learning organization for shell

Organizational Behaviour and Organizational Development

Learning Organization

Gaurav Goel 24/06/2009

TABLE OF CONTENTS

1.0 Introduction 3

2.0 Problem Statement 3

2.1 Discussion 4

2.1.1 Critical Factor 1: People 4

2.1.2 Critical Factor 2: Culture 5

2.1.3 Critical Factor 3: Management 5

3.0 The Role of Strategic Communication 7

4.0 Diversity and the Learning the Organization 8

5.0 Systematic Thinking 9

6.0 Limitations 12

7.0 Effects of changing shell into a learning organization 13

8.0 References 14

Organizational Behaviour and Organizational Development| 2

1.0 Introduction:

The development of learning organization depends on the development of every

individual’s creativity and the thinking process within the organization. in order to

become competitive, the organization must needs to capture the organizational

knowledge. The change in developed economy focuses towards the knowledge work with

the continuous sophisticated workforce, the capacity for learning from the work

experience, independent thinking along with the awareness of interconnected nature of

business for learning. Many of these factors point to acknowledge the changes in the

business practices. It may astute the recognized and knowledge intensive company. A

learning organization can be defined as the organization where the people at every level

continuously increasing their ability and capacity for producing the better results which

they really care about (Baker and George 2007). This action is taken collectively by the

whole workforce of the company. For presenting the performance and the continuous

improvement requires learning which motivates the companies to become learning

organization. Learning is an ongoing process which hugely gives the personal satisfaction

and reward the employees/workforce. There would be the possibility of achieving the

performance together with the desired level of satisfaction for each of the individual

involved through learning. With this view this assignment report discusses the critical

factors in the context of Shell, a petrochemical company. The company is global group of

petrochemical and energy companies with presence more than 100 countries and

collective workforce of more than 102,000. The company’s product and services help to

meet the increasing demand of world for energy with the due consideration of

environment and social responsibility (Dessler, 2004).

2.0 Problem Statement:

Many of the business functions with in the company are facing the challenges and

struggling to operate, manage and improve the efficiency in wok process in order to

ensure the consistent delivery of product and services on time with quality. The major

challenge faced by Shell is the people, culture and the management of overall process


with in the company. Most the management in the company is lacking with the human

skills and in some of the departments there is cultural issues as mix race of people is

working under one roof. The problem of Shell is being addressed for Indian based

operations (Burgelman, Robert and Andrew, 2005).

2.1 Discussion:

As discussed above in the problem statement that Shell is facing the challenges with

respect to the culture, people and the overall management. All the three area of concerns

are the major as well as critical success factor for every organization. We have discussed

each factor below in detail (Brouwer and Maria, 2006).

2.1.1 Critical Factor 1: People

In Shell people are lacking with the skills as there are lack of people who do not have the

background in petrochemical engineering and management. This problem arises due to

lack of motivation and attraction in the job provided by Shell (Hoque, 2005). The

company should motivate, attract and develop the skilled and talented people with in the

organization who are committed to the mission, vision and values of the company. There

are the following strategies suggested for the improvement in such factor:

The company should establish the working environment that could attract and

retain the talented and skilled people

There should be effective commitment for developing the efficient leadership

The company should give the authority to develop their skills with full potential

(Gibbons and Robert, 2007)

In addition to the above mentioned strategies the company should introduce a self

development program under which the people can develop the self mastery and can

launch the team development point. In the learning organization, this program will help

the individuals to cope with the significant changes with in the company which have been

implemented in recent years. For management level people, the company should launch

the coaching skill program under which the mangers can learn the management of


performance (Knight and Frank Hyman 2002). As an organizational behavior technique

there is a wide acceptance of recognizing the individual and team performance by

implementing the mission award process. the company should also develop the potential

within every individual through training so that the people can self define their mission

which should align with the company’s mission for obtaining the greater involvement and

shared vision (Lazear and Rosen, 2006).

2.1.2 Critical Factor 2: Culture

Culture is the second challenge faced by Shell. Since the company is a MNC therefore

people of mix race working together which create the cultural issues among them as an

obvious reason. In order to meet this challenge the company should implement the

continuous improvement in everything which company does. There are the following

strategies suggested for implementing the continuous improvement program in Shell:

The company should identify the improvement opportunities by measuring and

analyzing the overall work processes.

The company should enable all the employees to participate and play an effective

role for the continuous improvement

The company should establish the benchmark for all the work process so that

every individual employee can assess its work performance. This will divert the

mind of the employees from creating the cultural issues with in the organization.

(Miles and Snow, 2006).

