This article discusses the position of Chevron in Saudi Arabia in relation to Saudi Aramco, how Saudi Aramco should manage its local employees globally, how Chevron should manage its global employees locally, and lessons from Peter and Faysal encounter.
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Chevron and Saudi Aramco (i)Describe the position of Chevron in Saudi Arabia in relation to Saudi Aramco. Chevron is a major player in Saudi Arabia’s energy market and is the only international company that has exploration and production operations in Saudi Arabia. These operations include both retail and marketing. Chevron hires qualified employees on a full-time basis in Saudi Arabia. Chevron has supported some community projects, for instance, greening projects to maintain a robust public relation in Saudi Arabia. (ii)Discuss how Saudi Aramco should manage its local employees globally. The current profile of Saudi Aramco’s employees comprises approximately 87% Saudi nationals and only 13% from other countries. The benefits that are provided for the employees include annual vacation, paid holidays, and retirement plans. Thus, to ensure that employees are motivated to perform productively, management has earmarked various motivational and incentive programs that include excellent and competitive compensation, a conducive working environment, assigning responsibilities that balance work and family and accommodating personal and professional lifestyle. This would make Chevron be identified as one of the most productive and prestigious organizations to work for. Individuals are employed to work in a specified capacity, and each is given his or her defined responsibility. Based on this, each given employee authority defined in the employment contract and the necessary resources meant to carry out the duties. Each employee reports to a manager. The manager reports to a senior manager establishing the chain of command which links the various employees to the managers of the company. Saudi Aramco employees are paid very high salaries that are on par with the best paying jobs in the world. Secondly, each of the employees working in Saudi Arabia has access to various career development packages that enable people to improve their competency levels once the company employs them through courses that offer international certification. Saudi Aramco employees and their families have access to the best medical services with doctors that are employed from the best universities in the world. Saudi Armco also has positive training and services for women who are given very encouraging packages like scholarships once they start to work for Saudi Aramco. These packages make the average employee of the company dedicated
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to the work requirements of the company. This is because, with all your needs catered for, an employee has little to worry about but the task requirements of Saudi Aramco. (iii)Discuss how Chevron should manage its global employees locally. What does the story of PeterMartin's experience suggest is wrong in Chevron's diversity management strategy? The global scale of its operations, scarcity of skilled workforce, and a highly competitive commodity-based business makes Chevron highly vulnerable to the external environment. For Chevron to retain its market leadership in a competitive global knowledge-based economy, it has to depend on efficient knowledge exchange between its operations groups (customer facing) and the technology center staff (responsible for technology and support). Therefore, it is essential for Chevron to actively engage in knowledge management activities to increase operational efficiencies and overall cost-advantages. The story of Peter Martin indicates that the problem with Chevron is that it is competing with other international oil producing companies globally. Also, in a bid to try and manage its local employees, the company sends managers from other regions who turn out to be inexperienced. Chevron's challenge has been to manage its international workforce locally. (iv)How should Peter Martin have been prepared for his new assignment in Saudi Arabia? Peter Martin should have first visited Saudi Arabia before taking the job. Spending several months or even a year in Saudi Arabia would have enlightened him on the culture, dialect, and way of life of the Saudis. He should then have taken a junior position at the firm and move up the ladder to a senior post. This way, he would have gained all the necessary experience along the way to becoming a great manager. (v)What lessons can we learn from the Peter and Faysal encounter? If you do not understand what a person said, do not make assumptions. For a great manager, you have to be curious about what other people are doing and why. Peter wanted to know what Faysal was listening to but went ahead to assume that he understood what Faysal said to him.