model that gives equal priority to the Price, people and the planet. The company realizes the responsibility it has towards the society and environment and acts accordingly. The company is the 12^th largest producer of oil in the world. The objectives of the company are:

• To expand maximize the value of the assets that the company already owns in the oil and natural gas industry
• To have a positive impact on the economy of Abu Dhabi
• To maintain a sustainable growth in the industry
• To be a reliable global energy supplier for the long-term benefit of Abu Dhabi and the customers (thenational.ae, 2017)

The Abu Dhabi Supreme Petroleum Council was founded in the year 1988. This body was set up as an authority to guide and set rules regarding the policies that are related to the oil and gas industries in Abu Dhabi. The activities that are undertaken in this industry are all regulated by this council. The board of directors of ADNOC is the part of this council and is responsible to formulate business as well as financial strategies of the company as well as the industry in Abu Dhabi.

The council is headed by the president of the United Arab Emirates and the ruler of Abu Dhabi Sheikh Khalifa bin Zayed Al Nahyan. This group also consists of several other important personalities, who with their visionary nature and modern perspective of business lead the company towards the objectives. The higher management of ADNOC includes a group of prominent personalities who are responsible for operations and the business development of the company. Any decisions or any policies that is formulated on the behalf of the company are made by the people who are in the executive management. This policy has to be back up and supported by the Supreme Petroleum Council (adnoc.ae, 2017).

Leadership and Management

The definition of a leader can be referred to as an individual who inspires and encourages a committee or council of people so that a common purpose or objective can be achieved in a way that exhibits optimum performance and productivity.

The leader of a group is mostly a person who is selected by the group, this person guides and regulates policies and takes decisions on behalf of the council. This person has a certain degree of control over the people so that the members are able to conduct the assigned task in a way that is high quality and highly efficient. The factions of a leader are to inspire, regulate, synthesize and review the objective and direct a route for the subordinates to follow. Integrity and honor are the two values that are mostly related to leadership. The position of a leader commands respect and the attitude of a subordinates are be justifiable and is expected accepts the guidance in a rightful manner (Northouse 2015).

ADNOC is guided by the secure and rational support from the far sighted and visionary leadership of H.H. Sheikh Khalifa bin Zayed Al Nahyan.

The position of a manager is offered to a person who is skilled and qualified to be a manger and is an expert in handling situations; he or she has to go through an academic training or in the job training in order to be in the post of a manager of any kind. The factions of a manager can be widely segmented under the following: strategizing, organizing, leading, policy and decision making and monitoring of the daily operations of the business. In a business enterprise there are managers at every level and every dimension in order to channelize the power evenly. For example: in ADOC there is an array of executives who deal with different divisions like: finance, administration, marketing as well as human resource. The appointment and the role of a manager depend upon the scale and nature of business. For example in a large scale organization a manager is appointed at various levels and with various hierarchies in order to administer the operations of various departments of the organization.  A manager looks after the balance in between the employees of an organization and the executives’ interest of the organization (Tourish 2014).

There are some of the basic differences in a manger and a leader though the essence of the position is similar. A leader is focused on the overall success of an endeavor; where as the focuses of a manager is limited and short term. Managers can be divided in term of the nature of job into project manager and people manager.

Triple bottom line approach

A leader exhibits optimism in his behavior and encourages, motivates the subordinates to strive towards success, whereas a manager delegates task and directs the subordinates to work accordingly and deliver the assigned work in time.

Leaders are responsible in creating changes in the organization so that both the productivity of the subordinates improves as well as it leads to the betterment of the project. A leader is always focus on building, maintaining and encouraging team work rather than just focusing on one person. A manager acts in response to the dynamics that are being implemented by the hierarchy of the company. The responsibility of a manager lies in directing a group of people who are a team towards a delegated task (Hornstein 2015). 

A business organization is a dynamic entity that has to grow with the changing factors that impact the business on a daily basis. The management is usually divided in hierarchy as top level management: which includes the personalities who are regarded as the executives of the organization as in ADNOC the CEO, Upstream Directorate, Downstream Directorate, Marketing, Sales & Trading Directorate etc, most of the decisions taken by a company is by this group. Middle level management: the managers in the mid level are the ones who are responsible for guiding other managers in departments and on site locations they are responsible for devising operating decisions and then pass them for approval from the top level. Next is the first-line management or supervisory management also known as junior management – these people are responsible for implementing the policies and rules of the organization that is formulated by the top two tiers, the managers deal directly with the resources who are responsible in the daily operations of the business (Wang et al. 2014).

