Shell Philippines

Shell Philippines Buhay, Patricia Therese Del Rosario, Tara Margarita Larion, Angelica Paiso, Miruz April 2, 2012 BUSORGA V24

Table Of Contents Background of Shell Philippines!

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Organizational Structure! !

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CSR Activities!

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Application of Management Process! a. Planning b. Operating c. Leading d. Controlling

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SWOT Analysis! ! ! a. Strengths b. Weaknesses c. Opportunities d. Threats

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Overall Recommendation! !

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References! !

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I.

Background of Shell Royal Dutch Shell or just Shell is a global group of energy and petrochemicals

company with an aim to meet the energy needs of society. It is the 5th largest company in the world and is the second-largest energy company. Shell is active in every part of the oil and gas industry. They produce use ways that are economically, socially and environmentally viable, not only for now, but also for the future. It is stationed in more than 90 countries and territories worldwide with around 101,000 employees. With this, Shell helps to meet the world’s growing demand for energy while aiming to do this in the most economically, environmentally, and socially responsible ways. Their innovative approach ensures that they are ready to help tackle the challenges of a new energy future. They have strong values and practice their core values of “honesty, integrity and respect for people.” Shell was created in 1907 and was originally called “The Royal Dutch Shell Group.” It was created because Royal Dutch Petroleum Company and the “Shell” Transport and Trading Company Ltd of the United Kingdom decided to merge their operations together. This move was badly needed in order to successfully compete with the American petroleum company called John D. Rockefeller’s Standard Oil. In 1952, Shell became the first company to purchase and use an electronic computer in the Netherlands. The company is organized into three different parts: They are organized into three different parts: •

Upstream

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Downstream

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and Projects & Technology

Shell’s upstream business searches for oil and natural gas across America and then they recover them. Their Downstream business is their worldwide business. They refine, supply, trade, and ship crude oil here. Then they manufacture and market their product.

Projects & Technology manages their delivery of major projects. They also drive the research and innovation to create technology solutions. In the Philippines, there are various Shell stations and headquarters operating in oil and gas exploration, oil refining, distribution and sales to consumers. One of the headquarters is in Makati City and it has facilities in the Pandacan oil depot and other key locations. The Philippines is part of their Downstream business. Shell started its operation in the Philippines in 1914 and has grown to be one of the country’s largest investors. They employ over 3,000 people nationwide. Although it was denied, Pilipinas Shell was accused of 7.34 billion pesos of unpaid excise taxes. They were accused of importing Catalytic cracked gasoline and light catalytic cracked gasoline, these imports were stated to be bound for tariff charges. Even through the controversy, Shell is still the leading Petroleum Corporation in the Philippines.

Vision The vision of shell is to be the Top Performing and Most Admired Refinery in the world. •

Shell is committed to delivering sustainable excellence in business performance

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They focus on how to help their shareholders benefit

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They try to realize the potential of their people

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They work to meet their customers’ requirements

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They maximize their refinery margins, safeguard their asset integrity

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They deliver structural cost reductions

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They sustain a robust management system

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And they deliver continuous sustainable Health, Safety, Security and Environmental excellence.

Mission! Their mission is “to continuously deliver shareholder value.” •

They do so by manufacturing and supplying oil products and services that satisfy the needs of their customers

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They are constantly achieving operational excellence

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They conducting their business in a safe, environmentally sustainable and economically optimum manner

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And they employing a diverse, innovative and results-oriented team motivated to deliver excellence.

II.

Organization Structure/ Chart

The Organizational structure type in Shell is a Matrix Organizational Structure. This type of structure goes for all of the individual stations of Shell Philippines.

III.

CSR Activities/ Initiatives •

According to the company’s website, Shell has a Corporate Social Responsibility Committee which is composed of at least three non-executive directors who are appointed, when certain conditions are met, by the board. Their role is to help the Board of the Directors in evaluating the policies and conduct of the company with respect to their business principles, code of conduct and public concerns.

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In response to their corporate social responsibility activities, Shell has various projects which deal primarily with the environment, society and safety.

