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A Detailed Business Report On Shell Nigeria Business Essay

  1. Petroleum History
  2. Upstream Organization
  3. Downstream
  1. External Environment
  2. PEST Analysis
  4. Political factors
  5. Wars and Conflicts
  6. Government Policies
  7. Militancy/Terrorism
  8. Government Leadership
  9. Government Constructions.
  10. Political Trends
  11. Economic factor
  12. Home Market Trends
  13. General Taxation Issues.
  14. Market and Trade Cycles
  15. International Trade and Monetary Issues.
  16. Job Growth/Unemployment
  17. Interest and Exchange Rate
  18. Internal Fund and Cash Flow
  19. Social factor
  20. Consumer Buying Patterns.
  21. Ethnic/Spiritual Factors.
  22. Advertising and Publicity
  23. Health/Living Standards
  24. Brand company and Technology Image
  25. Consumer's frame of mind and opinions
  26. Media views
  27. Technological factor
  28. Research Funding
  29. Maturity of Technology
  30. Information and Communications
  31. Intellectual Property Issues
  32. Internet
  33. Transportation
  34. Software Changes
  35. Political Factors
  36. Economic Factors
  37. Social Factors
  38. Technology Factor
  39. Porter's Five Forces
  40. Bargaining power of buyers
  41. Bargaining electricity of suppliers
  42. Competitive rivalry
  43. Threats of New Entrants
  44. Threats of Substitutes
  45. Internal Environment
  46. SWOT Analysis
  47. SWOT Examination OF SHELL NIGERIA
  48. Strengths
  49. Longevity in the market
  50. More research
  51. Strong performance in the market
  52. Strong brand image
  53. Product/Service Differentiation
  54. Affecting the general public positively
  55. Weaknesses
  56. Gas flaring still in place
  57. Oil spillage
  58. violence still influences it
  59. much concentration onoil
  60. Opportunities
  61. Discovery of new engine oil wells
  62. Penetration into Danger zone
  63. Embarking on new products
  64. Rapid reaction to environmental criticisms
  65. Threats
  66. Loss in profit consequently of gas price
  67. conflict and violence
  68. competition from rivals
  69. High interest rate
  70. Global recession
  71. Strength
  72. Weakness
  73. Opportunities
  74. Threats
  75. MOST Analysis
  76. Mission
  77. Objectives
  78. Strategy
  79. Tactics
  80. Organizational Structure
  81. Organizational Strategy
  82. Organizational Change
  83. The Gagliardi Style of change
  84. Organizational Culture
  85. Vision and Quest Statements
  88. Power and Politics

Petroleum History

Most of the petrol used today has migrated in one country to another. It's the largest single item in the International market and the Petroleum industry is one of the major industries on the planet.

Petroleum is a fossil energy since it was made from the remains of small sea crops and pets or animals that died an incredible number of years ago. When the plants and animals died, they sank to underneath of the oceans. They were buried a large number of toes below the sand and silt. As time elapsed and as the layers increased, this organic and natural mixture was put through gigantic pressure and temperature. The mixture altered, wearing down into compounds made of hydrogen and carbon atoms called hydrocarbons. Finally, an oil-saturated rock-much such as a wet household sponge was formed.

All organic material does not turn into essential oil. Certain geological conditions must be satisfied within the oil-rich stones. There has to be a capture of non-porous rock that stops the olive oil from seeping out, and a seal that helps to keep the engine oil from increasing to the top. Under these conditions, only two percent of the organic and natural material is changed into essential oil. (Parra, 2004)

Shell Nigeria History

Shell Petroleum is one of world's leading suppliers of engine oil, gas and petrochemicals; Shell Olive oil Company has distinguished itself through its dedication to industry innovation. Its marketing expertise has enabled the business to compensate because of its relatively low volume of crude oil creation, when compared with its strongest rivals, by selling an equivalent amount of fuel nationwide.

Oil and gas functions began in Nigeria effectively in 1956, with the first commercial find in that year by the then Shell D'Arcy. From the 1960s growing environmental concerns led Shell to invest greatly in systems designed to reduce pollution and preserve energy in its vegetation. In the next decade, the company began publishing a series of consumer-oriented booklets on such topics as car maintenance and energy saving. Shell persisted to dominate the Nigerian oil industry for long until Nigeria joined the business of Petroleum Exporting Countries (OPEC) in 1971, after which the country began to take a firmer control of its oil and gas resources, based on the practice and rules of the other participants of OPEC.

