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Leadership and Organizational Change in Qatar Petroleum Research Paper

Organizational Background

Qatar petroleum is an international company located and owned by Qatar and is dealing with all oil and gas energy sources (Petroleum, 2006). The country gets most of her revenue from the sale of company products. Through the company, Qatar has experienced a lot of development records such as: sustainability in social and economic human development, environmental development, continued state economic development and efficient and effective management of exhaustible resources to facilitate safer inheritance by the next generation. Most of these developments have been a direct consequence of the company’s commitment in the promotion of education, career development and training in a bid to secure future professional demand. Under the leadership of Sheikh Tamim bin Hamad Al Thani, Qatar Petroleum is determined to be at the forefront of world with regard to rich natural gas and oil resources which are not only safe but also the most reliable producer.  However, despite the company’s track of development, the Qatar Petroleum has faced major challenges which tend to lower its productivity, competition and associated benefit delivered to the nation. In this work, focus is based on the challenge that befall Qatar Petroleum following the collapse of oil prices that made the leadership and management to embrace organizational change in order to keep focus on desired outcomes (Al-Emadi et al., 2007).

Nature of the problem

The initial higher oil and gas prices enabled Qatar Petroleum to meet most of the objectives from the sale the products. With reduced prices, however, the same objectives could only be achieved by increasing productivity. On the other hand, if the company chooses to do so, the consequences would see most wells drying sooner than later since all potential wells had already been sunken as early as 1974 (Al-Emadi et al., 2007). Therefore, increasing productivity would only mean that the existing wells had to be over exploited following the fact that no new wells could be sunken for additional output. Nevertheless, increasing production is not the only alternative. By embracing organizational change, the company can still meet the desired objectives even with the resulting lower product prices. Organizational change is defined as a set of modifications that affect any of the organizational composition, culture and or structure. According to Nadler (1995), organizational change is important in ensuring that the company makes progress and grows by improving lives and creating new values. Organizational change when successfully managed may maximize innovations and enable the workers to adapt to new realities. Under normal condition, most organizations will prefer the status quo to change following the associated higher efficiency coupled with certain predictability of the normal and cultural occurrence. Organizational change is a tough experience to most organizational management and leadership since the culture always promises interlocking goals from the prescribed assumptions. There are chances that the proposed organizational change related goals will be realized without the organization making progress. In this work, an attempt is made in the process of managing change by assessing both the factors that drive change and the ones that resist organizational change with respect to the Qatar Petroleum Company.

Managing Change in an organization

The ultimate goal of organizational change is to create a better working environment that will effectively cope with the current situations without making the organization to lose focus in its major desired achievements (Cameron and Green, 2015). Some organizational change occurs automatically with time while others are actually planned and implemented for a worthy cause. Organizations need to change in response to ever changing surroundings and continuous situational crisis (Fernandez and Rainey, 2006). However, without careful management and communication of change to all stakeholders involved in executing the change, the desired outcomes may never be realized. Organizational change may entail reorganization of structure, inclusion of mechanization, employing more workers or terminating other workers depending on the work force status, operational and cultural changes. At times organizational change may involve major changes that closely resemble going back to the drawing board (Sturdy and Grey, 2003). For example, major changes may be executed starting from the change in mission, vision and goal of the organization as it was in the case of Qatar Petroleum. Based on the change itself, there are factors either within or outside the organization that drives the change process to occur while at the same time there are those factors that tend to resist change by facilitating status quo.

Drivers of organizational change

There are many factors that facilitate organizational change. When the driving factors are stronger than resistive factors, organizational change occurs. These factors are broadly categorized into two main groups: internal and external factors (Whelan et al., 2003).

  1. Internal forces

These are factors from within the organization that drives organizational change to take place.  Internal factors include: workforce, marketing and financial status of the organization (Whelan and Somerville, 2010). The workforce factor facilitates organizational change with respect to existing deficiency, level and direction of loyalty as well as the automatic change in generational workforce education level. Sometimes the organization embraces change to fill unoccupied positions within the company or to replace the non performing workforce especially the managerial positions. Similarly, studies have shown that older workers are always loyal to the company and do not give easy time in allowing the organizational change while the middle age employees are loyal to themselves only. On the other hand, the younger generation employees are loyal to their career and are equally more educated. Depending on the situation and the need to measure up to the standards of other similar companies, change may be necessitated and would likely to be inclined towards the younger generation owing to their educational level. With respect to the organization in question, work force factor including the need to have experience coupled with education level facilitated the change. Having gone through tough times previously, the company had to be sure that the technical team chosen would deliver the strategic plan on time. This facilitated replacement of old and other non performing employees with energetic, hardworking and futuristic educated individuals.

Organizational marketing strategies may equally facilitate the change process to allow the company meets most, if not all the market demands. In case of poor initial marketing strategies of a company, achievement of desired goals may be derailed. In order to keep the company’s goals in focus, change is necessary. With good marketing strategy, there will be efficient and effective product circulation in the market, thus facilitating the achievement of desired goals. New marketing strategies that could be be applicable in Qatar Petroleum Company include: advertisement, price reduction, discount on cash purchase among other strategies that will make the company to be more competitive over other similar companies.

