Human Resource Management of the Giant Royal Dutch Shell Group of Companies Plc. Ltd.

Table of Contents"A word of the authors" 3Shell - Our choice of research 4The 100 years of Royal Duth Shell plc - The shell logo 5Burmah Shell Indo Pak and Shell Pakistan Ltd. 7Purpose of Existence - Mission Statement 7The management - How to run a complex oil giant 8The motivational practices - Shell people 8The organizational culture - Belief, value, ideas and norms 9The complex structure10The Top management11The Pre 1996 Matrix Structure 12The management Structure - Post 1995 and the degree of formalization13

The HR Structure, What Shell looks for in candidates 16The Recruitment Policy 17Training and Development18Financial Rewards and Appraisals20Diversity on the forcourt23Health and safety concerns242007 Update27Leadership styles, and Control Mechanisms28JOB ADD, FINANCIAL CONSULTANT29Cross Functional Conflicts30Recommendations and Suggestions30References, Authentic sources of information33"A word of the authors…"The authors of this compilation would like to thank the academic community members for their support, patience, humble guidance and good sense of humor. Their professional guidance has been greatly appreciated.

Tania Khan, head of COCO (Company Operated Sites) Shell Pakistan was particularly helpful in providing us in getting useful information that brought about the completion of this report. Also mentionable would be Mr. Mohsin Siddique (HR accountant) who was instrumental in the contribution to this article. Finally we would like to thank our major instructors Mrs.

Asmara Mashood, who unfortunately had to leave LSE due to unforeseen circumstances, and Miss Ayesha Jamal who helped us in completing this course. With their guidance we were not only able to learn the different theories associated with Human Resource Management, rather we were also able to gain valuable practical experience through our analyses of numerous case studies and reports.

We found our coursework to be thought-provoking and insightful providing us with tools to explore the management strategies of professional world. This research compilation is surely the first step towards becoming real managers, so that when we look back at our university with pride.

Shell - Our Choice of ResearchAfter exhaustive study of different companies, all decisions came to a halt at Royal Dutch Shell plc. It's extensive century old history added with its commitment to growth, expansion and development have earned it a brand name.

Shell Pakistan is the 2nd largest oil company in Pakistan. The four competitors going face to face are Pakistan State Oil having a 60% market share, Shell Pakistan capturing 30% of the market, Caltex with 6% market share and Total Parco with 4%.

Shell Pakistan Ltd. is a Multi National Corporation that aims to progress in Pakistan's highly volatile political structure. One of the main reasons for choosing Shell came from this fact alone that how the Shell management team copes with these different forces in Pakistan.

The 100 years of Royal Dutch Shell Plc. The Shell LogoFor more than 100 years the word 'Shell's, "Pecten" emblem and distinctive red and yellow colors have identified the Shell brand and promoted its corporate reputation. These symbols have stood not only for the quality of its products and services, but also as very visible representations of the professionalism, values in all of business activities and to all of its stakeholders around the world.

The word 'Shell' first appeared in 1891, as the trade mark for kerosene being shipped to the Far East by Marcus Samuel and Company. This small London business dealt originally in antiques, curious and oriental seashells. These became so popular - the Victorians used them to decorate trinket boxes in particular - that soon they formed the basis of the company's profitable import and export trade with the Far East.

The word was elevated to corporate status in 1897, when Samuel formed The "Shell" Transport and Trading Company. The first logo (1901) was a mussel shell, but by 1904 a scallop shell or 'Pecten" emblem had been introduced to give a visual manifestation to the corporate and brand name.

The choice of a shell as an emblem was not surprising, as it was the company name. Also, each of Samuel's tankers carrying kerosene to the Far East had been named after a different seashell. But why specifically was the scallop or Pecten chosen as the company's symbol in 1904? It was certainly not the simplest shape to reproduce in printed form.

Both the word "Shell" and the Pecten symbol may have been suggested to Samuel and Co. by another interested party. A Mr Graham, who imported Samuel's kerosene into India and sold it as 'Graham's Oil', subscribed capital to, and became a director of, The "Shell" Transport and Trading Company.

There is some evidence that the Shell emblem was taken from his family coat of arms. The 'St James's Shell' had been adopted by the Graham family after their ancestors made the pilgrimage to Santiago de Compostella in Spain. Whatever its origins, the original design was a reasonably faithful reproduction of the Pecten or scallop shell.

When the Royal Dutch Petroleum Company and "Shell" Transport and Trading merged in 1907 it was the latter's brand name and symbol which then became the short form name ("Shell") and the visible emblem (the "Pecten") of the new Royal Dutch/Shell Group. And so it has remained ever since. The form of the Shell emblem has changed gradually over the years in line with trends in graphic design. The current emblem was created by the great designer Raymond Loewy and introduced in 1971. Thirty years on it stands the test of time as one of the world's most recognized symbols.

Why red and yellow?The exact origins of the Shell red and yellow are hard to define. True, Samuel and Company first shipped kerosene to the Far East in tin containers painted red. But the link, once again, could be with Spain.

