Strategic Management Theory: An Integrated Approach - Case Study Example

Strategic Management of Masdar Name: Institution: Course Title: Course Lecturer: Date of Submission: Abstract According to Hill and Gareth (2012), strategic Management is involved with the association of a company’s mission and vision through the company’s management mechanisms. By adopting a strategic management system, a company is able to integrate the environmental factors surrounding it in its strategies. It also enables a company to identify the challenges facing the company, but also give it a competitive edge over other competitors. A company’s organization structure does have an effect in the manner it lays its strategic plans. To establish a company’s level of strategic management, it is important to put in consideration all the elements affecting the company. Table of contents Abstract………………………………………………………………………………………………….2 Operational Environment………………………………………………………………………4 Company’s Background…………………………………………………………………………5 Developments………………………………………………………………………………………..5 Management…………………………………………………………………………………………..6 Strategic Plan…………………………………………………………………………………………6 Goals and Objectives…………………………………………………………………………....6 Corporate strategy…………………………………………………………………………………7 Business Strategy………………………………………………………………………………….7 Functional Strategies…………………………………………………………………………….8 Company’s Policies………………………………………………………………………………..8 External Environment Analysis……………………………………………………………..9 Political factors……………………………………………………………………………………….9 Economic Factors…………………………………………………………………………………..9 Socio-cultural factors…………………………………………………………………………..10 Technological factors…………………………………………………………………………..10 Internal environmental factors……………………………………………………….....10 Corporate structure………………………………………………………………………………10 Corporate Culture…………………………………………………………………………………10 Resources…………………………………………………………………………………………....11 Operations…………………………………………………………………………………………….12 Human resource……………………………………………………………………………………12 Conclusion…………………………………………………………………………………………....12 References…………………………………………………………………………………………….13 Operational Environment The company was established and operates in the United Arab Emirates where there is a favorable economic environment hence attributing to its huge strides in infrastructural developments. The country’s economy has been developing massively in its varying sectors such as tourism, hospitality, and transportation hence shaping the development and urbanization taking place in the country. The economy also provides space for foreign investments and strategic partnerships. In its quest for urbanization, the country has massive plans for infrastructural developments which include airports, ports and industrial zones (Neuhof, 2013). There have been changes in the modeling and renovation of buildings at roads in Abu Dhabi as well as in development of the central market. Infrastructural developments aimed at boosting the country’s tourism have also been put in place with effort being made in the transport system to ease traffic as well as the opening of the Emirates palace in Abu Dhabi which led the way for tourism related infrastructural development in Abu Dhabi. The continued urban development and development in infrastructure has contributed directly to the increase in demand for power and electricity in addition to the ever growing demand. This has however led the government into implementing plans that are aimed at meeting the escalating demand for power, and maximize the capacity by a large percentage. This increase in output is supposed to be generated from natural gas and diesel (Webb, 2009). The country has been enjoying a good position economically hence taking measures to accelerate the economy growth by venturing into other sectors such as tourism and other non oil related businesses. The country aims to record a sizeable percentage of its contribution through non-oil related sectors (Hume, 2013). For instance, through the growth in the hydrocarbon sector as it has been experienced in the past. There have also been emergent opportunities and new values emanating from the new and contemporary based industries which bring about foreign capital from the ever growing business globalization. Company’s Background The company was founded in the year 2006 as subsidiary of the government of Abu Dhabi and Mubadala development Company. The company dealings are in the renewable energy and sustainable technology industry. Masdar city establishment in 2006 has enhanced a general platform for companies to progress while also being in a highly favorable environment with minimal trace of ecology (Hume, 2013). This was brought about by the establishment of Masdar Clean technology fund in 2006 with Masdar capital providing expertise on capital management to the companies operating in the renewable energy and clean technology industry. This was also followed up by the establishment of the Masdar institute of science and technology aimed at providing special emphasis on sustainable and clean technologies through their graduate level programs. Masdar carbon was established in the same period also, to manage those projects that related to reducing the carbon emissions and heat wastage. In order to enhance a large assortment of large scale renewable power energy plants world wide, Masdar power was formed. Therefore, it is evident that Masdar is a company that works as a collection of integrated units aimed at thriving in the renewable energy and sustainable technology industry (Creed et al, 2013). Developments Tourism has been boosted as the increasing number of visitors’ stream into the UAE with various interests. However, thousands of these visitors are treated to an array of hunt out organic and eco-friendly assortments and food stuffs at the Friday market in Masdar city (Neuhof, 2013). The company was integral to the international gathering of the sustainability week that was held in at the Emirate of Abu Dhabi. This is in addition to being a lead sponsor in the world energy forum 2012 held at the Dubai international Convention and Exhibition center. These efforts of the company with regard to development did not go unnoticed as the company received the ‘Energy Company of the year” award during the gulf business industry awards. Management The company’s board of directors is chaired by Al sayegh