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8/3/2019 Report Change
1/21
SRC PORT DICKSON
TABLE OF CONTENTS
NO. CONTENTS PAGES
Acknowledgement 1
1.0 Background of the company 2 - 4
2.0 Literature Review 5 - 7
3.0 Main Contents .. 8 - 13
4.0
5.0
Recommendations
Summary
14 16
17
6.0 Conclusion 18
7.0 References 19 - 20
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ACKNOWLEDGEMENT
First and foremost, gratefulness to God for without His providence and help -
granting us good health and courage we would not be able to accomplish this group
assignment on the prompt time.
Thanks to our MGT 751 courses lecturer, Dr Herwina Rosnan for the
guidance given through out the working out of this assignment.
Not to forget, the company of Shell Refining Federation of Malaysia (FOM)
Bhd. Port Dickson, Negeri Sembilan for all the knowledge and information this had
become very essential and useful during the accomplishing of this assignment.
Last but not least, appreciation and thanks goes to our classmates, friends
and family for support given in terms of motivation and money indeed.
To all groups members: Nurul Nazurah Nasri, Sharipah Nor Asiah, Ahmad
Shazeer and Noraini Saait congratulation for the success we had achieved. We had
worked as a great and unite team. Thank you for all the effort and determination to
make this assignment a success one. Hope that this project will become an
inspiration to all of us.
Thank you.
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1.0 COMPANYS BACKGROUND
SHELL REFINING COMPANY (FOM) BHD. PORT DICKSON
The Shell Refining Company at Port Dickson produces a comprehensive range
of petroleum products, most of which are consumed within Malaysia. In 1999, the
company completed its RM1.4 billion investment in Malaysias first Long Residue
Catalytic Cracking (LRCC). The LRCC represents an extremely important commitment
to this companys future.
At the same time, striving for maximum return to their shareholders, they
also believe in giving equal attention to caring for their environment and to
contributing to social development in their community. They actively encourage and
support diverse wealth creation in the community, the development of new skills
and expertise and the transfer of new technologies and best business practices to
this country. They take pride in being a dependable and trusted participant in
community initiatives and a caring and thoughtful neighbour.
Shell Refining Company Port Dickson has been advocating the adoption of
sustainable development by all industries in Malaysia. A sustainable future begins
with their carefully planned investments today, which ensure that they do not harm
their environment and inhibit their children from developing and prospering as they
wish to themselves.
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VISION
To be the top performing and most admired refinery in Asia.
MISION
To continuously deliver shareholder value by:
Manufacturing and supplying oil products and services that satisfy theneeds of their customers.
Constantly achieving operational excellence. Conducting their business in a safe, environmentally sustainable and
economically optimum manner.
Employing a diverse, innovative and results-oriented team motivated todeliver excellence.
OBJECTIVES
They are committed to deliver sustainable excellence in business performance by
focusing on the following:
Benefit the shareholders. Realize the potential of their people. Meet the customer requirements. Maximize refinery margins. Safeguard asset integrity. Deliver structural cost reductions. Sustain a robust management system. Deliver continuous sustainable Health, Safety, Security and Environmental
excellence.
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MANAGEMENT LEADERSHIP TEAM
Board of Directors
Dato' Saw Choo Boon
Chairman, Non-Independent and Non-Executive Director
Raja Ahmad Murad bin Raja Bahrin
Executive Director and Managing Director
Dato' Seri Talaat Bin Husain Tan Sri Clifford Francis HerbertIndependent & Non Executive Director Independent and Non-Executive Director
Dato' Jaafar Indot Mark Owen Stevens
Independent and Non-Executive Non-Independent and Non-Executive
Director Director
Dato' Mohzani bin Abdul Wahab Thomas Michael Taylor
Non-Independent and Non-Executive Non-Independent and Non-Executive
Director Director
http://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#sawhttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#rajahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#yahyahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#datohttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#mohhttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#thomashttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#thomashttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#mohhttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#datohttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#yahyahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#rajahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#saw -
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2.0 LITERATURE REVIEWIn this research study, we had found that the factors that contribute to
change management in the organization are the major focus. We had looked at the
past researches done by previous researches in order to identify the most popular
factors. The factors are leadership style, empowerment, motivation and rewards,
and dynamic relationship. On the other hands, the factors of leadership that can
contribute to change management are inter-organizational relationship,
organizational learning, processing information and making decision and
interaction/communication.
