Innovation Management - Abu Dhabi National Oil Company - Case Study Example

Name Tutor Course Date Table of Contents Table of Contents 1 Introduction 2 Background 2 Issues and problems 3 Strategies 5 Outcomes 6 Reflection 6 Works Cited 7 Introduction The Abu Dhabi National Oil Company is one of the largest oil companies in the Middle East and in the world at large. It is a state owned corporation dealing in petroleum products and their exploration in the United Arabs Emirates. It was founded fin 1971 and has tremendously grown to one of the largest oil companies in the region. The company mines, processes and distributes oil and gas all over the world. It explores the natural resources in the country and exports them to different parts of the world. The company process over 2.7 million barrels of oil in a day. This shows that the magnitude of their operations and the scale at which the company operates. The company has been in existence for over forty years and this has enabled it to survive in a dynamic environment. To operate in such a huge scale calls for usage of resources and management practice that allow innovation and room for growth. The company has based its operations in ensuring that they meet the needs of the market and at thee same time they carry out their activities in a socially responsible way that ensures environmental sustainability. The company has been rated highly in terms of occupational health for its workers and environmental sustainability that other companies the region could emulate. ADNOC also has several subsidiaries that help it to operate in its wide scope by capturing different aspects of the petroleum industry (ADNOC). Background For the company to achieve such success and high ratings over time, it has taken numerous efforts and challenges for r and managers in the companies. Being a state owned institution, it has had to deal with the political perspective of the business compared to other privately owned companies. With a growing demand for energy all over the world, countries in the Middle East have been forced to improve on their product delivery systems to meet the worlds growing demand. The demand or oil especially, has seen prices skyrocket over the last decade. This has been despite the increased production rates that all major produces have affected. The United Arabs Emirates is mainly a desert country. Oil and other petroleum products are the main sources of income for the country. The industry employs thousands of people in the country. The country has some of the largest oil and natural gas deposits on the planet. This makes a strategic point of interest for high oil consuming countries in Europe and America. To meet the demands of the world and to fulfill its objectives as a national company, the company has seen some innovative management strategies that have enabled it to carry out its mandate effectively, both locally and internationally. In a dynamic world of business, companies and business have increasingly adopted innovation and creativity as a way of creating appeal to the market and solving specific challenges that emerge in the day to day conduct of business. It has been widely argued that only innovative and creative business minds have the ability survive competition and meet consumer needs (Eardley and Uden 3). This way, businesses gain huge market shares and large consumer bases. Issues and problems The oil industry and business has extensive aspects that relate to it before the final product finally reaches the consumer. Before oil products reach consumers whether gas, petroleum, or other oil based products, there are multiple processes that take place. This all begins with exploration of oil products which are expensive ant extensive in nature. The UAE has made a huge step towards this and has discovered billions of barrels of oil wells in the country, both inland and offshore. Most of the discoveries in the country have been proven to be lucrative and economically viable. The processes that follow after exploration are testing and quality checks. Infrastructures necessary for drilling to begin are set and then refinery is carried out (Ghiselin, Dick 13). The transportation process than takes place and sometimes it is over thousands of miles. In between these processes, many problems and challenges emerge and have to be effectively managed to ensure that delays in one sector does not spill over to another department. The company has subsidiaries that tackle different responsibilities related to the industry subsidiaries. They are interrelated and the malfunction of one may adversely affect the operations of others. One of the biggest challenges is to have all these companies operating harmoniously and creating a system that works as a single unit. Another major challenge that faces the company and other companies in the region as well is the growing and constant demand of oil that has seen the resources of the company pushed to its limits. Environmentalists and scientists have also argued that the rete at which the world is consuming petroleum products is putting serious strains on suppliers and the environment as well. The demand for oil and its products is too high and even companies which produce millions of barrels in a single say cannot meet global demand. This is not withstanding that local needs have to be met as well. As part of the industry, the company faces numerous challenges that are associated with the industry. For instance, oil exploration processes and drilling have become increasingly expensive. This has been as a result of rising costs of raw material such as steel used in the drilling process. There is also the need to reach deeper levels in both deep sea and inland exploration. The company also faces a personnel problem that is common in the industry. This has been as a result of an increased wage rate and early retirement of professionals in the industry. Just like other companies in the oil industry, ADNOC faces environmental challenges that have been constant issues with environmentalists all over the world. The main issues have been focusing on pollution from oil spills and gas flaring which have serious environmental impacts. This also coupled with the biggest debate of global warming that s caused y the use of fossil fuels (Al-Zayer,). Strategies Being the huge company that it is, ADNOC faces all these challenges to different extents. The company has to constantly apply innovative management practices to cope with them regularly. Most of the challenges that the company faces are not unique to it but cuts across most oil companies. However, the difference lays in how managers and leader handle them hence the company is more lucrative and bigger in operations than most of its largest rivals in the country. First, The Abu Dhabi National Oil Company has several subsidiaries that deal with different aspects of the business. In this view, there are up to sixteen companies that are responsible for different aspects of the business. For example, there is a company responsible for offshore operations and another responsible for gas exploration. Other subsidiaries are charged with activities such as refinery, gas liquefaction, marine operations, ports operations, shipping activities, oil, and gas development. Engaging experts in this field has helped the company to ease the load of management on the company as a whole and ensure that different operations are handled by experts in the specific fields. On the issue of personnel and training, the company has partnered with several educational institutions to develop careers and talents of young people who intend to make careers in the industry. They have scholarship programs, an achievers program, petroleum institute a technical institute and a partnership with the Glnelg School of Abu Dhabi (ADNOC). This way the company has secured personnel for the near future and which has been major challenge for the company. The company is always vigilant to keep track of demand levels which are at times uncertain. This is through following OPEC set limits and surveying market in collaboration with other players in the industry. On the issue o f the environment and exploration, the company is constantly engaged in research and development strategies to make the use of fossil fuels more environmentally acceptable and make exploration to deeper levels more achievable. This has been through investments in various research and educational institutions Outcomes These strategies have yielded results and continue to support the endeavors of the company. The result has been the company being ranked as one of the best and largest in the world in terms of capacity and scope. The research strategy has secured the company with some of the most knowledgeable geologists, environmentalists, managers and other personnel necessary to run the company. The company has regularly received HSE award due to its environmental projects and strategies to make the use of fossil fuels safer and more acceptable. Reflection The Abu Dhabi national Oil Company has grown to be one of the most successful and largest in capacity and scope on the planet. It is ranked amongst the top 5 companies in the world. This is despite the short period of less than 50 years that it has been in operation. Appropriate and effective leadership and management can to a large extent be cited as reason why it has been so successful. The industry calls for innovation and constant application of appropriate strategies to enable it to effectively carry out its mandate inside and outside the UAE. The prospects for the company are even bigger as it prepares to employ new technologies and innovations to put it in a strategic position in the industry. Works Cited ADNOC. Abu Dhabi National Oil Company. n.d. 28 October 2013 . Al-Zayer,, Fuad . "The future of oil and gas and the resultant challenges and opportunities for NOCs." 26 April 2007. OPEC. 28 October 2013 . Eardley, Alan and Lorna Uden. Innovative Knowledge Management: Concepts for Organizational Creativity and Collaborative Design. Hershey, PA: IGI Global,, 2011. Ghiselin, Dick. "DRILLING ECONOMICS." Oil & Gas Investor (2005): 13-21. ProQuest. 28 Oct. 2013 . "Saudi Analyst: OPEC Production Cuts no Longer Able Alone to Prevent Price Plunge." BBC Monitoring Middle East Oct 26 2008 ProQuest. 28 Oct. 2013 . Read More