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The Abu Dhabi National Oil Company’s Principles Essay

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Updated: Jun 21st, 2021

Executive Summary

Evaluating the effectiveness of applying current terms and conditions for the implementation of important production tasks, using the example of ADNOC, has proven the relevance of those strategies that this organization encourages. Quality control involves evaluating the experience of partners and introducing modern processing and filtering tools. The same practices of updating the working process are being used to reduce the issue of delays.

One approach to solving the problem of increased costs is based on hiring highly qualified employees who are able to carry out their duties and generate profits for the corporation without the need for training. Another principle calls for a rich technical base with modern equipment. This type of activity justifies itself, corresponding to contemporary trends for minimizing costs.

In addition, to address the issue of unethical behavior in the workplace, promoting sustainable development and involving employees in the workflow through encouraging collaboration can help eliminate interpersonal conflicts and achieve high productivity for workers from different cultural backgrounds. At the same time, the company monitors its performance carefully through the practice of planning and adhering to a special framework that entails analyzing not only one but different areas of activity.

The concept of the battle of the forms is considered and assessed. Two steps of development are offered—advertising barter and reasonable profit sharing. Both strategies can ensure ADNOC’s dominance in drafting contracts since the status of the corporation and its recognition in the national and global market allows the organization to make key decisions when entering into agreements as well as to determine the volume of work done.

ADNOC’s development plans are bold but realistic, and the promotion of business integration provides evidence of the corporation’s interest in further growth. It is possible to provide some recommendations regarding the development of the company, including encouraging closer work with the staff and shortening the period needed to reach conclusions as well as involving investors and partners. In general, ADNOC’s activities can be characterized as fruitful due to its current terms and conditions.

Introduction

The activities of large companies in the modern business space are subject to a number of variations, and the management of these organizations must make many essential efforts to achieve efficient production along with competent allocation of resources, appropriate policymaking, risk-prevention efforts, and other relevant goals. In the face of ever-growing consumer needs and constantly increasing competition, corporations are being forced to realize their potential to the greatest extent and engage all possible terms and conditions to protect their financial interests. This approach to control characterizes the management of a company as responsible and demonstrates the interest of the leadership board in achieving the success and prosperity of the organization.

In assessing the prospects and possibilities of introducing suitable strategies and practices that use terms and conditions to ensure smooth and successful work, a concrete example serves an essential purpose. As a target organization for analysis, the Abu Dhabi National Oil Company (ADNOC) will be taken as a large and rapidly growing corporation maintaining modern guidelines and strategies. The company, one of the largest oil corporations in the Middle East as well as globally, is involved in the energy industry (“Who We Are”).

As this sector of activity is in high demand in the modern international market, the corporation must maintain a consistently high level of control over all areas of work. Managing the time involved in production along with dealing with increased costs, unethical practices, performance measures, and other issues is mandatory. This work aims to describe the principles that ADNOC is adhering to in order to apply local terms and conditions to maintain a profitable status and control over all areas of production.

Organization Description

The corporation in question is an important player in the global market. The national ADNOC company is the 12th largest oil production enterprise in the world and has more than 55 thousand employees (“Who We Are”). The organization’s management annually sets clear targets for investment and resource allocation in accordance with an ever-increasing demand for the most common type of fuel. Refining and sales of finished petroleum products are advanced processes in the oil supply chain.

Operating in this segment of the market, in particular, are oil refineries and petrochemical plants, product distributors, retail trade enterprises, and gas companies. Gulf countries such as the United Arab Emirates traditionally dominate the mining sector, which covers the exploration and production of valuable fuels. Therefore, ADNOC, having operated in the international arena for almost 50 years, has managed to efficiently exploit all available resources and transform its business into a source of profit for its country.

The close cooperation of the company with other participants in this market has ensured ADNOC’s authority among its partners and has allowed it to gain the trust of the government since the corporation brings significant revenues to the treasury of the UAE. In addition to selling fuel, the organization provides thousands of jobs, which helps to solve the problem of unemployment and attracts young and talented employees.

The company’s constant expansion of influence indicates that the leadership of ADNOC adheres to the competent principles of workflow organization at all stages of activity. Current terms and conditions allow solving a number of essential problems, and in the long term of its development, the corporation may become the main distributor of petroleum products to the countries of East and West. Thus, the internal organization of work and the application of relevant management mechanisms have ensured ADNOC’s success and recognition.