Within this era, many Multinational Petrol Companies like Gulf Petrol and Texaco (now ChevronTexaco), Elf Petroleum (now Total), Mobil (now ExxonMobil), and Agip, in addition to Shell, that was already participating in a dominating role in the industry emerged. Currently, the aforementioned companies constitute the players in Nigeria's oil industry, with Shell the major player accounting for a just little less than 50% of Nigeria's total daily creation, which presently stands at about 2. 4 million barrels of essential oil each day, (Socyberty, 2010). The company has delved into various businesses and these can be categorised into three organizations specifically upstream firm, the downstream firm and the jobs and technology Organization,

Upstream Organization

The Upstream firm explores for and extracts crude engine oil and natural gas, often in joint projects with international and countrywide oil companies. The organization also liquefies gas by cooling and reselling it to customers. It also converts natural gas to liquids to provide cleaner burning fuels. Additionally it is responsible for marketing and trading natural gas and power. In addition, it develops wind power as a means to generate electricity.


The organization convert crude oil into a range of sophisticated products, that happen to be moved and marketed around the various states in Nigeria for local, industrial and move use. Included in these are fuels, lubricants and bitumen. The creation business includes Refining, Resource and Syndication. Marketing includes the Retail, Business to Business, Lubricants and Alternative Energies and Carbon dioxide. The Chemicals business has dedicated Processing and Marketing products of its. It deals crude oil, essential oil products and petrochemicals generally to enhance feedstock for the Making business and also to provide you with the Marketing business. The Skin tightening and organization is responsible for coordinating and traveling Skin tightening and management activities across the company.

The organization provides complex services and technology capacity in upstream and downstream activities. It handles the delivery of major tasks and really helps to improve performance across the company. It offers differentiated technical information technology for Shell and drive research and creativity to create tomorrow's technology solutions. Tasks and Technology also stores Safety & Environment and Contracting & Procurement as they are integral to all or any Shell Petroleum's activities.

External and Internal Environment of Shell Nigeria

All organizations must have the input from other exterior environment that subsequently exchanges the product and services they produce in order to supply the energy for extended existence. "A business needs to have the ability to maintain its environment to make it through in today's business environment when you are constantly aware of development from its environment" (Tiernan et al 2006). All factors that are within other functions of their own organization are known as the internal environment. (Shell 2010)

External Environment

Challenges facing many companies today originate outside them. A report of the external environment can place major opportunities and risks. Successful companies follow extensive environmental trends and intermittently evaluate changes taking places in their industry. A corporation cannot in general control its extensive environment. (Dess and Miller, 1993:45)

PEST Analysis

An firm environmental evaluation should be ongoing and give food to all areas of planning before beginning the marketing process. Infestations analysis is a means of inspecting an organization's external environment. Infestations means Politics, Economical, Community, and Technology. These factors are beyond the control and impact of your business but it's important to be aware of it when doing product development, strategy or business planning, (Rapidbi 2008).

Source: http://www. HYPERLINK "http://www. learnmarketing. net/marketing. jpg"learnmarketing. net/marketing. jpg


Political factors

Wars and Conflicts

Government Policies


Government Leadership

Government Constructions.

Political Trends

Economic factor

Home Market Trends

General Taxation Issues.

Market and Trade Cycles

International Trade and Monetary Issues.

Job Growth/Unemployment

Interest and Exchange Rate

Internal Fund and Cash Flow

Social factor

Consumer Buying Patterns.

Ethnic/Spiritual Factors.

Advertising and Publicity

Health/Living Standards

Brand company and Technology Image

Consumer's frame of mind and opinions

Media views

Technological factor

Research Funding

Maturity of Technology

Information and Communications

Intellectual Property Issues



Software Changes

Political Factors

The political area can increase or lower a company's freedom and make the environment unfriendly or supportive of its activities (Dess and Miller, 1993:48). They have a huge impact upon the rules of businesses, and the spending vitality of consumers. This pertains to how government insurance policies impact Shell Nigeria Petroleum's procedure. Political factors such as Federal government policies, Political movements, and Government structures, militancy or terrorism have high effect on Shell Petroleum.

Rapid changes in Federal policies have affected Shell Nigeria Petroleum. When a government involves ability, he condemns the planning work done by the precious government and earns new policies which could or may well not prefer Shell Petroleum. Due to political instability, slow development occurs.

