Shell - The Company to Work For
Content
Organizational Behaviour
SHELL – The company to work for
Dear XYZ, I warmly welcome you to be a part of Shell family. I‟m sure that the firm with which you are going to associate will help you to achieve your career goal. Though you must be aware of “who we are” and “what we do”, it is worth mentioning some of the facts once again at this point of time. Our main objectives are to engage efficiently, responsibly and profitably in oil products and gas and to involve in exploring and development of other forms of energy to meet evolving customer needs and the increasing demand for energy. As you know, increased diversity is not only a good thing; it is rapidly becoming a key competitive factor in the current corporate environment. Also, our CEO, Jeroen van der Veer, once said it best, “by integrating diversity and inclusion into the mainstream of the business, we can translate our core values of honesty, integrity and respect for people into action, and improve global performance”. So we are constantly involving in creating a constant stream of innovative goods and services, winning customers and earning loyalty through exceptional performance. Before getting into the details of business, let me firstly brief about how Shell evolved and emerged as a global front-runner. The word „Shell‟ first appeared in 1891, as the trade mark for kerosene being shipped to the Far East by Marcus Samuel and Company (The Tank Syndicate). This small London business dealt originally in antiques, curios and oriental seashells. In 1897 they renamed it as Shell Transport and Trading Company (STTC). In early 1900s, the scallop shell or pecten replaced Shell Transport‟s first marketing logo, a mussel shell. And none imagined that Shell is going to be such a successful corporate when it partnered with Royal Dutch Petroleum Company in 1907. Since then, Shell went through different phases and showed the ability to handle them successfully in a strategic manner. To mention a few, the forced layoffs during 1930s depression, the reconstruction and an ambitious expansion programme after the first world war, the decision to internationalize the company and change its management‟s policy by placing local people in top positions in a given country in 1960s and the adaptation of the diversification policy to face the end of cheap energy during 1973 oil crisis. In the mid 1970s, to ensure ethical business standards across the global operations and to indicate how we promote trust, openness, teamwork and professionalism, and pride in what we do, Shell drew up General Business Principles (GBPs) based on our core values. Over 25 years it was successful in following the GBPs effectively. But, you know “change is un-changeable”. Shell has revised its GBPs in 2005 based on the growing concern about the security, CSR and sustainability. The revised principles are: The emphasis on compliance, Growing concern about security post 9/11, Emphasis on social performance and engagement with communities, Diversity and inclusiveness, Shell‟s enterprise first values and behaviors, Focus on dialogue as opposed to the dissemination of information, Development of sustainable development principles and Clarity on treatment of facilitation payments.
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This principled approach to business is the key to Shell‟s long term success. In addition to this, Shell started taking a new pathway of “acquisition” in 1980s to expand its business arena. And finally it was in 2005, Royal Dutch Shell plc was formed by unifying Royal Dutch and Shell Transport and Trading Company. Traditionally, we were a heavily decentralized business worldwide (especially in the downstream) with operating companies in over 110 countries each of which operated with a high degree of independence. The upstream tended to be far more centralized with much of the detailed technical and financial direction coming from the central offices in The Hague. The downstream business, which in some countries also included oil refining, generally included a retail petrol station network, lubricants manufacture and marketing, industrial fuel and lubricants sales and a host of other product/market sectors such as LPG, bitumen etc. The custom and practice in Shell was that these businesses were essentially local in character and that they were best managed by local "operating companies" – often with middle and senior management reinforced by expatriates. In the 1990s this paradigm began to change and the independence of operating companies around the world was gradually reduced and today virtually all of Shell‟s operations in all of its various businesses are much more directly managed from London and The Hague. The autonomy of “operating companies” has been largely removed as more "global businesses" have been created in all sectors. London is the headquarters of the downstream and other businesses and services whilst the management of the upstream business is the primary activity in the offices in The Hague. We are a vertically integrated oil company, that is the development of technical and commercial expertise in all the stages of this vertical integration from the initial search for oil (exploration) through its harvesting (production), transportation, refining and finally trading and marketing established the core competencies on which the Group was founded. While in the past the vertically integrated business model gave significant economies of scale and provided Shell with the opportunity to establish barriers to entry both geographically and on