Organizational Structure and Development of Sabic - Research Paper Example

Organizational Structure and Development of Sabic Introduction Organizational behavior is one that is able to create a specific understanding of business concepts that apply to the practical development of a corporation. The more that one is able to define the corporate structure, elements of the environment and contingencies within a company, the more likely that they can respond with a specific understanding and association of the organization. This research paper will investigate the organization of Sabic and the different components that are used for the functioning of this technology company. The more that one understands and associates with this growing and thriving company, the more likely that there can be an association with their structure as it affiliates with other types of companies. More importantly, an examination of the strengths and weaknesses of the organization provide a development and understanding of how it can work to provide a foundation for other developing corporations and the structure that they carry. Overview of the Organization Sabic is one of the largest companies that are located in Saudi Arabia. The main sale that is made through this corporation is petrochemicals. The creation of this company began in 1976 as a part of the developing country and quickly became used as an infrastructure that was developed for an international base. The main component of this particular company was to use natural resources to create value added commodities. The basic sales that are manufactured through Sabic are petrochemicals from natural resources. This includes chemicals, polymers and fertilizers are also a part of the main corporation and the sales that are made through the company. By offering these value added products, Sabic was able to move the city of Al – Jubail from a fishing community into a main area for international import and export. Several factories and infrastructures were built to support this, specifically through the government, which was followed in 1983 with joint ventures for the specific corporation. Since 1983, Sabic has been noted as one of the fastest growing corporations, with 6.3 million metric tons of petrochemicals that have been produced (Sabic, 2010). The mission and vision of Sabic is based on the production of petrochemicals that are a part of the products of the corporation. The vision states that they will be the leader of the globe in the chemicals that are produced through the corporation. The mission follows this with providing a responsible product to consumers based on quality, innovation, learning and excellence. The different qualities will be noted in the organizational structure as well as through shareholders. The values of the company are to inspire, engage, create and deliver. The standards that are met through the company are based on using natural resources and talent of the employees to produce the best standards for petrochemicals. Using the latest technology is also a part of this particular standard, combined with education and innovative systems to assist employees to move forward in the establishment of the factories. The objective that is followed by this is the ability to have a high level of integrity and to have high standards in relation to business practices, safety and the care of the environment (Sabic, 2010). Organizational Structure The organizational structure of Sabic is one that is based in Saudi Arabia; however, it relies on the exporting of the petrochemicals for efficiency. There are over 40 countries that affiliate with the manufacturing company and 60 plants that are located across Saudi Arabia and the Middle East. The global affiliations that are associated with the company have led into manufacturing affiliations that are a part of the main structure of Sabic. Each of the affiliations that have been built is developed with the concept of having joint partnerships in different manufacturing plants. The resources that are a part of Sabic are shared with the joint partners across the globe in exchange for resources and technology that are in different areas of the world. Each of these is followed back into the main branch of Sabic which is located in Saudi Arabia (Sabic, 2010). The foundational structure of Sabic is founded as a public corporation of Saudi Arabia. The government owns 70% of the shares of the company and the last 30% is held by private investors that are associated with Sabic. The private investors not only include individuals, but also associations with the Gulf Cooperation Council. The organization then has developed into a board of directors, which oversees the different events that are occurring. The chairman of this is Prince Saud bin Abdullah bin Thunayan Al – Saud. The vice chairman and chief executive officer is also a part of the overseen corporation and development that is a part of the corporation. The company is overseen by a board of directors that is underneath the chairman and vice chairman. This is followed by a management team that is led by the vice chairman of the board (Sabic, 2010). The management team and the board of directors are further divided into the different needs of the corporation. The group of managers are each responsible for one of the products that are offered through the corporation, including chemicals, metals, fertilizers, performance chemicals, polymers, innovative plastics and manufacturing. This is followed by a management team that is responsible for the corporate management of the business. The different leaders in this category are associated with finance, control, research and technology, strategic planning, shared services, corporate HR and corporate communications. The board of directors overlooks these two specific areas for the management of the team and includes five individuals that are responsible for the welfare of the management team. The shareholders and those that own the company as a part of the government are the main overseers of the corporation and hold the main vision and understanding of the mechanics that is a part of the business (Sabic, 2010). The organizational structure that is used is followed with specific components that relate to the services of the organization. There is a division of products that are offered, each which has a separate branch overlooked by the management team. Chemicals and performance chemicals have two main branches followed by two business units for plastics. Fertilizers and metals are both incorporated into this with one business unit that is responsible for the management and manufacturing of different parts of the product that are sent to different areas. Each of the