Militancy or terrorism has influenced Shell Petroleum in Nigeria very seriously. The militants in the Niger Delta where the primary oil is situated also impact the production of engine oil by Shell petroleum highly. They aren't supportive of the activities perpetrated by Shell. They can be of the view that Shell Nigeria do not are worthy of to be there as there are no significant development in their areas despite huge amounts of petrol been gotten from the Niger Delta areas. As a result of these, the militants seize petrol wells, kidnap expatriates for large amounts of money known ransom in exchange. They also inflate petrol wells and even wipe out these expatriates. The militants want a share of what's become from the sales of oil of their community so that as this has not been directed at them or has been mismanaged by the most notable officials in the federal government, the militants go a long way to have an impact on the daily creation of Shell Petroleum in Nigeria.

Economic Factors

The Monetary factors of a state also have a higher impact in the do of an company. The stableness of the current economic climate of a country determines how the consumers can take in energy products. The overall point out of the market influences the shows and strategies of an organization.

Nigeria's current economic climate has performed several reforms over the past decade after years of political instability due to over-dependence on the olive oil sector. Since 2008 the federal government has begun displaying the political will to implement the market-oriented reforms urged by the IMF, such concerning modernize the banking system, to curb inflation by blocking abnormal wage demands, also to resolve local disputes on the distribution of earnings from the petrol industry. In 2007-2009, GDP increased strongly thereby which makes it one of the growing economies in Africa. As at 2009, Nigeria's GDP stood at $339 billion and the GDP public exchange rate stood at $173. 4 billion (2009 estimate) and the GDP real development rate is 6. 1% (2009 estimation). (Source: CIA World Reality, 2010)

As due to this examination, the economy situation of Nigeria has a high impact of Shell Petroleum Nigeria as it influences it positively. Unemployment rate In Nigeria stands at 4. 9% as at 2007 as the inflation rate stands at 12. 4% as at 2009, (Source: CIA World fact). This analysis has a just a little negative impact as the purchasing power of the customers would be reduced.

Constituents of Nigerian GDP in 2008

Source: StockmarketNigeria. com

Social Factors

People's choices which include the beliefs, ideals and attitudes of culture are influenced by Community factors. Changes in the sociable factor of any country can impact purchasing action. Shell is aware of this public aspect which is shown due to the large number of customer buying Shell Petroleum related products. Oil spillage in the Niger Delta region of Nigeria is one of the health hazards triggered by Shell Petroleum in Nigeria as they spill essential oil in the waterways rendering it impossible for people in this area to seafood, which is one of their major occupations. Gas flaring is also one of environmentally friendly hazards caused by Shell Petroleum but it already has strategies to stop it by the end of 2011. The globe inhabitants is increasing and sociable values are also changing so the demand of petrol use is also increasing.

Technology Factor

Advances in technology have had a major effect on Shell Petroleum's success. Technological change impacts socio cultural behaviour. Due to the progress in technology, Shell Nigeria Petroleum have a portion of their company that bears out technology related projects dedicatedly just to meet up with the current improvement in technology in the energy sector and better the life of its customers. The Shell Petroleum Job and Technology section deliver differentiated technical information technology for Shell Petroleum and drive research and creativity to generate tomorrow's technology alternatives. (Shell 2010)

Porter's Five Forces

Porter 1980 stated that your competition state of a business is determined by five basic competitive pushes. The combined strength of these pushes establishes the ultimate profit possible on the market, where profit potential is precised in term of long run go back on invested capital. Various sectors vary in their ultimate profit potential as the collective strength of the pushes differs. The makes include:

Bargaining power of buyers

Shell petroleum has various brands of products from which a customer can choose from. It amounts from the lubricants to the natural gas. The energy of the buyer is high because of these various range so g products that abound in Shell petroleum.

Bargaining electricity of suppliers

Various suppliers of petroleum products also boost the durability of Shell petroleum because they mostly rely on Shell petroleum for the supply of petroleum products. The bargaining vitality of suppliers is high.

Competitive rivalry

The petroleum sector is a competitive sector. Competition is high and fierce as there are many companies like Exxon Mobil, Total, and Agip. Shell petroleum has remained ahead of these businesses because it has a strong brand name and it wields enough electric power and has strong effect in the olive oil sector because of its various quality brand products.

