Organization which changed from taditional model to organizational



The objective of this document would be to discuss an organization which has changed from a traditional organizational model to a transformed organizational model. The organization that is to be brought up is British petroleum. In today's competing market, businesses should be prepared and ready to change their procedures as rapidly as the circumstances transform and change without getting pressurized. Given that the World Wide Web has moved into industry world, levels of competition got more powerful and fiercer leading to managing crews to enhance their approach of undertaking things. With no potential to change in today's market an organization will definitely fail and drown in their absence of expertise and versatility. British petroleum is an organization that has changed its organizational model from a traditional model to a transformed model due to the fact they have figured out to become diversified and widen worldwide getting new revolutionary concepts and technology to a modern era of customers.

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Section 1 - Process for change

Topic 1 - Process Models of change

This initial stage of change calls for setting up the company to take that change which is essential, that involves disintegrate of present status quo prior to building up new means of functioning.

Solution to this is sustaining persuasive information demonstrating precisely why the present means of performing things could not carry on. This is least difficult to frame when you're able to indicate decreasing sales results, bad financial outcomes, concerning customer satisfaction surveys. These demonstrate that things must change in a manner that everyone is able to understand.

The Unfreezing step will involve;

Establishing an impression of urgency

With Coalition and sufficient capacity to steer the change

Develop a new vision

Communicating the vision to the entire company

BPs change emerged as the result of a quite thorough analysis for many individuals. In July 1989, the chairman employ, Rober Horton, commissioned Project 1990, a significant internal research that had the purpose of demonstrating the way to lessen complexness within the corporation to modernize the head office and to reposition the organization in style and approach of 1990's. The project crew discussed extensively outside and inside of British petroleum for more than 500 interviews and handling some 4000 questionnaires.

The approach adopted quite a few principles.

The requirement for change had been analysed in a manner that acquired details through lots of people .

Substantial attempt was handed to uplifting excitement for transformation, concerning communication of numerous kinds such as details of the necessity of change.

The focus was on constructing a corporation for the long run, as well as the design picked was unusual to become inspiring

Top management driven the change method and supplied sufficient helpful information for implementation.

There was extensive participation of everybody in the change task, which includes a significant educational initiative.

Clearly there was an on-going assessment of the change process, The Transition state relates to construction processes people and environment of an enterprise since it goes through transformation. The processes and structures of the transition state are quite distinctive from the ones from the current state. A Transition state is almost continually a turbulent and unpleasant location where old process and structures that worked effectively previously don't work effectively any longer. New processes and structures designed to operate in the long term aren't in position yet.

To ensure that British petroleum is going to succeed at the business transition it had become essential to develop new thoughts, bring in different personas, study new technologies and expertise. BP's transition would've in no way been achievable if it weren't for the understanding of the newest technologies as well as engineering. The organization needed to discover ways to discover oil and process it without dropping revenue and without disturbing the environment. BP wanted to discover individuals who're efficient at exploring chemicals and alternative sources of energy for example water, wind and solar.

Change Equation elements:

This formula gives a model to evaluate the comparable strengths impacting on achievable results or else of organisational change applications.

D x V x F > R

These three considerations have to be present for significant organizational change to be held. These aspects are:

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D = Dissatisfaction with how circumstances are at present; as in case of BP, it needed to reduce the complexity of the organisation at all levels.

V = Vision of precisely what is achievable; vision to change the traditional organisational model into transformed organisational model.

F = First, concrete actions which are to be taken ; to find out the complexity of the change, surveys and interviews taken to find out what exactly is needed for a change. Later on management steered the process of the change.

If the product of these three factors is greater than; R = Resistance, then change is possible; In BPs case there was dissatisfaction with the current ways in which how the company dealt with things, vision seemed achievable and first steps were also taken to see how it goes. So the resultant figure of those three factors was higher than resistance so change was possible.

Topic 2 - Organisational Context for Change

Culture always gets the attention at the time of changes in organisation - when companies merge and their cultures clash, for example, or when advancement along with other strategic change end up with the current culture becoming not appropriate, and prevents instead of supporting progress expansion. In more stationary atmospheres, cultural aspects are actually contributing to low spirits,

So therefore culture of any organisation influences the output and work environment. This is why so much research has been done to pinpoint exactly what makes an effective corporate culture and how to go about changing a culture that isn't working.

Components of the Cultural Web

The Cultural Web acknowledges 6 components which are related to each other that assist to make up what Johnson and Scholes call the "paradigm" - the pattern or model - of the work environment. By analysing the factors in each, you can begin to see the bigger picture of your culture: what is working, what isn't working, and what needs to be changed. The six elements are:

1. Stories - Historic activities and people discussed outside and inside the organization. Who and what the organization selects to immortalize states a whole lot in regards to what it beliefs, interprets as great conduct. In the case of British Petroleum before the merger with Amoco there were stories around that there will be a clash in between two cultures and believes of the organisation and the way they interpret things and deal with their business.