In 1915, when the Shell Company of California first built service stations, they had to compete against other companies. Bright colors were the solution, but colors that would not offend the Californians. Because of the state's strong Spanish connections, the red and yellow of Spain were chosen. As with the Pecten, the actual colors have been modified over the years, most notably in 1995 when a bright, fresh and very consumer friendly new Shell Red and Shell Yellow were introduced to launch Shell's new retail visual identity. The Shell emblem - or Pecten - remains one of the greatest brand symbols in the 21st Century.

Burmah Shell Indo Pak, Shell Pakistan Ltd.

The documented history of Royal Dutch Shell plc in Indo Pakistan subcontinent dates back to 1903 when partnership was struck between The Shell Transport & Trading Company and the Royal Dutch Petroleum Company to supply petroleum to Asia.

In 1928, to enhance their distribution capabilities, the marketing interest of Royal Dutch Shell plc and the Burmah Oil Company Limited in India were merged and Burmah Shell Oil Storage & Distribution Company of India was born. After the independence of Pakistan in 1947, the name was changed to the Burmah Shell Oil Distribution Company of Pakistan. In 1970, when 51% of the shareholding was transferred to Pakistani investors, the name of changed to Pakistan Burmah Shell (PBS) Limited.

The Shell and the Burmah Groups retained the remaining 49% in equal propositions. In February of 1993, as economic liberalization began to take root and the Burmah divested from PBS, Shell Petroleum stepped into raise its stake to 51%. The years 2001-2 have seen the Shell Petroleum Company successively increasing its share, with the Group now having a 76% stake in Shell Pakistan Ltd (SPL)- an expression of confidence.

Shell has currently about 1000 petrol pumps operating in Pakistan fuelling up the customers and business units.

Purpose of Existence - Mission StatementShell believes that its most valuable assets are its people, stakeholders, employee, and customers. Winning over them is the main work of this Group. However the following three paragraphed mission statement provides a clear cut way of explanation for Shell's purpose of existence, or in other words its mission statement:"

The objectives of the Shell Group are to engage safely, responsibly, efficiently and profitably in oil, gas, oil products, chemicals and other selected businesses and to participate in the search for and development of other sources of energy to meet evolving customer needs and the world's growing demand for energy. We believe that oil and gas will be integral to the global energy needs for economic development for many decades to come. Our role is to ensure that we extract and deliver them in environmentally and socially responsible ways, safely and profitably.

We seek a high standard of performance, maintaining a strong long-term and growing position in the competitive environments in which we choose to operate. We aim to work closely with our stakeholders to advance more efficient and sustainable use of energy and natural resources.

The Management - How to run a complex Oil GiantThe Management of Royal Dutch Shell plc, like other major oil companies BP, Amoco, Exxon and Mobil is highly complex. Controlling and efficiently profitably running an organization that is active in over 140 countries is not an easy job. Each country and region has its own difficulties and limitations that put the management's strategy in challenge and force it to change regarding the political, economical and social situations. This is the challenge that Shell accepts and moulds itself according to the situation.

In Pakistan, under the presence of highly volatile political and economic structure, with ups and downs in governments and uncertainties at every turn, it is very hard to operate profitably, which Shell with the help of highly skilled expertise achieves successfully. Shell Pakistan Ltd. in accord with its other offices and branches across the world follow the rules and strategies of Royal Dutch Shell plc Governance Principles. This is the real management game that outlines how Shell should conduct its business affairs in every part of the globe.

The motivational practices - Shell PeopleRoyal Dutch Shell plc. is a competitive employer that seeks to preserve and value the interest of its employees. To the group, the most valuable asset is employees earning the name of Shell as a brand image. In our interview of Miss Tania Khan, who is the Quality Inspector at Shell Pakistan, head office Karachi, a few years back, she told that Shell launched the IDP, Individual Personality Development plan. This was an international plan designed to improve and further sharpen the skills and talents of people working at Shell. Shell Pakistan Ltd. also showed great amount of interest in implementing this program. This program was named more sophisticatedly, Shell People.

Under this program, the employees are trained under the training workshops conducted at several places of the country and the chosen employees were also sent abroad especially from Asian nations like India and Pakistan. Shell Pakistan Ltd. has attractive salary packages offered to its employees. In our observation, we came to know that none of the motivational practices at Shell Pakistan or Royal Dutch Shell plc fit into the motivational theories present in the textbooks. This is due to the complex organizational structure as well as the theoretical limitation in each country.

The Organizational Culture - Beliefs, values, ideas and norms"Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations' true nature is that of a community of humans."Arie de Geus, The Living Company (1997), former director of Royal Dutch/ShellRoyal Dutch/Shell is a truly global organization, operating in 145 countries and employing over 119,000 people worldwide.

The company recognizes the importance of valuing all employees and maximizing their contribution to the organization. This philosophy sits at the heart of Shell's approach to enhancing performance, and forms one of the group's 9 Business Principles. It was recently highlighted again by the adoption of a new Group global standard on Diversity and Inclusiveness, which sets out the framework for creating a more inclusive workplace culture.