Threats of New Entrants

It would be extremely problematic for new entrants to enter in the petroleum market because Shell has generated and established a solid image and brand name. The hazards of new entrants are low because new entrants would face various barriers like:

They would want more time in making its brand known and etching it in the brains of existing customers of Shell petroleum who already like Shell Petroleum's product.

They would need more time also to break the monopoly of Shell

Threats of Substitutes

Shell petroleum offer quality products to the Nigerian market. Quality products like the Shell Rimula and Mysella are products that might be difficult to swap because the merchandise have undergone much research before it was created to the marketplace. Before a product is released into the market, it is well developed by the many departments in its various areas in the company therefore the dangers of substitutes is low.

Internal Environment

To exploit opportunities and reduce dangers in the exterior environment, managers must assess a firm's interior talents and weaknesses. The very best strategies are based on a thorough understanding of an organization's interior environment, (Dess and Miller, 2003:74).

SWOT Analysis

This is an instrument that is utilized to analyze a firm and its environment. SWOT evaluation helps companies who shoot for success channel its eye on key issues as it is the first stage of planning. SWOT analysis is split into two namely the inner and the Exterior factor. The Internal factor consists of Talents and Weaknesses while the External factor consists of Opportunities and Threats from its competitors.

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Longevity in the market

More research

Strong performance in the market

Strong brand image

Product/Service Differentiation

Affecting the general public positively


Gas flaring still in place

Oil spillage

violence still influences it

much concentration onoil


Discovery of new engine oil wells

Penetration into Danger zone

Embarking on new products

Rapid reaction to environmental criticisms


Loss in profit consequently of gas price

conflict and violence

competition from rivals

High interest rate

Global recession


Shell has been one of the major leaders in the oil and gas industry and has enough strength to perform in the coal and oil sector. It offers its existence in over 72 countries (Shell 2010). As a result it has a solid brand image in Nigeria. It control buttons almost all of the olive oil wells in Nigeria.

Shell also embarks on new tasks as they have a dedicated portion of their services wholly committed to undertaking new assignments to observe how to raised the lives of Nigerians and the world all together.

In Nigeria, Shell also organizes contests like mathematics tournaments and essays for students in secondary classes. Shell Nigeria also honours scholarships to undergraduates in Nigerian universities from the Niger Delta region as a means of aiding their studies. They also help post graduate students from the Niger Delta to study either in Nigerian universities or abroad.

As one of the major market leaders in the oil and gas sector, Shell Nigeria also offers a variety of excellent products that are offered to different sectors. They include Lubricants and Gas. Shell has various ranges of lubricants and engine oil which include:

Shell Rimula

Shell Mysella

Shell Tellus

Shell Turbo

Shell also source gas through pipelines to big companies that are situated in Lagos state, Ogun state, Abia state plus they have a strong brand image.


Shell Nigeria still embarks on flaring of gas during removal. They flare gas to eliminate unwanted bi-products. This process degrades the environment as it causes airborne diseases to the neighborhoods and also influences the ozone covering. Many of the people living in the Niger delta where Shell operates are fishermen and farmers by occupation but most of their lands and way to obtain livelihood has been afflicted by Shell therefore of engine oil spillage. This influences the fishermen and the farmers as the fishes in the river dies and their farmland are demolished.

Major focus on the coal and oil sector alone in Nigeria has made Shell not to seek out and invest seriously into other industries of the Nigerian market like agriculture. Heavy dependence on the engine oil proceeds allows it to come in contact with strict market conditions and as new companies are also growing in the coal and oil sector, it places it at a competitive disadvantage to its rivals who explore the other sectors of the Nigerian current economic climate rather than the coal and oil sector only.


Opportunities abound for Shell Petroleum in Nigeria. Essential oil wells are still being found in various places in Nigeria and as Shell is a major player in the oil and gas sector, it offers bought out these wells. Shell in addition has had the opportunity to prosper in the Niger delta area in Nigeria, a place where many essential oil companies are backing out from. Despite the risks and violence from the militants, they have been able to earn the center of a few of the militants.

The electricity industry has upgraded in Nigeria and consequently of this, Shell also has been able to attempt services and introduce these to the Nigerian market. This includes products like the Shell Turbo.


As a result of the problems facing Shell in the Niger delta region of Nigeria, Shell has been afflicted as some oil sites were collected from them matching to a judge ruling in Nigeria and handed to local owners. Shell runs in the large oil and gas sector, so that as the oil and gas sector is rapidly increasing, there is extreme competition from other oil and gas companies in Nigeria. These companies include Agip essential oil, ExxonMobil, Total.