operations have different management teams and an overseer that is responsible for communicating the main messages and which is responsible for providing the employees with different concepts associated with the manufacturing that takes place in the plant. This is combined with the separate research and technology facilities that are located in each of the joint venture areas across the globe, all which are designed to provide more efficiency with the production of the petrochemicals that are in each of the plants (Sabic, 2010). Organizational Goals The organizational goals that are a part of Sadic are divided into several components that can provide more efficiency and quality with the products that are given to different regions of the world. The main objective of Sadic is to be a leading innovator in the product of petrochemicals. This is followed by the desire to have quality, innovation and excellence that is in the products as well as from the internal environment that is created. The main organizational goals then lead into several areas of functioning, all which are designed to create newer goals for the corporation and to provide them with a leading responsibility in the globe for the different petrochemicals that are produced as a part of the corporation. The first set of organizational goals that is a part of Sabic is based on the financial performance that is a part of the corporation. In 2008, the proceeds were at an average of $5.86 billion. The assets followed this with 727 billion in the corporation. The production that was a part of this was at an average of 56 million metric tons, which was an increase from the 35 million metric tons that was produced in 2001. The main approach that is a part of the financial performance is to continue to leverage on the amount of products that are produced and to increase the amount of revenue that is created. Since there are 16 joint ventures that are located in each region of the world, Sabic has the ability to continue to increase the amount of profit that they make in each region. Taking advantage of the several locations as well as the different types of products that are produced in each region will help Sabic to continue to expand and increase the financial growth that is in each of the partner programs of the world. However, the amount of profit that is made with Sabic is one that has to continue to be monitored with the association of new products that are added into the region, as well as the innovation and development that is a part of the assets and development of the various products that are in the factories. The goal of Sabic is to reach 220 million metric tons by 2020, specifically by using innovation, research and technology to add into the products and services that are offered (Sabic, 2010). The second organizational goal that is a part of Sabic is the production that is a part of the factory. The goal is to continue to remain as a leader in the production of petrochemicals, such as ethylene, glycol, menthanol and polyethylene. The main goal with the company is to continue to remain a global market leader as a part of the production of these different chemicals. The chemicals that are produced are 60% of the corporation’s profits, making it one of the most substantial areas of improvement. However, for the profits to continue to increase there is also the need to create more innovative concepts with the products, as well as the need to research more efficient ways to produce the different chemicals that are a part of the factory. In each of the areas of products, which includes chemicals, plastics, fertilizers and metals, is the desire to continue to increase the amount of production that is offered while assisting in the development of newer products that are able to offer more innovative solutions for those that are in demand of these different products. To do this effectively, Sabic is focused on the global associations in the Middle East, Africa, Asia, the Americas and the Pacific region. These branches of Sabic are able to provide resources and technology which will help to create more efficient the products can become with both production and sales (Sabic, 2010). The third component that is a part of Sadic is the organizational structure that is used. Currently, the structure is based on a management team that overlooks each of the branches of the company. These are all taken through with the board of directors and the two chief officers of the corporation. Even though this is the main concept, the corporate structure continues to work on providing employees with new opportunities within the corporation. Training and education is one of the main goals of the organization, specifically by providing employees with more opportunities as a part of the organization while allowing them to move into different arenas of expertise. Doing this provides the employees with more opportunity to expand and grow within the corporation. There are also several opportunities that are provided for benefits and association with newer concepts that are a part of the corporation, all which allow employees to work more efficiently with the needed applications that are in the corporation (Sabic, 2010). Another component that is a part of Sabic is the research and technology that is needed for the company. This is one of the main focuses of the company as it makes a difference in the value and quality of each of the products and makes a difference in the responses that are a part of each region of the world. Currently, Sabic is one of the leaders in research and technology of the different petro – chemical products. There are over 15 research centers that are located in different regions of the world. The main focus is through the Global Application Technology organization, which is a branch of Sabic. The organization that is affiliated with Sabic is designated to find more efficient ways to create the products that are used within the corporation. The organization then moves into the development of new products, with over 150 that are created a year and which are produced by Sabic. The production of the newer products, as well as the efficiency that is added into the other materials offered by Sabic, are able to create a different approach to the manufacturing of different materials while providing more opportunity for growth within the corporation. The goal of the research and technology centers is to provide a higher level of efficiency with the products that are created while continuing to offer more petro – chemical products in the four main categories that are associated with the corporation (Sabic, 2010). The last organizational goals that are a part of Sabic are based on the safety and