Due to decentralization, the organizational culture at Shell is very friendly and highly motivated. Each motivated member of the team is expectedly prepared for the unexpected. Furthermore, certain delegation of authority and responsibility has been given to the frontline, which is responsible to the regional managers' turn to national Board of Directors who in turn is finally accountable to The London and The Hague Headquarters.

This is due to the story-telling and learning approach used by the management of the Group. The story-telling or scenario, in better words, is designed to help the team resist the future unforeseen circumstances e.g. what if OPEC embargoes the oil supply and the price of crude oil/barrel doubles within a few days? The other oil companies will find it hard to adjust easily, but at Shell, it's not that hard. It had happened 2-3 times in the past history of oil companies, the swift up and down waves of the OPEC oil supply has had bad times for the Group. Then under the influence of Pierre Wack, who served at the Shell Building from 1972-1988 in London, preparing for the future had been changed.

In one scenario, an accident in Saudi Arabia led to the severing of an oil pipeline, which in turn decreased supply. That created a market reaction that increased oil prices, allowing OPEC nations to pump less oil and make more money. The tale spooked the executives enough to make them reexamine their assumptions about oil price and supply. Was OPEC preparing to increase oil prices? What would be the implications if they did? As a consequence, when OPEC announced its first oil embargo, Shell handled the challenges better and faster than the competition.

Within two years, Shell moved from being the world's eighth biggest oil company to being the second biggest. Scenario planning had earned its stripes. Wack had been strongly influenced by the mystic philosopher George Gurdjieff, who had imported a form of Sufism -- a mystical branch of Islam -- into the West. Gurdjieff's teachings involved rigorous spiritual exercises, including practice in "seeing" as clairvoyants do. The art to martial arts, according to Gurdjieff, was the ability to "see" exactly where and when to strike for maximum effect.

Changes to the formal organizational structure were only one dimension of the organizational changes of this period. If Shell was to improve its operational and financial performance and improve its responsiveness to the multitude of external forces that impacted its many businesses, then change needed to go beyond formal structures. The criticisms leveled at Shell for being bureaucratic, inward looking, slow, and unresponsive were not about organizational structure, they were about behavior and attitudes. In any organizational change, a new structure may provide the right context, but ultimately it is the effects on individual and group behavior that are critical.

The Complex StructureThe organizational structure of Royal Dutch Shell plc. is highly complex due to its sheer size and enormous activities in over 130 countries. From its multi-national position to its joint venture merge, the Group has a unique structure. It is rated as one of the world's most three international organizations, the other two namely The Roman Catholic Church and the United Nations.

The Top ManagementThe Shell's governance structure or formal structure is shown in the figure below. As it is seen, The Parent companies are Royal Dutch Petroleum Company Netherlands and the "Shell" Transport and Trading Company plc. UK. These companies owned the shares of the group holding companies in 60:40 ratios (Netherlands: UK).

The group holding companies: Shell Petroleum N.V. of the Netherlands and The Shell Petroleum Company Ltd of the UK held shares in both the service companies and the operating companies of the Group. In addition, Shell Petroleum N.V. also owned the shares of Shell Petroleum Inc. of the US - the parent of the US operating company,Shell Oil Company.

The Service Companies: During the early 1990s, there were nine service companies located either in London or The Hague. They were:- Shell Internationale Petroleum Maatschappij B.V.

- Shell Internationale Chemie Maatschappij B.V.

- Shell International Petroleum Company Limited- Shell International Chemical Company Limited- Billiton International Metals B.V.

- Shell International Marine Limited- Shell Internationale Research Maatschappij B.V.

- Shell International Gas Limited- Shell Coal International LimitedThe service companies provided advice and services to the operating companies, but were not responsible for the operations. The operating companies consisted of over 200 companies in more than 100 countries.

They varied in size from Shell Oil Company, one of the largest petroleum companies in the US in its own right, to small marketing companies such as Shell Bahamas and Shell Cambodia. Almost all of the operating companies operated within a single country. Some had activities within a single sector (exploration and production (E&P), refining, marketing, coal, or gas); others (such as Shell UK, Shell Canada, and Norske Shell) operated across multiple sectorsThe Pre 1996 - matrix structureShell before 1996 had a matrix structure, as is shown in the figure below.

Within this three-way matrix, the geographical dimension was traditionally the most important. The operating companies remained national subsidiaries. This was the basis of operational and financial decision - making at Shell. It was reinforced through the strategic planning process, which provided its main emphasis on planning at the national and regional levels. It had three main features:1.Strong emphasis upon long-term strategic thinking. Shell's planning horizon due to its sheer size extended up to 20 years, much more than 4-5 years planning that usually companies engage in. As a consequence, the Wack's scenario strategy used to be implemented to better prepare the company for how future might unfold itself.

2.Much more emphasis was laid on the generation and implementation of ideas, rather than the narrow financial performance only. The Shell's planning department collected ideas from departments like Mathematics, economics, psychology, biochemistry, and ecology, etc. As a consequence, Shell pioneered many new management techniques, including multiple scenario analysis and business portfolio planning, cognitive mapping, etc.