a more global scale, this has been less a possibility in more recent times. As a result although the vertical integration remains there is much less interdependence between the businesses and each is now charged with being a self-supporting independent business without cross subsidies from other parts of the business chain. Talking about our 104,000 people worldwide, they have always been the centre of gravity to the delivery of our strategy and we involve them in the planning. We are committed to creating a workplace that value differences and provides channels to report concerns. We are investing to prevent incidents such as spill, fires and accidents that place our people, the environment and our facilities at risk. We require that all Shell companies, contractors and the joint ventures we control operate in line with our Health, Safety and Security (HSSE) standards. We continue to check that staff„s responsible for tasks with a significant HSSE risk have the necessary training and skills. In 2007 we introduced “Goal Zero”, a phrase that reflects our aim to achieve zero fatalities, zero accidents and zero significant incidents. The biennial survey provides insights into
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employees‟ views about working for Shell. Since recruiting, developing and deploying highly skilled people remain essential to our business, we continued to focus on recruiting talent as we recruited you. Recently, Shell engineers won three of the four distinguished achievement awards handed out by the Society of Petrophysicists and Well Log Analysts (SPWLA) at its June annual meeting in Austin, Texas. Regarding the organization structure, Royal Dutch Shell has a single tier Board of Directors chaired by a Non-executive Chairman, Jorma Ollila. The executive management is led by the Chief Executive, Jeroen van der Veer. Linda Cook and Malcolm Brinded are the Executive directors of Gas & Power and Exploration & Production respectively. Peter Voser is our CFO. As you are aware of, sustainable development is critical to everyone‟s future and to our business success. For us, contributing to sustainable development means meeting the world‟s growing energy needs in economically, environmentally and socially responsible ways. It is about using our technology, experience and skill to help building a “Blueprints” world that delivers economic development, energy security and CO2 reduction. Part of this commitment is about our today‟s products. We are already producing 3% of the world‟s natural gas – the cleanest-burning fossil fuel, offering advanced transport fuels based on Shell Fuel Economy formula and lubricants and delivering better bitumen and chemical products. Another part is about investing now for the future; in being leaders in developing low-CO2 second generation bio-fuels; in building our capacity in carbon capture and storage (CCS) technology, and in working to drive down the costs of renewable power. It is also a commitment to responsible operations: building our projects, running our facilities and managing our supply chain safely and in ways that reduce their negative environmental and social impacts and create positive benefits. It includes our work to employ local people and buy from local contractors and suppliers. It is reflected in how we make safeguarding the health and safety of our employees and neighbors our first priority, and in our efforts to manage our emissions and our use of resources like energy and water. It is demonstrated by our efforts to reduce the environmental impacts of producing oil from unconventional sources like oil sands. Meeting this commitment requires us to consciously balance short- and long-term interests. We remain committed to contributing to sustainable development because it is aligned with our value. It makes us a more competitive and profitable company. Also, it reduces our operating and financial risk, promotes efficiency improvements in our operations and creates profitable new business opportunities for the future. As I already mentioned, Shell is committed to playing its part in building a responsible energy future. Since the world will need vast amounts of extra energy in the coming decades to support economic growth and reduce poverty, this energy will need to be produced in environmentally and socially responsible ways. The following hard truths make this energy challenge tougher. First, demand for energy is growing rapidly. Second, supplies of easily accessible oil and natural gas will probably no longer keep up with demand after 2015. To close the gap, the world will have to use energy more efficiently and increase its use of other sources of energy like renewable energy and more nuclear energy. And third, the concerns about climate changes grow. The two