LEADERSHIP STYLE
According to Abraham, Griffin and Crawford (1999) in their research titled
Organization Change and Management Decision in Museums; the leadership style
plays successful change outcomes, which emphasized involvement, participation and
empowerment.
EMPOWERMENT
Based on the research titled Non-liner Change in Organizations: Organization
Change Management Informed by Complexity Theoryby Styhre (2002), the research
was done in Telecommunication Company. The researcher was found that one of
the purposes for organization change was top management wanted to examine
whether more empowered workers would be able to be more productive as an
effect of the broader and deeper work assignments. Abraham, Griffin, Crawford
(1999) supported his idea and that leader can emphasized involvement, participation
and empowerment in order to get successful change outcomes.
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MOTIVATION AND REWARDS
One of the factors that can contribute to change management in the
organization is motivation and rewards. According to Abraham, Griffin and Crawford
(1999) in their research titled Organization Change and Management Decision in
Museums, the importance of aiding the transition by recognizing and rewarding
employees involved in the improvements.
DYNAMIC RELATIONSHIP
Based on theJournal of Management and Development, one of the research
titled The Learning Organization New Lessons/Thinking for the Management of
Change and Management Development? by Carr (1997), the researcher consider
planned change in terms of dynamic relationship involving two groups of forces
which are driving forces and resisting forces.
INTER-ORGANIZATIONAL RELATIONSHIP
According to Testa (2002) in his research titled A Model for Organization-
based 360 degree Leadership Assessment, one of the factors of leadership that can
contribute to change management is inter-organizational relationship. From an
economic perspective transaction, cost economics suggests that inter-organizational
relationship is useful in reducing the cost of production.
ORGANIZATIONAL LEARNING
Refers to the researchA Model for Organization-based 360 degree Leadership
Assessmentdone by Mark R. Testa (2002), organizational learning plays important
role in leadership that can contribute to change management in the organization. A
more recent rationale for strong stakeholder relationships is support for
organizational learning.
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PROCESSING INFORMATION AND MAKING DECISIONS
According to Pech (2002) in his research titled Developing a Leadership
Knowledge Architecture: a Cognitive Approach, managers programmes like
scheduling time, processing information and making decisions remained deep inside
their brains. He claimed that researchers often describe managerial programmes
with words such as judgment and intuition, but that they seldom stop to realize that
these are merely labels for describing our ignorance.
INTERACTION/COMMUNICATION
Communication plays important role in change management. Refers to the
research A Model for Organization-based 360 degree Leadership Assessment done
by Mark R. Testa (2002), the researcher mentioned that clearly, communication and
mutual understanding on behalf of all parties involved is essential in ecosystem-
based relationships. The process of 360 degree feedback used so often today in
leadership development may be applied to this organizational dilemma.
This point also supported by Abraham, Griffin and Crawford (1999) which
they stated the importance of communication. Successful change outcomes would
most likely be associated with communication strategies that emphasized direct
communication and proof by managers of commitment to the change process as
well as a variety of media emphasizing written or symbolic communication.
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3.0 CHANGE MANAGEMENT IN SHELL REFINING CO. (FOM) BHD. PORT DICKSON
Organizational change involves moving an organization and the functions,
teams and people within it, from a current state to a desired future state. Change
management involves the effective facilitation of this move within the scope of the
people management policies and practices of the respective business. The effective
management of change is a core capability in nowadays organizational environment
and consulting approaches have proven to be highly effective.
Change management applies to change initiatives that have an impact on a
number of people or where change extends across organizational units, typically
referred to as transitional or transformational change. With the world becoming
increasingly competitive, it is necessary for organizations to run as efficiently as
possible. This is especially true for a large multinational company such as Shell,
which generated billions of dollars worth of revenue from various businesses across
the globe.
Reviews such as the Business Improvement Review (B.I.R), serve to identify
opportunities for improvement so that initiatives can be developed to exploit those
opportunities and ensure that precious resources are channeled where they can
yield the greatest benefit to the organization at the right time.
The B.I.R. at SRC Port Dickson was held in November 2006, culminating with
the Handshake with Mark Stevens, RVP East Manufacturing, on 18th January 2007.
