CASE 8 ROYAL DUTCH SHELL : FUELING THE WORLD INTRODUCTION Almost 200 years ago, a London historic dealer began importing sea shell from theFar East to supply a fashion for exotic décor. Marcus Samuel enterprise arranged thefoundation for a thriving import and export business later run by his sons, Marcus Juniorand Sam. At this time oil was largely used in lighting and lubricants and the industry wasbased in Baku and Russia with it is large reserve of high quality oil and strategic naturalharbour. The arrival of the internal combustion engine in 1886 to a demand for transportfuel. Building on their shipping expertise the Samuel brothers commissioned a fleet ofsteamers to carry oil in bulk. They revolutionised oil transport with the maiden voyage oftheir first tanker, Murex. In 1892 murex was the first ever tanker to transit the SuezCanal. The brother company was name the shell transport and trading company in 1897. Itused a mussel shell as it logo. Shell transport activity in the East combined with a search for new sources of oilto reduce dependence on Russia brought it into contact with Royal Dutch petroleum. Thetwo company join force in 1903 to protect themselves against the dominance of standardoil. They fully merged into the Royal Dutch Shell group in 1907. Shell changed its logoto the scallop shell or pectin which is used today. By the end of the 1920 Shell was theworld leading oil company producing 11% of the world crude and owning 10% of ittanker tonnage. The 1930 were difficult the group assets in Mexico were seized and it wasforced to concede generous terms to the Venezuelan government when it nationalised itoil fields. From the mid 1990 public scrutiny of the oil industry intensified as environmentalissues gained prominence. Shell was criticised over pelan to dis pose of the Brent sparplatform and also ran into difficulties in Nigeria. As the new millennium got under wayshell expanded in china and Russia. In 2005 shell dissolved its old corporate structure tocreate a single new company. Shell remains one of the world major oil and gascompanies. We have interest in liquefied natural gas and gas to liquid product we helpdevelop sustainable bio fuel and we are involved in wind project. On 4 August 2005 the
board of director announced the appointment of Jorma Ollila, chairman and CEO ofNokia at the time to succeed Aad Jacob as the company non executive chairman on 1hune 2006. Ollila is the first shell chairman to be neither Dutch nor british. As of 1 July2009, Peter Voser is CEO of shell. Peter who is Swiss is the first non-Dutch ,non-britishCEO of the company.DISSCUSSION 1Evaluate the planning processes employed by Royal Dutch Shell. How would you rate itsabilities to plan for its future within the oil industry? Royal Dutch Shell has used “develop premise regarding future conditions”. Theseplanning processes anticipate future events. Generate alternative “scenarios” for whatmay happen and identify for each scenario things that may help or hinder progresstoward your objectives. This company always create and do something by makingfuture prediction. This planning process is really successfully applied by this company. This company has practice this planning process because they always predicton future by their first thought, “the important of globalization”. First, we cansee through their first achievement in transferring oil by using their first bulk oiltanker in 1892. This first expedition was able to done because Royal Dutch Shell is a bigcompany that always used approach of looking forward and predict for the future, thispolicy is really good to be practice. As we can see what have been done by Royal DutchShell is spending bit time and cost to improve their company. They made research anddevelopment through predicting what is needed in many aspects like transport,communication and field of business, after predicting what will happens in future theywill develop what is need by their prediction. Like in transporting oil in large scale to thefurther distance. Royal Dutch Shell has successfully delivering the oil via massive oiltanker. This is really big achievement because by this ability this company were able toimprove their global field of marketing.
This is not just can be seen through those water transportation, this company alsohave made an huge investment for other transportation like rail and tunnel transportation,their ship now also have been improve with better ability to transferring and loading oilbarrel. Royal Dutch Shell’s achievement is really significant for their future. By all this we can make a conclusion that the Royal Dutch Shell is really good inplanning for their current and future, this company always planning by manipulated theircurrent condition than they will find their way to overcome problem and made a gooddecisions for the problem and for future by predicting any result, target and goal and thanwhat steps to be taken to reach the goals. The ability of this company to drive their future to bigger achievement wasexcellent. They can always planning to become better in future. The result is as we cansee how big the name of this company today.
DISCUSSION 2Which planning tool and techniques do you think have been utilized by RoyalDutch Shell? Which would you suggest they use for their planning and why? Royal Dutch Shell have been utilized ‘contingency planning’, as a toolsand techniques for their planning. Contingencies planning is identifyingalternatives course of action to take when things going wrong. The planningprocess and managing is uneasy work. There are always an uncertainenvironment to faced with. This is obvious when the first and second world warerupted. During the first world war, Royal Dutch Shell has realize the important ofgrowth and expansion over global markets. By that consciousness, Royal Dutch Shell hasapplied the planning tools, contingency planning on company operation. The companythen realize at time of war, it was quiet difficult to run business operation. It is not in termof the demand on fuel is down, it is even become more important because oil is needed torun machine and other war vehicle. But the difficulties is about to whose the oil is about to sell? Royal Dutch Shellsecond plan is making contract with one of the force that participated on that war. RoyalDutch Shell has become the main supplier for fuel to British Expeditionary Force duringWorld War 1. This has give the company good state in running the business. But the situation is reverse and differ in second world war. During the 1930s thepressure give depression force to Royal Dutch Shell to reduce its workforce entirely.The world war two has forced the demolition of many of its business and project location.This is really bad for Royal Dutch Shell to face with. Their operation is disturbed andthey are facing short pace of shrinking of their company. As to face and deal with thissituation, Royal Dutch Shell is once again having a second plan to overcome thissituation. The history of oil technology is change as Royal Dutch Shell is marking thehistory by making supreme advancements to the technology in fuel and chemical researchas well as the creation of brilliant advertising emphasizing themes of power, purity,reliability, modernity and getting away from it all. All of this turning good point in
second world war is the step that have been take by Royal Dutch Shell, what do they did,and what makes they turn the hard point to good point, they has plan to just sit and focuson rebuilding and expanding their business. This is how Royal Dutch is successfullyutilized their tools of planning.
