CASE 8 ROYAL DUTCH SHELL : FUELING THE WORLD INTRODUCTION

Almost 200 years ago, a London historic dealer began importing sea shell from the Far East to supply a fashion for exotic dcor. Marcus Samuel enterprise arranged the foundation for a thriving import and export business later run by his sons, Marcus Junior and Sam. At this time oil was largely used in lighting and lubricants and the industry was based in Baku and Russia with it is large reserve of high quality oil and strategic natural harbour. The arrival of the internal combustion engine in 1886 to a demand for transport fuel. Building on their shipping expertise the Samuel brothers commissioned a fleet of steamers to carry oil in bulk. They revolutionised oil transport with the maiden voyage of their first tanker, Murex. In 1892 murex was the first ever tanker to transit the Suez Canal. The brother company was name the shell transport and trading company in 1897. It used a mussel shell as it logo. Shell transport activity in the East combined with a search for new sources of oil to reduce dependence on Russia brought it into contact with Royal Dutch petroleum. The two company join force in 1903 to protect themselves against the dominance of standard oil. They fully merged into the Royal Dutch Shell group in 1907. Shell changed its logo to the scallop shell or pectin which is used today. By the end of the 1920 Shell was the world leading oil company producing 11% of the world crude and owning 10% of it tanker tonnage. The 1930 were difficult the group assets in Mexico were seized and it was forced to concede generous terms to the Venezuelan government when it nationalised it oil fields. From the mid 1990 public scrutiny of the oil industry intensified as environmental issues gained prominence. Shell was criticised over pelan to dis pose of the Brent spar platform and also ran into difficulties in Nigeria. As the new millennium got under way shell expanded in china and Russia. In 2005 shell dissolved its old corporate structure to create a single new company. Shell remains one of the world major oil and gas companies. We have interest in liquefied natural gas and gas to liquid product we help develop sustainable bio fuel and we are involved in wind project. On 4 August 2005 the

board of director announced the appointment of Jorma Ollila, chairman and CEO of Nokia at the time to succeed Aad Jacob as the company non executive chairman on 1 hune 2006. Ollila is the first shell chairman to be neither Dutch nor british. As of 1 July 2009, Peter Voser is CEO of shell. Peter who is Swiss is the first non-Dutch ,non-british CEO of the company.

DISSCUSSION 1
Evaluate the planning processes employed by Royal Dutch Shell. How would you rate its abilities to plan for its future within the oil industry? Royal Dutch Shell has used develop premise regarding future conditions. These planning processes anticipate future events. Generate alternative scenarios for what may happen and identify for each scenario things that may help or hinder progress toward your objectives. This company always create and do something by making future prediction. This planning process is really successfully applied by this company. This company has practice this planning process because they always predict on future by their first thought, the important of globalization. First, we can see through their first achievement in transferring oil by using their first bulk oil tanker in 1892. This first expedition was able to done because Royal Dutch Shell is a big company that always used approach of looking forward and predict for the future, this policy is really good to be practice. As we can see what have been done by Royal Dutch Shell is spending bit time and cost to improve their company. They made research and development through predicting what is needed in many aspects like transport, communication and field of business, after predicting what will happens in future they will develop what is need by their prediction. Like in transporting oil in large scale to the further distance. Royal Dutch Shell has successfully delivering the oil via massive oil tanker. This is really big achievement because by this ability this company were able to improve their global field of marketing.

This is not just can be seen through those water transportation, this company also have made an huge investment for other transportation like rail and tunnel transportation, their ship now also have been improve with better ability to transferring and loading oil barrel. Royal Dutch Shells achievement is really significant for their future. By all this we can make a conclusion that the Royal Dutch Shell is really good in planning for their current and future, this company always planning by manipulated their current condition than they will find their way to overcome problem and made a good decisions for the problem and for future by predicting any result, target and goal and than what steps to be taken to reach the goals. The ability of this company to drive their future to bigger achievement was excellent. They can always planning to become better in future. The result is as we can see how big the name of this company today.

DISCUSSION 2
Which planning tool and techniques do you think have been utilized by Royal Dutch Shell? Which would you suggest they use for their planning and why?

Royal Dutch Shell have been utilized contingency planning, as a tools and techniques for their planning. Contingencies planning is identifying alternatives course of action to take when things going wrong. The planning process and managing is uneasy work. There are always an uncertain environment to faced with. This is obvious when the first and second world war erupted. During the first world war, Royal Dutch Shell has realize the important of growth and expansion over global markets. By that consciousness, Royal Dutch Shell has applied the planning tools, contingency planning on company operation. The company then realize at time of war, it was quiet difficult to run business operation. It is not in term of the demand on fuel is down, it is even become more important because oil is needed to run machine and other war vehicle. But the difficulties is about to whose the oil is about to sell? Royal Dutch Shell second plan is making contract with one of the force that participated on that war. Royal Dutch Shell has become the main supplier for fuel to British Expeditionary Force during World War 1. This has give the company good state in running the business. But the situation is reverse and differ in second world war. During the 1930s the pressure give depression force to Royal Dutch Shell to reduce its workforce entirely. The world war two has forced the demolition of many of its business and project location. This is really bad for Royal Dutch Shell to face with. Their operation is disturbed and they are facing short pace of shrinking of their company. As to face and deal with this situation, Royal Dutch Shell is once again having a second plan to overcome this situation. The history of oil technology is change as Royal Dutch Shell is marking the history by making supreme advancements to the technology in fuel and chemical research as well as the creation of brilliant advertising emphasizing themes of power, purity, reliability, modernity and getting away from it all. All of this turning good point in

second world war is the step that have been take by Royal Dutch Shell, what do they did, and what makes they turn the hard point to good point, they has plan to just sit and focus on rebuilding and expanding their business. This is how Royal Dutch is successfully utilized their tools of planning.