Culture is a main driver in the multinational corporation for developing the cross

functional teamwork with in the company. The right understanding and better alignment

of the views encourages the people form different department to work together to solve

the specific issues of the company. In the organizational development, team work is

necessary as it encourages for having the systematic approach to solve the problem with

collective thinking. These skills with in the team develop through the creativity and

experience of every individual (Prendergast and Canice, 2008).


2.1.3 Critical Factor 3: Management

The management in the Shell is lacking with the adequate human relation skills which

tend to avoid the most prominent and significant element in the company. The overall

work process are hence not operating with the care which directly impact the

development of the company. More over in the business decision making the company’s

management is lacking with the quantitative approach. The leadership quality within the

organization is not upgraded due to the insufficient and limited capital resources. Though

these issues are important for the company and it should solve it as soon as possible

through organizational development technique (Rayton, 2008). It would be essential for

changing these factors in order to change Shell into learning organization. Before doing it

we need to understand the main characteristics of traditional organization and the

learning organization as provided below:

Characteristic

Elements

Traditional

Organization

Learning

Organization

Shared ValuesEfficiency and

Effectiveness

Excellence

Organizational Renewal

Management Style Control Facilitator Coach

Strategy/Action PlanTop down approach

Road map

Everyone is consulted

learning map

Configuration LadderFlat structure Dynamic

networks

Staff CharacteristicPeople who learn people

who know

Knowledge is power

Mistakes tolerated as

part of learning

Distinctive Staff Skills Adaptive learning Generative learning

Dimension System Financial MeasuresBoth Financial and non-

financial Measures

Teams

Working Groups

Departmental

boundaries

Cross Functional teams


(Source: Prendergast Canice. 2006b. `Uncertainty and incentives’, Journal of Labor

Economics, vol.20. no 2, 115-137)

3.0 The Role of Strategic Communication:

The learning process of an organization is same as like the learning process of an

individual. In an organization, the individuals feel the circumstances and accordingly

respond to the situation. They have the capability to analyze and observe the results

which has been arisen due to their action of responsiveness. The individuals then

remember such results which will further help them in future to gain the better outcome

of their action. Apart from this they collect the information from various sources for

future reference (Schein, 2003). In Shell these processes of responding to the situation,

remembering the results and observation from results are missing by the individuals

because of the complexities in communication within the company between the senior

management and the junior management. Apart from there are many other companies

which also do not follow such processes. Therefore to convert the Shell into learning

organization, it would be necessary to seek the tools and methods by which Shell can

learn concisely and perform in pursuance of its goals. In search of such tools, dialogue is

the one which is very effective (Rossett, 2004). The word dialogue is inspired from the

Greek word called dialogos which means that the through meaning of the word. In case

of Shell the purpose for bringing in the dialogue is to filter the group of people in order to

develop the synergistic understanding of the individuals about the experiences and goals

among all the people who are involved in such processes. The other reason for using such

tool is that it would be the people with in the organization that have the capability of

sensing, responding, observing and then remembering. A company is nothing but just an

action and resultant articulator of its employees. Hence it can be summarize as whenever

an organization learn it means the individuals employed in that organization are learning.

The researchers in the field of organizational behavior and organizational development

believe that if an organization needs to achieve the desired goals and vision then it should


develop a unitary consciousness within the company environment. In the line of using

dialogue as a tool, the strategic communication refers to the sharing of ideas, information

and experiences among the employees of an organization which should have strategic

significance to that company (Mahoney and Watson, 2008).

4.0 Diversity and the Learning the Organization:

In Shell the prevailing culture encourage the people to keep their ideas with in their mind

and do not attach from the community which is a negative fact in the process of learning

organization. In learning organization there should be culture of diversification of ideas

and thoughts along with the attachment of individual from the community. The

development of learning organization is not an individual task and hence needs a team

work approach (Pfeffer, 2005). It would be essential for capturing the strength, ideas,

strategies, thinking and experience of all the individuals for developing the competency

in the company. On of the important faculty for a company are the customers of the

company as they are the people who actually consume the product and services of an

organization. If a customer complaint about the product or service then the company

should focus on why this complaint occurs and where the company is lacking in the

quality of product and services. Therefore a learning organization can have the learning

which specifically comes from the people through the following ways:

Identifying the unique role of every individual and assign the task according to his

capability

Utilizing the best possible potential of the individual from the diverse background

Providing the support to each individual

Determining the various ways of contribution towards the organization’s goal

(Katz and Kahn, 2002)

The following structure defines the brief concept of learning organization.


(Source: Gibbons, Robert, 2007. `Incentives in organizations’, Journal of Economic

Perspectives, vol. 12/4.