3.Shell shifted its strategy from that of planning to thinking for the future, developing the capacity for organizational learning, promoting organizational dialogue, and facilitating organizational adaptation to a changing worldThe Management Structure - Post 1995 and the Degree of FormalizationThe central feature of the reorganization plan of 1995 was the dismantling of the three-way matrix through which the operating companies had been coordinated since the 1960s. In its place, four business organizations were created to achieve closer integration within each business sector across all countries.

It was intended that the new structure would allow more effective planning and control within each of the businesses, remove much of the top-heavy bureaucracy that had imposed a costly burden on the Group, and eliminate the power of the regional fiefdoms. The new structure would strengthen the executive authority of the Committee of Managing Directors by providing a clearer line of command to the business organizations and subsequently to the operating companies, and by splitting central staff functions into a Corporate Center and a Professional Services Organization.

The former would support the executive role of the CMD; the latter would produce professional services to companies within the Group. At the same time, the underlying principles of Shell's organizational structure were reaffirmed:• The decentralized structure based on the autonomy of the Shell operating companies Vis-à-vis the Group was to be maintained.

• The new structure continued the distinction between governance and executive responsibility. Thus, the formal structure of parent companies, holding companies, operating companies, and service companies was continued without significant changes. The Boards of these companies discharged the governance functions of the Group, including exercise of shareholder rights, the fulfillment of the legal obligations of the companies, and the appointment and Supervision of the managers who fulfill executive responsibilities. It was the management structure where the major changes occurred, especially within the service companies.

The Business Committees were accountable to CMD for:• The strategy of their business area;• endorsing the capital expenditure and financial plans of the operating companies and business segments within their business area;• appraising operating company and business segment performance; and the availability of technical, functional, and business services to the operating companies within their business sector.

Chairing each of the Business Committees was a member of the CMD. Thus, in early 1998, E&P reported to Managing Director P. B. Watts, Oil Products to Managing Director S. L. Miller, Chemicals to Vice Chairman M. Moody-Stuart, and Gas and Coal to Managing Director M. van den Bergh.

Professional ServicesThese new units provided financial support to the operating and the service companies within the Group. They offered their services on an arm's-length basis and competed with external service providers for the business of the operating companies. They were also able to provide services to third-party customers outside the Group. The services provided included:• Finance (e.g., treasury services, accounting, tax advice)• HR (e.g., recruitment, training)• Legal• Intellectual property (intellectual property protection, licensing)

• Contracting and procurement• Group Security (security advice)• Shell Aircraft Ltd (corporate jets)• Office services (e.g., accommodation, personnel services)• Health (medical services, environmental and occupational health advice)Each Professional Services unit was headed by the relevant director from the Corporate Center. For example, HR was headed by the HR Director; legal and intellectual property services were headed by the Legal Director.

The restructuring had involved the shift from a geographically-based to a primarily business sector-based structure, the elimination of over 1,000 corporate positions, the sale of much of its London headquarters, and the redesign of its systems of coordination and control. The restructuring had been precipitated by the realization that Shell would need to change the way it did business if it was to retain its position as the world's largest energy and chemicals company and offer an adequate return to shareholders in an increasingly turbulent industry environment.

Decentralization:Decentralization of decision making from corporate to divisional levels and from divisional to business unit levels at the same time as giving divisions and business units' full profit and loss responsibility was the key feature of oil majors organizational restructuring in the early to the mid 90's. Before the restructuring the Group was highly centralized which made the decision process slow and losses in accountability too.

What Shell looks for in candidates?Shell basically looks for 4 things in any and all candidates for its staffing requirements. They are:CapacityThis means the ability to analyze data quickly and efficiently, to learn and adapt to situations fast, and to make sound logical judgments based on facts. Shell also ranks all new personnel on creativity aka the 'out of the box thinking' to tackle different situations. Innovation, a side-runner for creative thinking is also encouraged by Shell for both new and existing personnel.

AchievementSimply put, it's the ability to get things done in a quick, low cost and efficient manner. It means that all personnel are graded on their resilience, will-power, self-confidence and similar traits to tackle complex time consuming problems that do arise.

RelationshipsRelationships are an integral part of any business enterprise, without which, operations or sales or marketing or any other departments work would come to a halt. At Shell, candidates with high 'people skills' are greatly desired, as they provide the needed connections that may enable greater growth. Candidates should have the ability to speak, work in a group and the ability to lead among other things.

TechnicalThe technical trait isn't necessary for most jobs at Shell. However, departments like chemicals, engineering or even IT do require specialized personnel, so Shell gives special preference to those with these needed skill sets.

The Recruitment PolicyShell started to see results from its increased recruitment efforts. In 2006, they hired almost 6,000 people - nearly 50% more than in 2005 and more than double their hiring levels in the late 1990s. Over half were from technical disciplines and, for the first time, Shell recruited more people in Asia than in any other region.

Shell strives to recruit locally and in ways that are sensitive to local conditions. For instance, to help build new skills in Algeria, they are hiring and training local graduates, rather than recruiting experienced staff from the national energy company. In 2006, they hired just fewer than 200 local university graduates and 75 experienced Indian professionals to support the establishment of Shell Technology India. In Nigeria, Shell recruited more than 350 graduates and experienced professionals, record numbers including the largest number of Nigerians returning home from abroad for many years.

