Management of Mubadala Investment and Development Company - Case Study Example

Mubadala Investment and Development Company (Name) (University) Mubadala Investment and Development Company 1.0 Background Mubadala Investment Development Company is an investment holdings company which manages portfolios of national and international investments. Under the ownership of Abu Dhabi Government, MIDC has played an instrumental role in improving Abu Dhabi’s economy. The company centers on the economic development and diversification strategy for Abu Dhabi. It is, therefore, an active investor in the geographies and sectors that have an increased potential in tangible returns. In this regard, the company’s portfolio is valued at over $ 60.7 billion (Mubabala, 2014). MIDC enjoys its participation in a range of sectors namely natural and energy resources, utilities, commercial finance, information technology, infrastructure, flight training services, real estate, aerospace, basic industries and services , semiconductor, seaport operations, medical services and renewable energy. As such, its revenue base outstretch in regions such as Europe, Middle East, North America and Asia. MIDC has championed in a number of development projects in recent years. Moreover, the company is centered on the improvement of Abu Dhabi’s economic development. MIDC partners with a number of leading companies in the quest to develop world-class development projects. MIDC focuses on managing long-term investment that can significantly deliver strong financial returns for the country. Some of these key developments include; i. Non Yao Development, Thailand ii. Vestas Wind for Prosperity iii. An anticipated investment in the Hydroelectricity in Serbia iv. Masdar City v. Ferrari development Through the company’s efficient organizational structure, it is mandated to strengthen Abu Dhabi’s economic growth potential. It further complements the standards for the government’s socioeconomic targets, service delivery and competitiveness throughout different markets. 2.0 SWOT Analysis 2.1 Strengths Members Public Private Partnership: The Company’s employees and stakeholders play a significant role in strengthening the organizational functions at all levels. Through a dedicated workforce, the company is capable of leveraging different processes that affect the overall outcome of the company. The Abu Dhabi government has played a mediating role in supporting the organizational functions at various levels. Evidently, it improves the MIDC’s competitive advantage in various market locations. Through the government, a number of ties have been established with partnered organizations across divergent levels. MIDC has improved the company’s coordination efforts with relevant stakeholders in addressing pertinent issues. Sector leaders: The organization’s members are among the most prominent organizations in Abu Dhabi and secondary partner states. In this regard, the dispensation of services and proffered investment strategies can be easily created in line to MIDC’s mission objectives. Effective leaders are essential in improving the company’s overall success across various organizational levels. Active members: Most MIDC’s employees are proactive, evidenced by their capabilities in the provision of resources aimed at developing MIDC’s activities. The organization’s employees have an induced behavior of improving the organization’s performance through comparison with other leaders. Mutual Support: Mutual support has significantly improved the company’s organizational process. Thus, the members can rely on a network of organizations that offer sufficient knowledge and information. Company’s Issues Multidimensional Approach The organization covers on extensive topics that are consolidated by a theme of sustainability. Whereas the present sustainability in Abu Dhabi is centered on one specific aspect, MIDC offers an umbrella approach with the aim of addressing different entities consolidated under three dimensions. These include environmental, economic and social entities characterizing its independent field of practice. Management Strategic Focus The company’s strategic focus are clearly defined in response to three instrumental levels of achievement namely; attaining a sustainable country, building an excellent organization and strong membership. Democracy A strong decision-making strategy is used within the organization that improves the level of coordination throughout the organization. Decision-making process is conducted by the General Secretariat, comprising of five elected representative and two permanent representatives, who are invited in developing new products and processes. Through ad-hoc task force, the company can address issues such as flagships, capacity building, and membership. Supporters/Partners The Secretary General of the executive council is entrusted in the proposition of the strategies and public policies whose strong position in the government provides a foundational support for the company. The company has instituted a strong partnership with successful companies. The companies have significantly increased its participation in different market. The guidance offered by EAD (environment Agency) offers strategic and operational support for the organization. 