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Introduction Of Company Petronas Business Essay

PETRONAS is the acronym for Petroliam National Berhad. PETRONAS not only centered on oil and gas, and provide education. PETRONAS can be an incorporated public business and has it different legal entity. PETRONAS was contained on the 17th of August 1974 and was owned or operated and manipulated by the federal government of Malaysia. PETRONAS has a set of vision, objective and worth.

PETRONAS is a favorite worldwide company that has ventured into 32 countries including Argentina, Russia and Egypt. PETRONAS methods a culture that stresses mainly on being environmental friendly and folks orientated. It presently employs over 30, 000 employees of 38 nationalities.

PETRONAS with the totally integrated coal and oil multinational, it has involved the whole petroleum activities. From managing the sharing contractors of the foreign production, we've been change into producing our own capacities in the upstream sector - allow us to take the business lead in the exploration and creation of the nation's oil and gas resources.

Besides that, we also ventured into downstream activities. We seek to increase value creation and strengthen of our own operations completely down the worthiness chain. The range of our own downstream activities includes essential oil refining, gas control and liquefaction, gas transmitting pipeline businesses, petrochemical processing and marketing, property investment, shipping, marketing of liquefied gas, marketing and circulation of petroleum products, and trading.

Furthermore, PETRONAS has operated service train station in Malaysia, South Africa, Sudan, Thailand and Indonesia. It includes distribution of automotive and professional lubricants globally, including the PETRONAS Syntium and Sprinta premium grade engine engine oil.

Internal Environment

There is a higher degree of interdependence between an company and its inner environment. The inner environment includes elements that have a direct influence on your day to day businesses of the organisation. They have an impact on the accomplishment of the organization's goals. The Micro causes of the surroundings are:

Vision and Mission

PETRONAS is a big company and a organization which is well known to the globe as it's a company that exports Malaysian olive oil. Being a big firm, PETRONAS has of course its individual vision and mission to achieve its common goal and serve its customers the best service they can provide.

As we all know perspective is a long-term plan that nearly every company or business has. PETRONAS's eye-sight statement is to be a leading coal and oil multinational of preference. As a business they are wanting to become worldwide known organization and to end up being the first choice among all the essential oil companies present so far.

Their mission declaration, on the other hand, is as employs:

We are a small business entity.

Petroleum is our central business.

Our major responsibility is to develop and add value to this national resource.

Our objective is to contribute to the well-being of the people and the nation.

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Their objective and perspective we imagine has made them increase tremendously since they were designed in the month of August on the 17th in the year 1974. PETRONAS has turned into a fully-integrated coal and oil corporation and it is ranked among FORTUNE Global 500's largest corporation on the globe. They have now ventured globally into more than 32 countries worldwide in its aspiration to be always a leading oil and gas multinational of choice.

Organizational structure

Organizational composition is the internal, formal framework of an business that shows how management is connected together and how authority is sent. (Stimpson, 2006)

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Figure 1: THE ORGANIZATION Organisational Composition of PETRONAS (Picture taken from http://www. chathamhouse. org. uk/files/6389_ggmalaysia. pdf)

PETRONAS adopts the functional organization framework. It enables field of expertise, allowing employees to give attention to their respective areas. You can find cross practical bonds between your individual divisions and departments. It's the bond and process of expertise that has resulted in the success of the company. Team work is inspired, all the departments interact to achieve the company's goals and targets. This has proved to fulfilling for the business as a whole and the employees, customers, suppliers and the city as a whole.

The type of authority is evidently drawn, purchases are directed from the very best most level, the leader and the CEO. PETRONAS in addition has hired consultants to boost business and organization results.

Functional Strategies

Human Resource division

Its main purpose is to meet the organizational needs of the company it signifies the needs of the individuals hired by that company. The main function of the individual resource office is recruitment, selection and training of employees among others. PETRONAS selects the best and brightest of employees through skill searches amongst local and abroad graduate. PETRONAS trains and molds its own employees through specialized training and impressive program provided in College or university Technology PETRONAS.

Finance division

The Funding Function supplies the company using its accounting and financial confirming backbone of the business. Its role is to recognize financial sources inclined to funding the businesses of the business and to track down profitable areas where in fact the business can invest their money to get higher profits. PETRONAS is mixed up in sports world through its investment with Mercedes F1team. PETRONAS has also contributed to the development of Turkmenistan market, by spending US dollar $ 1. 8 billion in the coal and oil industries.

Corporate Planning and development division

This division designs long-term and short-term business strategies which lead to the development of the organisation.

Technical Services division

This division is set up to operate a vehicle and deal with the technical activities of PETRONAS.

Education division

This section undertakes the responsibility of all educational activities PETRONAS is associated with. It entails the scholarships provided by College or university technology PETRONAS and the education programs provided to the underserved community.