Managing the Risks of Poor Quality

In order to successfully solve problems related to product quality and to sustain the trust of partners in the area of distributed goods, it is crucial to adhere to relevant risk management practices. In the case of ADNOC, the management has made significant progress in controlling all industries since, according to the company, it has developed “a network of fully-integrated businesses, with interests that range from exploration, production, storage, refining and distribution, to the development of a wide-range of petrochemical products” (“Who We Are”).

The organization has developed a special strategy that includes competent asset integration, which has a positive effect on product quality due to sufficient investment in the equipment sector. Kusumawardhani et al. note that following the mechanism of activity when such elements as capabilities, risks, resources, and constraints are controlled in a single system increases the opportunities of a particular enterprise and minimizes threats to the quality of goods (167). This practice is the result of the regulatory board’s effective work in relation to asset management.

In addition, sufficient funds are being allocated for the modernization of equipment, which contributes to growing the technical base and allows minimizing risks as a result. Contracts with partner organizations give ADNOC an opportunity to realize its full potential, consistent with the status of a highly developed enterprise. This interaction is being carried out on mutually beneficial terms, providing advertising contracts, performing financial transactions, and developing plans for long-term cooperation. This principle in terms of realizing opportunities helps to divert threats from the manufacturing sector and strengthen consumer confidence in the quality of distributed goods.

Control over Delays

The practice of reducing the time required to perform routine production processes is a relevant strategy under the condition of stable high demand. Analysis of the activities of ADNOC regarding its terms and conditions shows that the organization is paying sufficient attention to optimizing its manufacturing process, including the issue of the time involved in delivery of goods. A company that neglects to carry out such work risks a slowdown in production and consequent financial losses.

Therefore, ADNOC leaders have developed an efficient logistic system that allows controlling all delivery terms (“Marketing and Distribution”). This approach makes it possible to avoid customer dissatisfaction and earn consumer respect due to rapid, efficient operational activities.

As an additional optimization technique, ADNOC is promoting modern raw material processing systems. According to Cao et al., the practice of improving catalysts that split fuel particles is yielding valuable results in terms of reducing the risk of extended processing time (2336). More modern solutions aimed at speeding up the refining process provide evidence of company leaders’ attention to the corporation’s performance and market success. The mechanisms for improving the equipment system and the supply chain are valuable resources for increasing ADNOC’s productivity.

Managing Increased Costs in the Organization

Working at ADNOC provides employees with significant bonuses and status because, despite its numerous staff, the corporation is a prestigious and respected entity. Accordingly, all benefits and allowances that subordinates receive from the management result from high productivity and dedication to the common cause. The contribution of each employee to the success of the corporation is significant, and maintaining this approach to personnel management is one way to minimize costs.

According to Wan Ahmad et al., the need to educate subordinates to provide them the technical skills that they will require when they come to work for the company demands expenditures from the enterprise (1432). A focus on streamlining personnel activities means that highly qualified employees work for ADNOC, and the organization does not have to spend extra financial resources to control the parameters of subordinates’ professionalism and the degree of their readiness to perform immediate duties.

Another way to deal with increased costs involves optimizing the technical base that ADNOC’s employees employ in their work. The corporation’s operations require the use of modern and high-performance systems for drilling, pumping, and refining (“Exploration and Production”). The differences among these mechanisms lie in their purpose—some are applied on land, some are used are in the water, and some serve to find the sources of fuel.

Various types of tools allow adapting oil production to specific environmental conditions, reducing the need to improve upon outdated mechanisms. Moreover, business efficiency is also enhanced since modern machines help to perform all work in the shortest possible time. Although these devices are costly, they pay for themselves; therefore, the terms and conditions maintained in ADNOC contribute to minimizing costs.

Solving the Issue of Unethical Practice

Many companies having numerous employees face problems where the management must deal with interpersonal conflicts among subordinates as well as the manifestations of unethical behavior. The terms and conditions that are maintained in ADNOC are based on the principle of sustainable development, implying constant control over compliance with relevant preventive measures.

The management of the corporation is not only paying attention to current issues but is also seeking to achieve the firm’s ultimate goals, for instance, signing valuable contracts or accomplishing an annual plan. As Ameen et al. argue, “focusing on a single narrow perspective can lead to the missing out of some other key perspectives and even result in unethical behaviour” (28). Therefore, solving different problems can contribute to protecting the interests of subordinates and to avoiding the manifestations of inadequate decisions on the part of leadership.

