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Organisational Behaviour involves the study of attitudes and behaviours of individuals and groups or teams in an organization. The main factor that differentiates organizations is the employees and the most successful organizations are those that effectively manage their employees.
Organizational behaviour management has a number of goals it helps managers to achieve.
Predicting the behaviour of others in the organization and outside the organization. Through continuous study, the field of organizational behaviour provides a foundation that helps improve predictions at organizational events.
The second goal of organisational behaviour is to help explore events as they occur in an organisation. It is especially interested in determining why people are more or less motivated, bored, etc. The ability to understand employees enables you to effectively manage them.
Management is the art of getting things done through others. If behaviour can be predicted and explained it can be managed.
An organisation is a group of people who have come together to achieve a common purpose or goal. The essential characteristic of an organisation is the coordinated presence of people and not necessarily things.
Organisational goals are objectives that management seeks to achieve in pursuing the purpose of the firm. Goals motivate people to work together. Although individual goals are important, the organisation's overall goals are the most important. Goals keep the organisation on track by focusing the attention and actions of the members. They provide the organisation with a forward looking orientation. They do not address past success of failure rather they force members to think about and plan for the future.
Organisation structure is a system of task, reporting and authority relationships within which the work of the organisation is done. The structure defines the form and function of the organisation's activities. Structure also defines how the parts of an organisation fit together as in an organisation chart.
The purpose of organisational structure is to order and coordinate the actions of employees to achieve organisational goals. The premise of organised effort is that people can accomplish more by working together than they can separately. If the potential gains of collective efforts are to be realised however, the work must be coordinated.
Organisational structure can be analysed in three ways. Firstly, by its configuration or size and shape as depicted on an organisational chart, secondly, by its operational aspects or characteristics such as separation of specialised tasks, rules and procedures and decision making. Finally, it can be analysed through responsibility and authority within the organisation.
An organisational chart is a diagrammatic representation of an organisation structure. Each box represents a position and each line indicates the nature of the relationship among the different positions. From the chart, not only are specific relationships identified but one gets an overall sense of how the entire organisation fits together. A complete chart shows all people, positions, reporting relationships and lines of formal communication in the organisation.
Geodrill Limited is an exploration drilling contractor, which was incorporated in the Isle of Man in June 1998 and centers its attention on the mining industry in West Africa. It operates in three West African countries, which are Burkina Faso, Ghana and the Cote d'Ivoire. The Head Office is located in Accra, Ghana and manages operations throughout the West African region. There are, however, only two operating entities; Geodrill Ghana Limited and Geodrill CI SARL in Cote d'Ivoire. Geodrill Isle of Man operates contracts in Burkina Faso. The two entities are wholly owned subsidiaries of Geodrill Isle of Man.
Geodrill Limited has two issued shares owned by Blue Croft Limited and Red Croft Limited. All drill rigs were bought new except one 650/1 which was bought second hand in the year 2000.
Geodrill started operations in Ghana in 1998 with one UDR 900 multi-purpose drill rig and in 1999 added another.
At the end of December 1999, Geodrill owned ten UDR multi-purpose drill rigs all with boosters, auxilliary compressors, modern fleet of MAN trucks, track support vehicles and light vehicles.
Geodrill also owns three core only Sandvik DE 710 crawler mounted drill rigs and two Austex Air core truck mounted rigs. Current expansion in 2010 includes two additional rigs bringing total fleet to seventeen.
It is envisaged that by the end of 2010 the fleet size in terms of drill rigs will be twenty. The rigs to be added in 2010, while still of the UDR make (have recently changed to Sandvik) depart from existing strategy by being specialized drill rigs. Two of the rigs will offer RAB services while the other offer Air Core. The entire operations of Geodrill Ghana Limited and Geodrill CI SARL are carried out at Anwian Kwanta a suburb of Kumasi in the Ashanti Region of Ghana. It is based on a 10 acre land which has a modern workshop, offices and accommodation for both expatriates and nationals. The workshop strictly adheres to world class safety standards. Our health and safety and environmental program was designed by Tracmin to at a minimum comply with Australian safety standards.