environment that is created in each of the branches and factories of the corporation. The main goal that is associated with this is based on the safety, health and environmental performance index that are a part of the Saudi Arabian evaluation. Currently, the performance is at 0.74, with very few needs to have safety and health needs met at a higher standard. The main goal is to have a lower rate of injuries that are associated with Sabic and to have all employees have consistent safety and health measures when they are working within the factories. The second goal that is associated with this is to have fewer man hours that are related to injuries and to have less lost time that is associated with potential health and safety hazards that are in the work place. To reach this goal efficiently, Sabic has developed several training programs and equipment that can be used for safety measures so each of the employees are able to have a consistency with the work that they perform. More importantly, Sabic is devoted to performing in each of the factories with a concern for the environment. Many of the current goals are based on creating environmentally friendly manufacturing plants while meeting the basic standards for environmental protection through the current operations. Conserving resources, preventing pollution and reducing waste are all combined with the health and safety measures not only with the internal environment, but also with the external surroundings that are a part of Sabic (Sabic, 2010). Relevant Organizational Contingencies The relevant organizational contingencies are based on different aspects and approaches that are a part of the company. When looking at the management and structure, it can be seen that most of the contingencies are forwarded to specific departments and teams that are able to manage and troubleshoot what is occurring or can provide growth within the corporation. The different approaches that Sabic has for growth are dependent on the structure of the corporation, as well as the way that the external environment responds to those that are a part of the corporation. Understanding how this works provides a different approach to the operations and what is occurring within the organization. The first type of contingencies that are a part of the corporation is the innovation that is a part of the organizational structure. This is one of the most important factors of Sabic, specifically because they are reliant on the continuous changes of the environment and the need to produce more types of petro - chemicals for their success and growth. The several products that are offered by Sabic have to provide a specific relationship to what is occurring with the growth of each region of the world. For Sabic to stay as a head competitor there is also the need to continue offering more products and innovations that can be used by different target markets. For instance, the 150 different products that are created through the research and development centers are responsible for providing not only new innovations, but also high quality to the products that are a part of Sabic. This is based off the contingencies of Sabic, which is linked to the products, communications and new needs that other corporations have with the development of petro – chemical solutions (Sabic, 2010). The second set of contingencies that Sabic has is linked to the business development of the corporation. Sabic moved into a diverse and international corporation at a fast pace, and is now required to link to the diversity and the aspects of business in relation to a global corporate structure. To do this effectively, human resources, monitoring of the internal environment and the ability to work with thousands of employees is required by the business. Business operations and development of people operations are the two ways that the Sabic Corporation works with those in the internal environment while providing more opportunities for those that are employed by Sabic. Ensuring that there is the correct environment and troubleshooting for change management and other aspects of the corporation provides Sabic with a stronger basis within the company (Sabic, 2010). The third aspect that is a part of Sabic in relation to the contingencies of the company is based on other competitors and the continuous rise of new solutions for petro – chemicals and other products offered by Sabic. Sabic has several managerial committees and sales management designated to overlook the different concepts that are a part of the competition and business operations. The individuals that are designated to look at this approach are supposed to look at the different aspects that are a part of Sabic and the products that are offered and the way that it is working in relation to the competition. More importantly, the innovation of new products has to work with a specific market that creates a unique and diverse set of features for the corporation. The sales development that takes place within the organization is then linked to the other areas of business with a notification of the competition, demand of the market and the incorporation of new products that are based on innovation (Sabic, 2010). Comparison of Organizational Goals and Structure The organizational goals and the structure of the company are both intertwined and work together to provide substantial results to the company. The organizational goals of Sabic include aspects of both the internal and the external environment that is a part of the company. The internal environment is based on specific ethics, the building of a diverse environment and the ability to create innovation through teamwork. More importantly, there is a need to have a high level of efficiency in the internal environment through safety and environmental measures. The external environment is based on providing products that allow Sabic to remain as one of the top global providers of the several products offered through petro - chemicals. Each of these areas links specifically to the mission and vision of the company, which is based on providing the highest quality solutions in the field of petro – chemicals (Sabic, 2010). Not only is there a link between the different environments and the vision and mission, but also is an association with the overall goals and the structure of the company. When looking at the products, it can be seen that the main roles and incorporation of the different individuals is based on the goal of remaining an innovative leader within each of the products offered. More importantly, the incorporation of these two is based on continuing to provide new ways to meet the demands and to provide new solutions through the different products offered