2.2 Weaknesses Staff Some of the employees are not actively involved in the company’s initiatives; due to lack of resources in committing financial and human resources towards the company’s sustainability. Accordingly, insufficient resource allocation to some of the staff incapacitate their performance. Eventually, the company’s productivity is significantly hampered. Representative Turnover The high number of turnover has suggestively affected the number of expertise within the organization. Tentatively, the company lacks a system that encourage increased commitment aimed at improving higher sustainable levels. Hence, MIDC needs to implement a sustainable system that provides incentives in reporting. Although the company’s multidimensional approach offers a workable approach, it is compounded by a number of risks such as loss of focus. 2.3 Opportunities Pressure for Sustainability More often than not UAE has frequently topped international statistics as one of the countries that embrace high ecological footprints. Sustainability is projected as the succeeding level of excellence. Moreover, sustainability is viewed as a necessity in the achievement of business and government excellence. In this regard, the GRI has proposed the mandatory practice of sustainability reporting for the large and medium sized functioning in QECD countries. MIDC has created a number of initiatives have been created in setting up the International Connected Reporting Committee. Its collaboration will act as a key supporter for connected reporting, as well as, accounting profession, business, standard setters and inter-governed organizations. As such, MIDC is well placed in its initiative of suitability reporting. Local Interest for Sustainability The Abu Dhabi government has increasingly searched for excellence, given its attribute to achieve excellence. In this respect, the Abu Dhabi Policy Agenda of 2030 presents the vision of Emirate of achieving sustainable development and global competitiveness. The increased demand for the sustainability at the local levels has not been met by the local organizations. Company’s Success Through the exploitation of different markets, MIDC has earned a significant reputation as a market leader. Therefore, the company can increase its market base through the incorporation of dynamic strategies in investing into new companies. With partnerships with over 15 companies, it has a higher propensity of acquiring more partnerships. 2.4 Threats Financial Crisis Despite the waging financial crisis of 2008, the company has maintained a low-cost initiative reliance. In an environment subject to the budget cuts in the private and public organizations, the company finds it increasingly difficult to upscale its investment initiatives to countries that have not fully recovered. Fluctuation in the market Price MIDC investment in the petroleum industries is met with market instability. The variation in oil pricing tremendously affect the revenues collected at different times of the market. 3.0 Strategy 3.1 Vision MIDC seeks to be a catalyst in facilitating Abu Dhabi’s ambition in diversifying and transforming the economy to developing new leadership. Through the integration of effective strategic goals, the company’s competence is set to champion the world market (Mubadala, 2014). 3.2 Mission MIDC invests with world class partners, hence creating global champions in Abu Dhabi. Through proactive asset management, the company offers a sustainable financial return for socio-economic and shareholder benefits. In achieving its mission, the organization has engaged the private, government and not for profit organizations, in using their influence in integrating reporting and management principles within the organization and stakeholders (Mubadala, 2014). 3.3 Strategic Goals Raise Understanding and Awareness of Reporting Principles, Management, and Practices Through the creation and dissemination of knowledge, MIDC has informed and inspired its employees on improved strategies that can effectively contribute to the understanding of pertinent issues of social, economic and environmental issues. Through its portal, publications, newsletters and seminars, the company seeks to create and disseminate knowledge at various operational levels. Tentatively, it pursues to rate and analyze the effectiveness of its efforts in generating and raising awareness to its employees. The organized seminars and events raise an understanding of proffered management practice and sustainability. Consequently, the seminars offer a communicative channel where knowledge can be shared and discussed openly. In encouraging the uptake of sustainability, certain sectors are of priority focus. In this selection, consideration relating to the contribution to the local economy are used Facilitate the Adoption of Reporting Practices and Sustainability Management Capacity building: MIDC has built the capability within its employees and other partners in adopting skilled management practices. The employee’s needs are identified, and proficient mitigation strategies are used in offering appropriate training. New employees are subjected to training and coaching to better understand the company’s