DISCUSSION 3Do you feel that Royal Dutch Shell uses any participation and involvement strategies toimplement its plan? Why would participation and involvement be so crucial for such a firm? I fell that Royal Dutch Shell uses participation and involvement strategies toimplement its pelan is indeed because Royal Dutch Shell have used participation andinvolvement strategies in their business. In today current economic climate. Royal DutchShell has had to make some changes to its existing business model in order to adapt to thedemands and uncertainty of its client base concerning oil production. This company has madesome changes to its existing business model in adapt all the demand and to make adjustmentto what their client needs on their oil concerning business. In order to survive in globalvolatile market, at one point this company has involve in joint ventures with rival Exxon toform a partnership for the development of worldwide fuel addition. Partnerships bring the benefit of economy of scale with the sharing of bothresponsibility and funding requirements. Partnership is formed of two or more people ororganization agree to contribute resource to start and operate a business together. It is back bya legal and written partnership agreement. Good part of partnership is all member of it isagree to contribute their skills, expertise and ability to their new venture to reach goals andshare the benefits together. Besides that, it is important for royal Dutch shell to use this strategies to implement totheir pelan because for certain time we they always need some improvement andenhancement to certain part. When this company joint their project with Exxon on developingworldwide fuel addictive they got some good profit, first they got new knowledge, expertise,and skills from their partner. They will learn new knowledge that can be used to their future.Other than that, they also learn the new culture and ways of work with their partner, they canused this for make comparison and apply any good example from them to their company. Lastly, one of the very important reason of making partnership or joint venture is acompany can saved lot of their money to use as a capital and investment to develop any newcreation in order to strengthen their business. Create and develop new technologies need lotof expand and used of workforce and expert. This is sometimes really a burden to a company.And for some company, they found it id really hard to advance in some ways if they don’tfind any fund and help. This is where joint venture is really important and play their role in
helping company develop their technology. They can save their money and expert to be usedin investment at least for half of what needed, shell project management approach integratethe use of impact assessment and stakeholder management plan and any new project musthave a stakeholder engagement pelan in place. Once a project moves forward the groupdiversity framework require annual diversity pelan and a human right compliance toolprovide manager with a step by step approach to help them avoid violating the basic humanright of employee and local communities during a project.
DISCUSSION 3FURTHER RESEARCH- Investigate the types of alternative fuel sources that are currentlybeing used or research. How might these alternative fuel sources impact the oil industry?How might these alternatives fuel sources impact the oil industry? How might they impactRoyal Dutch Shell specifically? Alternative fuels are from resource other than petroleum. Some are produceddomestically, reducing our dependence on import oil and some are derived from renewablesource. Often they produce less pollution than gasoline or diesel. There are a lot of alternativefuel source currently used and research by the world today. These alternatif fuel is developbecause they want to find or overcome the issues of depleting sources of energy. They knowif they mastered and conquer this field it may come in much profit. There were many type ofthis alternative source like biomass, biofuel, solar power, liquid nitrogen and nuclear power.But two of the most popular alternative fuel today is biomass and hybrid technology. Biomass is an alcohol based fuel made by fermenting and distilling starch crop suchas corn. It can also be made from cellulosic biomass such as tree and grasses. The use ofethanol can reduced our dependence upon foreign oil and reduce greenhouse gas emissions.Advantage biomass is a domestically produce, reducing use of import petroleum, loweremissions of air pollution, more resistant to engine knock and add vehicle cost is very small. Hybrid technology is the technology that implied on machine to generate electricalenergy. Almost all the develop put in this technology to main vehicle and car. Car is one ofthe most consumer petrol on road. This problem seem cannot be put aside as the sources ofpetroleum is depleting years by years. The invention of hybrid technology has become a good answer to overcome theproblem of depleting resource of petroleum. This is way some giant of automotive companylike Toyota dan Honda is compete in developing and producing the hybrid car. World citizenis quiet happy to hear this thing and those hybrid has become more and more popular andwidely being used in few country. Those car like Toyota Prius have been used by UnitedState as their petrol car.
The invention of hybrid technology is obviously known that it is were develop inorder to respond to the problem of depleting sources of petroleum. But as the technology isdevelop a bit early, it is at the other side have turn to become a threat to the oil industry. Attoday current situation it may still look like just a normal thing. But if we look up to just littlefive year forward. The oil industry may feel the impact of lowering number of petrolconsumer. The reducing number of petrol consumer is occur when the hybrid technologiesbecome cheaper when expert become more advance in mastering this technologies. This is a normal thing that, when any technologies is become more mastered byhuman it will become cheaper and more affordable by human. So the same thing goes tohybrid and this is absolutely will give impact to oil industry. And royal Dutch shell itself asthe big company in oil industry will affected. The demand of their petrol fuel will decreaseperiodically as the hybrid technologies is become more familiar time by time.
REFERENCES1. A History of Royal Dutch Shell" by Stephen Howarth and others .2. http://www.shell.com.my3. Shell Shock: The secrets and spin of an Oil Giant" by Ian Cummins and John Beasant.4. http://www.fev.com/content/public/default.aspx?id=5575. http://hybrid.honda.com.my/6. http://en.wikipedia.org/wiki/Biomass