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Shell‟s Strategic Energy Scenarios, i.e. a) Scramble scenario where the individual countries rush to secure more energy for themselves that in turn may lead to price spikes, periods of economic slowdown and increasing turbulence b) Blueprints scenario, describe the routes about “how the world will respond to the energy challenge”. We are also continuously improving energy efficiency in our operations and we are developing technologies to reduce CO2 emissions. That is why we are stepping up our research and development efforts into second-generation bio-fuels, fuels and lubricants that improve fuel efficiency, and CCS. Advocacy is another important part of our contribution. We are calling openly for bold changes to the energy system, not just waiting to see what happens. Our CEO said it best “I‟m convinced that acting responsibly is the key to the door to do the more difficult projects that companies like Shell are naturally driven to”. Coming to the financial performance of Shell in 2007, its total income crossed $30 billion with the capital investment of $27 billion. Its oil and gas production was 3.3 million barrels per day. LNG sales went above 13 million tonnes which is enough to supply electricity to 34 million homes a year. Shell controls over 40 refineries all around the world. It was able to sell enough petrol and diesel to refuel 16 million cars a day. Despite being the front-runner for more than 75 years, during the Brent Spar episode in 1995 we were criticized over our plans to dispose of the storage platform. But, the Group learned quickly that public opinion had become much more sensitive to environmental issues. Subsequently, we worked much harder to open a dialogue with interested parties regarding the environmental impact and to develop good relations with the communities affected. Another problem to hit Shell arose from its presence in the Nigerian region of Ogoniland where the tribal minority in the Ogoni was aggrieved with the Nigerian government because they felt denied a proper share of federal revenues from the oil. Shell has since then strived to follow a policy of demonstrating its community of interests and reciprocal good feeling with both the governments and the local populaces it deals with. By 21st century, corporate social responsibility (CSR) had been gaining rapid importance and we were one of the first oil companies to weave CSR into our business philosophy. We undertook various projects that aimed at sustainable development of the regions where the company operated. The Shell Foundation was established with an initial endowment of $250 million from the Shell group and was actively involved in various sustainable development projects across the globe. Shell's global initiatives were rewarded with the World Environment Council Gold Medal for International Corporate Environmental Achievement in 2001. I hope that I tried my level best to give a glimpse about our company. Once again welcome to Shell family and wish you all the best for your challenging career. References: 1) www.shell.com 2) www.wikipedia.org 3) http://www.ibscdc.org
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SHELL – The company to work for
Dear XYZ, I warmly welcome you to be a part of Shell family. I‟m sure that the firm with which you are going to associate will help you to achieve your career goal. Though you must be aware of “who we are” and “what we do”, it is worth mentioning some of the facts once again at this point of time. Our main objectives are to engage efficiently, responsibly and profitably in oil products and gas and to involve in exploring and development of other forms of energy to meet evolving customer needs and the increasing demand for energy. As you know, increased diversity is not only a good thing; it is rapidly becoming a key competitive factor in the current corporate environment. Also, our CEO, Jeroen van der Veer, once said it best, “by integrating diversity and inclusion into the mainstream of the business, we can translate our core values of honesty, integrity and respect for people into action, and improve global performance”. So we are constantly involving in creating a constant stream of innovative goods and services, winning customers and earning loyalty through exceptional performance. Before getting into the details of business, let me firstly brief about how Shell evolved and emerged as a global front-runner. The word „Shell‟ first appeared in 1891, as the trade mark for kerosene being shipped to the Far East by Marcus Samuel and Company (The Tank Syndicate). This small London business dealt originally in antiques, curios and oriental seashells. In 1897 they renamed it as Shell Transport and Trading Company (STTC). In early 1900s, the scallop shell or pecten replaced Shell Transport‟s first marketing logo, a mussel shell. And none imagined that Shell is going to be such a successful corporate when it partnered with Royal Dutch Petroleum Company in 1907. Since then, Shell went through different phases and showed the ability to handle them successfully in a strategic manner. To mention a few, the forced layoffs during 1930s depression, the reconstruction and an ambitious expansion programme after the first world war, the decision to internationalize the company and change its management‟s policy by placing local people in top positions in a given country in 1960s and the adaptation of the diversification policy to face the end of cheap energy during 1973 oil crisis. In the mid 1970s, to ensure ethical business standards across the global operations and to indicate how we promote trust, openness, teamwork and professionalism, and pride in what we do, Shell drew up General Business Principles (GBPs) based on our core values. Over 25 years it was successful in following the GBPs effectively. But, you know “change is un-changeable”. Shell has revised its GBPs in 2005 based on the growing concern about the security, CSR and sustainability. The revised principles are: The emphasis on compliance, Growing concern about security post 9/11, Emphasis on social performance and engagement with communities, Diversity and inclusiveness, Shell‟s enterprise first values and behaviors, Focus on dialogue as opposed to the dissemination of information, Development of sustainable development principles and Clarity on treatment of facilitation payments.