Various issues in the Niger Delta also impact Shell Petroleum in Nigeria. Various militant groupings kidnap expatriates and engine oil wells and have for huge ransom. Because of this, the business is influenced greatly as they cough out huge money to secure their oil wells and protect their employees.

MOST Analysis

Like SWOT research, MOST analysis is also a tool used to internally assess the environment of any company. It identifies the company through its Mission statement, its Targets, its Strategy and the Strategies it programs to use in meeting these goals.


Shell Nigeria's objective declaration is to enhance profitability through ground breaking management strategies while ensuring cost success and harnessing strategies. This mission assertion 's the reason for the lifestyle of Shell. It strives to harness strategies by creating more impressive and effective ways of transforming energy to energy fit for individual use.


Shell Nigeria has explained aims that are designed for its operation. These objectives are essential points it intends to meet so as to match its objective. The targets are to engage in oil and its product efficiently and to source for energy to meet customer's needs and the world's growing demand for energy. By getting together with these objectives, the business intends with an advantage over its opponents.


Shell Nigeria has in place various strategies to make the business achieve its objective and set targets. These strategies include job development, empowerment, and wide open door insurance policy. The task and technology sector in the organization applies the needed factors in attaining these strategies. These strategies are long-term strategies that have been established to gain not only the end customers but also the economical state of the organization in return. In addition, it has strategies set up for bettering its existing products and also producing new ones.


Shell Nigeria has used various strategies to execute its mission, targets and strategic mission. These methods have helped the business have an edge over its rivals thereby making customers to keep to patronize them. These techniques include:

Free car servicing in every Shell petroleum filling station

Good shed for relaxing

Various promos designed to make the customer continue to patronize them

The variables generally in most analyses are indispensible and can be examined also from top to bottom. One cannot do minus the other. They work together by driving the other person until the business is prosperous.

Organizational Structure

For an organization to attain its proposed goal, mission and vision, it needs to truly have a kind of composition in place that may enable it carry out these processes. There have been various definitions of what an organizational composition is by different academics but John Martin and Martin Fellenz (2010) described an organizational composition as "the formal set up of process, communication and specialist relationships that impact and control how people organize and perform their work" (John Martin and Martin Fellenz 2010: p336).

In the early 1990s, Shell run using the matrix kind of framework. They comprised of four companies such as The Parent Companies, The Group Positioning Companies, The Service Company as well as the Operating Companies. The Committee of Taking care of Directors (CMD) handled the business. The committee of taking care of directors includes five managing directors which includes the chairman, the vice chairman and three other taking care of directors. The leader of the Royal Dutch Petroleum and the Managing Director of Shell rotated the chairmanship of the committee of managing directors. The committee's job was to provide a interconnection and linkage between the formal set ups of the group and also the management framework of the group.

However in 1995, Shell Petroleum restructured the way it managed. It dismantled the matrix operating structure of the firms and produced four business organizations to attain a nearer integration within each sector in every country where Shell Petroleum works. The composition made each business effectively control and plan its businesses well. The bureaucracy kind of leadership that were in operation was removed paving method for the structure to have enough strength to map out a defined role to the operating companies and business corporation.

Organizational Strategy

Strategy is an articulated desired way of a business that may be used by others to comprehend the business (Linstead et al, 2009:711). For Shell Nigeria, its strong drive to execute its strategy can be seen by the resulted improvements in Nigeria and therefore of this drive and development, they retain their strong Image and name that they have both in Nigeria and the globe as a whole. Shell Nigeria's main strategic features were:

They embarked on a proper future plan. The majority of Shell Nigeria's rivals like Agip, Total embarked on a 4 or 5 calendar year plan but Shell Nigeria embarked on a twenty yr plan not because they wanted to have a forecast of what is going to happen within the twenty calendar year period but because they thought scenarios that would happen and wished to have enough solutions to the cases. The solutions they provided allows managers to consider other ways to strategically respond to any scenario that might unfold in the future, (shell 2010).

They also played a tactical role by having a proper future plan where they might have sufficient facilities to develop organizational learning,

They also focused on the approaching generational talents. They were not too focused on financial performance. Various ideas from different research department like mathematics, economics, and ecology were not disposed of by the Task office in Shell Nigeria instead they delved into it wholeheartedly so that their strong name would still be number 1 and their reputation would be maintained.

