Four Functions of Management in Oil and Gas Companies
This paper examines the four dominant functions of management — planning, organizing, leading, and controlling — as applied to the operations of oil and gas companies. It discusses how strategic planning in the industry centers on supply chain optimization, return on invested capital, and business process re-engineering. The organizing function is analyzed in terms of balancing hierarchical structure with organizational agility. Leadership is explored through the lens of change management, shared vision, and subordinate development. Finally, the controlling function is presented as a continuous feedback mechanism for improving process efficiency and meeting revenue objectives. Together, these four functions form the foundation of effective management in a highly process-driven industry.
- Introduction: Overview of four management functions in oil and gas
- Planning: Strategic planning, SCOR model, ROIC, and innovation
- Organizing: Structure, hierarchy, agility, and collaboration
- Leading: Vision, change management, and subordinate development
- Controlling: Feedback loops, process control, and performance standards
- Summary: Four functions as critical oil and gas macro-processes
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What makes this paper effective
- Applies a well-established management framework (the four functions) to a specific, process-intensive industry, giving abstract concepts practical grounding.
- Integrates named analytical tools — SCOR model, ROIC, BPR — to support each management function with concrete industry-relevant terminology.
- Maintains a consistent industry focus throughout, ensuring each function is examined in the context of oil and gas rather than in the abstract.
Key academic technique demonstrated
The paper demonstrates applied framework analysis: it takes a standard management taxonomy and systematically tests it against a specific organizational context. By grounding each function in industry-specific challenges — such as exploration processes, hierarchical agility, and change ownership — the writer shows how theoretical frameworks gain explanatory power when anchored to a real sector.
Structure breakdown
The paper opens with a brief framing introduction, then dedicates one section to each of the four management functions in sequence. Each section defines the function, identifies its particular relevance to oil and gas operations, and references supporting scholarship. A short concluding summary reinforces the argument that these four functions are the primary macro-processes driving organizational success in the industry.
Introduction
The four dominant functions of management are planning, organizing, leading, and controlling. In the context of this paper, they are applied to the operations of an oil and gas company or organization. These four essential functions of management are critical for the efficient and orderly functioning of any organization, and are even more critical in a high process-centric business model — the type that oil and gas companies rely on for attaining their strategic objectives.
Planning
The development of strategic plans in oil and gas organizations is directly related to the development of core strengths and a unique set of differentiated attributes as a company. For many organizations that compete in the oil and gas industries, the ability to turn supply chain processes into a competitive advantage is their most important differentiator. The use of the Supply Chain Operations Reference (SCOR) model in the context of planning within many industries, including oil and gas, is an analytical construct that provides insights into how these series of processes tie into strategic planning (Razmi, Jolai, & Hezarkhani, 2008).
The development of strategic and tactical plans in many oil and gas companies is also built on developing innovative new approaches to the exploration, extraction, processing, and selling of oil and gas-related products through distribution channels. The role of innovation in the context of the planning process is also critical for the development of long-term differentiation (Miles, 2007). For many oil and gas companies, strategic planning centers on the development of both existing assets and the Return on Invested Capital (ROIC), which is used as the primary measure of asset utilization. There must, however, be a balance between existing asset utilization and the development of entirely new processes and approaches to discovering, processing, and selling oil and gas-related products. As the industry is inherently process-driven, managing to business process re-engineering (BPR) standards is also critical.
Organizing
The organizing function within an oil and gas company or organization needs to concentrate on both the hierarchical and structural definition of roles, responsibilities, and processes that enable the many departments comprising the organization to attain their shared objectives. By definition, the organizing function of management focuses on the structuring of both processes and working relationships to attain shared objectives and goals. The challenge many organizations face is in creating the optimal balance between structure, hierarchy, and control relative to the need for agility and an organizational structure that allows for more effective use of resources to capture opportunities and growth.
Organizing the many processes and functions within an organization must also contribute to the best possible organizational culture to ensure that objectives are attained. Of all the functional areas of management within an oil and gas company, the organizing aspect must provide enough structure while remaining agile enough to allow departments to work with one another toward a common objective or goal. Creating collaboration across the organization is fostered and fueled by the right balance of hierarchical organization and the adoption of agile processes and structures that enable greater cross-functional collaboration. The concepts of chain of command, work specialization, and structure — including the implicit roles of authority, responsibility, and accountability — must remain agile if an oil and gas company is to attain its objectives in an increasingly turbulent marketplace.
References
Aguirre, D., Calderone, M., & Jones, H. (2004). 10 principles of change management. Resilience Report, Booz Allen Hamilton. New York, NY.
Miles, R. E. (2007). Innovation and leadership values. California Management Review, 50(1), 192–201.
Razmi, J., Jolai, F., & Hezarkhani, B. (2008). Designing collaborative roles and responsibilities in supply chain. International Journal of Management Practice, 3(1), 96.
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