Ownership and Directors
Geodrill Limited has a Trust set up by Dave Harper, currently the Managing Director of the group. He is also the Chairman and CEO of Geodrill Ghana Limited, the operating entity in West Africa. The Trust is held by the City Trust firm based in Douglas, the Isle of Man, on behalf of the Harper Family Trust of Perth, Australia. It has two issued shares. The other director of Geodrill Ghana Limited is Terry Burling who is also the Operations Manager of the firm.
Figure 1: Organisational Structure of Geodrill
The Organisational Structure
Dave Harper is the Managing Director and Chief Executive Officer. He has about thirty years of experience in the drilling industry having worked both in Australia and West Africa. He started working in Ghana in 1991 as General Manager of SMS, an exploration drilling firm. Mr. Harper, a driller by profession, resigned in 1996 and set up Geodrill two years later. He is directly responsible for project flow and contracting with clients, client relations, invoicing and acquisition of major equipment. He also leads in setting corporate and business strategy. He is assisted by two departmental managers.
Terry Burling is the Operations Manager with twenty years of experience in the drilling industry. He previously worked with SMS in New Zealand, Australia, Papua New Guinea, Indonesia and in Ghana. Fortunately for the company, Terry Burling is an expert in both the mechanical and exploration aspects of the profession. His skills span drilling, mechanical engineering, electrical engineering and fabrication.
Greg Conroy is the Finance & Administrative Manager. He has worked in that capacity at several exploration drilling and mining firms including SMS (Ghana), Equigold CI SARL (Ivory Coast). He has over twenty years of experience in the industry. Conroy started working with the company in December 2008, having taken over from a Ghanaian who had been in the position since Geodrill was established and also previously worked with SMS. The Finance & Administrative Manager is directly responsible for managing relationships with all external stakeholders except clients.
The Structure of the Firm
Geodrill has a staff strength of about one hundred and twenty organized into two departments, Operations and Administration. There are four sections under Operations: Exploration, Maintenance, Stores and Health, Safety and Environment.
Exploration performs the drilling required by clients; the core activity of the company. The Exploration workers are organized in crews of four per rig per shift of twelve hours, therefore eight per workday. A Site Supervisor manages all aspects of the project being undertaken including a cash expense budget, accommodation, supervises the crew and liaises with the client's representative usually a geologist. If it is a large project with two or more rigs present, a store is set-up and stocked with consumables. In this case too there may be more than one Site Supervisor. The Exploration staff typically constitutes about 80% of the staff strength.
Maintenance provides engineering back up services for repairs and maintenance. This section also fabricates a lot of equipment including heavy duty, pneumatic vehicles. They work out of one of the most advanced workshops in West Africa and drive out to offer on-site support in their modified and well-equipped Land Cruiser pick-ups.
The Stores section manages the stock of consumables, fuel and spare parts. Though many firms in the industry treat stock as finance and accounting function because of its effect on profitability, Geodrill has placed its Stores under Operations to better ensure closer integration with the core functions of the business. Decisions on purchases are made with paramount regard to the necessity of the item for project execution rather than cost or any other consideration. Requests routinely originate from the Site Supervisors and are validated by the Operations Manager.
The Health, Safety and Environment section oversees the design, implementation, monitoring and evaluation of Health, Safety and Environment standards that, at a minimum, are required to conform to Australian mandated standards. The Australian standard is regarded as the most stringent for drilling firms globally and much higher than what is required in Ghana. Setting that as the minimum standard is a purely discretionary decision by Geodrill's Chief Executive Officer.
The Administration department is made up of Accounts, Human Resource, Information Technology and Logistics.
The Accounts section is responsible for all financial reporting including management reports and statutory reports. Geodrill tracks income by drill rig and by project. Major direct expenses such as fuel are tracked by drill rig and project. The Accounts section also manages the monthly cash budget. Drill rigs undergo major rebuilds to extend their life span every three to five years. The cost is capitalized. Depreciation rates are 10% for drill rigs, 20% as plant and equipment, 20% on motor vehicles, 20% on furniture and fittings and 5% on land and buildings. Currency of record is the US dollar. Audited financial statements are submitted to the internal revenue service and taxes are paid in US dollars. Geodrill is permitted by the Minerals Commission and Bank of Ghana to receive at least 50% and Bank of Ghana to receive at least 50% of its drilling income in US dollars. Financial year ends on 31st December.