Internship - Undergraduate / Post-GraduateShell also offers internship programs to interested and deserving candidates, to test their abilities on genuine business challenges. Shell offers undergraduates/post-graduates the chance to experience practical work to complement the theories learned from the classroom. They believe that application of what was learned in school is needed to deliver an output.

Having this opportunity will enable students to view the clearer picture of what it is like to adapt to the real condition of their respective fields of interest. To ensure that candidates get the maximum benefit, their placement is tailored to their specific abilities and interests and includes two-way evaluation.

A well-defined, distinct and objective-based project is a challenge that will directly involve them in planning, directing and execution. Reasonable allowance will be granted during their stay inside Shell while accomplishing the project. It gives students/candidates the opportunity to find out whether they and Shell are right for each other. If they are effective and efficient, then they could be one of Shell's possible recruits.

Training & DevelopmentShell invests in its future by investing in people. One can find world-class learning opportunities there. The direction and support of Shell's line managers, and Shell's in-house training experts help all of its personnel make the most of them.

Not only do they provide formal training designed to equip their own employees with up-to-date, valuable skills, but they're acutely aware that learning doesn't only happen on training courses. In fact employees at Shell learn most from doing their job - from hands-on experience, the range of challenges they themselves face, the countries they visit and the people they work with.

People who become part of the Shell family, they be fresh graduates or professionals with experience who transferred to Shell gain a lot of valuable experience and come face to face with a vast array of opportunities for growth and development that include:1. On-the-job learning - with a wide variety of possible roles, that allow employees to gain new skills and knowledge every time they move on2. Training for recognized professional qualifications - either through external organizations or Shell's own extensive training services and facilities3.

Personal development programs and structured on boarding experiences4. Direction and support - from 'buddy' schemes, mentors and regular appraisals with line managersShell's ambitions for their own personnel's future match what each employee looks for. (A great feat in itself). How each employee's career develops at Shell depends on a wide range of factors - the most important of which is the person himself/herself. But it's not just about individual enterprise and choice. Shell aims to guide employees to the support that's right for them.

A typical first jobOne's first job can last for anything between one and three years and could pan out as follows. Their next move may be to apply for a job locally or abroad.

Moving on inside ShellBecause Shell operates such a diverse set of businesses, the opportunities to move about and develop a career within Shell are extremely varied. Exactly when and how employees move on in their career depends on many factors including their business area and role. Shell is a meritocracy and new roles or promotion will be dictated by performance and competency.

Working abroadOne's first post will most likely, but not always, be in his/her home country and could last for anything between two and four years. The opportunity to work abroad is there, but whether and how soon one can take advantage of it vary greatly, depending on the business he/she joins, the opportunities available and the career direction one wishes to pursue.

Building skillsTo help this wave of new staff understand our values from the start, our introductory training programs have been improved. New employees are offered a series of training sessions and workshops including courses on the Business Principles.

Shell provides a balance of on and off-the-job learning. In 2006, about 10,000 staff participated in their company-wide leadership development courses. Sustainable development issues are integrated into the courses that are run jointly with leading business schools in Asia, Europe and the USA. Shell's Project Academy, launched in 2005, is a dedicated learning program, including ongoing assessment and support for project managers to help them build skills, learn from Shell and external experts and apply our standards and approaches. In 2006, the Commercial Academy was launched for commercial staff.

Worldwide choicesWith guidance from one's line manager, employees will be encouraged to be proactive in influencing the process leading to their next move - e.g. by applying for relevant positions posted on Shell's very own global resourcing intranet system. These could be in the employee's own home country or on the other side of the world. If an employee has the right potential, the choice of where he/she applies is his/her own.

Shell offers very competitive pay and benefits and to reflect the competencies required for their challenging and dynamic industry. Working practices vary from business to business and location to location. However, one can use the following as a general guide to the kind of rewards, benefits and working conditions available at Shell.

Financial Rewards & appraisalsShell offers a competitive salary that reflects both market conditions and the levels of skill and experience that they require to remain at the leading edge of our challenging and fast-moving industry. In addition, they ensure that their personnel that individual contribution is recognized and rewarded through performance-related pay and bonuses.

Benefits ProgramShell's benefit programs include a wide variety of bonus plus compensations and appraisals such as medical, dental, car financing and extensive pension plans.

Training provisionAs personnel progress in their career, training continues to play a vital role. For many professional qualifications, where the requirements of Shell's business and individual role align, the company itself offers work leaves, scholarships, and study-abroad sessions/training camps.

Balancing work and lifeShell's goal is to help its employees achieve an acceptable work/life balance by providing flexible working practices wherever necessary and operationally possible. For example, depending on one's particular circumstance a member of staff may have the opportunity to 'telecommute' and complete certain tasks from home. Shell also has a state-of-the art onsite daycare facility available to all employees. However, Shell's business is demanding. International travel, intensive projects and critical timescales can feature in many employees' working lives.