2. Rituals and Routines - The day-to-day conduct and activities of individuals that indicate appropriate behaviour. This establishes what is likely to occur in given circumstances, and what is appreciated by management. British Petroleum as an entity who had its own way of doing things by routines and rituals mean what company believes and how management take the things in their hands. There are chances of a clash if the two big entities merge i.e. in the case of BP merger with Amoco.

3. Symbols - Representations of organization such as logos, how luxurious the places of work are, as well as the official or informal dress up requirements. In the year 2000 British petroleum Amoco transformed its brand to BP, launched a whole new slogan - "Beyond Petroleum" - and changed its "Green Shield" logo using the Helios mark, an environmentally friendly yellow-colour sunflower.

4. Organizational Structure - This consists of both the framework based on the organization chart.

The Organisational structure of BP is as follows. Organization The organizational structure consists of:


The Board:

Executive Directors

Non-Executive Directors

Board Committees

Chairman's Committee

Nomination Committee

Audit Committee

Ethics & Environment Assurance Committee

Remuneration Committee

5. Control Systems - The means by which the corporation is governed. These comprise of establishments, quality systems, and benefits. After the Merger of BP and Amoco "an alliance of equals," but BP's management took the majority of the top notch placements and the new company has mainly followed BP's traditions.

6. Power Structures - The compartments of genuine power within the organization. This might include a couple of key senior management, a full group of executives, or perhaps a department. As we can see from the organisational structure the chairman is at the top of the organisation followed by board of directors and board committee.

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Section 2 - Exploring Change

Topic 1 - Drivers for Change

Porter's five forces analysis:

Threat of new entrants (It is High)

The threat of new entrants in the industry of oil is very robust . BP is an industry innovator, however the intense development of the industry, together with the lower costs as well as quick access to buyers are attractive for new entrants.

Buyer Bargaining Power (It is Moderate)

Requirements of consumers are substantial where there aren't any alternatives of motor fuels. Which signifies a small level of buyer power? Although brand awareness is massive, due to the excessive budgets with regard to promoting and advertising of oil organizations, brand trustworthiness is decreased. Product differentiation is lower. Taking into consideration the several present participants available on the market, this sets the buyer negotiating power at moderate level.

Supplier power (It is high)

Taking into consideration the significant volume of suppliers, the volume of suppliers, and the changing costs with regard to self-governing retailers, it is indicated that supplier power is robust. The key organizations are huge plus they perform all the things from the fuel supply chain. The elevated levels of forward integration are found inside marketplace.

Threat of substitutes (It is low)

The threat of substitutes in the industry of oil at these times is genuinely minimal primarily because of the high costs associated with; solar power panels as well as other substitute energy incorporate higher switching costs and lengthy holding time, causing them to be unappealing to the customer. , .

Although risk of alternatives is fragile, BP has now taken it into consideration as well as, It is mentioned which came into industry of substitute energy. British petroleum is making investment of large sums directly into establishing new technologies.

Rivalry (It is Moderate)

Despite the fact that there's a powerful rate of growth inside the business, competition continues to be moderate as a result of switching costs, competitor size and similarity of these rivals. There's a high price competition, in addition to any other industry. Nonetheless, there are few key market leaders and there's no spot for modest companies, which could not give same low prices

Topic 2 - Creativity and Improvement

Primary purpose: The European Foundation for Quality Management (EFQM) Excellence Model is a self-assessment structure for calculating the strong points as well as areas for enhancement of a corporation throughout most of its activities. The concept of 'excellence' can be used since the Excellence Model concentrates on what the corporation really does, or can do, to offer great products or services to its stakeholders, customers or service users..

The Model begins with the following idea:

You will find nine 'big ideas' or considerations in the Model that underpin this idea and make an effort to include all organisation's activities. Such nine considerations are separated into Enablers and Results. The Enabler requirements are involved with how the enterprise conducts itself, the way it handles its resources and workforce, the way it blueprints its approach and just how it critiques and screens key processes. They're:

1. Leadership

2. People

3. Policy and strategy

4. Partnerships and resources

5. Processes

The organisation's results are what it accomplishes. These include the amount of fulfilment among the many employees of organisation and consumers, its influence on the bigger community and crucial efficiency indicators. They are:

6. People results

7. Customer results

8. Society results

9. Key performance results

Each one of the nine criteria is subdivided to explain in additional depth the idea of 'Excellence' in this section so to analyse how well an organisation is doing through a list of practical questions to ask itself.