Human Resource section coordinates with departmental managers in the recruitment process, the setting of salaries and promotions. Salary levels are determined according to the hierarchy (organizational structure) and each band has 3 sub-levels. Junior employees earn a basic salary and overtime for work done beyond 8 hours in a weekday. For senior employees, a fixed salary that consolidates both a base pay and overtime is determined and their pay does not vary by the hours done. The section prepares the payroll and executes payments.
The Logistics section act as a go-between with Stores, and the rest of the company to ensure that procurements, imports and exports and immigration requirements for expatriate workers are smoothly executed.
Geodrill provides Reverse Circulation and Core Drilling services. The object of all prospective drilling is to get samples from different depths below the surface. The two basic methods are cuttings recovery and core recovery. Reverse circulation drilling falls in the first category and diamond core drilling in the second.
Reverse Circulation is the method of choice for obtaining consistently high quality rock chip samples with speed and efficiency. Geodrill provides reverse circulation drilling using the latest Face Sampling hammers and equipment drilling holes with 140mm diameter to depths of between 50 - 400 meters.
In terms of pricing, this drilling methodology is positioned in the middle. It is more expensive than RAB and Air Core drilling but less costly than diamond drilling. It is the most commonly used method. It collects samples from depth by pulverizing the rock which is then blown up through an inner tube and collected in a sample bag.
Diamond Core Drilling
This technique is used to drill to about 1500m deep. A diamond-impregnated drill bit cuts a core of rock hence the name Diamond core. The core sample is removed at intervals and catalogued. This is a much more expensive drilling method.
Geodrill provides the Deep Directional drilling using Down Hole Motor and Wedging; to control deviation so target is achieved, to intersect targets below inaccessible locations, to alter course of a drill hole to intersect target and to allow multiple target intersections by deviating branch holes from a parent hole.
Two other types of drilling, common in the industry but not previously offered by Geodrill, are RAB and Air core drilling. These are most ideal for shallow depths, are speedier and cheaper for clients.
THE EXPLORATION INDUSTRY IN WEST AFRICA
Market and Industry
Geodrill's current client list includes Newmount Ghana Gold, Golden Star Resources, Keegam Resources, Perseus Mining, Azumah Resources, Castle Minerals, Lihir Equigold, in Cote d'Ivoire, Ampella Mining and Gryphon Minerals both in Burkina Faso.
Geodrill is currently the market leader in Ghana with about 35% of the market share. In 2009, Geodrill was operating at 50% capacity in Ghana, 20% in Cote d'Ivoire and 30% in Burkina Faso. Geodrill hopes to increase operations in Burkina Faso in the near future as that industry is less saturated than Ghana in terms of competition and there are a lot of contracts readily available.
For 2010, the order book is full including two new rigs on order. Geodrill is still receiving invitations to tender on contracts all over West Africa in Gold and base metals.
Geodrill's competitors in Ghana are Boart Longyear, AMS exploration, Pontil Minerix, Drillmasters and Burwash.
In Cote d'Ivoire, their competitors are Boart Longyear CI, Ore-ex and Drill ex. In Burkina Faso, it's Boart Longyear BR and West Africa Drilling Services.
Current industry challenges include price competitiveness, and the labour market beginning to tighten.
Opportunities include gold and commodities boom, an influx of active exploration companies into West Africa and improving political stability in the region.
The mining, energy and infrastructure markets are expected to see the highest near to medium term growth in the sub Saharan African region.
In general, mining companies with a higher percentage of long term renewable contracts are viewed as being lower risk and Geodrill prefers to deal with such clients.
Analysis of the Industry
There is no substitute for exploration drilling services in the mining industry. The exploration process progresses from initial studies of the geological structure of an area, after which, samples must always be collected both from the surface and at depth to determine the actual presence of mineral. This collection of samples from depth can only be done by drilling down into the ground.
The threat of new entrants probably offers competitive pressure to existing firms in the West African market. The mining industry is made up of many small firms but dominated by a few very large firms. Exploration drilling, though it has a tangible end product in the form of samples, is really a service and depends as much on relationships as on the quality of the sample. It is a capital-intensive business but any entity that can get access to about $3m in start-up capital can start with a second hand rig, some spare parts and consumables. The exploration drilling firms usually operate under the umbrella of the client and so are indirectly regulated hence regulatory issues will not hinder a start-up.