Even though many are residents of the UAE, the thousands of employees involved in the activities of ADNOC belong to different cultural backgrounds. Sooner or later, conflicts can arise on the grounds of ethnicity, religion, or gender. To avoid this issue, the management of the corporation has sought to create optimal working conditions and stimulate focused involvement of employees in the performance of their immediate duties. Therefore, no cases have been reported in the press that mention scandals related to ADNOC or various conflicts of interest since activities here are based on respect for personal dignity and encouraging each subordinate’s personal professional development.

Monitoring Performance Measures

The timely assessment and monitoring of performance in any enterprise can help management to control the implementation of a working plan and arrive at conclusions based on the outcomes of subordinates’ activities. In most cases, standard principles are applied, such as the comparison of production and sales rates. However, in such a large company as ADNOC, the productivity monitoring system would benefit from improvement since it is difficult to control all areas of activity equally.

According to Al Refaei, the corporate manager responsible for the business integration and productivity of ADNOC, the organization is taking a number of measures to monitor working results, in particular, operation under a special framework that involves analyzing business activity for five years (4). This practice is based not only on formulating goals to be achieved but also on related tasks, including such indicators as building partnerships, signing contracts with suppliers, forming promotional agreements, and accomplishing other tasks. In the context of this work, ADNOC’s management has a clear understanding of the current responsibilities of the corporation and has the capacity to monitor performance continuously.

The principle of planning, which implies assessing different areas of activity, is a rare but valuable practice that helps avoid missing important changes in the mode of operation and aids in performing necessary interventions. ADNOC’s terms and conditions are providing the corporation with an opportunity to realize its intended goals in parallel, without concentrating all attention on one specific task. This, in turn, is opening up broader perspectives from the standpoint of performance and is allowing the management to introduce development strategies as quickly as possible. Therefore, the productivity approach employed is valuable and useful in this endeavor.

Battle of the Forms Concept

In the process of signing partnership agreements, mutual understanding cannot always be achieved. In the case of ADNOC, the corporation has the status of a reliable and stably developing market participant. Nevertheless, when interacting and cooperating with other large enterprises, even this organization may face some difficulties. In particular, the concept of the battle of the forms can manifest itself (“Battle of the Forms under the UCC”).

According to Alden, this term describes a situation in which neither company is ready to make concessions to the other when discussing the terms of certain contracts. Consequently, misunderstandings can lead to a breach of partnership and the loss of business confidence in each other. A winning situation for one organization may lead to insufficient conditions for the other. Alden remarks that such unproductive interactions are often found between suppliers and buyers when one side intends to sign a contract putting the most favorable conditions in place for itself.

To prevent such a situation within ADNOC, it is essential to consider a mechanism for drawing up contracts that will avoid infringing on the interests of the corporation but, at the same time, will not generate complaints from potential partners. Based on the terms and conditions of the company, it is possible to promote the strategy of advertising barter. Because ADNOC has authority both in the domestic and international markets, cooperation with this organization offers a good prospect for many companies.

The company’s management can plan terms of contracts that will benefit the corporation. At the same time, partners may receive an offer to place their advertising content on ADNOC products. This method of promoting goods can justify itself as it enables many customers to see and evaluate specific offers. Consequently, the higher the corporation’s authority, the greater will be the chance that its conditions will be dominant in drafting agreements.

Another strategy for securing contracts and their benefits for ADNOC can be based on a sound profit-sharing policy. According to Jirjahn, group-based performance within the framework of work in such a promising market as the extraction and refining of oil facilitates receiving dividends from mutual partnership (509). When one company is involved in providing high-quality filtration of raw materials and improving production characteristics, another organization can work on the analytical component of activities.

As a result, profit obtained through collaboration should be divided. The share of income is to be determined in accordance with the status of the enterprise and the volume of activities performed. ADNOC can afford productive cooperation with almost any other corporation, including both large market participants and small start-up organizations. Trading on its status, the company in question may attract partners for work that is important but not critical, such as drawing up development plans for a certain period and analyzing sales figures. The main activity is entrusted to the basic enterprise, and all third-party steps are secondary, determining their smaller amount of profit and the safety of ADNOC’s financial assets.