The 2006 B.I.R. focus was on Organizational Effectiveness (OE), Operational
Availability (OA) and Margin & Energy to develop sustainable improvement tactics in
those areas.
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Business Improvement Review (B.I.R) Logo
The B.I.R. logo shows Shell moving towards clearly defined targets by
focusing in the five work streams represented by the legs of the arrowhead. The
orange colour represents the burning desire of the staff to achieve the targets.
What is a B.I.R.?
The Business Improvement Review or B.I.R. process is a Downstream-One
initiative rolled-out to all Shell manufacturing sites worldwide. It is intended to
define and priorities the improvement agenda for manufacturing sites based on
identified financial and performance improvement opportunities. A full B.I.R. would
cover five areas of focus or work streams. These are:
1. Health, Safety, Security and Environment or HSSE
2. Non Energy Cost Coverage or NECC
3. Margin & Energy
4. Operational Availability or OA
5. Organizational Effectiveness or OE
The goal of a B.I.R. is to identify gaps in performance in each work stream
with respect to accepted benchmarks and generate realistic and sustainable tactics
to close those gaps. The B.I.R. will present us with a comprehensive plan for the
coming few years to improve and sustain their performance, and deliver significant
savings to the business. The Organizational Effectiveness aspect also looks at soft
issues that aim to improve productivity and the sense of fulfillment for the
employees in the organization.
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Each new initiative that is developed will first be prioritized using an Initiative
Prioritization Tool. Approved tactics will be tracked in terms of progress (progress
against planned timeline) and performance (actual results versus intended outcome)
via the Business Improvement Plan Tracker (BIPT) which is maintained at each site by
the Business Improvement Manager (BIM).
How will the B.I.R. be conducted?
The B.I.R. will be conducted by a team comprising of visiting consultants from
Shell Global Solutions International B.V. (SGSI) as well as local site representatives.
The event at Port Dickson will be coordinated by the site Business Improvement
Manager (BIM), Mr. Razif Rashid.
The roles and responsibilities of the various local functions that have a part to
play in the B.I.R. are given in detail in a separate document. However, in brief, each
of the three work stream teams will consist of:
i. Workstream SponsorAn Organization Member Leadership Team (OMLT) who will serve to advise the
team and provide support to gain access to essential resources.
ii. Workstream LeaderA SRCPD staff who will head a work stream team and liaise with the visiting
consultant to collect all the necessary data, arrange interviews and meetings
with various people and coordinate the activities of the team members.
iii. Team ParticipantA SRCPD Staff who will assist with the collection of data, communication of
ideas, and discuss the results to understand the key themes in the area of
interest. The team will then develop a number of practical initiatives to close
the identified gaps over a specified timeline. There will be 5 core team
participants in each team.
iv. Visiting Team LeadThis will be an SGSI consultant who will facilitate the proceedings of each work
stream.
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Apart from these core roles, a great number of refinery staff will be either be
interviewed or called upon to contribute their knowledge when clarification is
needed on a subject. All staff is encouraged to provide feedback or suggestions to
the BIM or any B.I.R. team member. All suggestions would be taken on board with
enthusiasm. The B.I.R. team will also serve as ambassadors to communicate with the
site regarding the B.I.R. The key phases of the B.I.R are described in a later part of
this document.
How long is the B.I.R. process?
The B.I.R. can take anything from two weeks to several months to complete
depending on the degree of complexity at site and the number of work streams
taken into focus. In the case of SRC Port Dickson, the management team has
decided to focus on three areas:
i. Margin & Energy:This will allow them to take maximum advantage of the current high oil prices
environment to maximize the Return On Equity (ROE).
ii. Operational Availability or OAReliability and asset integrity are essential in achieving maximum utilization,
and to minimize reactive maintenance
iii. Organizational Effectiveness or OEA sound organizational structure and distribution of responsibilities will lead to
better efficiency and higher productivity. A sensing survey will be sent out
earlier to map the characteristics of the organization based on the 9 Box Model.
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B.I.R.The Journey
i. Groundwork / PreparationThe main steps during Groundwork/Preparation will be:
1. Gathering of the data needed for the B.I.R.2. Forming a Local Team to participate in the B.I.R.3. Completing a B.I.R. Kick-off Visit, which will include the
Business Objectives workshop.
