Planning in Management - Literature review Example

Planning in Management Name Institution Date Table of Contents Running Head: PLANNING IN MANAGEMENT 1 Planning in Management 1 Name 1 Institution 1 Date 1 Running Head: Planning in Management 12 2 Table of Contents 2 Abstract 3 Planning In Management 4 Introduction 4 Literature Review 6 Abu Dhabi Refinery Company (TAKREER) 6 Discussion 9 Conclusion 10 References 11 Butt Gerald, 2001. United Arab Emirates: A New Perspective. Ministry of Information and 11 Culture. Abu Dhabi. UAE. 11 Iraq Business News, 2012. Middle East Downstream Week Returns to Abu Dhabi. Retrieved on 12 November 20th 2012 from 12 http://www.iraq-businessnews.com/tag/abu-dhabi-oil-refining-company-takreer/. 12 The Abu Dhabi, 2007. Economic Vision 2030. 12 Abstract This project is about planning as a management function in the Abu Dhabi Refinery Company (TAKREER). The paper provides an expansive definition of planning in the business world. A discussion is then made on the importance of planning to businesses along with an explanation on the process of business planning. In addition, a study on how planning can be achieved is done. This function has its benefits and these are discussed in the paper. Managers usually face some challenges when dealing with this function and some of these challenges shall are discussed in this paper. The paper also explains how a company can control and monitor the planning function. Besides these, the paper investigates planning as carried out by the Abu Dhabi Refinery Company (TAKREER). It defines planning from the view of Takreer Refinery before giving basic information about Takreer Refinery. A discussion on how it has been able to apply planning as a management function is critically. Details are given on the impact that the use of planning has had on Takreer Refinery alongside giving details on how planning was successfully deployed. An illustration on some of the techniques that are used by management while carrying out this function is made. Further, a short comparison is be made on how planning at Takreer and the planning that was discussed in our introduction are related. The paper then discusses planning as applied by Takreer, albeit in our opinion, before giving a conclusion on planning, both generally and as applied by the Abu Dhabi Refinery Company (TAKREER). Planning In Management Introduction Planning involves the processes of developing mission and objectives of a business and establishing how they can be accomplished (Fincham, 2003). It can be said to be the creation of a road map aimed at guiding the business towards its success. Planning is meant to increase the chances of success of a business. It enables a business to anticipate any problems that may occur and make decisions on how best to tackle the problem in advance. In addition, planning helps justify the preparation and actions taken by management in the business. It gives validation for a decision or an action. Besides, planning is an indication of the ability and commitment of a business and its management. It gives the business a picture of the future and helps it in making some decisions that will best suit the business in future. It is important for the business as it helps it in investigation and evaluation of new opportunities and can be presented as a case for financing, if need be. Furthermore, planning enhances communication between management and staff and develops a clear understanding of roles. According to Parr (2009), planning is a process that goes beyond the production of a plan and continues to its implementation and beyond. The process of planning should take a participatory approach by all the concerned groups. It can be said to be a cycle that has three key elements that include preparing a management plan, implementing the plan and monitoring and reviewing the plan. Several steps can be taken in the process. First, is the pre-planning phase where the goals are set. Information is then collected and research carried out. This information is then evaluated and a SWOT analysis carried out to identify any constraints. Management can then develop their vision and objectives. After this, alternatives are identified and evaluated. A draft of a plan can then be made and consultation done. After approval, the plan is monitored and reviewed before making a decision on whether to update the plan. Companies use the above processes in application of planning. The goals and objectives may be different but their approach is the same. Strategic planning can be used as a technique by the managers in planning. It involves a vision on where the business is, where they want to be and how they can get there. By implementing the function of planning, the management will be able to identify its effectiveness. Further, it will be able to observe continuity in management and accountability in the business will be increased. Planning also helps management