Integrated Management System n Shell Oil Company - Assignment Example

?Quality Management in Shell Oil Company Introduction Today, a firms’ management must be highly consistent so as to operate and control the company effectively. Business managers need to deal with different challenges such as economic performance, environmental sustainability, healthcare, and workplace safety in a highly competitive world. It may not be practical to implement different independent management systems in a company to manage all these operations. In the opinion of Zeng et al, the problems of numerous separate management systems in an organisation include complexity of internal management, lower management efficiency, cultural incompatibility, employee hostility, and higher management costs (cited in Vulanovic, et al, 2011, p. 321). It is necessary for managers to think of an integrated management system which encompasses the elements of quality management (QMS), environmental management (EMS), and health and safety management (OHSMS). Since an integrated management system can involve different facets of corporate management, it is vital to identify the different aspects associated with it. In order to implement an IMS in the Shell oil company, it is better adopt a five-phase implementation process which includes phases such as preparation, planning, implementation, monitoring, review and certification. During the initial phases, an effective, quality policy and environment policy must be developed to give the implementation process a clear direction. This paper will specifically outline an implementation plan for a new IMS in the Shell Oil Company. Integrated management system Integrated management system can be simply defined as a management system that integrates all systems and operations of an organisation into an extensive framework, assisting the organisation to operate as a single entity with shared goals and objectives. The integrated management system greatly aids an organisation to become a unified entity and link each function to a single common goal (Pardy & Andrews, 2009, p.107). Evidently, such a centralised system would assist the organisation to improve its overall performance. “An integrated management system is the most effective way to discharge an organisation’s obligations to its employees, customers, and the wider community”. (Freiberger Forschungshefte, Issue 526. 2008, p.39). In simple words, this system gives stakeholder a clear idea on what the organisation expects from them. Another major feature of integrated management system is that it provides the organisation with a genuinely co-ordinated system instead of mere ‘silos’ (Emea.bsi-global.com). Experts suggest that this management system is greatly helpful for the organisation to obtain a clear and comprehensive picture of its all aspects, the way they affect each other, and the associated risk factors. As there is less duplication in an integrated management system, it is easy to implement the new system in the future. Through this technique, the management team is provided with a single structure which would enable them to deliver the organisation’s objectives efficiently and effectively. The potentiality of an integrated management system ranges from managing employee needs to monitoring market competition and maximising resources. The most fascinating feature of this system is that it is relevant to all types of organisations regardless of their nature and size (Driving.myfoxcharlotte.com). Under this approach, two or more management systems are integrated into one cohesive system with a common set of policies, procedures, processes, and documentation. Shell Oil Company Shell Oil Company is the Royal Dutch Shell’s US based subsidiary, and it is one of the largest oil companies in the world. The US head office is located at Huston in Texas, and nearly 22,000 employees are from the United States. The Shell Oil Company together with its consolidated companies and its share in equity firms is one of the largest oil and natural gas producers, gasoline distributers, natural gas suppliers, and petrochemical manufactures in the United States (Debate.org). With approximately 25,000 Shell-branded gas stations in the country, Shell is the leading market player in the American oil and energy industry. The Shell company and its partner Saudi Armaco (an oil company owned by the Saudi Arabian government) operates a joint venture called Motiva Enterprises, which is well known for its refining and marketing efficiencies, operates three refineries on the Gulf Coast of the U. S. Shell products mainly include oils and fuels while the company delivers services like exploration, production and, and refining of petroleum products (Shell.us.). Holusha (n. p.) reports that although the Shell gasoline included the RU2000 and SU2000 lines previously, the V-Power line has superseded them later. In 1997, Shell and Texaco signed a contract for two refining and marketing joint ventures. When one of those strategic alliances joined their Midwestern and western operations, the other combined the Star Enterprise and Shell’s eastern and gulf coast operations. Following the merger of Texaco and Chevron in 2001, Shell bought Texaco’s shares in terms of joint ventures. In the next year, the Shell oil company began to convert the Texaco stations into the Shell brand and this process was termed as “the largest retail rebranding initiative in American business history” (Driving.myfoxcharlotte.com). Shell’s market power is increasing in the American oil and energy industry because US is an industrially developed country and hence it needs huge amounts of fuels and other petroleum products to meet its growing energy needs. Approaches to IMS implementation Considering the current fuel/energy consumption trends in the United States, the importance of the Shell Oil Company is likely to increase over the next decades. Hence, the company would need to deal with a huge number of complex business transactions every day, and consequently operational management may become a tough task for the organisation. At this juncture, an integrated management system can benefit the Shell to co-ordinate its market activities and to improve its business outcomes. In addition, such a management system can benefit the organisation in several ways. As Bush and Johnston (1998, pp. 60-61) point out, an integrated management system notably assists the company to cop up with growing management system requirements in the modern business world. Today companies are increasingly pressurised to register for one or several international standards. In addition, some other management systems are also forced to comply with some industry-specific guidelines or standards (Labour.gov.on.ca. 2009). It is identified that some government agencies require member organisations to maintain a management system to meet quality standards. To illustrate, the Occupational Health and Safety Agency demands the establishment of a management system for ensuring process safety in the United States. In addition to all these, organisations are compelled