ADNOC is an organization that is at par with changes and the type of leadership that is expected form a manager in the organization is a mixture of both transformational and transactional. Motivation and encouragement along with creative innovations in terms of development is way the organization wants to grow in the future. The company is focused on the betterment of the organization as well as the people who are associated and in order to do the managers adapt to the changes and makes an effort to understand the dynamics of the industry. Hence transformational leadership is appropriate. According to the MARS theory of organizational behavior Motivation rate is dependent of the capability of the resource. The managers and the leaders are expected to understand the rate of motivation that the resource under him or her requires and hence the leader should have a transactional approach as well (Hill et al. 2014).  

The role of the Supreme Petroleum Council

Chaos theory can be defined as a concept of the process that describes development of a company that justifies how and why to expect the unexpected this also gives a scope to accept surprises and changes in the process of operation. There are two main aspects to the concept the butterfly effect and the feedback. The mechanism of this theory is based on by looking for organizational sketch that directs towards a particular type of behavior within the organization.

The oil and gas industry works on heavy risk and crisis situations, the industry has been under several negative radar of environmentalists and councils of human rights. Hence the managers have to be ready with contingency plans and policies to deal with any situation that may arise. Accidents are not under the control of anyone but organizations should maintain safety measures and full precautions to avoid accidents (Cassidy 2016).

This model explains how an organization can improve its productivity and performance by focusing on the objectives that are set by the company. The MBO theory states that, the leaders and the managers who are associated with an organization should come up with common goals and objectives for example: the objectives of ADNOC are aforementioned.

According to this theory, the employees play a key role in the growth and development of the organization and they should be responsible enough to set their own target and with the help of the managers achieve them. Some of the functions of this theory are: enhancement in the employee motivation process, build commitment towards an organization; it also assures a improved communication in between the employees and the managers to attain the objectives.

As ADNOC is one of the leading companies in the oil and natural gas industry that has goodwill of delivering the needful in the right time, the company is set to achieve all the objectives the strategies that are implemented in attaining the objective are. According to the CEO of ADNOC, Dr. Sultan Ahmed Al Jaber the company aims to achieve the objectives by concentrating the resources on four specific criterions: improving the performance and productivity o the company, maximizing the profitability of the organization, maximizing the efficiency and investing time and resource on the people who are directly or indirectly related to the organization (Goetsch and Davis 2014).

Conclusion

The leadership of H.H. Sheikh Khalifa bin Zayed Al Nahyan, President of UAE and Ruler of Abu Dhabi, and H.H. Sheikh Mohammed bin Zayed Al Nahyan Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, has always been valued by the ADNOC as the steady uphold and constant support. The farsighted visionary leadership of the CEO has lead the company in building its reputation and coming up with new and innovative ways of management.

The company in order to maintain the sustainability and ethical standpoint can implement more employee friendly policies so that the commitment towards the company is grown reducing the employee turnover. In order to deliver the commitment the organization should employee more skill improvement workshops for the employees. Safety and risk management is another area that has a lot of scope and improvement, the industry deals in hazardous items hence efforts should be directed towards innovations in technology that ensures minimum depletion of environmental resources as well as safety for the people who are working on site.

References:

adnoc.ae. 2017About us. [online] Available at: https://www.adnoc.ae/en/about-us/who-we-are [Accessed 25 Oct. 2017].

Cassidy, A., 2016. A practical guide to information systems strategic planning. CRC press.

Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.

Northouse, P.G., 2015. Leadership: Theory and practice. Sage publications.

thenational.ae. 2017. Adnoc to build new refinery and cracker. [online] Available at: https://www.thenational.ae/business/energy/adnoc-to-build-new-refinery-and-cracker-1.629911 [Accessed 25 Oct. 2017].

Tourish, D., 2014. Leadership, more or less? A processual, communication perspective on the role of agency in leadership theory. Leadership, 10(1), pp.79-98.

Wang, D., Waldman, D.A. and Zhang, Z., 2014. A meta-analysis of shared leadership and team effectiveness.