Analyzing Saudi Aramco's Organizational Structure and Decision Making

This report critically analyzes the organizational structure of Saudi Aramco, a prominent company based in Dhahran, Saudi Arabia. It identifies the company's use of a Line Organization structure, detailing its hierarchy from the board of directors and CEO down to senior vice presidents and other management positions. The report outlines the advantages, such as quick decision-making and defined responsibilities, and disadvantages, including potential overload and lack of specialization. It further explores the impact of the structure on the decision-making process, highlighting how the flow of information influences recommendations and crucial decisions. The report also examines the effects of decision-making on key activities and external stakeholder relationships, emphasizing the importance of consultation. Finally, it suggests actions to address growth and development challenges, such as function adjustments and enhanced departmental interaction, drawing parallels with other successful organizations like Saudi Basic Industries Corp.

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Organizational design and change
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Introduction
The paper looks at Saudi Aramco organizational structure. Saudi Aramco is among the greatest
company in Saudi by revenue and is located in Dhahran, Saudi. The article critically analyses its
organizational structure having established a strong structure which facilitates and prepares it to
future growth.
The organizational structure adopted by Saudi Aramco
Saudi Aramco Company uses a Line Organization structure. At the top position of this
organization, we have the company's board of directors with the CEO as the head of the board
(Pick et al 2015 p.89). Below the CEO, we have six senior vice presidents heading different
departments. Other management positions follow down the organogram.
Advantages of the organization structure
The organizational structure allows for a quick decision-making process.
Responsibilities are Fixed and well defined hence increased responsibility and accountability.
Disadvantages of the organization structure
The structure causes an overload of duties and responsibility at each level of management.
There is a lack of specialization, as one executive may supervise different types of jobs.
Organizational structure decision-making process.
The line organization structure of Saudi Aramco Company enhances a proper decision-making
process. The appropriate flow of information and reporting lines up the organogram facilitate
recommendations of every employee to reach the board of directors who make vital decisions

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regarding the design and the implementation of crucial organizational change. An organization
with such a well-established critical decision-making process is the Saudi American Bank, and
this has facilitated its previous success in the banking sector (Monreiro et al 2020 p.54).
Impacts of decision-making processes on the performance of significant functional
activities in the organization
Due to the long line of reporting in the organization structure, certain key activates requiring
prompt decision making are affected. The reason behind this is, information may delay before
reaching the CEO or the board of directors who bear the sole responsibility of making crucial
decisions. However, the line organization structure to this organization facilitates accountability
while performing key activities since every individual is answerable at a given level of
management.
Impacts of the organization decision making process to the relationship with external
stakeholders.
The companies line organization structure calls for a line decision-making process. Therefore,
the decision-making process propels the company upward and enhances a good relationship with
its external stakeholders (Abugre 2020 p.123). The reason behind this is through consultation is
made before making key decisions affecting the external stakeholders. Decisions made using this
process are always math the interest of both the company and the external stakeholders.
Effectiveness of the organization structure and its decision-making process
Saudi Aramco organizational structure and decision-making process are effective since the
managers get all the information required while making critical decisions. Adequate information
is ensured due to the well-established upward information reporting chain (Bui et al 2020 p.67).

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Besides the different levels of management can make some of the minor decisions; hence there is
a smooth performance of duties and responsibilities.
Actions to help the organization can meet growth and development challenges.
The organization can combine or sprit functions to ensure on level of management is not
overwhelmed with duties which can be performed at different levels. Also, the administration
should enhance departmental interaction while tacking various challenges facing the company.
Departmental interaction will help in bringing together ideas on how to solve and improve
developmental problems. Departmental interaction has helped Saudi Basic Industries Corp in
addressing developmental challenges hence making it the best performing company in Saudi
Arabia in 1995.

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References
Abugre, J.B., 2020. The Moderating Role of Affective Interpersonal Conflict on Managerial
Decision-making and Organizational Performance in Private Sector Organizations: A Study of
Ghana. Journal of African Business, 21(1), pp.20-41.
Bui, T.D., Tsai, F.M., Tseng, M.L., Wu, K.J. and Chiu, A.S., 2020. Effective municipal solid
waste management capability under uncertainty in Vietnam: utilizing economic efficiency and
technology to foster social mobilization and environmental integrity. Journal of Cleaner
Production, p.120981.
Monteiro, G.P., Hopkins, A. and e Melo, P.F.F., 2020. How do organizational structures impact
operational safety? Part 2–Designing structures that strengthen safety. Safety Science, 123,
p.104534.
Pick, D., Teo, S.T., Tummers, L., Newton, C., Yeo, R.K. and Marquardt, M.J., 2015. Think
before you act: organizing structures of action in technology-induced change. Journal of
Organizational Change Management.