Changing Business Environment

Topics: Human rights, Royal Dutch Shell, Vertical integration Pages: 6 (2107 words) Published: June 17, 2013
This paper is an assignment for the subject module Principles of Corporate Communications (ABCR 2103) of Bachelor of Business Management Offered by the Faculty of Business Management in Villa Collage, Maldives. For the purpose of the discussion of this assignment I have taken Royal Dutch Shell PLC, a multinational company registered in Netherland. This project is consisting of main three parts, an over view of the company, which gives detailed background of the company and history of the company, how it was formed and main areas of business interest and also the management of the business and organizational structure of the business. Second part is consisting of the major setbacks and challenges faced to the company by the home and abroad, internal and external. Which includes challenges mainly faced by the Human Rights Action Groups, and extend of these challenges and the following consequences. In the final part I looked at how company reacted the challenges faced and how the company adapted its corporate communication strategies through restructuring and reviewing process to eliminate the negative impacts of those challenges and the same time giving details of the adaptation process I looked at the efficiency of those processes and resulting effects to the reputation of the company and stake holder confidence.

Overview of the company
Royal Dutch Shell Plc is a public limited company founded in Hague, Netherlands and registered office in London, UK. This business was formed in 1833 as a retailer to sell sea shells by Marcus Samuel and later began import export. Then in 1892 the first oil tanker was commissioned and in 1897 the company was incorporated as “Shell Transport and Trading Company”. At same period Royal Dutch company was also formed and began business. These two companies were merged in 1907 as 60: 40 ratio holding for Royal Dutch and Shell Transport and Trading respectively and founded Royal Dutch Shell PLC, commonly known as Shell. (Wikipedia). Shell is the largest company with £149.2 billion market capitalization at the end of 2011. (Ranking) According to the 4th Quarter Results of 2011, Shell has more than 90,000 employees, which generated just over $ 470 billion revenue securing profit of over $31 billion. (Wikipedia) Shell is a vertically integrated company which has operations in all the stages of petroleum and gas related businesses, namely oil exploration, drilling, refining, transportation and distribution. Shell has operations in over 90 countries, and 40,000 outlets worldwide. The expansion of company was supported by the fast growing automobile industry and oil-fuelled ships. (Grant, 2002) During 1970s shell like other companies began to diversify to other areas of business other than primary gas and oil by acquiring other companies such as Billiton (1970) metal mining company, US and Canadian coal companies (1976 – 7) and Witco Chemical’s polybutylene division in 1977. (Grant, 2002) Early 2000 shell moved into renewable energy business however this is short lived and in 2003 Shell started disposing these businesses. In 2006 Shell sold its entire solar power generation business and in 2008 it withdrew from most ambitious London Array wind farm project. (Times, May 2008) But still shell holds a half of Raizen, joint venture with Cosan, to produce ethanol. The organizational structure of the Shell has changed during the past few decades. It has been described as the among the three most international organizations. The group of companies is divided into four types, parent companies, the group holding companies, the service companies and operating companies. The managerial responsibilities of group is carried out by the Committee of Managing Directors (CMD) which is the top management team. That is five managing directors, three from Royal Dutch and Chairman and Vice Chairman of Shell. The Peter Voser is the CEO of the company and Jorma Ollila is the Chairman. This is totally...
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