through the corporation. As this is done, there is the ability to have stronger goals with the movement forward of products that are innovative and which work outside of the competition. Without the internal structure of innovation, research and products development, as well as the implementation of teamwork at every level, there wouldn’t be the ability to continue with these demands (Sabic, 2010). The sales, people operations and overall operating committee of the company provide the same type of support when working toward the growth and development of Sabic. When looking at these aspects, it can be seen that they are combined with the organizational structure specifically to relate to the external environment and the growth of the company. The main component of Sabic in terms of marketing and sales is to have a focus on continuing to be the type service provider for metals, plastics, petro – chemicals and other chemical solutions. When working with these particular products, the organizational structure is responsible for placing the demands and the concepts needed within the company. More importantly, there is the need to create an alternative focus with the goals through the external environment and the responses from the structure of the company. Since Sabic is an international corporation that relies on the exporting of different products, the efficiency of the organization comes with linking the internal environment to the research and implementation of new products that are able to move into the market of a global organization (Sabic, 2010). Recommendations and Conclusion The functions of Sadic and the way that it has built into a global organization has allowed for a different structure and set of ideas to be available to the corporation. More importantly, there is a link to the use of technology, innovation, research and product development as a main component of the organization. The efficiency, innovation and the main goals of the company have all led to a continuous growth of the organization, as well as further development that is needed within the company. While the structure and the way that Sabic is functioning is able to provide more results for those that are using these various products, there are also other aspects that Sabic can consider to remain as the top provider of these products. Focusing on the aspects of environmental concerns, research and development of products and marketing to larger markets at an international level will all help Sabic to remain as a top provider of the various products that they offer. When linking the internal structure to the goals of the company, it can be seen that there are some disconnections with Sabic and the expectations that are a part of the corporation. Each of the products that are researched and developed from Sabic have to be based off the factory work and the innovations that have already been developed by the corporation. The four main categories of products that are offered is one that limits the ability for Sabic to grow. The research and development, as well as the innovation that is used, is further limited by the factory work and the concepts that apply to the products that are used within the corporation. For Sabic to expand into different components, is the need to change the way that specific aspects are developed within the company. For instance, there is the need to create a diverse portfolio through newer products, as opposed to slightly innovative products. This has to be combined with an emergence of innovation through the internal environment while finding more of the demands that are associated with Sabic. The second recommendation that Sabic can tap into is based on the division that is a part of the corporate structure. This links to the consolidation of the products that are offered as well. The corporate structure has several outlets throughout the world and has a basis in different regions to help with the growth of Sabic as well as what is needed for this corporation. However, for the new business development to be more effective there needs to be an overlap of the different positions and what is expected. Currently, all of the jobs are divided according to region, function and expectations of those that are working within the team. While this is effective for the main operations of Sabic, it doesn’t provide the needed opportunities for the corporation. To incorporate a different level of efficiency, there will need to be different environmental considerations for each of the areas. Tapping into the differences in region for training, development and innovation can help to create a stronger component to the internal environment while tapping into more resources from various regions. Sabic can use the global structure not only for a basic concept, but can also move into regionalized divisions that will enhance the performance and innovation in each country. Since the 1980s, Sabic has grown into one of the largest manufacturers of various products, based on petro – chemical solutions. From this time, there has been the ability for Sabic to grow into several joint venture programs that are based on an international level and which are able to provide the same products at a global level. The initiatives that have been taken through this corporation have led it into one of the top four suppliers of petro – chemicals and solutions that many can use within the household or in businesses. As one of the largest manufacturers of these products, Sabic is able to provide new and innovative solutions with metals, plastics and for community and society. The goals that are associated with this are based on providing a strong level of quality and innovation that continues to move the corporation forward. The internal structure of Sabic is one of the components that have helped this particular company to emerge into the needs of the community. The ownership by stakeholders and the management team are all investors in the corporation, which creates a strong basis for the corporation. More importantly, each have focused goals and defined aspects that are a part of the corporation and which allow it to move forward, specifically because it is based on investments by other individuals. The other focuses of the company are based on the international standards that are needed for the company, such as safety, the environment and health. Combining this with continuous research, development and product innovation is able to create a different level of success for Sabic and is leading to its continuous growth as a leading global corporation. References Sabic. (2010). Sabic Corporate Information. Retrieved from: http://www.sabic.com/corporate/en/ourcompany/default.aspx. Read More