who has taken major steps in developing Masdar also referred to as Abu Dhabi future energy company. The chairman is vastly experienced having worked in various environmental initiatives. The company’s CEO is Sultan Al Jaber, who is also the managing director. Other board members of Masdar are; Carlos Obeid, HE Abdulla Nasser Al Suwaidi the chief executive officer of ADNOC, and Waleed Al Muhairi who is the chief operating officer of Mubadala development company (Nohuef, 2013). This report underlines the need for strategic management by analyzing how Masdar has incorporated strategic management on its operations and how it would be affected by the organization structure of the company. The report also includes the external and internal factors that may affect the company’s operations. The company’s desire to operate in international markets has also elevated the company’s need to have in place a strategic management plan. Strategic Plan The company is driven by the vision of becoming one of the world’s most spectacular avenues for renewable energy development and clean technologies to achieve global recognition with regard to sustainable development and to progress in renewable energy and sustainable development (Hume, 2013). To achieve this plan, the company has in place goals and objectives that it aims to achieve through its strategy. Goals and Objectives The company aims to enlarge its export base. This has become a key strategy for many businesses in the modern day due to the ever changing market environments and growth in international trade. The company also endeavors to encourage strategic alliances and partnerships between the public and the private sectors in addition to provision of development programs aimed at educating workers in knowledge based sectors (Creed et al, 2013). This has been aided by the company’s desire and need to invest substantial amounts in education and research. The company also aims at being in the forefront to enhance and encourage investments in areas of intellectual infrastructural gains as well as play a part in the growth of non-oil sector contribution share of the United Arab Emirate’s economy. The company has put in place a mechanism that requires implementation of important strategies in its operations (Webb, 2009). This has been brought about by the need to have a competitive edge in the renewable energy and technologies industry. Some of these strategies are as delineated below; Corporate strategy In its quest for long term profitability, Masdar has been heavily reliant on vertical integration (Webb, 2009). Through the exploitation of the network structure assumed by the company, it can replace non-performing partners unable to meet the company expectations and standards with new partners. The company also operates closely with its suppliers so as to improve quality as well as minimize costs. Masdar has also set new focus on promotional activities so as to address the challenges it faces in its marketing as well as enhance the company’s profitability and reputation in the United Arab Emirates. Business Strategy As part of its business strategy, Masdar stresses on the importance of differentiating its products and innovation which has contributed largely to its popularity in the United Arab Emirates. The company has put in place varying strategies in order to achieve maximum nil waste and enhance its work in relation to use of renewable technologies. This can be underlined by the wind towers above buildings and the design of the buildings aimed at minimizing consumption of water through the use of resourceful appliances such as; installation of low flow showers as well as closely monitoring the consumption of water by consumers and also looking into cases of water harvesting and recycling (Webb, 2009). The company has also enhanced its business strategy through the use of the electric powered personal rapid transit vehicles in and around the premises and campuses of the Masdar units. The company generates about thirty percent of the buildings electric load through the photovoltaic roofs that are connected to the solar plant. Functional Strategies The company maintains contact information of its suppliers and also a sustainable procurement which is used to analyze the supply chain. This assessment is conducted through a series of criteria put in place to attain sustainability through saving water and energy, reduction of waste use that has bio-based materials and recycled packaging. The operations are conducted in a smooth manner to minimize the carbon traces hence cutting down the company’s cost of operation (Webb, 2009). Company’s Policies Through its policies, Masdar aims at achieving some objectives which include; Maximizing its profits through expanding its export base Investing substantially in academic intensification so as to arouse the sense and desire of innovation among the young people who form the future generation, in addition to developing and shaping the manner in which present workers at the sector think. The company is also keen to remain on the fore front in providing growth and development prospects in the non oil sector of the country’s economy so as to eradicate the effects of fluctuations in oil prices on the economy of United Arab Emirates. This is an important factor because if successful, it would enhance economic stability. The company faces some challenges as well which include lack of property financing by financial institutions in the United Arab Emirates. This is in addition to a transport limitation to the Masdar as there is no accessibility for the Abu Dhabi metro (Creed et al, 2013). External Environment Analysis Political factors The contribution of the oil sector in the Middle East has largely attributed to the noteworthy growth and development witnessed in the past years. The government has contributed to this growth through favorable diplomatic relations and investments hence attracting a number of multinational corporations (Neuhof, 2013). However, the region is challenged by the political revolution in some countries in the region which threaten the economic prosperity and future opportunities for the region. The labor law requires that a company operating in the private sector should recruit at least twenty percent of the employees domestically, failure to which the company would be