  1. External forces

External factors for organizational change are factors originating from the organizational surrounding and the organization do not have direct control over them. External factors include: globalization, legislation, market force, technological advancement and political influence.

Technological advancement, especially among the competitors might have necessitated the need for change in Qatar Petroleum. For example, studies have reported that Shale gas exploration in US is highly mechanized making their production cost to be far much cheaper as compared to other similar producers (Vidic et al., 2013; Jackson et al., 2011 and Rahm, 2011). In the process, their gas prices had lower prices yet the quality remained higher. Competitors like Qatar Petroleum Company had to consequently lower their prices too in order to maintain market and ensure there is no shift. High higher production cost and lower product prices, the organizational leadership and management had to embrace change with a view of increasing the profit margins by avoiding excessive production cost.

Market force as a driving force to organizational change relates to the organization’s product movement in the market with a similar movement of product from competitors as well as with the buyers’ preference in choosing a product. For example, when Qatar signed globalization deals, different oil and gas companies were free to compete in the market world wide. As a result of this competition, the product prices were significantly lowered making an individual company to adjust to the situation thus facilitating organizational change.

Factors resisting organizational change

Organizational change is not always an idea that will be accepted enthusiastically by employees. This is because the change process is associated with a number of fears ranging from the organizational level to the personal level. Within the organization, there is fear of deviation from organizational track, uncertainty in achieving the desired outcomes, failure and neglecting the known while focusing on the unknown. On the other hand personal resistance to organizational change is associated with the fear of loss of status or job security, unwillingness to accept non reinforcing reward systems and a belief that the desired change will not realize the desired outcomes contrary to the change administrators. Other causes of resistance to change includes: security in the past and present before the change, economic implications, organizational culture and norm, misunderstandings, threat to skills or competence, reluctance to experiment, threat to the power of influence, fear of looking stupid as a result of outdated skills and limited resources.

For better understanding and coping with the resistance to change it is important to consider the kind of resistance to change. According to Hambrick and Cannella (1989), there are three main kinds of resistance to organizational change, namely: blind, political and ideological resistance.

Blind Resistance

Some people may be afraid to implement the organizational changes irrespective of the high possibilities of the change to offer solution to existing challenges. In Qatar Petroleum Company, all levels of employees ranging from casual workers to managerial position possible reacted defensively to change parameters owing to the existing culture and fear of the unknown especially during the initial implementation stages. According to Fernandez and Rainey (2006), in order to cope with this resistance, the change administrators should not give more pressure to employees, but rather ought to communicate friendly the desired outcomes and give the resisting employees time to accept the changes.

Political Resistance

Political resistance to organizational change occurs when some organizational employees feel that the desired change implementation would make them lose some values such as individual power, position in the work niche and the role played within the company. Political change resistance can only be surpassed by effective and careful communication of the change desires. When the employs realize through communication and involvement that the proposed changes do not inflict adverse effect on their personal working status, they would let go their worries and consequently embrace change (Cameron and Green, 2015).

Ideological Resistance

Organizational change is never planned and implemented by one person, but rather by a team. If it so happens that within the team, there is a genuine intellectual disagreement about the proposed change, part of the team that associated the change with more damage, failure and or diversion of the organization desires may resist its implementation. If this happens then it is advisable for the change administrators carry out more research based on the intellectual and philosophical reasons given by the resisting groups (Mento et al., 2002).

Theories of managing change resistance in an organization

This work assesses three major theories or models used to manage organizational change, namely: Kotter’s eight step model, Kubler-Ross change model and Nudge theory. In all these models, effective change communication, stakeholder inclusion and empowerment is a common proposal.

Kotter’s eight step model

Kotter’s eight step model provides a strategic process of enforcing the desired organizational change through identification of important elements to a successful transformation (Appelbaum et al., 2012; Mento et al., 2002 and Kotter, 1996).

 

The eight step model can be categorized into three main categories, namely: creating a climate for change, engaging and enabling the organization and finally implementing as well as sustaining the desired change (Appelbaum et al., 2012).  The first category involves establishing a sense of urgency, formation of a powerful coalition between the stakeholders and change administrators and creating change in vision. With regard to the Qatar Petroleum Company, the very first step would oversee the market forces and competition from similar product companies thereafter, a group of people with similar ideology with respect to change are selected to spearhead the change following clear and easy to follow the vision. The second category deals with communication of change ideas to all stakeholders with a view of removing all the misunderstandings leading to change barriers and empowering all the employees to feel and be part of the change rather than taking a low profile of watching the change administrators execute the change. In doing so all members of the organization would work hard for the change to be successful as no individual is ever willing to be associated with failure. This collective change execution is also accompanied by plans for short term assessment to verify and take appropriate actions as to whether the long term change would be realistic or not. The last category entails increment in change credibility in order to facilitate building on change and finally institutionalizing the new change as an organizational culture.

