Organisational Change - Kuwait Oil Company

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Organizational Change

Executive Summary:

This study gives an overview of the organization which was taken for study.

This study discusses the internal and external changes that take place in the Kuwait Oil Company. The external changes that take place outside the Kuwait Oil Company were found out to be technical changes, employment relationship and workplace communication. Internal change factors are identified as Labour force trends and development in employment laws.

The eight steps in the change process are also discussed in this study.

This discussion includes the changes that were caused by the following:

  • Labour force trends
  • Development in employment laws
  • Workplace communication
  • Technological changes
  • The employment relation

Various changes that can be adapted to make the Kuwait Oil Company as a successful one are discussed at the end of each section. Training and communication are the two factors which minimize the negative actions of the change.

Contents

External Environment Changes:

Labour force trends:

Changes in the employment law:

Internal Environment changes:

Workplace communication:

Technological changes:

The employment relationship:

Conclusion:

Bibliography

Introduction:

Kuwait Oil Company came into being in year 1934. The company is actually an Anglo enterprise with the participation of English and Middle East people in its set up. The company therefore came into being with the joint efforts of BP or British Petroleum and Gulf Oil Corporation which is now called Chevron. The major activities of the company include oil exploration, drilling and development of well that extracts oil and natural gas from the earth floor. The major part of the production of the company goes in export to other countries in the Middle East, Europe and Asia.

At present the Kuwait government has complete 100% stake and control over the Kuwait Oil Company. The company was taken over wholly by the government in year 1975. This way the company at present is a wholly owned government enterprise.

The structure of the company is as follows.

(KuwaitOilCompany, 2014)

External Environment Changes:

The things that happen outside an organization is known as external factors.These external factors affect the internal function of a business.The objectives and strategies of a business can be affected by these external factors.External factors which affect the business are listed below:

  • Social factor
  • Legal factor
  • Economical factor
  • Technical factor
  • Competitors

These external changes cannot be controlled by any organization. (Hillstrom, 2006)Labour force trends and changes in the employment law are the external factors we are going to discuss in this study.

Labour force trends:

Any change in the labour force trend cannot be controlled by any organization.Kuwait Oil Company also cannot control the changes that are ongoing in the labour force trends.The labour force trend has a greater impact on the performance of Kuwait Oil Company.Each and every employee in an organization does not possess the same age, education, skill and gender.An organization must have the capacity to manage these characteristics in order to receive maximum contribution and commitment from their employees. A highly educated employee may not have a required skill to accomplish a task, in such case it is the duty of the HR manger to guide and train the employee to accomplish the task provided to him.Objectives of an organization cannot be achieved when an employee lacks certain skills required for doing a particular task.

The HR department can effectively control the issues emerging from the labour force trends.The conflict between the human beings is inevitable because human beings are unique with their own mindsets.These problems stem from employee perceptions about their work environment and conflict between an employee and organizational needs. It is the responsibility of the organization to adopt certain changes to find the solutions of this conflicts.With the help of various approaches to job design like implementing realistic job previews and by reducing the employee’s role conflict, stress, work overload and ambiguity, the problem caused due to labour trends can be effectively addressed (DiCecio, 2008).

The issues that emerged in Kuwait Oil Company due to labour force trends are discussed below:

Issues:

  • Lack of skills
  • When the employee gets promoted he may lack education qualification.
  • Attrition rate

Solutions to the issues caused due to labour force trends are discussed below:

Kuwait Oil Company can adopt a proper HR policy.Performance appraisal can be used to review the performance of employees working for Kuwait Oil Company.Based on the results of performance appraisal program employees can be given training to achieve their personal goals as well as organizational goals and objectives.Attrition rate in the Kuwait Oil Company is due to the retirement of senior employees as well as resignation of other employees.A suitable recruitment policy can be adopted by the employees to close the vacancies that arise due to the retirement as well as resignation of employees of the Kuwait Oil Corporation.

Changes in the employment law:

A small change in the employment law affects the performance of the organization to a greater extent.Based on the employment law HR department can take care of the changes to be done in the Kuwait Oil Company.HR department can revise the contract of each employees based on the changes that are implemented in the employment law.It is the duty of the HR department to check out the working conditions and safety measures of the Kuwait Oil Company. The HR department must ensure the safety level of the employees.The HR department checks the recruitment to the retirement process is as specified by the employment law of Kuwait. Compensation to the employees is given as per the employment law.

As per the employment law of Kuwait, the HR department of Kuwait oil Company must give priority to the Kuwait nationals in the recruitment process. The terms and conditions present in contract are based on the employment law of the employment law of Kuwait. Proper communication channel can be used to communicate about the recent development in the employment laws to the empoloyees.Changes in the policies of the organizations due to the employment law must be communicated to the employees.When there is a change in the employment law regarding the safety and security measures it is the responsibility of the Kuwait Oil Company to implement these changes.When there is a change in the policy related to salary, Kuwait Oil Company management identifies the change and take necessary steps to implement the change in their organization.

