A Brief History Of Petroleum Commerce Essay

Most of the oil consumed today has moved from one state to another. It is the largest individual trade good in the International market and the Petroleum industry is one of the largest industries in the universe.

Petroleum is a fossil fuel because it was formed from the remains of bantam sea workss and animate beings that died 1000000s of old ages ago. When the workss and animate beings died, they sank to the underside of the oceans. They were buried 1000s of pess below the sand and silt. As clip elapsed and as the beds increased, this organic mixture was subjected to tremendous force per unit area and heat. The mixture changed, interrupting down into compounds made of H and C atoms called hydrocarbons. Finally, an oil-saturated rock-much like a wet family sponge was formed.

All organic stuff does non turn into oil. Certain geological conditions must be met within the oil-rich stones. There must be a trap of non-porous stone that prevents the oil from oozing out, and a seal that keeps the oil from lifting to the surface. Under these conditions, merely two per centum of the organic stuff is transformed into oil. ( Parra, 2004 )

Shell Nigeria History

Shell Petroleum is one of universe ‘s prima manufacturers of oil, gas and petrochemicals ; Shell Oil Company has distinguished itself through its committedness to industry invention. Its selling expertness has enabled the company to counterbalance for its comparatively low volume of rough oil production, as compared to its strongest rivals, by selling an tantamount sum of gasolene nationwide.

Oil and gas operations began in Nigeria efficaciously in 1956, with the first commercial discovery in that twelvemonth by the so Shell D’Arcy. By the 1960s turning environmental concerns led Shell to put to a great extent in systems intended to cut down pollution and to conserve energy in its workss. In the undermentioned decennary, the company began printing a series of consumer-oriented brochures on such subjects as auto care and energy preservation. Shell continued to rule the Nigerian oil industry for long until Nigeria joined the Organization of Petroleum Exporting Countries ( OPEC ) in 1971, after which the state began to take a firmer control of its oil and gas resources, in line with the pattern and regulations of the other members of OPEC.

Within this period, many Multinational Oil Companies like Gulf Oil and Texaco ( now ChevronTexaco ) , Elf Petroleum ( now Total ) , Mobil ( now ExxonMobil ) , and Agip, in add-on to Shell, which was already playing a dominant function in the industry emerged. To day of the month, the above companies constitute the participants in Nigeria ‘s oil industry, with Shell the major participant accounting for a merely small less than 50 % of Nigeria ‘s entire day-to-day production, which presently stands at about 2.4 million barrels of oil per twenty-four hours, ( Socyberty, 2010 ) . The company has delved into assorted concerns and these can be classified into three organisations viz. upstream organisation, the downstream organisation and the undertakings and engineering Organization,

Upstream Organization

The Upstream organisation explores for and infusions crude oil and natural gas, frequently in joint ventures with international and national oil companies. The organisation besides liquefies natural gas by chilling and selling it to clients. It besides converts natural gas to liquids to supply cleaner firing fuels. It is besides responsible for selling and trading natural gas and power. It besides develops air current power as a agency to bring forth electricity.


The organisation bend rough oil into a scope of refined merchandises, which are moved and marketed around the assorted provinces in Nigeria for domestic, industrial and conveyance usage. These include fuels, lubricators and bitumen. The fabrication concern includes Refining, Supply and Distribution. Marketing includes the Retail, Business to Business, Lubricants and Alternative Energies and Carbon dioxide. The Chemicals concern has dedicated Manufacturing and Marketing units of its ain. It trades rough oil, oil merchandises and petrochemicals chiefly to optimise feedstock for the Manufacturing concern and to provide the Selling concern. The Carbon dioxide organisation is responsible for organizing and driving Carbon dioxide direction activities across the company.

Undertakings & A ; Technology

The organisation provides proficient services and engineering capableness in upstream and downstream activities. It manages the bringing of major undertakings and helps to better public presentation across the company. It delivers differentiated proficient information engineering for Shell and drive research and invention to make tomorrow ‘s engineering solutions. Undertakings and Technology besides houses Safety & A ; Environment and Contracting & A ; Procurement as these are built-in to all Shell Petroleum ‘s activities.

External and Internal Environment of Shell Nigeria

All organisations should hold the input from their external environment that in bend exchanges the merchandise and services they produce in order to supply the energy for continued being. “ An organisation needs to be able to pull off its environment to last in the current concern environment by being invariably cognizant of development from its environment ” ( Tiernan et al 2006 ) . All factors that are within other maps of their ain house are referred to as the internal environment. ( Shell 2010 )

External Environment

Challenges confronting many companies today originate outside them. A survey of the external environment can descry major chances and menaces. Successful companies follow wide environmental tendencies and intermittently assess alterations taking topographic points in their industry. A company can non in general control its wide environment. ( Dess and Miller, 1993:45 )

Plague Analysis

An organisation environmental analysis should be uninterrupted and feed all facets of be aftering before get downing the selling procedure. PEST analysis is a manner of analysing an organisation ‘s external environment. PEST means Political, Economical, Social, and Technology. These factors are beyond the control and influence of a concern but it is of import to be cognizant of it when making merchandise development, scheme or concern planning, ( Rapidbi 2008 ) .

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Political factors

Wars and Conflicts

Government Policies


Government Leadership

Government Structures.

Political Tendencies

Economic factor

Home Economy Trends

General Taxation Issues.

Market and Trade Cycles

International Trade and Monetary Issues.

Job Growth/Unemployment

Interest and Exchange Rate

Internal Finance and Cash Flow

Social factor

Consumer Buying Patterns.

Ethnic/Religious Factors.