4. Preparing Logistics for the B.I.R.5.
Preparing an Interview and Group Sessions Schedule for the B.I.R.
ii. Confirmation and Set UpNo formal set up meeting was held at SRC Port Dickson. Preparations for the
B.I.R. will be finalized via email and telephone communication with the visiting
team members. The information gathered during the groundwork /
preparation phase will be reviewed by the Local and Visiting B.I.R. teams.
iii. Conduct B.I.R. Sensing SurveyThe B.I.R. sensing survey will sent out to all staff. The survey, which is based on
the 9 Box Model, will be rolled out online and the data collected will be used by
the Organizational Effectiveness (OE) team to develop their hypotheses about
the organizational effectiveness at SRC Port Dickson. The results will be re-
affirmed via interviews with a cross-section of the refinery.
iv. On-BoardingThe B.I.R. program and deliverables will be finalised and agreed during On-
boarding, along with team building between the Local and Visiting B.I.R.
Teams.
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v. DiagnosticsThe Diagnostics Phase will run for 1-2 weeks. Data gathering tools and
interviews will be used to assess the current situation at the Port Dickson
Refinery by each of the 3 B.I.R. teams:
1) Organizational Effectiveness (OE)
2) Operational Availability (OA)
3) Margin and Energy
vi.
Business Improvement PlanBusiness Improvement Plan development will run for the OA, Margin and
Energy and OE work streams. During this stage, potential benefits will be
substantiated, solutions will be developed and a tracking/governance structure
will be put in place.
vii. Prepare for ImplementationDuring this phase, the Business Improvement Plan will be converted into firm
action plans, which will then be integrated into their Business Plans.
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4.0RECOMMENDATIONS
The Shell Refining Company in PortDickson was implemented change in their
company for many times ago. In implementing the change company need to take
into consideration both internal and external factor such as environmental,
economics, social and so on to ensure the company successful implemented change
in their organization.
We are suggest some recommendation for the Shell Refining Company in
Port Dickson to improve their productivity and enable to implement the change
effectively and efficiently.
Non-environmental policies in such areas as taxation, industrial policy, credit,and agriculture play a critical role in sustainable development. Too narrow a
focus on environmental policy could lead to unintended and potentially
unsuccessful consequences. Shell company need to take a systematic way in
facing the environmental policies to ensure it will not give harmful impact on
business operation.
The Shell Refining Company should cooperate with governments individuallyand in concert because it play a critical role in helping business foster
sustainability by creating stable, market-based frameworks that encourage
and enable innovation.
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Shell company also needs to have a good relationship with the private sectoras they plays a critical role in addressing the challenge of climate change in a
world of increasing demand for energy. Profit-driven technological innovation
is crucial. Two key factors affect meeting growing world demand for energy
which is resource availability and innovation. Energy resource constraints are
unlikely until 2025 or even after; research and development in new energy
technologies are going forward rapidly. So, it is important for Shell to have a
good relationship with other private sector in organizing their future plan.
Besides, Shell have to build a relationship with publicprivate partnershipsand the vital role of technology are the building blocks in creating a
revolution in energy affairs that would benefit developed and less developed
countries alike. For example The United States whose research and
development on climate equals the rest of the world combined will play a
decisive role in fostering that revolution.
In addition, Shell need to see how Europe Company has adopted a moreintegrated approach to sustainability than its American and Asian
counterparts. Europe Company integrates sustainability goals directly into
their ideology and socioeconomic programs in a more holistic manner. By
using this approach, Shell is near to reach their vision for the long term
period.
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Given rising population and increasing affluence particularly in developingcountries, such as Malaysia, environmental burdens will become weak
without new or dramatically improved technologies. In the case of air
pollution over the next 50 years, to completely offset effects of population
growth, new or improved technologies must reduce emissions by 98 to 99
percent. Shell need to implement the high power technology system in order
to overcome this problem for the present and past beneficial.
Companies, governments, financial markets, and academia all have importantand complementary roles to play. It is imperative to train a new generation of
leaders in sustainable development. Education is a vital part of the Shell
Center for Sustainabilitys mission. Business cannot succeed in a society that
fails. So, we are suggest Shell to have an institution same as Petronas have
nowadays in order to born a new great generation with the valuable
knowledge to be a leader for future.