Internal Environment changes:

The changes in the internal environment are proactive and occur due to organization’s own policies. Internal forces for change come from the organization.Some internal changes are:

  • Technology changes
  • Workplace communication
  • Employment relationship

Workplace communication:

Communication commonly means transmission of commonly meaningful information.Communication in work place may be either oral communication or written communication. (Von, 2013)

Communication function in organizations:

Communication is the number one tool in organizations.It is the most powerful tool and significant characteristic of man kind.Nothing will happen without communication.Sucess of any management depends more on their ability to communicate with labour.Communication is nothing but the process of interchanging facts, view points and ideas between person placed in different positions by effective communication.Effective communication only will lead the team to work satisfactorily in the organization. (Von, 2013)

Importance:

For ensuring good coordinations,communication is a must.Most of the problems for human occur due to lack of communication.Communication is the process of initiating,transmitting and receiving information.Among these three stages,if any one lacks, definitely it will lead to misunderstanding of concept. (Von, 2013)

There are a number of thoughts and concepts related to communication. The process of communications includes the following steps that are followed by Kuwait Oil Company.

From the above diagram it is clear that the message from sender gets encoded and then sent through the message channel. Thereafter on reaching the right place it is decoded and then received by the appropriate person. The message receiver mostly gives the feedback. It should be noticed here that any interference is the whole process should remain out and should not disturb the whole process.

Need for communication:

  • To establish and spread goals of an enterprise widely.
  • To develop plans for further achievement.
  • To organize human and other resources in the most effective and efficient way.
  • To lead,direct,motivate and create a good working environment. (Von, 2013)

Communication flow in the organization:

Communication flows in three directions in the Kuwait Oil Company.They are:

  • Downward communication
  • Upward communication
  • Horizontal or lateral communication

Downward communication:

In this type the information is sent from the higher level to the lower level.The communication may be oral or written type.Oral communications are instructions,speeches,meetings,telephone,loudspeakers and written communications are memoranda,letter,handbooks,pamphlets,policy statements,procedures and electronic news display.Sometimes information may loss as it comes down the chain of command and it consumes move time.So feedback system is necessary for this type of communication. (Von, 2013)

In the Kuwait Oil Company communication flows downward when the superior gives instruction about the work to be done by the subordinate.When the management communicate their objectives and policies to the subordinates we can experience a downward flow of communication.

Upward communication:

Upward communication flows from subordinates to superior as per organizational hierarchy.There is a chance of passing irrelevant information to their boss.The information may be modified or filtered from real think.The top level management can know about the production performance,marketing information and financial data and so on.This upward communication is mainly applicable for participative and democratic organization.The informations may be in the form of suggestion, appeal and grievances,complaints,counseling,group meeting,open-door policy,morale questionnaires,exit interviews and ombuds person. (Von, 2013)

In the upward communication the subordinates give feedback about their superiors. In the Kuwait Oil Company the informations may be in the form of suggestion, appeal and grievances,complaints,counseling,group meeting,open-door policy,morale questionnaires,exit interviews and ombuds person.

Horizontal or lateral communication:

The information is passed between the same level of organization.This type of communication is mainly implemented in peed-flow information.It helps to better understanding of information and to coordinate towards the management goal.In Kuwait Oil Company lateral communication is followed between departments.

Communication can be either oral or written.Written communication is passing of information in writing from one person to another through posters,circulars,leaflets,etc.In oral communication information is passed on orally from one person to another.It can be done by face to face, in meetings or by telephone etc. (Von, 2013)

Barriers to effective communication in Kuwait Oil Company:

Following are the barriers for effective communication:

  • Physical barriers
  • Personal barriers
  • Organizational barriers
  • Semantic barriers
  • Mechanical barriers

Physical barriers:

It includes physical distance,distracting noises and other interferences.Difficulty in passing of message mainly increases with increase in physical distance.

Personal barriers:

It arrives from motives,attitudes,judgement and emotions.Finally it leads to psychological distances.It may be caused due to problems in encoding and decoding others sentiments,attitudes and motives.

Organizational barriers:

Usually information flows through hierarchical structure in organization in downward communication.So, there are many chances of information being filtered.

Semantic barriers:

It refers to the relationship of signs to their reference.It arises due to limitations of the symbolic system.Symbols may reach a person’s brain through any of the senses such as feeling or hearing.Generally,symbols may be classified as language,picture or action. (Von, 2013)

Mechanical barriers:

It includes inadequate arrangement for transmission of news,facts and figures,poor office layout,defective procedure as and practices.