They operate an wide open door policy which means that they welcome ideas and constructive criticisms from their workers and the general public. They have a hearing ear by firmly taking into relevance the employees needs through various discussions with them either through councils or accepted trade unions.

They have various workforces from all strolls of life which comprises of different skills, civilizations, gender. These various workforces bring together and talk about ideas that help Shell Nigeria in its quest to obtain additional customers and understand them better.

They employ very skilled, licensed and experienced employees and as a result of this, it includes great remuneration to its employers. Shell petroleum also compensate exceptional employees with various bonus products like healthcare allowance, attire allowance, house allowance. Shell petroleum also gives annual leaves and its entitlements. In addition they take part in maternity/paternity leaves and its entitlement. There is also a retirement plan for the elderly and experienced ones who've served the business for quite some time.

Various employees of Shell Nigeria who wish to further their occupations more than their present state are wholly supported by Shell Nigeria through various techniques like scholarship plans. Shell Nigeria alone train its staff through various professional training and control programmes. They do that to instill and embed command and managerial worth in their employees.

Shell Nigeria as a firm embarks on various philanthropic assignments merely to better the lives of folks in Nigeria. Such empowerment programs include various Scholarship or grant plans, various inter-school contests, and various football tournaments. They also spend greatly in research and development. Shell is one of the most significant entrepreneur in research and development and spends much on the exploration and enlargement of technologies that would lead to the generation of more and genuine energy with skillful products because of its customers. (Shell. com, 2010)

Since the idea of strategy is based upon a firm obtaining its goals and objectives (Tony Morden, 2007:184), Shell Nigeria has a dedicated focus to attain it by applying the needed factors had a need to achieve these strategies through their dedicated Tasks and Technology Portion of their organization that delivers efficient services. Using this method Shell Nigeria now has a solid existence in the Nigeria oil and gas industry in so doing overpowering its major opponents like Agip, Conoil.

Organizational Change

Change management means applying measures and technologies to deal with changes in business surroundings also to profit from changing opportunities. The features of change include adapting to change, managing change, and effecting change. Change is becoming an essential issue and characteristics of present-day companies and therefore of the, it poses a range of key problems for all sort of organizations, whether private, public or voluntary, (Stephen Linstead et al, 2009:619).

Various factors like management, guidelines and trends of the governments, complex organizational framework of any company, competition and threats from other companies, causes a company to change and the individuals largely accountable for change in an organization are the managers of that organization.

The Gagliardi Style of change

The Gagliardi style of change was developed by Pasquale Gagliardi in 1986. The model describes that "the principal strategy of an organization is the maintenance of its cultural identity in terms of prevailing ideals. A virtuous group from the collective connection with success through stabilized worth to cohesion and efficiency sustains the continuity of culture. But if the alternatives allowed for by the culture are unsuited to new problems, then the virtuous group becomes a vicious group impeding change. The effect may be visible cultural change, social revolution or cultural incrementalism", (Gagliardi 1986).

For Shell, change began as the result of the number of changes embarked by the planet petroleum industry in the twentieth century but as in those days Shell didn't go through any change because that they had a well balanced management structure, a structure lacking any autocratic chief executive officer. Gagliardi (1986) mentioned that if the alternatives allowed for by the culture are unsuited to new problems, then your virtuous circle becomes a vicious group impeding change, the effect could be an noticeable change in culture, social trend or culture incrementalism but for Shell petroleum, it maintained its personality in conditions of prevailing value which were in place majorly from its opponents because its structure was stable. Shell commenced lagging behind in terms of its financial reports and because the financial statistics had features of reduced financial performance and bogus organizational structure, and because other companies in the olive oil industry had completed organizational change and began to flourish, Shell set up an interior team in July 1994 that would study its inner framework and the team would in turn produce plans on how to embark on a change that might be effective and improve and regain its strong brand image.

The motive behind the necessity for change in the business was the mission to truly have a structure that might be easy for the corporate centre to exert affect above the operating companies that would be effective and also the quest to boost coordination between the operating companies. The team embarked on its task and after much interview and sourcing of ideas, the team developed various options for change by October 1994. They handed in a written report to the Committee of Directors and put in days and nights with the directors spotting out the objects of change. It had been deliberated upon by the management and an announcement was transferred to all employees in the business's use. The management led by Cor Herkstroter, the chairman of the committee of directors in 1995 offered a talk to Shell employees worldwide. He signified the fact for change, defined the principal aspect of change and at exactly the same time advised the employees to be ready for whatever change that would come. Gagliardi's (1986) model makes market leaders of organizations know how their companies would be afflicted culturally when they set up change ideas in their organizations little ponder the committee for change was initiated. By the end, the organizational change influenced most employees as much of them lost their jobs.