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For the environment, Shell takes on biodiversity, prevention of oil spills, cleaner air and reduction of water use. When taking up projects, the protection of biodiversity is a factor in choosing whether or not the project will be continued. Shell teams up with the community and conservation groups in determining whether or not the project will benefit the ecosystem as well as its inhabitants. Another thing which concerns a lot of people is oil spills and Shell makes sure to use tankers that have passed quality standards and even requires larger oceans vessels to have double hulls to prevent it. Also, shell has made investments to minimize their contribution in air pollution. This includes the upgrading of facilities, installation of cleaner-burning equipment’s and sulfur dioxide capture technology. Lastly, Shell makes sure that they are effectively using their water supply with no room for misuse. They are advancing their technology to help them manage their water use.

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As for the society, Shell had already made a lot of contribution in its development. First and foremost, Shell had been providing energy to the world and it has invested a lot of money for the development and discovery of modern energy with plans of bringing it to the market. Also, the company helps in financing the government by paying taxes adequately. Although it is no longer in Shell’s responsibility to take into account where the government uses the money, they support the latter’s effort in using the revenues effectively. Shell also promotes buying and hiring locally. They have various trainings for local suppliers to help them cope up with the standards Shell needs.

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In the Philippines, Shell has a foundation called, “Pilipinas Shell Foundation, Inc.”. It was established last August 1982 and it manages social developments programs for education, environmental stewardship, health, sanitation and safety, leadership enhancement and attitude development, livelihood and enterprise development and technical and vocational skills training and employment. Examples of its projects are scholarships for the Pepeng Pasada Club, DRIVE Scholarship Program, Gawad Kalinga Bayan-Anihan (GK-BA) project, Nueva Ecija Trail Bikers Delivery of LLINs, and Chess clinics for children in Pandacan.

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The Pepeng Pasada Club is an exclusive membership club for public transportation drivers who are loyal customers of Shell. A member’s dependent is given vocational scholarship to take up welding, automotive servicing, and basic computer courses among others.

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The DRIVE Scholarship Program, on the other hand, meaning Driver Reward and Incentive, is designed for dependents of contracted class A lorry drivers of Shell’s Distribution and Road Transportation (DRT) sector. Dependents are given the opportunity to have call center trainings, basic computer and hardware configuration courses and a lot more. Scholars are also given trainings from partner industries like Toyota and Jollibee.

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As for the Gawad Kalinga Bayan-Anihan project, its goal is to encourage the less fortunate to produce its own food for hunger alleviation. Shell provides the Gawad Kalinga Bayan-Anihan sites with funds and technical support.

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Shell also has its own anti-malaria campaign which is materialized through the efforts of Nueva Ejica trail bikers in delivering Long Lasting Insecticide-Treated Nets (LLIN) to isolated and malaria prone areas.

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The Chess clinics for children to Pandacan are for kids to learn strategies needed in playing the said game as well as develop their imagination and confidence.

In addition to everything that had been said, Shell also prioritizes safety. They want a safe environment for everyone that is why they have developed 12 lifesaving rules.

The said rules are as follows: 1) Work with a valid work permit when required. 2) Conduct Gas tests when required. 3) Verify isolation before work begins and use the specified life protecting equipment. 4) Obtain authorization before entering a confined space. 5) Obtain authorization before overriding or disabling safety critical equipment. 6) Protect yourself against a fall when working at height. 7) Do not walk under a suspended load. 8) Do not smoke outside designated smoking areas. 9) No alcohol or drugs while working or driving. 10) While driving, do not use your phone and do not exceed speed limits. 11) Wear your seatbelt. 12) Follow prescribed journey management plan.

IV.

Application of Management Process

Planning Long term plans are made by SHELL themselves, individual retailers or dealers cannot change the planning process of the company. But short term plans than involve actions that affect the stations within the year are a function of the targets that SHELL will give from the long term plans. Although Shell has full power of the long term plans, these plans still depend on the short term plans to succeed, since the individual stations were given a task by the mother corporation.

Organizing The CEO of Shell retailers/dealers are under benchmark, meaning they are able to stay efficient under the required amount of resources. This is because they organize their workforces well. For example, If a certain station's default staff number is 50 people per station, and there are 3, that means a dealer of a cluster of 3 stations would have to work with and pay for 150 laborers. What dealers do to stay efficient is, recognize the patterns in the number of customers in a day per station, and organize them in such a way that they maximize their capacity utilization. So, if a Shell retailer/dealer had those 3 stations in the example, they would only work with 30 (for example) per station meaning they would only work with and pay for only 90 people instead of 150. So organizing their workforce keeps them efficient and capacity optimally utilized.