Page | 1
This principled approach to business is the key to Shell‟s long term success. In addition to this, Shell started taking a new pathway of “acquisition” in 1980s to expand its business arena. And finally it was in 2005, Royal Dutch Shell plc was formed by unifying Royal Dutch and Shell Transport and Trading Company. Traditionally, we were a heavily decentralized business worldwide (especially in the downstream) with operating companies in over 110 countries each of which operated with a high degree of independence. The upstream tended to be far more centralized with much of the detailed technical and financial direction coming from the central offices in The Hague. The downstream business, which in some countries also included oil refining, generally included a retail petrol station network, lubricants manufacture and marketing, industrial fuel and lubricants sales and a host of other product/market sectors such as LPG, bitumen etc. The custom and practice in Shell was that these businesses were essentially local in character and that they were best managed by local "operating companies" – often with middle and senior management reinforced by expatriates. In the 1990s this paradigm began to change and the independence of operating companies around the world was gradually reduced and today virtually all of Shell‟s operations in all of its various businesses are much more directly managed from London and The Hague. The autonomy of “operating companies” has been largely removed as more "global businesses" have been created in all sectors. London is the headquarters of the downstream and other businesses and services whilst the management of the upstream business is the primary activity in the offices in The Hague. We are a vertically integrated oil company, that is the development of technical and commercial expertise in all the stages of this vertical integration from the initial search for oil (exploration) through its harvesting (production), transportation, refining and finally trading and marketing established the core competencies on which the Group was founded. While in the past the vertically integrated business model gave significant economies of scale and provided Shell with the opportunity to establish barriers to entry both geographically and on a more global scale, this has been less a possibility in more recent times. As a result although the vertical integration remains there is much less interdependence between the businesses and each is now charged with being a self-supporting independent business without cross subsidies from other parts of the business chain. Talking about our 104,000 people worldwide, they have always been the centre of gravity to the delivery of our strategy and we involve them in the planning. We are committed to creating a workplace that value differences and provides channels to report concerns. We are investing to prevent incidents such as spill, fires and accidents that place our people, the environment and our facilities at risk. We require that all Shell companies, contractors and the joint ventures we control operate in line with our Health, Safety and Security (HSSE) standards. We continue to check that staff„s responsible for tasks with a significant HSSE risk have the necessary training and skills. In 2007 we introduced “Goal Zero”, a phrase that reflects our aim to achieve zero fatalities, zero accidents and zero significant incidents. The biennial survey provides insights into
Page | 2
employees‟ views about working for Shell. Since recruiting, developing and deploying highly skilled people remain essential to our business, we continued to focus on recruiting talent as we recruited you. Recently, Shell engineers won three of the four distinguished achievement awards handed out by the Society of Petrophysicists and Well Log Analysts (SPWLA) at its June annual meeting in Austin, Texas. Regarding the organization structure, Royal Dutch Shell has a single tier Board of Directors chaired by a Non-executive Chairman, Jorma Ollila. The executive management is led by the Chief Executive, Jeroen van der Veer. Linda Cook and Malcolm Brinded are the Executive directors of Gas & Power and Exploration & Production respectively. Peter Voser is our CFO. As you are aware of, sustainable development is critical to everyone‟s future and to our business success. For us, contributing to sustainable development means meeting the world‟s growing energy needs in economically, environmentally and socially responsible ways. It is about using our technology, experience and skill to help building a “Blueprints” world that delivers economic development, energy security and CO2 reduction. Part of this commitment is about our today‟s products. We are already producing 3% of the world‟s natural gas – the cleanest-burning fossil fuel, offering advanced transport fuels based on Shell Fuel Economy formula and lubricants and delivering better bitumen and chemical products. Another part is about investing now for the future; in being leaders in developing low-CO2 second generation bio-fuels; in