As due to this change, Shell now operate a straight-forward management framework where effective vitality and control is exerted by the corporate center over the various operating companies and the confirming connections would be much easier to follow. If the change was done, many of its personnel was trained to deal and understand the change that is carried out since they were involved in it, this is part of the company's strategy which is "Shell runs an open-door insurance plan with its employees".

Gagliardi's (1986) change model clarifies the outcome of obvious, incremental, and ground-breaking change on ethnical views that exist in organizations. This change model that was applied was to improve and broaden the idea and values associated by the change initiative, (Latta 2009).

Organizational Culture

Organizational culture is currently an essential part in the understanding of various organizations. A connection or bond is available between your culture of an organization and other principles such as control, electric power, and organizational composition, (Stephen Linstead et al, 2009:151). In virtually any change occurring in virtually any organization, the consequences on the individual and group behavior are the greatest. There have been various explanations of organizational culture by different scholars but matching to (Schwartz and Davis 1981: 33), "Culture is a routine of beliefs and expectations distributed by the organization's customers. The values and expectations produce norms that powerfully form the action of specific and communities in the organization". Change dwells at the heart of authority. Organizational culture is among the many situational variables that are extremely important in making the initiatives of market leaders successful when change initiatives are executed, (Latta 2009).

Shell's culture covers various aspects which include its

Vision and Mission statements

Values and objectives

Technology, products and services

Vision and Quest Statements

Vision and Objective statements are stated by most companies in order that they would know very well what they would like to achieve and where they would like to be in the nearest future. It really is a way of making a firm look extremely effective. Shell Nigeria objective assertion is "to enhance success through ground breaking management strategies while guaranteeing cost effectiveness and harnessing strategies" while its eye-sight affirmation is "to be the market head and deliver the best value to your stakeholders. "

Shell Nigeria has enough commitment and determination to its stakeholders also having its customers in mind. They search out for further ideas on how to be pioneering in its quest for creating energy.


Shell Nigeria's beliefs is "to create high criteria of performance and ethical habits while its objectives is "to engage successfully, responsibly and profitably in essential oil and its own products, and other selected businesses and take part in the search for and development of other resources of energy to meet evolving customer needs and the world's growing demand for energy".

As oil and gas cannot be done without, as it is a major way to obtain energy, Shell Nigeria's exclusive value and aim is to source for coal and oil in the Niger delta region with techniques that it could not affect the surroundings.


It has been the culture of Shell Nigeria and Shell in other locations of the world to harness technology and offer better products and services because of its customers. More ways have been found about how to raised harness and process energy. Shell Nigeria has various products and services which include lubricants and gas which can be used for everyday living.

Power and Politics

Power is needed in organizations since it is the major way organizational goals can be achieved through various efforts of ideas. Therefore organizational politics are activities used to get and apply ability in organizations (Martin and Fellenz, 2010: p518)

Shell Petroleum had a powerful status after it was produced. The influence they had cannot be matched up because they had no fierce competitors as at when it was created. These were even said to be one of the three renowned institutes. Shell Petroleum is exclusive in its composition and its day to day management of its various teams is complex. The Committee of Managing Directors (CMD) acquired control over the group; they were the ones in charge of the affairs of the business. The Committee also experienced its chairman which rotated between the President of the Royal Dutch Petroleum and the Chairman and Vice Chairman of Shell Transportation and Trading.

Shell operates an individual tier leadership. The overall leadership composition is chaired by a non exec chairman, Jorma Ollila as the executive management is led by Chief Executive Officer, Peter Voser. These directors, chairmen web page link with other chairmen and directors of Shell worldwide to make sure that Shell lives up to its name. They make sure the image is retained and also ensure that more ways to source for energy are devised and harnessed.

Shell started to create a strong image and name for itself and became one of the largest petroleum companies in 1995. Shell petroleum play a high level of politics and wield enough vitality in the engine oil sector of Nigeria. The political culture of Shell petroleum in Nigeria is the one which has been always criticized. The company was criticized for the part it played in the sentencing of an activist, Ken Saro-Wiwa of the Ogoni land and since the incident happened, they have got gained more critics than good friend both locally in Nigeria and Internationally.