The exploration drilling business is characterised by short drill programmes (contract duration of three months to one year). Each drill programme can be properly viewed as a real option, and determines the next step for the client. The level of activity is driven by the ease of fundraising on the capital markets and the price of gold as it determines the value of any find. The drilling service is homogenous in nature, hardly differentiated except by the speed and efficiency of execution and the safety record of the drilling firm. There is not much collaboration among the firms.
Suppliers of major inputs such as drilling consumables are quite powerful when the industry is booming. When the price of gold falls or the capital markets are not doing well, there is usually an excess of serviceable second hand equipment available. This dilutes the power of the suppliers somewhat. The sources of consumables are many hence the suppliers here are much less powerful than the suppliers of equipment.
There are two types of clients: Mining firms and exploration firms. The mining firms have operating mines and earn revenue from selling the gold that they mine. The exploration firms hold concessions and carry out drill programs to determine their potential. Exploration firms do not earn operating revenues; they earn a return eventually by selling the concession if it is proven to have the potential to yield some gold. Therefore, exploration firms finance their drill programs by raising equity on the capital markets.
The clients are very powerful and price sensitive. Drill programs tend to be one of the largest costs of the client. For both types of clients, it determines the life and value of the business.
1. From inception, management decided it did not want a Worker's Union. Management instead formed an informal workers committee which is made up of senior employees and who are nationals for that matter. Management then acts as a union and seeks to ensure the general welfare of workers in consultation with the workers committee. This is itself is unique in an industry where unions are common.
2. Geodrill operates only in West Africa whereas its key competitors operates globally. From Ghana the chairman who also doubles as the chief executive officer oversees everything. This gives Geodrill the advantage to follow the market more closely and adapt quickly. For its competitors, there might be a general manager heading a particular region who will lack final authority on decision making.
3. Geodrill adheres to a strict health, safety and environment policy and as much as possible use brand new equipment which are serviced regularly and kept in top shape by the operations department from its workshop which is fitted out with the most advanced equipment needed. Competitors often deploy older rigs that have been in service in other parts of the globe and this gives Geodrill an edge over competitors when it comes to contract execution.
4. Geodrill has more nationals in the top hierarchy than its competitors. Locals are found in management positions usually reserved for expatriates among their competitors. This enables management to keep the wage bill lower than that of their competitors because nationals generally earn lower than expatriates while at the same time motivating nationals to give off their best because they know the top positions are not kept for only expatriates.
5. Geodrill pays higher than market rates and keeps job content interesting so as to attract the best men available and also maintain them. To lay off full time permanent employees however, is difficult under the labour laws of Ghana and other West African states hence Geodrill keeps 80% of nationals on two year contracts renewable so far as the company has contracts to support number of staff. If rigs become idle then the workers on that rig can be laid off with a month's salary in lieu of notice and are recalled when a contract is secured for that rig.
Geodrill's structure is a mixture of both the organic form and mechanic form but more of the organic form. It is decentralised in that there is a delegation of responsibility with the necessary authority to go with achieving that responsibility.
Knowledge is located throughout the firm and does not reside only in the chief executive officer or top management. There is also contribution from various specialisms. If there is a problem, which is human resource related or logistics related, there are people in middle management for those roles and who are mandated to solve them.
There is a high trust culture and even though written communication is encouraged, sometimes just a verbal command is enough to get the work done no matter how sensitive. Written communication should be encouraged though and enforced as the company grows since some people will end up abusing the sense of high trust.
Policies and procedures even though they exist, are generalisable, show equity, uniformity, are restrictive, and impersonal. Also rules and procedures are both implicit and explicit. Implicit rules develop as employees become accustomed to doing things in a certain way over a period of time. Though unwritten, these implicit rules have the same effect on employee behaviour as written rules. As the company grows it will be better if every policy and procedure is made explicit.
Geodrill even though it has some of Weber's ideal bureaucracy characteristics including division of labour, hierarchy of authority etc., it is not so stringent as to allow it to lead to laziness, inefficiency and red tape. Strategic decisions for the company are taken by the top three people in management and it is usually very swift. Departmental decisions are taken by department heads that is the operations manager or the administrative manager hence decision making generally is very swift within the organisation.