Functions of Management at Shell Oil How

Functions of Management at Shell Oil

How External Factors Affect the Four Functions of Management at Shell Oil

There are many external factors influencing or affecting the four functions of management at Shell Oil. The intent of this analysis is to evaluate each of the four functions of management, explaining what external factors most influence their operations and performance. As Shell Oil is a process goods producer that transforms raw materials into finished goods, the factors most affecting the four functions of management are supply chain focused.

Planning

Shell Oil relies heavily on the Supply Chain Operations Reference (SCOR) model as a means to mitigate sourcing oil, gas and raw materials needed for creating their finished goods (Razmi, Jolai, Hezarkhani, 2008). Strategic planning at Shell is highly dependent on how well integrated the company is with suppliers in the areas of exploration, mining or extraction, processing and refining oil- and gas-related products. Process innovation in the oil and gas industry is a major source of differentiation, and as a result, Shell makes this area a priority in their strategic planning efforts (Miles, 2007). .

Organizing

As the oil and gas industry has continually gone through turbulent economic re-structuring and entire nations look to either enter or exit OPEC based on political unrest. The need for creating a very high level of collaboration across the supply chain of Shell and allowing for contingency planning is critical for managing the company to profitability. These external factors of rapid shifts in oil prices, the continual political unrest in the Middle East, and the threat of price wars with OPEC all force Shell into a position of having to create as many contingency-based supply chain relationships as possible. This is part of their organizing function, as they seek to mitigate the level of disruption to their business based on turbulent external factors.

Leading

For any business to successfully compete over time they must be able to have transformational leaders who can provide a vision of how the company needs to change in order to survive (Aguirre, Calderone, Jones 2004). The pressure to have Shell Oil mean more than just being a global leader in gas and petroleum refining and retailing is critical for the company to meet Corporate Social Responsibility Requirements (CSR) that are essential for operating in 3rd world nations (Miles, 2007). These factors have a major impact on the leadership function of management in the company today.

Controlling