The guidelines of the Nigerian do not appear to have an impact on Shell Petroleum because regardless of the clarion call created by protesters in the Niger delta region of Nigeria of the continued oil spillage induced by their Shell, it includes fallen on deaf ears because the business has been seen as a major player in the olive oil sector of Nigeria. Shell petroleum still flares gas in Nigeria, an insurance plan the Nigerian administration has abolished but due to untouchable nature of Shell, the Nigerian federal was obligated to alter the deadline of gas flaring various times.

Shell petroleum has been the major reason behind civil unrest in the Niger delta because of the political influence they may have on the Nigerian authorities. They have seized the lands of people surviving in the Niger delta and rather than the company growing the Niger delta region, they spill oil on it. The government does nothing tangible to avoid them due to influence they have got. The federal Government of Nigeria has failed to place tougher sanctions for companies engaging in oil spillage. The rules are being bent whenever Shell petroleum needs to be damaged.


Organizations do know that they could face dangers at some times in their business life and as a result of the they examine their firms to understand what hazards would threaten their resources. They propose options to avoid these risks later on.

Shell petroleum understands that they may in the future face dangers from changing conditions in economical, competitive, legal, political, fund and business field which could have effect on their performance and for that reason, they have analyzed this risks and proposed safeguarded answers to the risks because of the skill in sensing where their business is most prone. The analyses include:

Fluctuation in the price of crude essential oil and engine oil products

The demand and supply of engine oil could be afflicted by various factors like natural disasters and politics instability which would bring about the fluctuating prices of crude petrol and its own products. These fluctuations could have an impact on the money conditions of Shell Petroleum and could make long-term tasks in its upstream sector less profitable. This poses a potential risk to the financing situation of the business and therefore Shell Petroleum has changed to increase their petrol reserves so that in the nearer future, if the risk happens, they would not be affected.


Competition from other major players in the Nigerian olive oil sector like Total, Agip have become a major hazard to the existence of Shell Petroleum. These competition forces are strong because the products of Shell Petroleum are competing in item type markets which will make other petroleum products known. The power of Shell Petroleum to attain its collection strategies will depend on the company's reaction to these competition makes. Shell Petroleum consequently of this has moved to manage their expenditures through cost-efficient finances.

Brand image and Company Reputation

Shell Nigeria has mainly dominated the Nigerian oil sector since its creation through the acquisition of essential oil wells, larger olive oil reserves, olive oil lands from the government. All these will be the major property of Shell Petroleum which constitutes their brand image and the reputation of their company. An erosion of the reputation could have an adverse reaction on the business's operation and the access to new resources. By identifying this risk, Shell has transferred to ensure demanding conformity to the code of conduct and key points of her business by causing all CEOs of various Shell companies all over the world ensure that their workers are constantly being reminded of these rules by putting your signature on the ethics form.


Various sensitive regions in Nigeria, especially the Niger Delta could expose the employees to hazards, crashes and even lack of life. Social unrest, natural disasters, criminal offenses, health of the employees, explosion all donate to risks that poses risks to Shell Petroleum which could affect its procedures adversely and bring an awful reputation to its image. Shell petroleum recognized this risk and made sure that employees who operate in these areas are made mindful of the actual fact of employed in these regions, they also made sure that the employees are Health Security Security and Environment (HSSE) certified. They also ensured that they are well trained on what to do in case of any natural and unnatural devastation.

Reliable Information Technology

The world is turning out to be a global town and it is the duty of companies to follow the style in the change in Information Technology. Shell Petroleum appreciates that in the nearest future, it may fail to deliver her services in an efficient manner anticipated to reliance and relocation of information technology services. The company has moved to resolve this issue by spending more in Task and Technology team. More technological projects are being completed in all areas where in fact the company operates. That is to make certain that the business continues to provide quality and improved services on a regular basis as development and technology are its major elements.

Climate change

Climate change like the emission of greenhouse gases, the depletion of the ozone coating are dangers and concerns that may lead to the delay of various projects. Shell Petroleum's objective to be the major developer of energy fit for human use would take a downturn if environment changes continue steadily to affect it. Because of this risk, Shell Petroleum has found alternate ways of producing energy from choice options by increasing the rates of its carbon dioxide power and emission rate. That is to be sure that the business does not decrease in the production of energy.

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