roadmaps. Quality Assurance: The Company’s members are encouraged to enhance credibility, quality and reliability of different reporting through external assurance and benchmarking. Recognition: Successful members are recognized and are awarded, hence its boost the employees morale and motivation to achieve excellence. Provision of Forums for Experience Sharing and Learning Advocacy: The Company draws attention to germane environmental, social and economic governance issues that affect the present and upcoming developments of the company. Creating Opportunities for International Recognition and Cooperation Networking: The organizations has facilitated connections with affiliated organizations in fostering dialogue and collaboration through the improvement of systems management practices. Through networking the company has significantly grown and attuned to credible and effective organizations, hence promoting partnerships. Building an Excellent, Autonomous, and Sustainable organization With respect to its efficient strategic planning, the organization has attained competitive strategies throughout its partnerships. MIDC has incorporated efficient operational systems such as mobile cloud computing; which has significantly improved access to information. Therefore, the organization has sustained its competence across various niche in becoming a growing market leader. 4.0 Guiding Principles The company focuses on four guiding principles namely partnerships, inspiration accountability, and integrity. 4.1 Inspiration MIDC is motivated by a deep sense of purpose that encourages all employees and superiors to create an impact of greater good. Governance forms the organizational framework through which MIDC ensures its accountability for the strategies and tactics linked to sustainability. It presents the roles, structures, responsibility and affiliated procedures that MIDC must adopt to sustain the responsibility excellence from the highest level of the organization. In the light of responsibility, the strategies ensure that appropriate decision are made with respect to proper direction and guidance in senior leadership within the MIDC. A governance framework set by the Corporate Compliance Review Board ensures effective communication and coordination of the company’s efforts (Mubadala, 2014). Organizations are identified by their organizational culture, at MIDC efforts have been undertaken to develop an admired organizational culture. The development of the code of conducts and practices has been established to all its employees. The main driver for the organizational success is sustainability that has enhanced the organizational practices. The objective of such initiative is to integrate all business activities into sustainable practices. These are; i. Acting with integrity ii. Use of digital systems and information technology security iii. Integrity when dealing with customers iv. Conflict of Interests v. Money Laundering vi. Safety, health security, and the environment 4.2 Accountability & Integrity MIDC strives to take responsibly and to engage in a humble and transparency in operations while handling its investment issues. Internal Audit Process Audits are part of corporate monitoring of MIDC’s operations in creating shareholder value through promoting a risk & control oriented cultures. It offers an independence and objective assurance to MIDC’s Board of Directors, the Audit Committee, business controls, risk management, and governance procedures. MIDC’s scope of work and Internal Audit Functions determine whether MIDC’s systems of internal controls, risk management and governance processes are adequate in functioning in a manner that ensures; i. Interaction across difference governance groups ii. Accuracy in managerial, financial and operation information. iii. Appropriate identification of risk and proffered management initiative iv. Achievement of plans, objectives, and programs. v. Fostering continuous improvement and quality control processes vi. Compliance to regulatory or legislative issues that impact the company vii. Creating opportunities that improve the MIDC’s management control, image, and output. 4.3 Partnerships The company has worked hand in hand in consolidating and including successful companies into its portfolio. It has, therefore, created a spirit of investment with all its partners in various fields. SMART Initiative In 2010, the company initiated an awareness program that furthers employee education on the importance of the sustainability and comprehension of employee behaviors and their impact to the environment. Accordingly, the continuous campaign employs visuals and workshops in educating and enhancing the employee’s comprehension on sustainability. The development of a microsite was initiated to showcase a number of tips and platforms where employees can register innovative ideas and reduce negative impacts (Mubadala, 2014). 