Following rules can be followed for effective communication in Kuwait Oil Company:

  • The information to be passed must be simple and clear.
  • A two way communication channel can be created.
  • A mutual twist and relationship to open cordial can be developed.
  • A proper time can be chosen to deliver the message.
  • Regular feedback can be taken from the subordinates by the superiors.
  • Empathetic listening can be induced by Kuwait Oil Company.
  • Try to develop flexibility and customize the message according to the need of the audience.

Technological changes:

The Technological changes include the coming of new technologies, new products and services and various other innovations. The technological progress has a serious impact on the organisational change. The organisation change thus requires to be made as per the competitive technological change in the industry. The use of latest machines, high outputs, more variety and various other features needs to be added in the production process so as to make the product and service. Inability to bring about the technological change would result in no orders for the company, comparatively lesser output and lesser profits for the organisation. Thus brining technological change is the need of the hour so as to fight back competition and sustain in the business. Moreover the technological upgrades bring with them high quality, high output and proves to be more cost effective. Thus organisation in search of all the above features need to bring technological upgrades so as to improve its position in the industry and bring itself to a comfortable level of business and thereon profit margins. (Bakker & Schaufeli, 2008).Both manufacturing and service organizations are increasingly using technology as a means to improve productivity and market competitiveness.

Kuwait Oil Company uses technology at the bottom level of management to the high level of management. Technology is used in refining and also in decision making process.Technology change include a change in the problem solving and decision making approach and changing service methods.When the Kuwait Oil Company implement new technology, employees are not aware of the new technology.So the management of Kuwait Oil Company can provide a training to their employee in carrying out their work with the help of new technology.Kuwait Oil Company can hire well trained professionals and engineers to rectify the errors that occur in their refining machines and information technology used by them.By using advanced technology Kuwait Oil Company can achieve its goals and objectives.It can be also able to produce quality products to its customers.

The employment relationship:

Employment relationship is the legal link shared by the employer and the employee.The relationship between the employer and employee is based on mutual dependency. It is the duty of every employer to treat their employee with proper respect.We can witness conflict and problems in organizations with good policies. Employment relationship can be affected by the following:

  • Breaching the employment agreement
  • Disputes over application of an agreement
  • Unfair bargaining
  • Compliance with the employment law
  • Management style
  • Communication
  • Arrears of wages

In order to prevent greater loss these problems must be solved at the initial stage or else it may cause greater loss to both the employees and the employers. (development, 2005)

The employer and the employee can try to solve the disputes between them before taking the assistance of Employment Relation Authority. In Kuwait Oil Company, the common problem that occurs in the employment relation is the breach of employment law. In such situation the employer can discuss with the trade union of to sort out the issues if the issue could not be settled they can seek the help of the Employment relation authority.The employment relation can be also affected by the work place conflicts.Workplace conflicts include pay, working hours, performance issues, different goals, misunderstanding between the employer and the employee, issues regarding workload, profession, health and safety and level of cooperation. (development, 2005)

The issues which change the equation of employment relationship are issues related to working hours, workload issues and misunderstanding between the employees and employers due to salary.The following methods can be adopted to sort out the issues that arise due to the employment relationship:

  • Maintaining proper communication channel to reduce misunderstanding.
  • Hiring more workers to reduce the workload and working hours of the existing employees.

Conclusion:

Rapid change in the technology also affects the business process. . In this study changes such as workforce trends, developments in employment law, workplace communication, technological change and employment relation. Labour force trends are identified as age, education, skill level and gender of employees. The issues which arise due to labour force trends were found out to be lack of skill and education and high retirement rates. These issues can be avoided by providing proper training to the employees. Any development or changes in the employment laws can be implemented with the help of HR department. The communication in the Kuwait Oil Company is affected due to physical barriers such as noisy transmission and inconsistency in communication. These issues can be avoided by following an effective communication method.

Bibliography

Bakker, A.B. & Schaufeli, W.B., 2008. Positive organizational behavior: Engaged employees in flourishing organizations. Journal of Organizational Behavior, pp.147-54.

development, c.i.o.p.a., 2005. Change agenda.

DiCecio, R., 2008. Changing Trends in the Labor Force: A Survey. FEDERAL RESERVE BANK OF ST. LOUIS REVIEW.

Hillstrom, 2006. USlegal. [Online] Available at: http://definitions.uslegal.com/m/managing-organizational-change/ [Accessed 15 December 2013].

KuwaitOilCompany, 2014. Board of Directors. [Online] Available at: http://www.kockw.com/sites/EN/Pages/Profile/Leadership/Boards-of-Directors.aspx [Accessed 20 April 2014].

Von, J.W., 2013. nwlink. [Online] Available at: http://www.nwlink.com/~donclark/leader/leadcom.html [Accessed 15 December 2013].

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