Business environment has become highly competitive globally due to globalization, the rapid changing economic environment, rising expectation from clients and advancement of technology. Organizations that are keen in maintaining competitive advantage over their competitors need to be prepared to shed their traditional management practices and adopt modern practices which will give them an edge in the market. Management development is one of the practices that need to be embraced in organizations to enhance productivity and profitability for future growth. Arabian Oil Company (Saudi Aramco) is no exceptional, since it is also facing similar challenges despite being the leading oil company in the world. In order to secure its future success, it needs to invest in its management development program to guarantee direct economic benefits. According to Cannell, (2008) effective management of both public and private sector organizations is of critical importance to organizational success and national economic well being. Moreover, it has been noted that majority of companies in Saudi Arabia have deficiencies in relation to qualities and skills of their management team and this has greatly hindered their success in the competitive business world.
Goldstein, (1989) defines management development as a structured process through which managers of organizations enhance their skills, knowledge and competencies to perform their duties effectively through either formal or informal learning methods. Development of managers in organizations is a crucial process since it helps to sustain effective performance in their duties for great achievement both in the present and the future. Cannell, (2008) asserts that management development programs in organizations maybe approached through various ways such as; professional development of managers and other employees who are being groomed for management positions in the future, coaching, mentoring, internal training, job rotation and business workflow analysis.
Saudi Aramco is a state owned company and the largest oil producing company globally. It supplies more than 10% of the world oil demand. The company had proved oil reserves of 260.2 billion barrels in 2012 which was the largest in the world oil production. It also owned 284.8 trillion cu.ft of natural gas reserves. The company operates oil refineries and also markets their oil locally and internationally. It has distribution ventures in other countries including China, South Korea, Japan and the US. According to Vitalis, (2006) Saudi Arabian Oil Company exports 55% of its crude oil to the Far East making it one of the highest exporters of oil in the world. Due to this enormous growth, the company is facing tough challenges in relation to its management and organizational development which are key ingredients for its future success.
This research report gives a critical analysis of the management development program employed in the Saudi Arabian Oil Company. The researcher worked as a volunteer with the company administration and the human resource manager to assess the management development strategies that the company has been using to gain its high competitiveness globally. The researcher also assessed future prospects of the company and chances of it continuing to be the leader in the business market. In the study, it was identified that Saudi Arabian Oil Company has enjoyed its competitive advantage due to its proper management development strategies which include:
Coaching and mentoring programme
The Saudi Arabian Oil Company has made tremendous growth in the oil manufacturing industry due to its effectiveness in coaching and a strong mentoring programme for the management team. Laabs, (2000) defines coaching as the process of helping managers or employees to exploit the potential that is within them to perform better in their duties in their organizations while mentoring programme is regarded as a powerful tool that prepares individuals to learn and grow within an organization where they are prepared to take on new roles and responsibilities, build confidence in handling greater challenges and develop their career to enable them assume greater roles within the organization in the long run. Macneil, (2001) points out that most managers and employees experience uncertainty in their work environment since they work under pressure and need to deliver high level performance using the available resources and personnel.
A research conducted by Megginson, (2005) which aimed at assessing the impact of strategic approach to coaching in organizations found out that coaching has increased in usage over the recent years in building management and leadership qualities of both employees and managers in business and academic circles. It indicated that organizational coaching is widely viewed as a corporate strategy that is designed to maximize the potential of employees in organizations to deliver quality services. Research has shown that 88% of organizations which perform best in the global market train their managers through coaching. This has been attributed to its flexibility to changing organizational culture and goals, strong need for managers to support the development of their teams and low levels of management skills needed to train new managers. Coaching has also been found to be highly cost effective and reaches a wider range of audience.
Saudi Arabian oil Company applies the use of Manager-coaching to a wider extent as opposed to external coaching. They believe that when managers identify talent among the employees and lower level managers and coach them, it cultivates the culture of hard work among other employees aspiring to ascend the ladder in the management hierarchy. According to the survey conducted by the Chattered Institute of personnel Development (CIPD, 2005) on manager coaching, 19 % of the respondents agree that it is very effective while 65% said that it is effective. Only 16% of the respondents indicated that Manager-coaching is not effective in training managers for organizational management.
