GASCO’s Core Problem: Autocratic Leadership and High Power Distance in UAE Culture

GASCO Company’s core problem lay in the realm of ineffective leadership. The prevalent leadership style at GASCO was highly autocratic, where full control and decision making authority resided in the hands of top management, with little flow of communication to lower managerial levels. According to the Hofstede Model of Cultural Dimensions, the UAE as a country ranks high on the dimension of power distance. Power distance is a measure of the level of hierarchy (U. A. E. Power Distance ) and the significance of designation to the level of authority one possesses.

This means that followers are not expected to make decisions by themselves or negotiate a decision with their leaders or managers. It also means that employees will avoid taking responsibilities and exhibit withdrawal attitude when issues rise for discussion for the fear of losing their jobs or the fear of negative comments and actions from their managers, which deprive the company from the benefit people’s innovation. Managers also in that case make decisions by themselves and will not accept the participation of other members.

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They are also expected to identify formal, clear tasks or short term goals, and assign them to their followers. Thus the GASCO leadership culture was a reflection of the prevalent corporate culture in the majority of companies operating in the UAE. This issue became increasingly apparent when numerous complaints and issues that were forwarded by GASCO employees to their Human Resources Division. More than 45% of the complaints were related to the relationship between employees and their managers, which is common as a result of the UAE cultural context.

The following cases are real examples of concerns that were raised by GASCO employees:- Case 1: Employees were not provided with any clear development plans. This is because of the lack of communication between employees and management – managers were reluctant to act in a supportive role, and instead focused more on the accomplishment of tasks and goals in the short term. Case 2: Managers did not involve employees in the decision making process. Employees felt they were underestimated and were eager to contribute their suggestions and ideas Case 3: Employees were also complaining about their “lost efforts”.

Several records showed that some employees were over performing, working with commitment and integrity to their jobs, but managers fail to recognize and reward their efforts. Case 4: GASCO policy included holding weekly meetings between managers and their employees to discuss the latest issues and developments within the company. More than 18% of managers used to postpone, reschedule, or cancel this meeting Case 5: Due to work load and pressure, managers did not allow their employees to attend training sessions, which stood as an obstacle in the employee development process

Case 6: Managers made no efforts to build relationships with their employees and other departments/divisions. This resulted in poor coordination, which in turns makes work processes and procedures long, lazy, and ineffective Case 7: Managers were concerned only with the completion of tasks, placing immense pressure on their subordinates, which often they could not handle Case 8: Managers did not allow employees to make decisions on how they perform their job Case 9: Managers did not provide a clear, direct way of doing the job. This led to immense conflict between employees and their subordinates.

All these complaints are indicative of an ineffective or unsuitable leadership style within the company. It is apparent that the real challenge facing the company was implementing broad change, that would change the focus of leadership and management practice towards one that was more open, allowing for improved communication and delegation of authority and decision making power. Only effective leaders are able to create a positive environment to encourage innovation, adaptability and learning through continues coaching and empowering, along with emphasizes team work and open communication, while understand employees needs and priorities.

This change would be adopted soon, when GASCO announced that it would enter into a merger with ATHEER, Abu Dhabi Gas Company. The reason behind the change is the integration between GASCO and ATHEER, which created one of the largest gas processing companies in the world and it provided GASCO a tremendous opportunity to look into the future and discover ways of making two good companies into one great company. Furthermore, it provided the opportunity to adopt the principle of continuous improvement, which was needed due to

? Increased competition in the industry ? Ageing equipment which required new capital investments ? Experienced workers retiring ? Increased workloads because of new projects Mergers between two or companies have many implications on various aspects of the respective organizations. Managerial structures need to be revised, organizational hierarchies need to be changed, new policies and systems need to be created to promote smooth integration of the companies’ respective operations and practices with each other.

But there is one significant issue that requires delicate handling – the merging of two different organizational cultures, and the handling of arising conflict and resistance to change. At no other time is the need for effective, supporting leadership more important than when implementing companywide change. Thus, with keeping this in mind, GASCO initiated the G21 Journey. GASCO leadership and management team found G21 Journey a great chance to develop, motivate, and empower people and to create transformational leaders out of them.

The main goal of the journey is to improve working environment through coordination and transparency, which cannot be achieved without effective leadership. G21 Journey is considered a transformation in GASCO’s strategy which was necessary to handle the merger with ATHEER Company, as well as to respond to environmental changes and future challenges. However, the cultural context of the UAE still imposed some characteristics that could potentially weaken the G21 Journey’s effectiveness. The GASCO 21 Journey is composed of three key components (GASCO internal booklet, the G21 Journey, 2008)

? Business Process Design: o Aligning work efforts with company objectives o Improving the Business processes and procedures ? Performance Management: o Managing, monitoring, and measuring performance o Improving the efficiency between Divisions and Departments ? Cultural and Leadership: o Building commitment and ownership at all levels o Developing leadership and teamwork capabilities The implementation of G21 Journey is considered a strategic change in GASCO’s operational, organizational and business levels.

The merger had a series of objectives that needed to be achieved, such as the goal of improving the working environment through coordination and transparency. Another goal was to recruit, induct and train approximately new 1,000 employees during the plan to meet the growth arising out of new projects. But most importantly the initiative addressed the need to develop leadership at all levels of the organizations. This was a positive step, for poor leadership had resulted in the following problems: 1. Low culture and moral 2. Poor perceived working environment 3.