5.0 Partnership MIDC’s investment philosophy is focused in the founding a world class partnership aimed towards achieving competitiveness in a dynamic market. These partnerships consolidate a broad range cooperation and initiatives with leading companies such as Boeing, The Carlyle Group among others. In this regard, the MIDC Infrastructure Partners, is a joint partnership of Credit Suisses, GE, and MIDC, aimed at investing in development and infrastructure. As such, these investments are projected towards rapidly growing regions such as North Africa, Middle East, and Turkey. In increasing its revenue, it centers on four significant sectors namely telecommunications, infrastructure, transportation, energy and social infrastructure. This investment concentrate on a wide range of projects namely; power production, airports, hospitals, public housing, educational institutions and telecommunications cabling. AMD (Advanced Micro Devices) AMD is a US-based, international semiconductor company whose sole purpose centers on the development of the computer technology and affiliated technologies; evidenced in the commercial and consumer electronic market. In 2007, the company purchased 49 million shares of AMD, having about a 19 percent stake at AMD’s stock ((Rehman Institute, 2007). MIDC holds designs, significant equity stake and integrated technologies that powers numerous devices and machines. Accordingly, it is the world’s second largest microprocessor supplier and graphic processing unit (Rehman Institute, 2007). General Electric (GE) General electric is a US-based international media, technology and financial service company. As such, MIDC has a significant partnership with the company that includes equity ownership owning about 80.2 million shares with a 0.76 percent ownership (top1000funds.com, 2009). It initiates in clean energy, commercial finance, leadership development and aerospace development (top1000funds.com, 2009). The Raine Group The company holds a minority equity stake in the Raine Group LLC. This is a merchant bank that invests in entertainment, sports, and the media throughout the globe. EBX Group Through a strategic partnership with EBX, MIDC has entered into one of South Africa’s strategic market, through a subsequent investment of US $ 2.0 billion preferred equity investment. In 2013, EBX suffered substantial financial difficulties. In this regard, EBX and MIDC agreed to restructure the company’s investment in EBX. The discussions resulted to a series of transactions where the company redeemed a significant portion of its original investment into direct equity interest in different assets (top1000funds.com, 2009). 6.0 Leadership Participative Leadership Style MIDC is occasioned by myriad decision-making processes that necessitate the incorporation of the expertise in different sectors. It is considerably difficult for the managers to initiate a comprehensive decision-making process without incorporating an investment committee. The staff is involved in the decision-making process given the number of expertise in the organization. Such consultation has propelled an effective decision-making process that oversees the sustenance of MIDC competitive strategies across different platforms. Through the decision-making process, the company has significantly partnered with affiliated companies in maintaining proffered affiliates. Through MIDC’s managers, the decision-making process with Masdar Clean energy was supported by the staff. The staff provided the necessary framework and information for the investment. However, the final investment decision was made by the MIDC’s Investment Committee. Therefore, the company’s Investment Committee is tasked with monitoring and developing investment strategies, aimed at improving the company’s performance. 6.1 Training Programs Information Management Leadership Programs This is an entry level programs where prospective individuals seeking a fast-paced knowledge in Information technology, are initiated. Tentatively, the training module attunes the employees to proffered skillset that improves functionality and performance throughout MIDC’s performance. MIDC thrives on a competitive spirit, which incorporated the need for a highly skilled individual. In this regard, the programs consolidate four demanding assignments which drives both personal and professional growth. After a successful completion of the training program, trainees are expected to showcase the professionalism throughout the practice. The dynamic market in information technology necessitates for enhanced management training in dispensing the company’s functions. Ultimately, MIDC attains an improved productivity and efficiency at all operational levels. Experienced Commercial Leadership Program This is a talent development programs garnered towards equipping marketing and sales professional on proffered marketing strategies. The program is MIDC’s cornerstone for future development. The programs consist of a three-month rotational job assignment, a structured course work, and interactive seminars. Human Resources Leadership Program More often than not the HR professional at MIDC will be dealing with the company’s valuable asset (Mudabala, 2014). As such, the trained employees directly participate in the planning and implementation of strategies that build and maintain a competitive team. Consequently, the program is aimed at accelerating the development experience for mid-career HR Professionals. The two years program is complemented by a world-class training program, long lasting professional support and rotational base assignments. Risk Management The programs offer a world class training programs on growing a company safely and securely. The programs consist of a number of intensive rotational coursework that enhances an individual’s leadership and technical skills. 