Saudi Arabian Oil Company needs to embrace other types of coaching such as external coaching rather than concentrating on internal coaching only. This will enable the managers to learn new skills at the same time to be updated with the changing trends in the world business market. In the same survey conducted by CIPD, (2005) it was established that external coaching is more effective as opposed to internal coaching. It indicated that 65% of the organizations under study used external coaching of which 92% of the managers said that external coaching is effective. This was attributed to the fact that external coaching enhances new skills, good performance and high productivity in the organization.
Mentoring on the other hand is an important tool used in developing organizational managers who have the required training and experience to drive the companies vision into the future. Clutterbuck, (2007) defines mentoring as a process through which experience, knowledge and management skills are shared freely from individuals who are able, willing and available to share this information with others with the aim of preparing them for the future challenges in an organization. Studies have shown that companies that use mentoring culture to develop their future leaders maintain a high competitive advantage with less cost involved. Mentoring is one of the most cost effective and efficient tools that an organization has for the development of its employees. Saudi Arabian Oil Company seem to use less of this method to nurture its top organization mangers. This was attributed to the fact that top managers in the organization tend to be very busy allowing no room to mentor lower level employees. They are always out in meetings or when within they are highly preoccupied with their day to day activities which they perceive to be more profitable than mentoring other junior staff members. On the other hand the organizational managers in Saudi Arabian Oil Company when interviewed indicated that there was an element of fear among the top leadership where they believed that if you mentor junior leaders they will replace you from your position and therefore perceived mentoring process as their own undoing. The management also considers mentoring to be straining on their budget and therefore they are trying to be budget cautious in order to avoid unnecessary spending within the organization.
Ball, (1997) points that for the organization success managers, leaders and executives need to encourage career ongoing development programs. They need the skills and knowledge to help their employees manage, grow career wise and be in a position to advance their careers. Saudi Arabian Oil Company has engaged their employees on career development programs which have been successfully handled by the management. They have been able to maintain their valuable employees and at the same time increased employee engagement in the company. Ibarra, (2003) points out that career development gives one a sense of direction and makes it clear for the employee and mangers to know where they want to be in the future.
Herr, (1996) defines career planning as the process short of establishing career goals, objective and defining the steps that are required to achieve them. Savickas, (2011) points out that career development is influenced by both external and internal factors. He adds that changing jobs and a multicultural employees and technology has tremediousily affected the productivity of the organization. Managers and leaders are motivated to establish career development for their employees as effective response to employee problems in the organization as top mangers prefer to promote employees that fit between the task assigned and the employees and also because they are interested in career development programs (Mcneil, 2001). He also adds that most organizations adopt career planning and development due to pragmatic human resource response concerns and also because they believe that it will help to ensure a continuous supply of qualified and talented employees for future growth of the organization. It is widely speculated that most employees leave an organization due to lack of career development and growth. Ball, (1996) notes that active career development and planning initiates the organization’s key retention tool to keep talented employees within its fold. It also brings into focus the high potential of candidates who can be well groomed for future responsibilities in the organization. Similarly, organization which focuses in career development boosts the morale and the productivity of the staff members. Career development initiatives gives employees a clear focus about their career progress, the blind spots that they need to overcome and be able to meet the set goal by the organization management.
Myers Brigg test
Gardner and Mark (1996) define personality as a set of traits and characteristics that relate to an individual’s attitude, emotions, interpersonal interaction and motivation. It is a very meaningful trait in management since employee’s personalities will dictate how well they can be productive in the organization. Many organizations have been using self reporting personality tests over the recent years to identify the personality trait of the employees before hiring them or in the management development process. The Myers-Briggs type indicator is a popular test used in organizations to develop managerial skills and build teams for effective productivity. The theory addresses four areas of personality to create sixteen distinct types. This theory is the best for career development, counseling and team selection in any organization. Saudi Arabian Oil Company applies the Myers-Briggs indicator in developing management skills in the present and upcoming managers of the organization. However, Saudi Arabian Oil Company does not apply the Myers-Briggs indicators in all aspect of management development. The most commonly used aspects of the indicator are team building and counseling, though they not effective as they should be. Saudi Arabian Oil Company should embrace full use of the Myers-Briggs indicators to enable them select the personality that have the right attitude and motivation to drive the organization to the next level.