Time off and time outShell's holiday entitlement and maternity/paternity leave packages are market competitive. They also aim to accommodate career breaks and sabbaticals wherever possible, taking into account both their business needs and their individual employee's own aspirations.

Our diverse global communityShell employs around 112,000 people, from more than 100 different nationalities and ethnic groups, providing their staff with great opportunities to meet and work with people from many different cultures and backgrounds. Shell strongly believes in equal opportunity and takes a very strong stance on diversity and inclusiveness - so much so that a dedicated department within Shell works to develop and promote our diversity policies at Group level.

Sports and social activitiesThe company has active employee forums that organize a variety of sports and recreational events for employees and their families. Additionally, all their departments organize a variety of activities, conferences and away days. They also have a variety of vacation properties within the country that can be used by employees over holidays and weekends.

Listening to our employeesAs part of Shell's responsibilities as an employer, they regularly conduct surveys among employees to discover issues that may need to be addressed or improved.

5 Years On - General assessment if one were to join Shell.

Where do you see yourself in five years' time? A common enough question - and one that you'll find easier to answer given the range of training and development opportunities available at Shell.

Five years after joining Shell, some people may have already decided to focus on a particular business area or role. Others may have decided to move into a new field - perhaps from a technical role into a commercial one. Some people may be based outside their home country on long-term postings, while others could be traveling on shorter project assignments. However it becomes clear that Shell is one company that many join but very few leave. Once people join, they develop within the company, and gain both valuable knowledge and skill sets, necessary for success.

Shell is committed to creating a workplace that values differences. A diverse workforce can better understand customers and stakeholders. An inclusive workforce is more motivated and able to bring their talents to bear. They have three targets in this area:•Increase the proportion of women in senior management to a minimum of 20%. In 2006, Shell made good progress, with the proportion of women in top positions rising to 11.6%, up from 9.9% in 2005. They have increased their effort to attract women candidates and introduced development and mentoring programs targeted at female staff. Nearly 30% of new staff in 2006 were women.

•Have local people fill more than half the senior management positions in every country we operate in. In 2006, 25% of these countries achieved this, compared to 36% the previous year. This decline came mainly from a small number of staff changes in countries with few senior management positions.

•Improve staff perceptions of the inclusiveness of their workplace, as measured by the Shell People Survey. In the 2006 Survey, 64% of the company's employees were positive about inclusiveness in their part of Shell.

Shell seems committed to equal opportunity in recruitment, career development, promotion, training and reward for all employees, including those with disabilities. All job applicants and employees are assessed against clear and objective criteria.

Diversity on the forecourtShell is the only international energy company licensed to build and operate service stations in India. Shell has brought their own environmental and social standards with them, including their commitment to diversity and inclusiveness. Shell's quickly growing network of service stations has made a special effort to hire women, people with disabilities, and disadvantaged members of society.

For female employees, this meant installing separate changing and bathroom facilities. They work only the daytime shifts, so they do not have to work or travel after dark. Local NGOs have helped convince families that our service stations are appropriate places for women to work. As a result, there were on average 17 women employed per station by the end of 2006.

For people with disabilities, Shell made its sites accessible, for example by installing wheelchair ramps. At each station, there is a supervisor who knows sign language. By the end of 2006, on average four disabled people were working at each station.

Health and Safety ConcernsShell Canada had 127 recordable injuries for a TRIF of 0.81, compared with 122 injuries and a TRIF of 0.98 in 2005. Their 2006 LTIF was 0.07 with 11 lost-time injuries - a significant improvement from the 2005 LTIF of 0.15 and 19 lost-time injuries. Shell Canada's 2006 LTIF and TRIF were both record low injury frequencies, although they didn't meet their 2006 TRIF target of 0.75.

Almost 1,200 people attended Shell's 2006 open safety meetings -- nearly double the 2005 attendance.

Shell Canada's Target ZeroStatistically, 2007 was the best-ever safety year for Shell Canada with record low TRIF rates. The 2008 safety challenge will be even greater -- large projects, a major oil sands expansion, plant maintenance shutdowns and workplace renovations all carry increased risk and it could see Shell activities and work hours double.

That's why they adopted Target Zero as their 2008 theme. It means that every day, Target Zero is the goal in all of their activities: zero injuries, spills, gas releases, and process incidents. Many of our operating locations already use it as the core of their safety campaigns. This example for safety came from Shell Canada, where the environmental conditions happen to be the worst in the world. However, this Target Zero policy is one that the company has adopted as a whole.

HealthIn one of Shell's oil refineries the plant's health team takes a structured approach to assessing the health risks associated with the refinery work environment, reporting on health performance and assessing the health impact of projects as well as providing medical and emergency response services. The health team runs a number of proactive initiatives focused on improving employee health and emotional well-being including flu vaccinations, cholesterol testing and quit smoking programs.

The refinery is a participant in an innovative study being conducted by the University of Queensland in collaboration with Harvard University, which screens for and treats depression in the workforce. By identifying workers suffering from depression, the Work Outcomes Research and Cost-Benefit (WORC) Project seeks to enhance the quality of life of workers and those around them (such as co-workers, family) as well as providing increased job security because the worker's situation is understood. The refinery also participates in Health Watch, an Adelaide University study tracking the long-term health of 19,000 past and present employees in the petroleum industry.