7.0 Tools 7.1 Customer Satisfaction Customer satisfaction has been highly integrated to the company’s functionality. The company received Cisco’s awards on gold standards regarding proficiency in services and customer satisfaction (Mubadala, 2014). In this regard, MIDC’s service allocation is met by effectiveness and competence at all operational levels. Through the creation of a sustainable practice, the company has been competent in service allocation. In effecting a proffered customer satisfaction, the company employs Quality Functional Deployment strategy which enhances the customer experience in its operations and partnership companies. In essence, this strategy transforms qualitative user demands through the incorporation of quantitative parameters in deploying functions through quality provision and deploying strategies that achieve design quality in the company’s practice. In one of its affiliates, General Electric, client satisfaction toll is implemented which tracks the customer’s experience with GE’s services and products (Kranhold, 2006). Thus, surveys offer an in-depth analysis instrumental for the company’s progress with respect to customer satisfaction across different levels (Kranhold, 2006). 7.2 ISO 9000 Standards The company has successfully maintained proffered operational standards throughout its services. Meeting such ISO standards are instrumental at various operational aspects, evidenced through Al Taif Technical services (Mubadala, 2011). The company is dedicated to meeting the customer’s needs through provisioning of world class services in guaranteeing fleet readiness and deployment. In this regard, Al Taif Technical services have been recommended for the international quality management standards ISO 9001: 2008. MIDC’s products and services have met ISO standards given their quality of service dispensation and production management by affiliated partnerships. This includes its partners such as GE, EBX Group among others. The importance of conforming to ISO standards are essential ion divergent aspects. 8.0 Conclusion MIDC has showcased a competitive company throughout its organizational process; given its dispensation of services in different sectors. Its ability to favorably compete in divergent sectors has witnessed its exploitation in different market niche in maintaining an effective competitive edge. Moreover, its service dispensation has significantly emerged as a top leader in dispensation of quality services. The company’s leadership has played an instrumental role in attuning the company’s organizational goals towards excellence. Underpinned by effective strategic goals, the company has streamlined its efforts in realizing the company’s vision. Through a participative leadership style, effective decision-making process has been realized. Participative leadership forms the company’s cornerstone of successful implementation of proffered strategies in its practices. Its vision has compelled the company to sustainably participate in different sectors that have substantially contributed to its success. MIDC’s SWOT analysis ascertains that the company can effectively use various opportunities in tapping additional revenues and customer base. Nonetheless, the propensity of instability of different regions thwarts its growth process. However, through a number of mitigation practices the company can overcome such challenges. On the other hand, its sustainability practice has boosted its image and increased growth. Conforming to ISO standards has improved quality of service and products across its chain. Evidently, its partners have sustainably maintained high-quality services throughout their services and products. MIDC is, therefore, compelled to adhere to appropriate customer satisfaction strategies across its divergent investment portfolios. Customer satisfaction is viewed as the important aspects in provisioning of quality services, because it not only improves the company's customer base but also boosts the company's image. References Mubadala. (2014). Vision, Mission, and Values. Retrieved from https://www.MIDC.com/sites/default/files/MIDC%20C0C_English%20version%202.pdf Kranhold, K. (2006 July 10) Client-Satisfaction Tool Takes Root. Retrieved from http://online.wsj.com/articles/SB115248772900601871 Mubadala. (2011). Injazat Data Systems earns Gold Certification from Cisco. Retrieved from http://www.MIDC.com/en/news/injazat-data-systems-earns-gold-certification-cisco Mubadala. (2014). Al Taif Technical Services. Retrieved from http://www.MIDC.com/en/what-we-do/logistics/al-taif-technical-services Rehman Institute. (2007). Mubadala & AMD: “Capable Capital” Turns to Chip Maker. Retrieved from http://www.rehmaninstitute.com/mubadala-and-amd-%E2%80%9Ccapable-capital%E2%80%9D-turns-to-chip-maker/ top100funds.com. (2009 MIDC) Taps foreign expertise for new return sources.http://www.top1000funds.com/profile/2009/06/03/MIDC-taps-foreign-expertise-for-new-sources-of-return/ Read More