Leading The Shell retailer/dealer we have interviewed works under the belief that, you cannot motivate a person, you can only provide a stimulus for them to motivate themselves. This is so that they do not confuse their privileges over their rights. An example would be, instead of motivating a worker by promising free

education for their children from competent workmanship, he would provide them with a personal savings account that he will manage from their salary so that they can pay for the education. The result of this, is that the worker still sees the value of the privilege given, as it is still from their own money -- as opposed to the boss simply offering the prize to the best worker. This in effect, will subconsciously create a self-motivating factor in the worker and will generate lasting and valuable results. If the retailer/dealer does this with all the workers, they eventually form a sense of loyalty. A lot of the workers who started out as pump-boys but then through the savings account were able to pay for a college education for themselves with a degree in accountancy, are competent enough to now work at a multinational, but still prefer to work under their previous boss – the retailer/dealer – but with a different position of course.

Controlling There are a lot of factors that need to be controlled in the business, but having explained how the workforce is kept under control, the next thing would be the targets. The Shell retailer/dealer we interviewed uses this dartboard system where he can predict upcoming fluctuations in sales. He then creates plans to remedy the fall before it even happens if ever it comes. The targets though, are in shell's control, and he can't do anything about that. All he can do is control the factors of his business to hit those targets again using his dartboard.

V.

SWOT Analysis of Shell SWOT Analysis is a type of planning method used to realize and evaluate the

business' Strengths, Weaknesses, Opportunities and threats both in the internal environment and the external environment. With this planning technique, the business would have a better view of its current standing and that it would be easier to identify which needs to be improved in order to reach its goals.

The SWOT analysis of the company is as follows:

Strengths •

It's ability to look around and adjust to its economic surrounding

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Benchmarking

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Diversity of their products

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Environmental friendly approach

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Their people/employees

With Shell being the globally recognized company that it is, there are numerable aspects of the business that would be considered as its strengths. The company being able to reach this level in the industry must mean that they are trustworthy enough for consumers and customers to invest their time and money in. Shell has the ability to adjust and look beyond what the current economy needs. They identify what the consumers around them look for and they adjust to fit its liking. !

Another strength would be that they use Benchmarking. Benchmarking is a self-

improvement and systematic method used to compare other external factors, understanding, identifying other business practices, strengths and the like to compare it with your own business. With this the business would either adapt or learn from the information that was gathered and take the necessary actions for the business from there. Next would be the variety of products that they cater to the consumers, not only is it limited to gas but they also provide, oil, lubricants, petroleum-based products and other vehicle needs. Lastly, would be its people/employees. The employees, some are even high school graduates, are properly trained and well disciplined. The employees are evaluated and then trained to do their job. One good example of this is Shell's "Gas Mo Bukas Ko" program, a technical-vocational skills training program, which provides its employees with proper education in a specialized course for a better future.

Weaknesses •

Industry and the environment

A weakness that is largely considered by shell is the industry itself. With the environment changing everyday it’s pretty hard to keep track of the sources shell needs in order to make their products. Another would be the industry because the government tends to shy's away from the responsibility of communication to relay and let the economy know what the industry is going through and what its current standing is. They'd rather that the Gas and Oil Companies answer the public rather than themselves. The government cannot relay to the consumers that high gas prices is not a nationwide phenomenon but instead a global phenomenon which not only affects the people within our area but everyone else in the world as well.

Opportunities •

is to grow as a cluster organization

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New partnerships

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Possibility of finding a new place for resources

A cluster organization is considered to be a type or form of business with a network type structure. It could refer to one entity that has many teams or divisions each with its own area of specialty. With this type of organization the distribution of work would be easier and that production would go at a higher rate. Good business would result also result to good feedback from customers which would reflect at the company's reputation. Looking for new partners would be a good idea as well considering that the company may need it in the future and with extensive of the right kind of research, they might be able to find new places on where they could get their resources for better production.

Threats •

Competition

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Weather

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Prices

It is safe to say that Shell is one of the top gas and oil companies today. But that doesn't mean that it would stay that way forever. Other similar companies are catching up by means of technology, product distribution, promotion and other means of improvement. Prices of the products are a potential threat as well. With shell's more than average prices, even if it would offer a discount, consumers would still most likely go to other businesses that cater the same product but at a lower price. Weather is also a potential threat to the business because a calamity or undesired natural disaster could harm the productivity and distributions of the raw materials used in making the products.