This shows the levels of dedication and commitment, not to mention concern that Shell has for the health and safety of its employees. This policy and many more have been adopted world over in Shell.

Wellbeing AwardsIn October 2006 that very same refinery won a Wellbeing Award for its proactive approach to lowering stress levels among employees. The Wellbeing Awards are held during Barwon Region's Mental Health Week in October and are supported by the Rotary Club of Highton Kardinia. They acknowledge achievements in the area of mental health. The refinery has introduced a number of actions including mentoring and stress training that have seen a marked drop in the number of cases of stress within its workforce.

"If employers and business can understand the issue of mental health and create work environments that are supportive and flexible, the long-term gains for individuals and businesses cannot be understated. Proactive projects such as the one undertaken at Shell enhance the wellbeing of the workplace and contribute to better outcomes for individual employees.

"Toni van Hamond, Chair, Mental Health Week CommitteeSafetySafety is Shell's number one priority. In September 2006, a major milestone was achieved - working three million work-hours without a lost time injury (an injury requiring time off work). To celebrate, Shell Geelong Refinery continued its support for the City of Greater Geelong's Learn-to-Swim Scholarship Program, winner of the Victorian Aquatic Industry 2006 Resusci Anne Outstanding Aquatic Programming Award.

This performance reflects extensive efforts in recent years to introduce a steady, consistent change in the way the refinery, and every employee works. A key message being promoted, every day at work as well as during special events such as Safety Week in June 2006, is the importance of individual responsibility and how, collectively, safety performance can be improved when individual standards are lifted.

In 2006 external recognition of the increasingly high standards being achieved at the refinery was received:•In May, Victorian WorkCover Authority (VWA) conducted its annual audit of the refinery's safety case. The safety case is a comprehensive Risk Management Plan that identifies potential hazards and implements measures to avert them. Each year the VWA inspects aspects of the safety case.

In 2006 the refinery received its best ever result with the VWA finding no areas of non-compliance; and,•Approval was received from Energy Safe Victoria for the refinery to operate an Electrical Safety Management Scheme (ESMS). Approval came after a rigorous inspection and assessment process lasting about three years. Shell's application, led by electrical engineer Debbie Schroer, required the refinery to demonstrate how it could not only meet, but better, the safety outcomes and objectives of the Electrical Safety Act 1998.

2007 UpdateThe refinery's commitment to safety has continued. In April 2007, a further milestone - four million work-hours without a lost time injury - was achieved.

Shell & Contractor Safety CentreIn early 2004, the company opened the Shell and Contractor Safety Centre at the refinery. The centre reflects international research that has found effective adult learning is more readily achieved in a hands-on (rather than class room) environment.

The safety centre incorporates 18 display areas that deal with:•manual handling,•electrical isolation•cranes•rigging and forklifts•chemical awareness•asbestos removal•hydrojetting and grit blasting•working at heights•scaffolding•hot work•safe mechanical isolation•confined space entryMany require the learner to participate in an interactive exercise - for example, at the height safety display, learners can check old height safety equipment for faults, practice donning and doffing a safety harness and check various anchor points for suitability.

The safety centre is an initiative driven by Shell/Contractor HS&E Forum.

Leadership styles - Grassroots leadership at Royal Dutch Shell plc.

"A successful company depends on leadership. But there is the need of a new definition of leadership and a new approach to providing it. The leader has to find the way to empower these frontline people, to challenge them, to provide them with the resources they need, and then to hold them accountable. As they struggle with the details of this challenge, the leader becomes their coach, teacher, and facilitator. Change how you define leadership, and you change how you run a company.

Once the folks at the grass roots find that they own the problem, they find that they also own the answer - and they improve things very quickly, very aggressively, and very creatively, with a lot more ideas than the old-style leader could ever hand down from headquarters." Steve Miller, 52, the group managing director of Royal Dutch Shell Group of Companies.

Steve Miller observed the Group undergoing a structural change but people at Shell did little to bring their efforts on the frontline. So he adapted the leadership strategy of grassroots. This type of leadership joins the Top Management and the frontline employees to work together and share ideas in new product development. Furthermore, Miller brought in the learning approach. He led the company to teach the others so that the others of his own line could learn too. He makes things personal getting communication among the company's frontline people.

He feels that due to the personal connectedness, he can go anywhere in the world and talk to his company's employees in a very direct and friendly way. Steve Miller knows his materials very well from inside out, front and forward and backward. He and his team teach and urge employees' contribution in marketing, HR and other departments of the business.

Cross Functional ConflictsCross functional conflicts arise when there are inter linked businesses. At Shell, there are defined channels. Interlinked businesses at Shell have retail and B2B channels of selling products. Each channel has its own customers and cross functional conflicts arise when there are issues in handling their complaints. Usually cross functional conflicts do not arise as much due to the strategic planning process at Shell. This is because each yearly the Committee of Managing Directors CMD, and the Chief Executives sit together to discuss every functions performance in detail.