Perspectives and Plans for Development

ADNOC is setting clear development prospects, corresponding to its terms and conditions and determining the rate of growth and advancement in the domestic and international market. The company presents official strategies in the public domain, and anyone can learn about the short-term and long-term plans of the corporation. One of the aforementioned features of ADNOC, which is related to monitoring the performance of the organization, is connected to compiling a reliable algorithm for working over the next several years. The official project is referred to as the “2030 Strategy” and is setting the course for full integration into the economy based on stable market conquest (“ADNOC Integrated 2030 Strategy”).

One of the steps of this plan is “to deliver the greatest possible return to Abu Dhabi” by increasing the value of its products and engaging a large number of investors and buyers (“ADNOC Integrated 2030 Strategy”). The entire work algorithm is supporting not only the stable growth of the client base but also the expansion of the company’s capabilities through the improvement of production processes and marketing campaigns.

The likelihood of realizing the goals set is high because ADNOC has, at the moment, achieved significant integration into the country’s economy and has ensured a stable profit for the UAE. Moreover, the plan is providing for the stimulation of the development of the technical base, which, in turn, will enhance the potential of activities and increase productivity. Therefore, the framework of work with an eye to the future allows bold but objective and feasible aims.

Recommendations

Although ADNOC is demonstrating successful growth outcomes and effective work practices based on internal terms and conditions, it is possible to provide some recommendations for improving the results of the company’s activity. For example, the development strategy, aimed at achieving specific goals by 2030, is realistic. However, in order to deserve even more market confidence, this time frame can be halved, and the outcomes of the work done may be arrived at sooner. Also, improving performance monitoring can include control not only over the technological base but also the company’s staff. Active effort to engage talented and highly qualified employees is recommended to eliminate any manifestations of incompetence in performing the complex operations of oil extraction and refining.

Finally, minor changes in the company’s marketing policy could benefit ADNOC. For example, the management of the corporation might aim to become more active in involving investors and partners, such as by organizing a larger number of presentations, creating the potential to generate even greater profit. The evaluation of activities is largely based on the governing board’s ability not only to implement the current terms and conditions for the benefit of the organization but also to make new efforts to improve the status of the enterprise. Moreover, work in this direction promises to be fruitful since ADNOC has authority in its market segment. Therefore, encouraging interest in the corporation is a logical and desirable practice.

Conclusion

The considered terms and conditions of ADNOC allow assessment of which practices the management of the corporation is maintaining in order to realize set goals, corresponding to the status of a profitable enterprise. Quality control, protection against risks, the prevention of delays and increased costs, protection from unethical practices and the loss of market positions, and other mechanisms are crucial components of business activity. Based on all the prospects and development plans considered, ADNOC is setting clear and serious goals that can enable the organization to achieve even greater success in its market segment. The proposed development suggestions are advisory in nature as the company has sufficient experience and can cope effectively with challenges that may arise.

Works Cited

ADNOC. Web.

Alden, Scott. “Winning the “Battle of the Forms.” Holding Redlich. 2016. Web.

Al Refaei, Hashem. “ADNOC Evolved: An Enhanced Organization: Resilient, Competitive and Fit for the Future.” The 35th JCCP International Symposium. 2017, Tokyo. Conference.

Ameen, Ali, et al. “The Impact of Knowledge Sharing on Managing Organizational Change Within Abu Dhabi National Oil Organizations.” International Journal of Management and Human Science (IJMHS), vol. 2, no. 3, 2018, pp. 27-36.

NOLO. Web.

Cao, Zhengwen, et al. “Catalysis Meets Nonthermal Separation for the Production of (Alkyl) Phenols and Hydrocarbons from Pyrolysis Oil.” Angewandte Chemie International Edition, vol. 56, no. 9, 2017, pp. 2334-2339.

“Exploration and Production.” ADNOC. Web.

Jirjahn, Uwe. “Performance Pay and Productivity: A Note on the Moderating Role of a High-Wage Policy.” Managerial and Decision Economics, vol. 37, no. 7, 2016, pp. 507-511.

Kusumawardhani, Mayang, et al. “Development of Strategic Asset Management Planning in the Petroleum Industry.” Journal of Quality in Maintenance Engineering, vol. 23, no. 2, 2017, pp. 165-179.

Marketing and Distribution. ADNOC. Web.

Wan Ahmad, Wan Nurul Karimah, et al. “Sustainable Supply Chain Management in the Oil and Gas Industry: A Review of Corporate Sustainability Reporting Practices.” Benchmarking: An International Journal, vol. 23, no. 6, 2016, pp. 1423-1444.

“Who We Are.” ADNOC. Web.

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