According Argyris, (1999) is a learning organization is one that is in a position to learn new skills to enable it confront amounting forces such as competition, advances in technology and shifts in customer preferences in the market. The concept of a learning organization started in the 1990s by Peter Senge. It aimed at enabling the organization’s employees to obtain skills for creating, acquiring and transferring knowledge. These employees will be of great importance to the firm since they will help the organization in cultivating tolerance, enhance open discussion and critical thinking. Learning organizations usually have an advantage over others since they are able to adapt to the unpredictable situations more quickly than their competitors could in the event that there is change in the market situation. Saudi Arabian Oil Company has no clear strategy in regard to making their company a learning organization. Though they try as much as possible to equip their employees with necessary skills to enable them respond to future unpredictable situations, the company lacks an organized and systematic mechanism to facilitate learning in an organization. The Company needs to have a continuous learning process in the organization to enhance creativity and innovation which are necessary in solving future unpredictable situations.
Leadership development and organizational culture
Companies are forced to develop new strategies and change their structures as a way of adapting to the changes in the market, change of customer expectation, advancement in technologies and new regulations in the market. Organizations that do not have strategies to respond to such changes usually face tough challenges in terms of productivity, profitability and a diminished competitive advantage. However, for such changes to be successful the organization’s culture requires to be aligned with the companies’ strategy and structure. This process requires that there is a change in the culture of the organization. Though some leaders believe that cultural change is a long term process and takes too long to yield any measurable results, the process is highly advantageous to the organizations if it is planned and managed well. The Saudi Arabian oil company though performing well in the oil market, it has no clear strategy in managing cultural change as such the company risks losing its competitive advantage should any unpredictable situation in the market affect it in the future.
Management and leadership development are important aspects that need to be considered for any organization that needs to succeed in the highly competitive world. Organizations that embrace the culture of coaching and mentoring their employees have high chances of maintaining high competitive advantage both in the present and the future.
This assignment was very important to me as a management development student since it has served as an eye opener on the aspects of management development skills that enable organizations to gain competitive advantage over other organizations that are producing the same products or offering the same services. This work based research report has provided an insight knowledge on how mangers of leading organizations can develop the capacity of their junior employees and mentor them to assume management roles in the future when the organization demand so. This assignment has also enabled me to gain skills in carrying out a work based research as well as identify management challenges in leading organizations that can easily hinder their future chances of growth. It has also given me an opportunity to identify the areas that need management development skills in order to enable the organization maintain its competitive advantage. This research report has also enlightened me that for any organization to withstand any future challenge it has to be a learning organization. This will equip its employees and managers with necessary skill that enable the organization to adapt to the fast changing business world whenever there is a crisis or unpredictable challenge. Career development, coaching programs and creating an organizational culture are important aspects of management development that if implemented will enable the organization grow tremendously to meet its objectives
Argyris, C. (1999). On Organizational Learning. Massachusetts: Blackwell Publishers Inc.
Ball, B. (1997). “Career management competences ‘ the individual perspective”. Career Development International 3(2) 70-7
Cannell. M. (2008). Management Development factsheet. London.
Clutterbuck, D. (2007). ‘Quiet transformation: The growing power of mentoring’, Mt Eliza Business Review, Summer/Autumn,
CIPD, (2005) Annual Survey Report on Training and Development: London
Gardner, W. and Mark J. (1996) Using the Myers-Briggs Type Indicator to Study Managers: A Literature Review and Research Agenda. Journal of Management, p 45-60
Goldstein, Irwin L., ed. (1989). Training and Development in Organizations. 2nd ed. San Francisco: Jossey-Bass, 1989
Ibarra, H. (2003). Working identity: unconventional strategies for reinventing your career. Harvard Business Press.
Laabs J (2000), ‘Need peak HR performance? Consider a coach’, Workforce, vol 79 no 10, pp 132-135.
Mcneil, C. (2001), ‘The supervisor as a facilitator of informal learning in work teams’, Journal of Workplace Learning, vol 13 no 6, pp 246-253.
Megginson, D. and Clutterbuck, D., 2005. Techniques for coaching and mentoring, Amsterdam; London, Elsevier Butterworth Heinemann.
Schwandt, David R., Marquardt, Michael J. (2000). Organizational Learning. Boca Raton: St. Lucie Press
Strenger, C. (2008). “The Existential Necessity of Midlife Change”. Harvard Business Review. February 2008: 82’90..
Vitalis, R. (2006). America’s Kingdom: Mythmaking on the Saudi Oil Frontier. Stanford: Stanford University Press.
Yergin, D. (2008). The Prize: The Epic Quest for Oil, Money and Power. New York: Simon and Schuster. pp. 265’74