The goals and targets for each function are set on a tactical level, and are provided with a budget enough to sustain costs incurred by the Finance Department, Marketing Department, Production Department and the IT Department etc. Unanimously, the Group's marketing plan, e.g. the recent Michael Schumacher's promotional campaigns of Shell Helix Ultra lubricant oil for engines, is seen worldwide on Billboards and TV Commercials. The orders and targets set by the Top Management at The Hague or London Headquarters are met in accordance with the code of conduct. As a result there is little or no cross functional conflicts.

In the advancement of technology, when Shell People was launched, under this program the computerized employment information program was also introduced that is going on currently in effect. This was mainly to avoid the cross functional conflicts. In this program, each employee's information was collected and sent to the top management to see, even on operational goals, whether the employee is managing himself/herself up to the mark or not. It is a brilliant and a much formalized system of information storing.

Furthermore, each employee is locked up with a set of goals to achieve; the employee accepts the goal and works toward achieving it. It is next to impossible that the achieved goals and targets be different than the locked up targets because it is not a paper based system, since on paper anyone can write anything, which had happened in the past and lead to cross functional conflicts. It is a highly confidential system that is only used by the Top Management to assess the performance of its employees.

Recommendations and SuggestionsThere are three identifiable problems and issues inside the company that can be clearly highlighted and must be solved to give the company its competitive advantage when compared to other companies. The first problem is the shorter employment time that is contributed by the employees to the company. In recent years namely 2000 to 2005 there was a sharp increase of employees that were leaving the company in favor of other employment positions in other oil and petroleum companies that are competitors of Shell.

Although this phenomenon does not encompass the whole global operations of the company, there is still a negative impact on the performance of this business organization since these events happens in costumer rich regions such as Asia, India and the Middle East.

Another major problem that is being faced by the company is its eroding supply base in the Middle East and other oil producing regions due to the ongoing friction between the United Kingdom and oil producing countries in the Middle East such as Iran with regards to topics such as the war on terror, the occupation of Iraq and the on going negotiations on the nuclear ambitions of Iran. Since Shell Company is partly British owned, these contemporary issues and news can directly affect the supply and logistical train of the company.

Due to the support given by the British government to the United States with regards to the occupation of Iraq and the war on terror, the company has been losing the influence and prestige when it is viewed by Arabian and Middle East producing companies. This animosity against the corporation stem from the fact that it is a British company in the eyes of an Arabian or Iranian. This company has also supplied fuel, oil and other petroleum based products to the occupying forces in Iraq and Afghanistan which are wholly composed of the British and American Armed forces.

To remedy these pressing problems, certain issues and concerns must be addressed. To combat the negative publicity that is being shed against Shell in the Middle East countries and the loss of the preferential treatment previously offered by Middle East countries to the company, an appropriate campaign must be launched to erase this negative perception about the company. This publicity campaign will not only be geared towards Islamic oil producing countries but will also focus on other Islamic countries. Reconciliatory talks and discussions must be established with the members of the OPEC in relation to the current prices of oil and petroleum based products.

To further reinforce these steps, the company must assign area/regional managers in these countries who have a significant understanding and immersion in the local Islamic culture and thinking to reduce the probability of misunderstanding and miscommunication that would add another injury to the present situation. The manager must also have leadership qualities and characteristics to inspire his/her subordinates to respect Arabic customs and traditions. He must exude motivation, self confidence and necessary skills that are suitable for the job at hand.

Lastly, the company must set up two programs so that it can remedy the last problem mentioned in this paper. First, to capture the new market, it must redefine its products to comply with strict government and environmental standards. The process of using, mining and manufacturing its products must be free from any pollution and contamination. These vital steps will not only please a government and a lobby group but would also earn the sympathy and recognition by the public.

The company must also take steps in reengineering its internal structure to accommodate renewable sources of energy. It must train personnel and employees so that they would be ready to research, experiment and to test various sources of energy that is being developed by the oil industry.

References - Sources of authentic information1.Shell Pakistan Ltd. www.shell.com.pk2.Royal Dutch Shell - The global homepage for Shell www.shell.com3.Case Study 7 - Organizational Restructuring within the Royal Dutch Shell plc Cases to accompany Contemporary Strategic Analysis Fifth Edition, Robert M. Grant4.Interviews:Mubbasher Omar, Asia Pacific Head, Royal Dutch Shell plc.

Masooma Raza - owner, MSR Shell service station, Muzang Chungi, Ferozpur RoadTania Khan - Head Company Operated Sites, Shell Pakistan Ltd.

Rasheed Ziad - Regional Operational Manager Lahore, Shell Pakistan Ltd.

Mohsin Siddiqui, HR Manager Shell Pakistan ltd.

5.Shell Annual Report PDF file, www.shell.com6.Shell Sustainability Report, www.shell.com7.The Royal Dutch Shell Company, Report available http://ivythesis.typepad.com/term_paper_topics/2008/02/the-royal-dutch.htmlThe Human Resources reportRoyal Dutch Shell plc.

Lahore School of Economics