Maintaining Of Company's Development Sustainability - Term Paper Example

Maintaining Of Company's Development Sustainability The echoing words in the media are “sustainability, renewable energy, and transparency.” Multi-national corporations have the tasks of meeting stakeholder expectations, strategic corporate goals and financial objectives, and providing an acceptable product to their customers. This paper will take a glimpse at the conglomerate, “Halliburton” that is globally recognized as synonymous with oil and energy. The topics of discussion are the function of management within the organizational structure of the company, the legal and ethical issues the company faces, along with how the company confronts the challenges of maintaining transparency and accountability in an ever changing environment.

Planning and Function of Management Managing a 14.7 billion dollar corporation requires coordination, the efficient use of talented people, the latest technology, and the allocation of resources effectively with precision. Halliburton started in 1919 by Erle P. Halliburton in Duncan, Oklahoma is one such company. The company reporting approximately 55,000 employees in 70 countries worldwide is the world’s largest provider of services to the energy industry (Halliburton, 2010). Halliburton’s Board of Directors takes the lead in formulating the strategies for the company and in laying the foundation for management objectives to meet corporate goals.

Bateman and Snell (2006) state, “The board makes major decisions affecting the organization subject to corporate charter and bylaws. Boards perform at least three major sets of duties: (1) selecting, assessing, rewarding, and replacing the CEO; (2) determining the firm’s strategic direction and reviewing financial performance; and (3) ensuring ethical, socially responsible, and legal conduct” (p. 293). The Board of Directors is a group of 8-20 members with the task of overseeing the company’s operations and complying with the governing standards of the Global Reporting Initiative (Halliburton, 2010).

The horizontal structure of Halliburton operates through two divisions, Drilling & Evaluation and Completion & Production; because Halliburton is present from the beginning of a project the company supervises operations from the start of exploration through the final stages of production of the energy sources into products for the end user (Halliburton, 2010). Bateman and Snell (2009) describe the horizontal structure as the “departmentalization of the line departments within the organization” (p. 301). The design of the division of work enables management to ensure alignment with the strategic corporate goals and meet the objectives of the company.

Within the horizontal structure is the vertical or hierarchical design that shows how tasks are delegated within the organization (Bateman & Snell, 2009, Chapter 8). Bateman and Snell (2009) clearly define responsibility, authority, and accountability as terms showing the distribution of power within the organizational structure as well. They define responsibility as, “when a person is assigned a task that he or she is supposed to carry out” (p. 297). Similarly their definition of authority is, “the power and the right a person has to make decisions, give orders, draw on resources, and do whatever else is necessary to fulfill the responsibility” (p. 297). Bateman and Snell state, “Accountability is the subordinate’s manager has the right to expect the subordinate to perform the job, and the right to take corrective action if the subordinate fails to do so” (p. 297). The terms they highlight are areas in which Halliburton can control to ensure the internal operations are meeting the key strategies of the administering boards.

Legal Issues, Ethics, and Corporate Responsibility Maintaining ethical business practices when operating in other countries is an area of complexity multi-national corporations’ face. As a multi-national corporation Halliburton has the responsibility of simultaneously making certain that their foreign business practices conform to the standards of a U.S. company operating within the physical boundaries of the United States and complying with the operational practices and standards of the hosting country.

The challenge of maintaining accuracy in accounting practices, transparency in reporting, and other evaluating instruments are vital for American companies operating outside of the United States. In light of the scandals of global corruption in some of the world’s most visible companies, the creation of Sarbanes-Oxley Act of 2002 was passed to measure and monitor corporate activities (Public Law 107-204, 2002). The development of a standardized set of acceptable business and accounting practices of the Act is a way in which the internal business practices of publically traded companies are evaluated.

As a result Halliburton’s leadership continues to work diligently to pass the scrutiny of industry watchers by becoming a transparent, accountable, and a socially responsible corporate entity. Strategic, Tactical, Operational, Contingency Planning The wide spread global economic crisis continues to affect companies across industry boundaries and Halliburton is no exception. Whereas the company’s earnings of 14.7 billion in 2009 are substantial the earnings are a 20% loss in income in comparison to 2008.

The uncertainty of the future is a concern; however as a tactical strategy Halliburton is initiating a proactive contingency approach by aligning resources in areas to strengthen the company’s market position for when the economy rebounds (Halliburton, 2010). One of the main reasons for the company opening a second headquarters in Dubai, United Arab Emirates is to position the company in the center of the emerging markets in the oil, gas, and energy industries (Halliburton, 2010). Bateman and Snell (2009) state, “To retain, or gain a competitive edge, successful organizations must be adaptive always sensitive to changes in their environment and able to respond quickly, efficiently, and effectively to them” (p. 348). Planning for the future is a way in which organizations can gain a competitive advantage, however internal organizational flexibility or agility is essential for meeting the challenges of a continuous changing external environment (Bateman & Snell, 2009, pp. 326-348). As global environmental conditions continue to show signs of stress, corporations such as Halliburton are implementing initiatives within their organizations to reduce the possible adverse consequences their operational practices may have on the environment.

In their, “Corporate Sustainability Report” Halliburton identifies key components enabling the company to perform responsibly: (1) do no harm to the environment; (2) support local communities where they do business; and (3) use technologies for the potential to deliver benefits to the company, customers, and the energy using world (Halliburton, 2010). Badiru (2010) defines sustainability as, “implying the ability to sustain and maintain a process of object at a desirable level of utility” (p. 31). Halliburton’s internal instrument to measure the corporation’s effort to achieve a balance in their operational activities makes the possibility of the company becoming a socially responsible entity achievable.

Conclusion The increasingly controversial topics of renewable energy, sustainability, accountability, and transparency will continue to challenge multi-national corporations in the ever changing environment. However organizations have the ability to gain a competitive advantage and distinguish themselves as socially responsible corporate entities by implementing proactive corporate initiatives and managerial strategies. References Badiru, A. (2010). The many languages of sustainability.

Industrial Engineer: IE, 42(11), 30. Retrieved from MasterFILE Premier Database http://web.ebscohost.com.ezproxy.apollolibrary.com/ehost/pdfviewer/pdfviewer?vid=5& hid=110&sid=5cc6d587-715b-4364-9a53-70c877e97ad0%40sessionmgr11. Bateman, T., & Snell, S. (2009). Management: Leading and collaborating in a competitive world, 8th Ed. New York, NY: The McGraw-Hill Companies, Inc. Halliburton. (2010). Retrieved 13 December 2010 from http://www.halliburton.com/AboutUs/default.aspx?navid=966&pageid=2458.

Public Law 107-204. (2002) Sarbanes-Oxley Act of 2002. Retrieved from http://www.sec.gov/about/laws/soa2002.pdf.