VI. Overall Recommendation As a summary, our group has looked at the background of Shell and what their vision and mission are. We have focused on the strengths and opportunities of Shell as a company as well as their weaknesses and strengths. We also learned about the business aspects of how their company works using the SWOT analysis, the application of the management process, their CSR activities or initiatives and their organization structure. Shell is a global company with many strengths and weaknesses. Although it is a strong company right now, many things threaten to ruin what they have right now like new competing companies and keeping up with the changing times. However, Shell is known to be able to adjust to its surroundings, and because of the diversity of their products, Shell will continue to open doors and new opportunities to people looking for employment and customers looking for fuel. Shell should continue being green and providing eco-friendly fuel to the world. They should also take the opportunity of starting a new partnership and grow as a cluster organization. They should also focus on fixing their weaknesses. Even though they cannot

change the weather and their environment, they can work on the prices to make it more pocket friendly. All in all our group would recommend Shell to everybody. They are a company that has proven themselves to be one of the best, and they listen to what the consumers want. Not only do they work to provide fuel globally, but they do it in an environmentally safe way.

References: BibMe: Fast & Easy Bibliography Maker - MLA, APA, Chicago, Turabian - Free. (n.d.). BibMe: Fast & Easy Bibliography Maker - MLA, APA, Chicago, Turabian - Free. Retrieved March 25, 2012, from http://www.bibme.org/ Environment | Philippines. (n.d.). Shell Philippines | Philippines. Retrieved March 25, 2012, from http://www.shell.com.ph/home/content/phl/environment_society/ respecting_the_environment/ PSFI Programs | Philippines. (n.d.). Shell Philippines | Philippines. Retrieved March 25, 2012, from http://www.shell.com.ph/home/content/phl/environment_society/ shell_in_the_society/psfi/programs/ Pilipinas Shell Foundation, Inc. | Philippines. (n.d.). Shell Philippines | Philippines. Retrieved March 25, 2012, from http://www.shell.com.ph/home/content/phl/environment_society/ shell_in_the_society/psfi/ Society | Philippines. (n.d.). Shell Philippines | Philippines. Retrieved March 25, 2012, from http://www.shell.com.ph/home/content/phl/environment_society/shell_in_the_society/ Safety | Philippines. (n.d.). Shell Philippines | Philippines. Retrieved March 25, 2012, from http://www.shell.com.ph/home/content/phl/environment_society/working_safely/ The following I did myself. So pa-check na lang if wrong. Rebueano, A. (n.d.). Unlad Pasada: Providing Scholarships for Loyal Members of the Pepeng Pasada Club. Retrieved March 25, 2012, from https://docs.google.com/viewer?url=http %3A%2F%2Fwww-static.shell.com%2Fstatic%2Fphl%2Fdownloads %2Fsociety_environment%2Fpsfi%2F2011%2Fpandacan_chess_clinic.pdf Rebueano, A. (n.d.). DRIVE Scholarship Program: Opening Opportunities for Dependents of Lorry Drivers. Retrieved March 25, 2012, from http://www-static.shell.com/static/phl/ downloads/society_environment/psfi/2011/drive_scholarship_program.pdf Betchayda, I and Castro, M. P. (n.d.). GK-BA Gears Up for IBOF Production. Retrieved March 25, 2012, from https://docs.google.com/viewer?url=http%3A%2F%2Fwwwstatic.shell.com%2Fstatic%2Fphl%2Fdownloads%2Fsociety_environment%2Fpsfi %2F2011%2Fgk_ba_ibof.pdf

Flores, R. (n.d.). Nueva Ecija Trail Bikers Deliver LLINs. Retrieved March 25, 2012, from https://docs.google.com/viewer?url=http%3A%2F%2Fwww-static.shell.com%2Fstatic %2Fphl%2Fdownloads%2Fsociety_environment%2Fpsfi%2F2011%2Ftrail_bikers.pdf Generoso, G. (n.d). PSFI Conducts Chess Clinic for Children in Pandacan. Retrieved March 25, 2012, from https://docs.google.com/viewer?url=http%3A%2F%2Fwwwstatic.shell.com%2Fstatic%2Fphl%2Fdownloads%2Fsociety_environment%2Fpsfi %2F2011%2Fpandacan_chess_clinic.pdf