in proper utilization of financial and human resources. Implementation of this function does not come without its challenges. According to Rowlinson (2000), the future is not always predictable and this uncertainty may present a problem to managers. This calls for extra skills or use of experience to work out. Sometimes making predictions can be influenced by anxiety, optimism and even fatalism. It therefore requires proper control and analysis before implementing the planning function. In addition, time is also an essential factor in planning. The timing of execution of a plan should be well set so as to ensure it serves the intended purpose. Control and monitoring of a plan requires a combination of analytical and planning techniques. Techniques such as forecasting can be used in predicting the future. Other techniques like use of the Gantt chart and the load chart can be utilized while monitoring the plan. It is important that resources are properly allocated through budgeting and records of these kept so as to facilitate control and monitoring of the planning function (Findings, 2004). Literature Review Abu Dhabi Refinery Company (TAKREER) Having its location in an area where oil is considered to be key to economic development, the UAE contributes to about 10 % of the world’s total reserves in oil. According to Butt (2001), the biggest of oil reserves in the UAE are found in Abu Dhabi. The Abu Dhabi Refinery Company continues to play a key role in the oil industry in the UAE. It has been playing the role of oil refining in the UAE since 1999. Proper execution of this responsibility in the oil industry cannot be achieved without proper management of the company. Takreer has continually maintained its position as a leading oil refining company through use of high standards together with refining operations that are efficient and observing sound health and environmental safety practice. It has also attained world performance standards f both employees and operations. During its formation, the Abu Dhabi Refinery Company was meant to take over the oil refinery responsibility from the Abu Dhabi National Oil Company (ADNOC). One of the management tools that have been deployed to facilitate this is the planning function. According to Iraq Business News (2012), Takreer defines planning as a tool that can be used to diversify strategies and integration plans and recognize significant business improvements that will propel the business up even during financial unrest times. In an inclinement towards the vision 2030 goals, the Takreer management forecasted the need to expand its operations. Being the leading refinery company in the UAE, it decided to take the path of pursuing new projects related to the refining sector and these were projected to almost triple the current capacity of the Emirates to about 485,000 barrels a day. The projects included the expansion of Ruwais refinery that was within the United Arab Emirates, together with constructing a new refinery in the Furairah Emirate. This was a real example of Takreer’s future strategy in expansion of its participation in the chain of the hydrocarbon value. It must be noted that these expansion plans were part of ADNOC’s strategic plans in achieving future goals (The Abu Dhabi, 2007). Takreer was able to achieve the expansion plans successfully. According to Yabhouni (2007), one of its objectives is to maintain the best standards in health, safety and the environment (HSE). In addition, it is supposed to be a pace setter in the oil refinery business and be a global player. Besides this, it is meant to achieve the targets of nationalization and identify and use technologies and methodologies that will give the company an edge over others. After its formation in 1976, with 15,000 barrels per stream day (bpsd) capacity, the need to expand was implemented in 1983 when Takreer increased Abu Dhabi Refinery’s capacity to 60,000 bpsd. The year 1992 saw the capacity increased further to 85,000 bpsd. All this was in line with its objective of being a reliable supplier despite the increased demand. Having identified the challenge presented to them by increasing demand, Takreer took the opportunity and decided to initiate the expansion project of the Ruwais Refinery. Between 2000-2002, Ruwais Refinery commissioned two condensate processing trains with capacities of 140,000 barrels per day (bpd). These would process the condensate that is produced in Abu Dhabi offshore gas fields. These condensate splitters are the largest in the world. Further, in compliance with HSE preservation, Ruwais Refinery commissioned facilities that processed Unleaded and Low Sulphur Gas Oil. These would increase production of Gasoline and Low Sulphur Gas Oil. Takreer hasn’t stopped looking out for opportunities to grow. The growth of domestic demand for refined products including chemicals and clean fuels in the Middle East and the world at large made it