to abide by the requirements imposed by their corporate headquarters and stakeholders. Evidently it would be a challenging task for companies to remain competitive in the market while meeting all these requirements. An integrated management system is the only possible way to manage this situation potentially because new requirements can be integrated into this management system without much difficulty. In short, an IMS would provide the Shell Oil Company with more functionality and totality. Improved effectiveness is another advantageous feature of an IMS. This management system can aid the Shell to interpret its industry-specific standards more holistically so that the company can meet system requirements as well as stakeholder needs efficiently. When the overall missions and goals are well established with the help of an IMS, the company would easily get a view on what is next. Through a deep evaluation of the economy, an IMS can make a system more logical and user-friendly. A well established IMS is capable of promoting the credibility and image of the company, and it can also influence the overall corporate culture (Tang, 2003). Evidences suggest that an integrated management system is a better strategy to trim down operating costs as it guarantees improved effectives and operational efficiency. As management experts point out, it would be less costly to implement an IMS than several individual management systems. Once this management system is in full swing, less time and money is needed for the maintenance of this system. Finally, a well-established IMS can help reduce redundancies and conflicting elements which are very common when numerous separate management systems are used. Evidently, reduction in redundancy and conflicting elements would assist the Shell to improve its overall performance. There are some obstacles to the implementation of an integrated management system. Poor competence and knowledge in the company often becomes a potential barrier to the effective implementation of an IMS. Therefore, a successful implementation is possible only if the managers are well aware of different systems and procedures in the organisation. Similarly, the IMS implementation would be an extremely difficult task if different management systems are separated organisationally. When the company management has one-sided focus on each area, integration of different management systems is difficult. Once an IMS is installed, there may be a possibility of job re-distribution among workers. Since workers would be forced to adapt to new working conditions, this situation is likely to create great confusions and disorders in the company. Therefore, managers should thoughtfully consider the implementation of an integrated management system. Since the Shell Oil Company is likely to remain as a leading player in the American market over the next decades, it is better choose a comprehensive approach to the implementation of an IMS in the Shell Oil Company. There are a number of distinct steps to the implementation of an IMS. The commission states that the initial appraisal which encompasses initial environmental review and self assessment is the primary phase of an IMS implementation (UN, Economic and Social Commission for Asia and the Pacific, 2003, p.28). At the time of the management system implementation, specifically for the first time, the company management has to identify where the organisation stands in terms of the requirements it needed. The initial environmental review and self assessment can give the management a clear view about the current position of the organisation. Although this practice is voluntary, it is vital to set goals for the achievement of continued improvement in operations. There must be a common statement of policy to enhance the execution of the IMS. Policy represents overall goals and direction of the organisation with respect to quality and environment as formally developed by the top management. There are certain standards for the development of quality policy and environmental policy. While forming the quality policy, it is necessary to make sure that the policy would fit the purpose of the organisation. In addition, it must express a commitment to meet the requirements specified and to improve the efficacy of the quality management system on a continuous basis. It is expected that the quality policy provides an extensive and effective framework for introducing and scrutinising quality objectives. Finally, the management should convince the members about the new policy by enhancing communication within the organisation. According to Weib and Bentlage (2006, p. 222), a well structured environmental policy is essential to support the IMS implementation because people are environmentally cautious today, and they do not support businesses that do not promote environmental sustainability. The environmental policy should well address the environmental impacts of the company’s activities, products, or services. The policy must also express a commitment to promote continual prevention of pollution and other environmentally harmful activities. The environmental policy must necessarily guarantee its commitment to abide by the environmental legislation and regulations that are in place. In addition to providing a well developed framework for establishing and analysing environmental targets, the environmental policy should be also well documented and communicated to all the stakeholders. The oil company must ensure that the public has good access to its environmental policy. After forming the quality policy and the environmental policy, the Shell management has to consider the selection of common management representatives. Management representative is a key position assuming important responsibilities and authority. Organisations implementing an IMS appoint two managers – one for quality purposes and the other for environment purposes. In contrast to this, it is advisable for the Shell Oil Company to appoint one manager for both the system because an IMS in itself is for the integration and co-ordination of numerous separate activities. Depending on the size and scope of the company, one manager may or may not be able to handle the operations of the whole organisation alone. Since the Shell’s work is of high magnitude, the manager may seek the assistance of representatives from each department. It is particularly important for different management systems to establish clear and broader objectives to have a clear direction for their operations. The various management systems must ensure that they were “established at relevant functions and levels within the organisation” (UN Economic and Social Commission for Asia and the Pacific, 2003, p. 30). In addition, the chances for the success of the IMS implementation would be increased if there is a common statement of objectives. Under such a circumstance, different management systems can work collaboratively to achieve the organisational objectives (ibid). It is clear that there will be a number of functions in an organisation including administration, project