building our capacity in carbon capture and storage (CCS) technology, and in working to drive down the costs of renewable power. It is also a commitment to responsible operations: building our projects, running our facilities and managing our supply chain safely and in ways that reduce their negative environmental and social impacts and create positive benefits. It includes our work to employ local people and buy from local contractors and suppliers. It is reflected in how we make safeguarding the health and safety of our employees and neighbors our first priority, and in our efforts to manage our emissions and our use of resources like energy and water. It is demonstrated by our efforts to reduce the environmental impacts of producing oil from unconventional sources like oil sands. Meeting this commitment requires us to consciously balance short- and long-term interests. We remain committed to contributing to sustainable development because it is aligned with our value. It makes us a more competitive and profitable company. Also, it reduces our operating and financial risk, promotes efficiency improvements in our operations and creates profitable new business opportunities for the future. As I already mentioned, Shell is committed to playing its part in building a responsible energy future. Since the world will need vast amounts of extra energy in the coming decades to support economic growth and reduce poverty, this energy will need to be produced in environmentally and socially responsible ways. The following hard truths make this energy challenge tougher. First, demand for energy is growing rapidly. Second, supplies of easily accessible oil and natural gas will probably no longer keep up with demand after 2015. To close the gap, the world will have to use energy more efficiently and increase its use of other sources of energy like renewable energy and more nuclear energy. And third, the concerns about climate changes grow. The two
Page | 3
Shell‟s Strategic Energy Scenarios, i.e. a) Scramble scenario where the individual countries rush to secure more energy for themselves that in turn may lead to price spikes, periods of economic slowdown and increasing turbulence b) Blueprints scenario, describe the routes about “how the world will respond to the energy challenge”. We are also continuously improving energy efficiency in our operations and we are developing technologies to reduce CO2 emissions. That is why we are stepping up our research and development efforts into second-generation bio-fuels, fuels and lubricants that improve fuel efficiency, and CCS. Advocacy is another important part of our contribution. We are calling openly for bold changes to the energy system, not just waiting to see what happens. Our CEO said it best “I‟m convinced that acting responsibly is the key to the door to do the more difficult projects that companies like Shell are naturally driven to”. Coming to the financial performance of Shell in 2007, its total income crossed $30 billion with the capital investment of $27 billion. Its oil and gas production was 3.3 million barrels per day. LNG sales went above 13 million tonnes which is enough to supply electricity to 34 million homes a year. Shell controls over 40 refineries all around the world. It was able to sell enough petrol and diesel to refuel 16 million cars a day. Despite being the front-runner for more than 75 years, during the Brent Spar episode in 1995 we were criticized over our plans to dispose of the storage platform. But, the Group learned quickly that public opinion had become much more sensitive to environmental issues. Subsequently, we worked much harder to open a dialogue with interested parties regarding the environmental impact and to develop good relations with the communities affected. Another problem to hit Shell arose from its presence in the Nigerian region of Ogoniland where the tribal minority in the Ogoni was aggrieved with the Nigerian government because they felt denied a proper share of federal revenues from the oil. Shell has since then strived to follow a policy of demonstrating its community of interests and reciprocal good feeling with both the governments and the local populaces it deals with. By 21st century, corporate social responsibility (CSR) had been gaining rapid importance and we were one of the first oil companies to weave CSR into our business philosophy. We undertook various projects that aimed at sustainable development of the regions where the company operated. The Shell Foundation was established with an initial endowment of $250 million from the Shell group and was actively involved in various sustainable development projects across the globe. Shell's global initiatives were rewarded with the World Environment Council Gold Medal for International Corporate Environmental Achievement in 2001. I hope that I tried my level best to give a glimpse about our company. Once again welcome to Shell family and wish you all the best for your challenging career. References: 1) www.shell.com 2) www.wikipedia.org 3) http://www.ibscdc.org
Page | 4