Lack of developing employee capabilities 4. Absence of leverage of information system 5. Gap in key management processes 6. Lack of performance management Thus the core problem of an ineffective leadership style spilled over into all other aspects of the GASCO Company, resulting in problems ranging from low employee morale to ineffective utilization of the company’s internal information system. Given that GASCO’s vision includes the desire to become an employer of choice, the prevalent leadership style directly influences the company’s image as a desirable or undesirable employer.

Thus an internal leadership crisis results in outward externalities. The G21 Journey was a positive step towards improving the leadership style of the company as it was of the utmost importance in facilitating the merger with ATHEER. The key components to improving the leadership style are: ? Driving Performance Management ? Emotional Intelligence ? Designing Change Efforts ? Building Stakeholder Relationships ? Innovation ? Adaptability and Learning ? Teamwork ? Open communication and transparency ? Performance

? Professionalism As it appears from G21 Journey description above, the journey was a brilliant action from GASCO’s Leadership and Management Team towards improving the working environment and emphasizing openness, transparency, and coordination in GASCO’s culture. It is also obvious the what GASCO really needed is effective leaders whom can successfully bring the change into light while maintaining a positive environment that smoothes the progress of empowering people An Application of Leadership Theories to GASCO Company

The definition of effective leadership varies with different situations, cultures and even nations. For example the United States may have a completely different style of leadership than its eastern counterpart. Here based on evidence gathered through research via interviews and questionnaires, it is concluded that GASCO has an autocratic style of leadership which takes its roots from the prevalent, patriarchal Arab culture. Literature has asserted that leadership behavior is determined culturally and hence differs from culture to culture (e.

g. Aram and Piriano, 1978; Burger and Bass, 1979; Wright, 1981; Adler, 1991). Robbins (1993) suggests that national culture plays an important role in determining the style and effectiveness and the UAE scores high in power distance and uncertainty avoidance indexes (Hofstede 1994). Leadership styles have been categorized in many different ways, but the result of a study conducted in 1939 proposed three fundamental leadership styles that have come to be accepted in the business world today.

These styles are the Participative Style, the Autocratic Style, and the Delegative (Laissez-Faire) Style. GASCO is reflected to have an Autocratic style of leadership, which is the cause of much discontent and dissatisfaction amongst its employees. Rooted in the Exchange Theory of Leadership, according to which GASCO can be classified as having a Transactional management or leadership style. This is a more task-oriented style, where leaders prioritize goal achievement over the satisfaction and morale of their employees.

A similar situation seems to reflect in GASCO’s management style; the prime purpose of an employee seems to do the tasks as dictated by the manager; this results in an impersonal relationship between the manager and the employee and less participation or involvement by the employee. What is needed are leaders that are concerned about maintaining close working relationships with their people, recognizing that people are the conduit through which goals are achieved.

Thus, the current management style, which is transactional in nature, is not appropriate for an organization preparing for immense growth and taking on a new journey to achieve its vision in the twenty first century. Such ambitious goals of an organization require a collective and participative style of leadership; the reasons for which shall be explained in the recommendations section. Leadership at GASCO after G21 Journey

For the G21 project to be implemented successfully, it became necessary to conduct companywide research with GASCO to gather data that reinforced or negated the complaints that were being received from employees regarding management. Data Collection Method: The project team for G21 developed a 30-Question questionnaire to assess the ability of the G21 Journey to create the transformational leaders needed at GASCO to revitalize the corporate culture and make it conducive for organizational change.

After several discussions with the G21 Team Leader and the Training Officer at GASCO, the project team highlighted five leadership criteria that should be available, or developed in GASCO managers and team leaders, which are as follows: 1. Vision 2. Communication 3. Credibility and Responsibility 4. Empowerment 5. Building Relationships with stakeholders To ensure trustworthy feedback from participants, the project team chose to make the questionnaire feedback anonymous, where participants did not have to provide their names and Staff ID numbers.

Anonymity is attributed to creating more transparency and to give an open space to participants to express their opinions freely without restraint. Before collecting data, the project team calculated the needed sample using online sample calculator provided in “Creative Research Systems Web Site, www. surveysystem. com”, with confidence level of 95% and confidence interval of 5. Questionnaire demographics were also highlighted as an important measurement tool; they can be categorized into the following: 1. Gender 2. Location (Abu Dhabi -Main Office / Habshan-Bab / Buhasa / Al Ruwais / Asab /Pipelines

3. Nationality (UAE National / Expat) 4. Years of working within GASCO Questionnaire Evaluation As stated previously, the questionnaire consisted of 30 questions. Each question requires the participant to rate one of the five leadership criteria mentioned above on a scale of 1 to 5 (from 1: Strongly Agree to 5: Strongly Disagree). Each criterion will be weighted by giving scores to six questions and then sum them up. For example, in best case scenario, if a participant gives a score of 1 to each of the six questions related to Empowerment, then the total is 6.

Similarly, in worst case scenario, if a participant gives a score of 5 to each of the six questions related to Credibility and Responsibility, then the total is 30. By now, a scale from 6 to 30 is crafted for each criterion and the scores will decide in which area does participant responses fall. Favoritism and satisfaction percentage will be also clear for each criterion. Out of 4050 employees, the required sample is 350 participants. The questionnaire was sent to 500 employees either by handing hardcopies or through emails. Feedbacks received were 386, and 350 responses were chosen randomly to represent the required sample.

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