DISCUSSION 3
Do you feel that Royal Dutch Shell uses any participation and involvement strategies to implement its plan? Why would participation and involvement be so crucial for such a firm? I fell that Royal Dutch Shell uses participation and involvement strategies to implement its pelan is indeed because Royal Dutch Shell have used participation and involvement strategies in their business. In today current economic climate. Royal Dutch Shell has had to make some changes to its existing business model in order to adapt to the demands and uncertainty of its client base concerning oil production. This company has made some changes to its existing business model in adapt all the demand and to make adjustment to what their client needs on their oil concerning business. In order to survive in global volatile market, at one point this company has involve in joint ventures with rival Exxon to form a partnership for the development of worldwide fuel addition. Partnerships bring the benefit of economy of scale with the sharing of both responsibility and funding requirements. Partnership is formed of two or more people or organization agree to contribute resource to start and operate a business together. It is back by a legal and written partnership agreement. Good part of partnership is all member of it is agree to contribute their skills, expertise and ability to their new venture to reach goals and share the benefits together. Besides that, it is important for royal Dutch shell to use this strategies to implement to their pelan because for certain time we they always need some improvement and enhancement to certain part. When this company joint their project with Exxon on developing worldwide fuel addictive they got some good profit, first they got new knowledge, expertise, and skills from their partner. They will learn new knowledge that can be used to their future. Other than that, they also learn the new culture and ways of work with their partner, they can used this for make comparison and apply any good example from them to their company. Lastly, one of the very important reason of making partnership or joint venture is a company can saved lot of their money to use as a capital and investment to develop any new creation in order to strengthen their business. Create and develop new technologies need lot of expand and used of workforce and expert. This is sometimes really a burden to a company. And for some company, they found it id really hard to advance in some ways if they dont find any fund and help. This is where joint venture is really important and play their role in

helping company develop their technology. They can save their money and expert to be used in investment at least for half of what needed, shell project management approach integrate the use of impact assessment and stakeholder management plan and any new project must have a stakeholder engagement pelan in place. Once a project moves forward the group diversity framework require annual diversity pelan and a human right compliance tool provide manager with a step by step approach to help them avoid violating the basic human right of employee and local communities during a project.

DISCUSSION 3
FURTHER RESEARCH- Investigate the types of alternative fuel sources that are currently being used or research. How might these alternative fuel sources impact the oil industry? How might these alternatives fuel sources impact the oil industry? How might they impact Royal Dutch Shell specifically?

Alternative fuels are from resource other than petroleum. Some are produced domestically, reducing our dependence on import oil and some are derived from renewable source. Often they produce less pollution than gasoline or diesel. There are a lot of alternative fuel source currently used and research by the world today. These alternatif fuel is develop because they want to find or overcome the issues of depleting sources of energy. They know if they mastered and conquer this field it may come in much profit. There were many type of this alternative source like biomass, biofuel, solar power, liquid nitrogen and nuclear power. But two of the most popular alternative fuel today is biomass and hybrid technology. Biomass is an alcohol based fuel made by fermenting and distilling starch crop such as corn. It can also be made from cellulosic biomass such as tree and grasses. The use of ethanol can reduced our dependence upon foreign oil and reduce greenhouse gas emissions. Advantage biomass is a domestically produce, reducing use of import petroleum, lower emissions of air pollution, more resistant to engine knock and add vehicle cost is very small. Hybrid technology is the technology that implied on machine to generate electrical energy. Almost all the develop put in this technology to main vehicle and car. Car is one of the most consumer petrol on road. This problem seem cannot be put aside as the sources of petroleum is depleting years by years. The invention of hybrid technology has become a good answer to overcome the problem of depleting resource of petroleum. This is way some giant of automotive company like Toyota dan Honda is compete in developing and producing the hybrid car. World citizen is quiet happy to hear this thing and those hybrid has become more and more popular and widely being used in few country. Those car like Toyota Prius have been used by United State as their petrol car.

The invention of hybrid technology is obviously known that it is were develop in order to respond to the problem of depleting sources of petroleum. But as the technology is develop a bit early, it is at the other side have turn to become a threat to the oil industry. At today current situation it may still look like just a normal thing. But if we look up to just little five year forward. The oil industry may feel the impact of lowering number of petrol consumer. The reducing number of petrol consumer is occur when the hybrid technologies become cheaper when expert become more advance in mastering this technologies. This is a normal thing that, when any technologies is become more mastered by human it will become cheaper and more affordable by human. So the same thing goes to hybrid and this is absolutely will give impact to oil industry. And royal Dutch shell itself as the big company in oil industry will affected. The demand of their petrol fuel will decrease periodically as the hybrid technologies is become more familiar time by time.

REFERENCES
1. 2. 3. [2005] 4. 5. 6. http://www.fev.com/content/public/default.aspx?id=557 http://hybrid.honda.com.my/ http://en.wikipedia.org/wiki/Biomass A History of Royal Dutch Shell" by Stephen Howarth and others [2007]. http://www.shell.com.my Shell Shock: The secrets and spin of an Oil Giant" by Ian Cummins and John Beasant.