Shareholders of a company can directly effect its plans and activities. PETRONAS shareholder is the government. It creates income and value because of its shareholder. PETRONAS offered the government RM 52. 3 billion from its RM86. 8 billion pre-tax earnings, in the form royalty, dividends, corporate tax, tax and export responsibility. PETRONAS provides shareholders with the opportunity to gain first palm exposure on the Company's operations by arranging several trips to its Gas Control Vegetation. Such two-way communication enhances commercial transparency and helps shareholders take a longer term view of the investment predicated on a better understanding of the company's corporate strategy and procedure PETRONAS recognizes the value of well-timed and identical dissemination of information to shareholders. Therefore they organise the Annual General Meeting (AGM) which is a crucial system in shareholders communication.


"PETRONAS must be committed to enhancing the ability of its employees, as a company is only as effective as folks who work for it. "

This term is from PETRONAS mission assertion. Employees are the most important asset of organisation, since it's the dedication, inspiration and skills of a worker that make an enterprise successful. PETRONAS highly values its employees and is aware of the importance of these inspiration. Therefore PETRONAS arranges various programmes to encourage and support its employees by regarding them in voluntary work. Programs such as Sentuhan Kasih and Jalinan Insan allow our employees to add directly to homes for disadvantaged children and orphans in the regions of their functions. These programmes provide the employees with job satisfaction, which in exchange highly motivates them to execute better.


Lord Holme and Richard W used the next definition. "Corporate Public Responsibility is the continuing dedication by business to react ethically and contribute to financial development while enhancing the quality of life of the workforce and their own families as well as of the local community and population at large"

The culture now could be to be good by giving to the city. Therefore organisations have certain responsibility towards the community they work in. PETRONAS is a responsible citizen of the city, thus is has effectively imitated and backed various interpersonal, environmental and community tasks.

PETRONAS and Education

PETRONAS is dedicated is developing the folks plus they operate in by giving education particularly in the field on knowledge and technology. They are determined to create a skilled human source of information bottom part for Malaysia through various techniques.


University technology PETRONAS (UTP) - Provides practical technological training and ground breaking programs to help employees build skills and competencies.

PETROSAINS - offers a rich and stimulating environment for the public to learn about science and technology

PETRONAS benefit's out of this program since they are molding their own workforce, by educating them in requirements which are important to PETRONAS.

PETRONAS and Environment

PETRONAS recognizes the value of conserving natural diversity to be able to ensure people, pets or animals and plants. Therefore they developed the KUALA LUMPUR CITY CENTRE (KLCC) Recreation area, to balance the challenging demands of growing metropolitan populations, with the environmental conservation. A essential public park and green lung for the location of Kuala Lumpur.

External Environment

External environment refers to the factors that happen outside the business which can't be controlled by the business. These factors will effect the inner functions of the business enterprise and its strategies to conform itself to the changing environment.

Political Environment

The Malaysian government thought we would create circumstances company, somewhat than using taxes, production limits, leasing, or other familiar instruments of supervision. The federal government sought to assert national protection under the law over the utilization of the country's resources. A state company, having both supervisory powers on the majors and creation activities of its own, was a workable compromise between allowing the majors full rein and excluding them, with their capital and expertise, altogether.

Petronas is given fulltrust by Malaysia government to execute business separately from the government. Government keeps 100% of Petronas and formulates and implements energy guidelines including engine oil & gas. The business cooperates with the government for the normal purpose to develop the country to achieve the degree of advanced countries. Regarding the relationship between Petronas and the government, one executive at Petronas said, "There is a world, especially in the 3rd World, where only the federal government and the federal government (G&G) can open the first door. " He said that there surely is the planet which will not function well with the absence of "mutual trust" between the federal and NOC.

Legal Environment

PETRONAS is a multinational organisation. Therefore the company is subjected to laws in every of its host countries, such as taxation and consumer privileges.

Government taxation - A big total of the income is usually paid to government by means of income tax, dividends etc. Despite the lowered net earnings, PETRONAS paid RM 30. 0 billion as dividends, RM20. 3 billion as tax, RM 9. 1 billion as corporate income tax, RM 2. 2 billion as export duties and RM 6. 2 billion as royalties.

Health and safeness at work - This is designed to protect the personnel from any type of physical injuries. It needs the working environment to be safe with adequate equipment and sanitation. These requirements usually add up to the business enterprise cost.

Consumer protection under the law - This legislations protects the buyer from products that not reach a reasonable level of safety. PETRONAS sternly routines this as to ensure maximum recognition amongst other oil and gas company as well as caring for customer satisfaction.

It creates income and value because of its shareholder. PETRONAS provided the government RM 52. 3 billion from its RM86. 8 billion pre-tax profit, in the proper execution royalty, dividends, commercial tax, income tax and export responsibility.