5.0 Systematic Thinking:

A systematic thinking process is the last approach for developing a learning organization.

It will help the personnel to broaden the knowledge and frame the references for better

understanding to each other. Once the company will apply the knowledge and tools, the

systematic thinking process starts within the company. The implementation of total

quality management within the company would be an essential step for bringing in the

systematic thinking (MacDuffie, 2003).

The following diagram includes the key elements that are important for developing Shell

as learning organization.


Structure

Mechanism Organism

Technology Culture

Organization

(Source: Dessler, G. (2004). Human resource management, (8th edition). Upper Saddle

River, NJ: Prentice-Hall, Inc.

There are the following skill sets required by an individual to support Shell into

developing as learning organization:

1. Capability to analyze the culture of the organization

2. Capability to give up the old parables

3. Should posses the ability to identify new patterns which should be multitasking, and

miniaturization with the low level of depression within the company

4. Should capable enough to develop the clear and open perspective i.e. to relax, sense

of humor - ability to laugh and capacity to scan the information and extract the key

point for the success of the company

5. Capacity to establish synergy among the employees of the company and take the

results from such synergy

6. Should eager to learn forever


Awareness

Environment

Leadership

EmpowermentLearning

LearningOrganization

7. Should have the capacity to create the comfort zone for other and safe working

environment

The visionary step of converting Shell into learning organization would be quite difficult

as it has both the strong as well weak points. In reality the weak point of the company is

the attitude of the employees as it will be changed massively for the development of

learning organization. The positive point for Shell is that the individuals in the company

are keen to learn. In contrast to this, they do not accept that they are lacking with the

skills and knowledge. Therefore it would be necessary to change the attitude of the

people employed in Shell for the successful creation of learning organization. The

successful implementation can be achieved through the exchange of knowledge which

should be available readily (Brouwer and Maria, 2006). In such practice the knowledge

would be the power for Shell and also guarded the employees from jealously. The other

factor which needs to be changed is the culture of openness as it could be the difficult

task. With respect to change this factor, the positive point of Shell is that the individuals

are aware about the prevailing culture and agreeing that this is not obvious in Shell. In

contrast to this point the weak part of Shell is that the majority of people do not want to

change the culture as they arte habitual of it (Christensen, Clayton, Joseph and Bower,

2002). The employee engagement and knowledge management can support Shell to

change its culture. Since, it will include the communication structure, employee

involvement schemes, reward systems and industrial relations among the employees. In

the process of developing Shell into learning organization there might be some challenges

as provided below:

The company might have the operational fire preoccupation which means that the

company is not capable to create the environment so that the employees can sit

back and think strategically

The company might focused towards the systems and process which would be

exclusion of various other factors

The upper management might reluctance to provide training due to financial

crunch and motive of cost cutting and more keen to invest in immediate needs


The individual employees might have the hidden personal agendas which they do

not want to disclose

All the processes in the company follow the top-down driven approach with lack

of supervision and hence lack of leading the real empowerment

(Foss, Nicolai and Keld Laursen, 2005)

6.0 Limitations:

In the development of learning organization, the most significant problem exists at the

conceptual level. Every individual organization has its own intelligence which might

clash to the intelligence of people employed in the company. Therefore an individual can

claim that it does not have the understanding of new system till he will conceive the

change as a whole. There could be another limitation for Shell as the organizational

change will not be possible to isolate the individual action within the company. It will be

hard to say that the company has the existence level beyond the level of its employees

and finally become a problem for changing the organization into learning organization.

Apart from these the other limitation will be that the senior management has the

boundless faith in the continuous development within the organization which will lead

the non-acceptance of reason for changing the Shell into learning organization (Rayton,

2008).

7.0 Effects of changing shell into a learning organization


As we saw in the beginning that how shell faced many difficulties but after using certain

steps and measures shell changed the organization structure and culture to form a

learning organization. There is no longer a right way to do a thing as they came to a

subject of re-examination. They changed themselves to systematic thinkers and believed

that the current reality is one of the many possible realities which lead to a critical

thinking process from top level to lower level. They came up with a scenario planning

system where many scenarios are kept into mind and the company actually rehearses that

will be there reaction if any of the few possible scenarios turn into the eye reality. This

helped shell to analyze and sustain even when the oil price dropped to $25 a barrel. The

process of learning organization in the company is not over yet as this process can never

be over as it’s an on-going process and will always help the company to sustain and

remain at the top 10 in several kind of economic crises and disasters.( Kline, Peter and

Saunders, 1998)

8.0 Reference:


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Dessler, G. (2004). Human resource management, (8th edition). Upper Saddle

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