to devise a plan to expand the capacity of Ruwais, adding the capacity by 400,000 bpd. This demonstrates the drive by Takreer to utilize the planning function and clearly, it was able to achieve the set objectives in its plan (Takreer, 2010). Takreer was able to achieve this level by approaching Foster Wheeler (UK) which was to perform a feasibility study for the implementation of the new Ruwais Crude Oil refinery with a scheme of optimum residue conversion. The new Refinery was meant to produce unleaded gasoline, propylene, liquid petroleum gas, aviation fuel, gas oil, kerosene together with other derivatives of hydro-carbons. The basic engineering design was then set in progress as it looks to meet the 2014 deadline of completion. These facilities are expected to meet high standards of environmental safety along with efficiently and safely producing hydrocarbon products. The blueprint of the project was in line with the target of increasing Ruwais’ capacity by 400,000 bpd. The process was configured with 21 process plants together with 20 utility units and supporting offsite. In order to make Takreer a pace setter in the environment, a carbon footprint with the latest technology was used. It was also designed with the largest core unit in the world, the Residue Fluid Catalytic Cracking (RFCC) unit with a 127,000 bpsd capacity. It was not all smooth throughout the planning and implementation. Despite the challenge, the management has been set for the challenges at hand. The size of the project presented the major challenge. This required optimum design of processes all the way to the implementation of the various packages. A forecast of the project shows the possibility of many interfaces surfacing during the project progress and these require an optimum fashion of project management. The Takreer management has continuously been proactive towards meeting the challenge that are beforehand and ensure that the project is successfully completed. Some of the techniques that are applied by the management are in line with those of planning. Techniques such as project management, forecasting and use of analytic tools are key to the success of this project. A look at the project’s Gantt chart shows the year 2014 as the year of completion of the project (Aulet, 2009). Discussion All business organizations require the use of management tools in the about of their activities. Planning has been used to good effect by organizations and it has led to the success of the business entity using the function. For instance, Takreer has been utilizing the tool ever since its formation and this has been the reason behind its growth in the oil refinery industry. The company still continues to utilize this function in its projects as evidenced by the latest project on expansion of the Ruwais Refinery. Planning has enabled the company to get a vision of the future and continuously expand its business whenever the projection shows the need for expansion. Despite the challenges that are faced, proper management techniques are deployed to ensure that the hurdle is jumped. Questions that arise on how planning can be used to fruition can be answered by a review of how the Takreer Refinery has been able to achieve its success. The process of planning has been reflected in the way Takreer has been able to utilize the function. Conclusion Planning is an essential tool in management that should be deployed by all organizations right from their formation. As seen in the case of Takreer refinery, planning gives a platform by which expansion of the organization can be done based on the needs and the objectives of the organization. Takreer has been able to continuously discover opportunities for expansion and has gone ahead and pursued it. This has given it its high ranking in the oil refinery industry globally. The example set by Takreer demonstrates that with proper planning, there can never be a shortage of room for expansion in the business. References Aulet K. William, 2009. Business Planning Principles and Applications. MIT, USA. Butt Gerald, 2001. United Arab Emirates: A New Perspective. Ministry of Information and Culture. Abu Dhabi. UAE. Fincham E. Jack, 2003. Basic Management Principles. University of Kansas. Findings, 2004. Planning for the future: the difficulties people face. UK. Iraq Business News, 2012. Middle East Downstream Week Returns to Abu Dhabi. Retrieved on November 20th 2012 from http://www.iraq-businessnews.com/tag/abu-dhabi-oil-refining-company-takreer/. Parr John, 2009. Management Planning Guidelines for Protected Areas in Fiji. Birdlife International. Rowlinson Karen, 2000. Fate, hope and insecurity: Future Orientation and forward planning. Policy Studies Institute. Takreer, 2010. Abu Dhabi Refinery Company (Takreer). Abu Dhabi. The Abu Dhabi, 2007. Economic Vision 2030. Yabhouni A. Mohamed, 2007. Ruwais Refinery Expansion Project Opportunities and Challenges. Abu Dhabi. Read More