Kubler-Ross change model

Kubler-Rose change model provides a perception and general feeling organization members have during the change process from the conception of change ideas to acceptance of change (Elrod and Tippett, 2002; Wylleman et al., 2004 and Fossum, 1989). This model provides a five stage understanding of peoples’ reaction towards the desired change and can be used to enforce change. The five stages include: denial, anger or frustration, depression, decision making through experimentation and acceptance (Elrod and Tippett, 2002) as shown in figure 2. The model also suggests a suitable way of dealing with the reaction of the members at all stages. In the denial stage, Kubler-Ross change model reveals how members reject the change insisting on the status quo. When the organization carries on with the change process, the members then proceed to a stage of anger. At this stage the members have realized that the change is real, and actions are irreversible, but following their initial denial they tend to look for reasons to blame others for enforcing the change (Wylleman et al., 2004). Frustrations lead to depression- a stage in which people have already started dealing with change even though with a higher level of work place demotivation. Through experimentation and careful study of the change process and the resulting effects, especially from short term goals, a decision is made that finally make the members to accept the organizational change. According to the model, Qatar Petroleum Company through creation of alignment, maximization of communication, employing motivation, development of capabilities and finally sharing knowledge, are among the strategies the company could employ in dealing with the respective stage reactions.

 

Nudge theory

Nudge theory provides an understanding that is central in making the members of the organization to accept and embrace change (Chakrabortty, 2010). The theory seeks to influence the decision making process amongst members through design of choices based on how people think. Unlike other theories that enforce organizational change, Nudge theory acknowledges the attitudes, knowledge and capability of the members in designing choices that would lead to self acceptance rather than enforcement of ideas of change. Therefore, in line with this theory Qatar Petroleum Company could minimize the confrontation that normally exists as a result of authoritarian leadership that only seeks to force changes (Kosters and Van, 2015; Johnson and Goldstein, 2003).

Leadership Theories in relevance to organizational Problems

There are about six most widespread theories of leadership that can be used to evaluate and develop an understanding of leaders, namely: trait theory, behavioral theory, great man theory, contingency theory, transactional theory and transformational theory (Stanley, 2016; Kibbe, 2015; Epitropaki and Martin, 2004). Nevertheless, in relevance to organizational change, this work only gives a critical argument on transactional and transformational theories.

Transactional Leadership Theory

Transactional theory of leadership is anchored on mutual benefit of the organization and is practiced through motivation, direction and control (Lowe et al., 1996). The leaders employing this theory are focused on achieving the organizational set standards or change using motivation through rewarding good performance and punishing deficiency. It is common with Leissez-faire type of leaders who subject the other members to a series of choices (Bryant, 2003). The work of the other organization members is to choose as per their know how keeping in mind that failure will lead to punishment. The leader himself does not make a decision, but rather impose the group to oversee the series of alternatives and arrive at a decision. Owing to uncertainties and fear of failure, there are higher chances that the group will stick to what they already know (working within the organizational culture and conforming to the normal habits) and thus avoid change as much as possible. In as much as this theory enhances followers creativity, the structure of the leadership still makes them to lack self motivation as they have to be closely supervised to perform organizational duty (Wofford and Goodwin, 1994). Therefore, this leadership theory can only work best in cases where the organizational problem is simple, clear and require a short term plan not as in the case of the Qatar Petroleum Company.

Transformational leadership Theory

The transformational leadership theory is based on the interaction between the leader and his followers in such a way that the inspiration from the leader makes the followers to develop a lot of trust in the leader (Bass et al., 1990). Unlike in transactional leadership theory in which followers are extrinsically motivated by the reward or the need to avoid punishment, in this theory, the resulting trust and inspiration makes the followers to be motivated both intrinsically and extrinsically (Judge and Bono, 2002). Transformational theorists believe that rules governing the conduct of the organization are flexible and group norm is the guiding principle (Yukl, 2002). With this regard, therefore, transformational leadership is best applied in the Qatar Petroleum Company. In so doing, the organizations’ followers gain a sense of belonging and thus can easily identify themselves with the leader who is more of proactive than responsive. This type of leadership theory is most applicable in Qatar case where the organization is to act as a unit in executing a change.

Conclusion and Recommendation

In summery, this work assets that ‘change is permanent’ and organizational norm through sticking to organizational culture should be a thing of the past even if there is no situational problem. Change make not only leaders but also followers to be innovative and always be ready to handle situations as they presents themselves. However, the process of change should never be rushed or associated with only the leaders, but rather it should be executed by all members of the organization acting as a unit. Before an organization undertake a change, be it transformational or situational, there should be an understanding of all the factors driving and rejecting change and consequently, effective communication to enable organizations to operate as a unit. This work also recommends transformational  theory of leadership for change as opposed to other theories.

 

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