Considering all above points we can discuss BP Excellence possibly most incredible are the changes that have taken place inside BP itself, launched by CEO Browne and the top management. When a traditionally hierarchical firm, BP has become structured in a flat way. As soon as a corporation in which obligation was diffuse or completely missing, it's currently an organization where every person is counted upon to lead straight to profits as well as to participate in making or circulating understanding which will eventually improve profits. People who cannot rationalize their efforts are quickly and, some might state, ruthlessly dismissed from the organization. So leadership has been this way which wants things to be best in the company, utilizing best people by making best policy, utilizing best resources and running most processes effectively and more efficiently to get best results from people, customer satisfaction, by being eco-friendly to society all this could have been done by doing some key performances which ensure company's success.

Exactly how this extraordinary transformation did took place? BP grew to become a "learning company," in the development and change of psychological representations. As an example, BP management now devote significant amounts of time in strategy sessions-reflecting on the current state of the oil sector and also the chances on the hand, the likely stumbling blocks, and substitute considerations. Furthermore, the organization has become characterized by substantial testing and practically having fast transmission of all understanding within the company.

Section 3 - Impact of change on people

Topic 1 - Surviving change

The first time when letters 'B' and 'P' were used like a brand was initially in Jan 1917. This took place via acquiring Anglo-Persian Oil Co (APOC), a British subsidiary of the German Organization Europäische Oil Union. This was registered as a trademark in early 1920s. APOC transformed its name in 1930s to The Anglo-Iranian Oil Co (AIOC) after which had become the British Petroleum Co Ltd in 1950s.

Pursuing the merger with Amoco in 1998, The British Petroleum Co Ltd transformed its name to BP Amoco plc. In May 2001 the organization changed its name to BP plc. After acquiring series of companies which one of this is Burmah-Castrol. So this organisation has been changing over time by either transforming its organisation style or by Mergers, so these changes never came in between the success of the company has been to the extent that it stands in between top notch profitable companies of the world. The company not only goes about doing its business at profitable level but also represents the diversity of individuals, services and products. Its radiance is an indication of the dreams and intent behind impacting life on the planet in positive and serious means. With each other they are utilised as an identification symbolising a totally worldwide organization formed from the many distinctive parts of ARCO, Amoco, British Petroleum, Burmah Castrol yet others.

BP is surviving after such a big change from what the company used to be at start. It continues to grow.

Topic 2 - Tracking resistance to change

Whenever there is a change in an organisation it a big process and needs to be carefully looked at. After the initiation of the change processes there must be some resistance which might come across in the middle. To understand this we first see the transition curve.

John fisher's personal transition curve discusses some key points.

Anxiety: The awareness that events lie outside one's range of understanding or control. It is the feeling of worry that could naturally come into mind of individuals when the change process is being taken place. I.e. the workforce the way it works after the merger with a different organisation, two cultures collide then it is to be been seen which culture is more dominates and persisting and overlaps on the other.

Threat: The understanding of a forthcoming complete change in one's central behavioural set ups. In an organisational change risks might be reviewed as regardless of whether following the change has been implemented and organisation has been transformed into the new form. After the change will it be more successful? The reason why changes were implemented, will it fulfil that reason?

Depression: This stage is characterized by way of a common absence of inspiration and distress. People are unsure in regards to what the future holds and exactly how they may accommodate into the future "world".

Disillusionment: The consciousness that the beliefs, values as well as objectives are not compatible with the ones from the entity. The stumbling blocks related to this stage tend to be that the personnel will become uninspired, unfocused and more and more not satisfied and steadily withdraws their efforts, possibly psychologically or physically by giving resignation.

Hostility: Repeated hard work to confirm interpersonal forecasts which have previously turned out to be a failure. The issue here's that individual's keep on operating procedures which have frequently became unsuccessful to accomplish a productive outcome and therefore are not any longer an element of the new course of action or are excess to the new approach to work . The brand-new functions are overlooked at best and truly undermined at worst.

Denial: This period is based on having too little acceptance for any change and turns down the process of effects on the individual. Individuals continue to act as if the change has not taken place. Using old practices and processes and dismissing proof or facts as opposed to their belief systems.

Section 4 - Evaluating strategic change Initiatives

As it's already mentioned that in earlier 1990s, BP started to change. First within the management of David Simon (CEO from 1992 to 1995), and a lot more lately under John Browne (Lord Browne, as of 2001), BP revived its profile inside the oil industry and amongst commercial titans more typically. It reduces its core labour force by more than half, from 120,000 to 53,000, in the year of 1990. ; Simultaneously, it obtained key natural resource corporates. At the beginning of the 21st century, BP had stepped up from becoming the 5th biggest and very least rewarding of top oil organizations to the 2nd greatest and most profitable; 1st quarter of year 2001,was a gloomy time period for many companies globally, BP documented a record-busting USD 4.13 billion profit.9 It's primary routines include the exploration and generation of crude oil as well as natural gas, producing and promoting, and solar technology activities which have got it the label "Beyond Petroleum." Having always been considered as among the primary contributors to pollution, BP currently aims to get an eco-friendly "green company." It regularly reports on its performances, health, safety, environmental care, social investment, and responsiveness to local conditions