The concept of sustainable development provides a framework foraddressing issues on an integrated basis in economic development, social
development and environmental quality across generations so that
development maximizes the long-term benefits to society through new
engineering and managerial technologies, training related to sustainability,
and the development of public policy focused on enhanced sustainable
development. As a conclusion, Shell needs to practice this concept on
managing their business operations to ensure the company gets both social
benefit and market share increase.
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5.0SUMMARYShell Refining Company is company that produces a comprehensive range of
petroleum products, most of which are consumed within Malaysia. In 1999, the
company completed its RM1.4 billion investment in Malaysias first Long Residue
Catalytic Cracking (LRCC). The LRCC represents an extremely important commitment
to this companys future. For the change process, they choose to do Business
Improvement Review (B.I.R), which serves to identify opportunities for
improvement so that initiatives can be developed to exploit those opportunities and
ensure that precious resources are channeled where they can yield the greatest
benefit to the organization at the right time. The B.I.R. at SRC Port Dickson was held
in November 2006, culminating with the Handshake with Mark Stevens, RVP East
Manufacturing, on 18th January 2007. The 2006 B.I.R. focus was on Organizational
Effectiveness (OE), Operational Availability (OA) and Margin & Energy to develop
sustainable improvement tactics in those areas. The goal of a B.I.R. is to identify gaps
in performance in each work stream with respect to accepted benchmarks and
generate realistic and sustainable tactics to close those gaps. The B.I.R. will present
them with a comprehensive plan for the coming few years to improve and sustain
their performance, and deliver significant savings to the business. The Organizational
Effectiveness aspect also looks at soft issues that aim to improve productivity and
the sense of fulfillment for the employees in the organization. At the end, the change
process had been implemented. These were supported by the change manager
which is act as a director, navigator, caretaker, coach, interpreter and nurturer.
These changes give many benefits to the Shell because it makes their performance
improved and thus, lead to make high profit.
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6.0 CONCLUSION
Change process is important for every organization in order to ensure that
the human aspects of introducing new processes and technology are addressed.
These include creating an organizational structure aligned with new strategies and
processes; having jobs and skill sets that support the new organizational direction;
employing effective communications strategies; ensuring customers, suppliers and
other stakeholders understand and support the effort, and minimizing resistance to
change. Besides that, the organization also will get greater organizational
effectivenessby addressing their peoples concerns, it can accelerate the adoption of
new processes and technology that boosts organizational effectiveness and
efficiency. Moreover, it also will improved work quality and morale. These are
dividends we receive for placing people front and- center in the change process.
Change process also will enhanced collaboration and communication by
encouraging dialogue and circulating the information people need to know leads to a
more cooperative, and more productive, environment. Furthermore, by doing
change process, the organization will get higher retention rate for employees. A
carefully thought-out approach to change reduces stress and turmoil and encourages
people to stay loyal to our organization. The change process also will make
organization do better customer service.An effective organization with good morale
and knowledgeable employees can deliver the benefit most changes are designed to
provide - better and more cost effective service to clients.
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7.0 REFERENCES
Styhre, Alexander (2002).Non-linear Change in Organization: Organization
Change Management Informed by Complexity Theory. Retrieved August 8, 2008,
from the World Wide Web:http://www.emeraldinsight.com/Insight/
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001.pdf
Abraham, Morris, Griffin, Des and Crawford, John. (1999). Organization
Change and Management Decision in Museums. Retrieved August 8, 2008, from the
World Wide Web: http://www.emeraldinsight.com/Insight/
viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0260160
401.pdf
Carr, Andrian (2007). The Learning Organization: New Lessons/Thinking for
the Management of Change and Management Development. Retrieved August 8,
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Pech, Richard (2002). Developing a Leadership Knowledge Architecture: A
Cognitive Approach. Retrieved August 8, 2008, from the World Wide Web:
http://www.emeraldinsight.com/
Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0
220260604.pdf
Testa, Mark R. (2002). A Model for Organization-based 360 Degree
Leadership Assessment. Retrieved August 8, 2008, from the World Wide Web:
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Rothberg, Glenn. (2005). Accessing Ideas to Develop Leadership and
Organization. Retrieved August 8, 2008, from the World Wide Web:
http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Publis
hed/EmeraldFullTextArticle/Pdf/0220240104.pdf
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