Economical Environment

Economical environment refers to the economic factors that have an impact on the business enterprise in terms of recession, interest levels, exchange rates and global economical factors.


Recession results the fall of demand for several products, as income is reduced. To keep carefully the demand on going, the costs of products is decreased. PETRONAS has net profit declined by 13. 9% due to high development costs and low essential oil price that has been brought on by the downturn.

Interest rates

During inflation, you will see increase in the supply of money associated to the quantity of goods available. This will likely result in a growth in prices of goods and services throughout the market over a period of time. The high interest levels and fall of purchasing power would therefore affect the money flow of the business.


Technological Environment

In order to conform itself to the speedy growing technical environment, an organisation has to be versatile and recognises the value of technology to its business expansion. PETRONAS is a technology reliant organisation that promotes and uses technology vastly for research and development.

PETRONAS focuses its technology on evolving operational superiority through better herb and Health, Safety and Environment (HSE) performance. In addition, it aim to create niche technologies to improve the performance of its central businesses.

In the upstream sector, PETRONAS focuses on technical development to increase hydrocarbon resources and to enhance output and recovery of its domains. Alternatively, downstream, PETRONAS maximises produce in petrol, gas and petrolchemical functions by applying appropriate technology. It also creating a renewable energy lab to enable itself to move further forward and become a technology-driven company.


PETRONAS PRIMAX 3 was created to provide maximum cover and performance for your vehicle. Based on complete testing, PETRONAS PRIMAX 3 unique cleaning formulation will starts to work from the first time you complete it up, ensuring that your engine is obviously at its most effective. By formulating with original additive components, PETRONAS PRIMAX 3 proficiently protects your engine against injector fouling and corrosion, reinstating your vehicle to its peak performance to improve energy economy.

However, Shell is the first choice in producing high quality fuels. Shell Super with gasoline economy method is specially designed by Shell experts to offer extra kilometers at no extra cost. It really is developed with Shell's Synthetic Viscous Friction Improver, designed to reduce friction in this essential part of your engine, assisting to improve its efficiency.

On the other palm, all Caltex petrol's now include technologically-advanced, patented fuel ingredient, Techron. Caltex Techron with soap is unsurpassed at keeping engines clean and cleaning up debris to help reinstate original performance. It contains powerful detergents that assist in removing debris from gasoline injectors intake ports and valves. The key benefits for using Techron are upgraded performance, enhanced trustworthiness, smoother drive, restored fuel market and lower emissions.


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Sponsorship Programmes:

PETRONAS will offer you academics sponsorships to deserving students for studies in supplementary schools and companies of higher learning every year. You will find more than 19, 000 students have benefited from PETRONAS' tertiary education sponsorship programs at the Foundation, Undergraduate and Postgraduate levels. Besides that, more than 11, 000 extra school students have received sponsorships from PETRONAS. Students can obtain the sponsorships by obtaining excellent results in the Sijil Pelajaran Malaysia (SPM) examinations for undergraduate studies at set up colleges, both in Malaysia and abroad. On the other hand, students can make to pursue technological and non-technical training that are related to the industry. In addition, scholarships can be found to Malaysian extra university students.

Employees and Community:

In reaching out to society, PETRONAS promised to serve disadvantaged communities and communities throughout the world goes the excess mile with the proactive contribution of their workers at the grassroots level as volunteers. PETRONAS's employees dedicated their time for it to help relieve the needs of the disadvantaged areas in Malaysia and abroad. Group-wide, PETRONAS sorted out different programs to encourage their employees in their voluntary attempts to connect with the neighborhoods that require help the most. PETRONAS sorted out annual programs like "Sentuhan Kasih" and "Jalinan Insan" for allowing their workers to contribute right to homes for disadvantaged children and orphans in the regions of PETRONAS's operations. Furthermore, the "PETRONAS Volunteer Opportunity Programme" works together determined NGOs and relevant get-togethers to scout for volunteer opportunities and provide necessary training, way and support to develop skills useful in programmes such as disaster rehabilitation and education outreach activities.


PETRONAS has managed its business environment well since it is now has ventured to 32 countries. Therefore, PETRONAS should be innovative and creative to adjust the energetic environment of business in order to maintain and increase its business. As the consequence of well planning and well utilizing of technology, PETRONAS has grown to become a massive power to flourish in petroleum industry from the past to the present. Great company of electricity and technology experienced become the main factor of this success.

With the strategy of integration, adding ideals and globalization, PETRONAS gets the new routes to provide excellent performance to the stakeholders, employees, nation, and web host countries and neighborhoods where PETRONAS operate.

PETRONAS will continue to develop the businesses in Malaysia and overseas as the voyage towards comprehend our perspective "To be a Leading Oil and Gas Multinational of preference".

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