management, R&D, marketing and promotion. Once the integrated management system is in full swing, the top management can easily co-ordinate all these functions without any confusion or disorder. Since the IMS implementation involves the elements of organisational change, the top management has to take necessary steps to ensure that the implementation process would not affect the organisation’s operational efficiency. For this, the Shell Company has to enlighten its employees about the necessity of change and obtain their full support. Referring to the view of Woodman and Dewett (2004, p. 39), the company must adequately train its employees to cop up with new organisational activities and worksite environment. When the organisation plans to implement a new IMS, there is a great possibility for some potential business risks that can significantly affect the firm’s business outcomes. In order to avoid such downturns, the Shell’s top executives should give increased focus to risk management. However, once the IMS is implemented successfully, it would give the organisation a great level of control over various risk factors. Authors like Vulanovic, et al suggest a multi-level synergetic model for the implementation of an integrated management system. According to the authors, strategic synergy is prioritised at the first phase of implementation and it simply refers to strategic objectives that promote the company’s mission, vision, and values. At the second level, the organisation mainly considers three things such as organisational structure, cultural synergy, and resources. Finally, the third phase reflects the “documentation synergy of all IMS procedures, work instructions, and records” (Vulanovic, et al, 2011, p. 322). While planning the implementation of quality, environment, and OHS management, paying attention to the importance of synergies is essential. Vulanovic, et al propose three groups of synergic activities such as synergy of common aspects, synergy of management systems, and organisational synergy. The implementation of the IMS in the Shell Oil Company must be based on strict fulfilment of standard’s requirements chosen but not organisation’s risks. The implemented IMS may not be capable of meeting the organisation’s needs. Some scholars consider the integration process as the consolidation of two systems resulting in the loss of independency of one or both the systems. However, integration of management systems leads to the formation of a more comprehensive and stronger management system. While framing the integrated management system, the Shell’s top management has to ensure that it is potential enough to address different risk elements carried by the organisation. Based on the above discussion, the IMS implementation process can be divided into five phases namely preparation, planning, implementation, monitoring, review and certification. In order to obtain a clear view on this IMS implementation approach, Tyrrell and Barker (2013) illustrate the process using a diagram. This diagrammatic representation is given below. (Source: Tyrrell & Barker, 2013) The authors call it as a ‘plan-do-check-act’ methodology and states that standards are based on this methodology. They add that it enhances continual improvement of the integrated management system and ensures the system’s credibility, robustness, and reliability. In the project commencement or preparation phase, the Shell management identifies potential risk factors and sets time periods for the timely completion of the implementation process. Then the management plans are reviewed thoroughly and a gap analysis is conducted to find pitfalls if any. Following the review, a project inception meeting is organised to make some crucial decisions regarding the management of IMS including employee involvement and training. Finally, a draft framework is developed at this phase to obtain a clear direction and intension of the project. In the planning phase, the Shell’s top management must spot environmental impacts, health and safety hazards, and other potential risks that could result from the implementation project. The major objective of this stage is to ensure that all risk possibilities are identified and thereby potential preventive measures are taken to address the risks identified. This stage involves setting ‘specific, measurable, attainable, relevant, and timely objectives and targets’ (Tyrrell & Barker). Then it is essential to check whether the objectives and targets set are in line with business requirements or stakeholder interests. During the implementation phase, roles and responsibilities for managing different aspects of the IMS will be identified. In addition, an assessment of training needs of each job will be carried out and based on this information a documented training plan is formed. Well planned training delivery is an essential requirement of this phase because this strategy is vital to make certain that all personnel are well aware of IMS operations. It is very important to note that all the staff, from ground level employees to managers, must obtain the benefits of training. A stakeholder engagement plan characterised with effective communication mechanisms is designed at the implementation phase to promote active involvement of all human elements related. Evidently, monitoring is a crucial phase of any implementation process because it is essential to know the success or effectiveness of the newly implemented system. Monitoring would greatly assist the Shell management to take corrective and preventing actions if the company's new IMS system does not function properly. Review and certification is the final stage of the IMS implementation process. During this phase, the Shell’s top management reviews the IMS periodically to ensure its continual efficiency, adequacy, and suitability. This review is also helpful for the management to check whether it met the objectives and targets in line with the policy. Finally, before the issuance of the original certificate, the firm has to perform a pre-certification audit. Conclusion An integrated management system can benefit the Shell Oil Company in several ways. Such a system would assist the organisation to deal with issues like complexity of internal management, lower management efficiency, cultural incompatibility, employee hostility, and higher management costs. The initial phases of IMS implementation involve designing comprehensive quality and environmental policies in order to obtain a clear framework of the project to be executed. In order to obtain an overall view of the environmental impacts, health and safety hazards, and other potential risks that could result from the project, a detailed risk assessment is essential. Finally, monitoring tool will check the efficiency of the IMS implemented and the final certification will verify if all the reviews provide satisfactory outcomes. A ‘plan-do-check-act’ methodology can help designing the implementation process and completing the project within the specified time limit. References Bush, J. 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