Leadership and Change Management Case Study

Excerpt from Case Study :

Leadership and Change Management

Consider a change that has been recently introduced in your organization. Using relevant change and leadership theories, critically analyze the benefits and problems that introduction of this change has brought. TO WHAT EXTENT HAS LEADERSHIP CONTRIBUTED TO THE RESULTS OF THIS PROCESS?

RasgGas is a joint venture gas company between Qatar Petroleum, the State of Qatar's national oil and gas company (majority stakeholder), and ExxonMobil, an American Integrated Oil and Gas company. The company is about fifteen years old and has been involved in all aspect of exploration, development, production, liquefaction and marketing of gas from the North Field. RasGas is a major contributor to the State of Qatar's worldwide leadership in the production and marketing of Liquefied Natural Gas (LNG) export. The company has utilized technologies to drill high capacity gas well and build the largest and most efficient liquefaction trains in the world. These technologies and large scale facilities enable RasGas and the State of Qatar to economically produce and export LNG to all parts of the world, a reach that was beyond economic possibility just few years ago.

To accomplish this objective, the company has put into place a geographically extensive "assembly line" that connects to, collects, processes, stores and ships a natural resource (gas), from its original location deep below the surface, to a transportation network that delivers the product to its eventual consumers. Its activities related to the extraction of the gas from the reservoir by way of wells, and transportation to shore by flow lines is considered the "subsurface" part of the business. The processing of the gas occurs onshore, and is considered the "surface" part of the business.

For most of the first fifteen years of the company's existence, the focus has been on the creation ("development") of the assembly line: the drilling of wells, designing, building and installation of platforms, pipelines, the gas plants and the storage and shipment terminals. This development work was completed in early 2010, with the commissioning of the last gas plant train, Train Seven. This train design is the largest gas plant design in the world. As an indication of the scope of this work, in 2009, the work involved in the development process consumed in excess of 100 million man-hours.

As the development progressed, wells and gas plants were put into service, and a revenue stream was established. The nature of the gas plant designs was such that the production contribution from each succeeding project was skewed to the later phases of the development process, in effect, smaller gas plants were put online first, followed by significantly larger ones towards the end of the development phase. Almost half of the production capacity and wells came online in the past two-year.

In the first half of the 20th Century, economics were based of Fordism and mass production industries, rather than high technology and information processing. In the 21st Century, more organizations are going to be integrative, human-timed rather than machine-timed, more horizontal than vertical or hierarchical, and based on teams and virtual enterprises. Managers will have to deal with new, complex systems in which change is the norm, with a style of frankness, directness, learning from mistakes, trust and respect. Adaptive organizations must be proactive, with stakeholder and customer participation, less hierarchical, having shared leadership and a common vision. Their communication style will be open, with impartial and objective decision-making and a collaborative workplace (Garrity p. 270). Adaptive leaders will be less authoritarian, and value listening, collaboration, education and vision (Garrity p. 273).

Defining the Change

The change described in this paper relates to the organizational changes put into place to facilitate and to improve the company's transition from one focused on the development of its production system, to one that will be focused on the actual, continual campaign of production, and of production sustainability. The production system can be compared to an assembly line, and like many real-world assembly lines, it shares some similar characteristics:

• The raw material quality may change with time, and the quality control/quality assurance systems must be able to accommodate these changes.

• The equipment is all aging and requires an increasing amount of maintenance.

• The end-user's demand for product is changing, and the production system must be able to respond to these changes in demand.

These characteristics are different from the basic characteristics present during the development phase in which activities can be categorized as:

• Well defined, with minimal changes that are well managed at all times. The incoming products needed for the construction are known and of fixed properties, by way of contractual terms.

• The design and build are all "green-field," in effect, all new equipment with initial warranties provide by the suppliers.

• The scope of work is fixed or as a minimum controlled through a project management of change process.

• Easily compartmentalized along functional lines; the structural engineers for one process step could proceed with their design with minimal interaction with other processes, other than clear communication on the boundary conditions (for example, the output from the recovery unit could be adequately describe through it's flow rate, at a certain temperature, with a particular composition). These differences require the operating organization to be one that is more flexible, resilient, and most importantly, integrated across functional lines. The impact of events that occur in one area of the assembly line, such as the well, have a knock-on effect downstream, which requires all of the different technical functions to be working together on a common issue rather than relying on fixed boundary conditions.

The organizational change undertaken to support this change in focus was to adapt a matrix management organization around individual production blocks as "assets." The "Asset Surveillance Team" for each block would consist of all the functional disciplines necessary to address the required subsurface issues. As with most matrix organizations, the individuals would still report within their functional organization. One difference in this implementation from classic matrix organizations was the intentional elimination of an Asset Manager. Instead, rotating "focal points" were defined. It was believed that this would eliminate any confusion within the teams regarding their responsibilities, and also would foster an increased level of ownership by each of the team members.

The main objective of the Asset Surveillance Team was to promote inter-disciplinary communication, and a deliberate attempt was made to eliminate a hierarchical structure that could work against team collaboration; especially in light of the fact that whoever would be designated the Team Manager would most likely come from one of the disciplines. The Asset Team Changes were: Narrow, Strategic, Proactive, Planned, Emergent and Top-down. Eisenbach at al (1996) describe transformational change as requiring the creation of "a new system and then institutionalizing the new approaches" (p. 80). New models of visionary, charismatic and transformational leadership "are likely to become even more important to organizations because of the breathtaking changes in the business and political environment" although there is still little integration between research in change management and leadership styles. Most change is transactional and incremental, but sometimes in the life of organizations and societies there are interruptions by "brief periods of discontinuous, radical change" (Eisenbach et al., p. 80).

Event-pacing may be most suitable to small, incremental changes since it is focused on narrow, specific outcomes but time-pacing works better in periods of radical change. In these periods, successful managers "provide clear responsibility and priorities with extensive communications and freedom to improvise," like jazz improvisation (Eisenbach et al., p. 82). They connect present projects with the future with time-spaced intervals and regular pauses so the organization can assimilate changes. While transactional leaders manage through providing rewards for performance, transformational leaders are inspirational, charismatic and visionary. They are most appropriate to organizations facing radically new situations or undergoing a crisis, and know how to create positive appealing visions of the future and are able to set challenging and stimulating goals for their followers. They also know how to control and pace change so their followers are not overwhelmed and the entire process falls apart and how to reward behaviors "that are directed toward fulfillment of the vision" (Eisenbach et al. p. 84). Drew and Coulson-Thomas (1996) asserted that the majority of executives "believe their organizations to be faced with revolutionary change, and that the pace of change is increasing" due to technology and globalization (p. 7).

All change advocates support the concept of cross-functional teams and collaborative work ventures to: improve communication; increase the speed of action and level of commitment; and improve flexibility and adaptability. Even so, the type of teams that work in Japan may not function in more individualistic Western cultures and "the benefits are all-too-often exaggerated and the difficulties underestimated" (Drew and Coulson-Thomas, p. 7). Loose networks and a supportive organizational culture may be just as effective as teams. Some organizations such as hospitals and airlines have more extensive experience with teams than others, and they are most suitable to routine and ongoing…

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