disallowed from recruiting any further foreign employees. Economic Factors The company operates in a region where the economy is booming. This is attributable to considerable rise in the economy that has remained stable while maintaining a high growth rate. The fluctuations in oil prices have also benefited the UAE and other Middle East countries thereby increasing the revenue produced for their economies (Hume, 2013). However, these fluctuations in prices make these economies vulnerable due to their dependency in the oil industry. This sustained growth has also been brought about through business outsourcing to Chinese and Indian companies that charge lesser costs for their services. Socio-cultural factors Despite the presence of many foreigners in the UAE, the country remains a Muslim country predominantly. The nation has directed most of its efforts towards development and the need for maximizing optimal resources utilization hence encouraging the use of recyclable and environmental friendly products so as to avoid excessive exploitation of resources (Barron, 2008). Technological factors The United Arab Emirates has a reputation for technological advancements in its infrastructure and availability of high echelon technological support structures, than enhance it to maintain its high efficiency levels globally. The company has in place a very advanced ICT network and infrastructure which provides sustainability of many organizations in its economy. These facilities contribute a great deal towards research and development of renewable and sustainable sources which is in line with the expectations of Masdar (Barron, 2008). Technology through the internet has kept information flowing with regard to any developments and also on the varying product and services availed by the company. Internal environmental factors Corporate structure The company is a public sector corporate entity established in Abu Dhabi, In the United Arab Emirates with its goal being working towards the development of renewable and alternative energy sources, and implementing innovations in sustainable technology. Since it was initiated in 2006, the company has grown to integrate five functional units. The company is one of the excellent global centers with regard to renewable energy and clean technology. It endeavors to remain in the fore front in the energy sector by integrating research, development, innovation with investment, sustainable production, deployment and exportation (Webb, 2009). The company’s main strength comes from the readily available source of funds from the emirates government for its undertakings. Stability is another key strength of the company. This is due to a stable management system that rarely initiates employee turnover. The stability of the United Arab Emirates as a nation has also greatly ensured stability of the company due to its relation with the government. The nature of the company’s business is entrepreneurial with the board of directors providing leadership to the five units of the organization (Neuhof, 2013). However, it is worth noting that every independent unit of the organization has its own managerial body that provides insight in the activities of the unit and seeing to it that they are in line with the strategic plan of the parent company. Corporate Culture The core significance of the vision of the company in the long term is ensuring continued sustainability whose structure is designed to incorporate economic, social, and environmental factors into the company’s corporate culture and strategic plan (Creed et al, 2013). The company’s efforts and initiatives are directed towards the achievement of Sustainability in the United Arab Emirates in an effective manner. The integrated units enable the company to focus its energy and resources effectively towards the development of aspects that are of benefit in implementing and formulating inventive procedures to assume sustainable practices. Resources Marketing The company is a leader in the UAE with its dedication to development, research and implementation of sustainable technologies (Hume, 2013). The company appeals to people with desire to implement and adopt green practices by promoting itself as a provider of sustainable technology. The company has been key to the development of Masdar city as well as the providing education in sustainable research. Operations The company has entered into partnerships with other corporate entities mostly in the energy sector of the UAE hence having in place the required resources to carry out research and development effectively. Human resource The government provides insight to the company’s operations hence its human resource management involves training and development programs that are provided to employees as well as students studying at Masdar institute of science and technology. The company has also been taking student teams to workshops in international regions. There are a number of incentives provided to Masdar employees as well as required by the law in addition to providing them with safe and productive work environments (Neuhof, 2013). Conclusion There has been increased need for strategic management by companies in the modern day as a result of the ever-changing market place. This has been brought about by the fact that organizations are now operating on a global scale hence the need for strategic decision making to enhance the adoptability of a business in these international markets. Masdar has in its endeavors opened its operations door to international regions hence the need to adopt strategic management. This in turn enhances the company in its research and development strategies so as to achieve sustainability. References Barron, R. (2008). Masdar Bets on Massive Offshore Wind Park. Greentech Media. Retrieved 19 May 2015.  Hume, P. 2013. Masdar City: A Rising Star. The Ecologist. Retrieved 19 May 2015.  Creed, A., Kordvani, A., & O'Connor, J. (2013). Renewable energy across the MENA region. Clyde & Co. Retrieved 19 May 2015. Hill, C.,& Gareth, R. (2012). Strategic Management Theory: An Integrated Approach, Cengage Learning, 10th edition 2012  Neuhof, F. (2013). Masdar inaugurates Seychelles windfarm. The National. Retrieved 19 May 2015. Webb, C. (2009). Sun shines on turbine makers. Power Engineering International 17 (6). Retrieved 19 May 2015.   Read More