Ad and Promotion

Health/Living Standards

Brand company and Technology Image

Consumer ‘s attitude and sentiments

Media positions

Technological factor

Research Support

Adulthood of Technology

Information and Communications

Intellectual Property Issues


Transportation system

Software Changes

Political Factors

The political sphere can increase or diminish a company ‘s independency and do the environment unfriendly or supportive of its activities ( Dess and Miller, 1993:48 ) . It has a immense influence upon the ordinance of concerns, and the disbursement power of consumers. This relates to how authorities policies affect Shell Nigeria Petroleum ‘s operation. Political factors such as Government policies, Political tendencies, and Government constructions, combativeness or terrorist act have high impact on Shell Petroleum.

Rapid alterations in Government policies have affected Shell Nigeria Petroleum. When a authorities comes to power, he condemns the planning work done by the cherished authorities and brings in new policies that may or may non prefer Shell Petroleum. Due to political instability, decelerate development occurs.

Combativeness or terrorist act has affected Shell Petroleum in Nigeria earnestly. The activists in the Niger Delta where the chief oil is situated besides affect the production of oil by Shell crude oil extremely. They are non supportive of the activities perpetrated by Shell. They are of the sentiment that Shell Nigeria do non merit to be at that place as there are no important development in their countries despite big sums of oil been gotten from the Niger Delta communities. As a consequence of these, the activists prehend oil Wellss, nobble exiles for big sums of money known ransom in return. They besides blow up oil Wellss and even kill these exiles. The activists want a per centum of what is gotten from the sale of oil from their community and as this has non been given to them or has been mismanaged by the top functionaries in the authorities, the activists travel a long manner to impact the day-to-day production of Shell Petroleum in Nigeria.

Economic Factors

The Economic factors of a province besides have a high impact in the behavior of a company. The stableness of the economic system of a state determines how the consumers would be able to devour energy merchandises. The overall province of the economic system influences the public presentations and schemes of a company.

Nigeria ‘s economic system has undertaken several reforms over the past decennary after old ages of political instability due to over-dependence on the oil sector. Since 2008 the authorities has begun demoing the political will to implement the market-oriented reforms urged by the IMF, such as to overhaul the banking system, to control rising prices by barricading inordinate pay demands, and to decide regional differences over the distribution of net incomes from the oil industry. In 2007-2009, GDP rose strongly thereby doing it one of the turning economic systems in Africa. As at 2009, Nigeria ‘s GDP stood at $ 339 billion and the GDP official exchange rate stood at $ 173.4 billion ( 2009 estimation ) and the GDP existent growing rate is 6.1 % ( 2009 estimation ) . ( Beginning: CIA World Fact, 2010 )

As a consequence of this analysis, the economic system state of affairs of Nigeria has a high impact of Shell Petroleum Nigeria as it affects it positively. Unemployment rate In Nigeria bases at 4.9 % as at 2007 while the rising prices rate bases at 12.4 % as at 2009, ( Beginning: CIA World fact ) . This analysis has a somewhat negative consequence as the buying power of the clients would be reduced.

Components of Nigerian GDP in 2008

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Social Factors

Peoples ‘s picks which include the beliefs, values and attitudes of society are affected by Social factors. Changes in the societal factor of a state can impact buying behaviour. Shell is cognizant of this societal facet and this can be shown due to the big figure of client purchasing Shell Petroleum related merchandises. Oil spillage in the Niger Delta part of Nigeria is one of the wellness jeopardies caused by Shell Petroleum in Nigeria as they spill oil in the rivers doing it impossible for people in this part to angle, which is one of their major businesss. Gas flaring is besides one of the environmental jeopardies caused by Shell Petroleum but it already has programs to halt it by the terminal of 2011.The universe population is increasing and societal values are besides altering so the demand of fuel ingestion is besides increasing.

Technology Factor

Progresss in engineering have had a major impact on Shell Petroleum ‘s success. Technological alteration impacts socio cultural attitudes. Due to the promotion in engineering, Shell Nigeria Petroleum have a subdivision of their organisation that carries out engineering related undertakings dedicatedly merely to run into up with the current promotion in engineering in the energy sector and break the life of its clients. The Shell Petroleum Project and Technology subdivision deliver differentiated proficient information engineering for Shell Petroleum and drive research and invention to make tomorrow ‘s engineering solutions. ( Shell 2010 )

Porter ‘s Five Forces

Porter 1980 stated that the competition province of an industry depends on five basic competitory forces. The combined strength of these forces establishes the concluding net income possible in the industry, where net income potency is precised in term of long tally return on invested capital. Assorted industries differ in their ultimate net income potency as the corporate strength of the forces differs. The forces include:

Dickering power of purchasers

Shell crude oil has assorted trade names of merchandises from which a client can take from. It ranges from the lubricators to the natural gas. The power of the purchaser is high because of these assorted scope so g merchandises that abound in Shell crude oil.

Dickering power of providers

Assorted providers of crude oil merchandises besides increase the strength of Shell crude oil because they largely rely on Shell crude oil for the supply of crude oil merchandises. The dickering power of providers is high.

Competitive competition

The crude oil sector is a competitory sector. Competition is high and ferocious as there are many companies like Exxon Mobil, Total, and Agip. Shell crude oil has remained in front of these companies because it has a strong trade name name and it wields adequate power and has strong influence in the oil sector due to its assorted quality trade name merchandises.

Menaces of New Entrants

It would be highly hard for new entrants to come in the crude oil market because Shell has created and established a strong image and trade name name. The menaces of new entrants are low because new entrants would confront assorted barriers like:

They would necessitate more clip in doing its trade name known and etching it in the heads of bing clients of Shell crude oil who already like Shell Petroleum ‘s merchandise.

They would necessitate more clip and to interrupt the monopoly of Shell

Menaces of Substitutes

Shell crude oil offer quality merchandises to the Nigerian market. Quality merchandises like the Shell Rimula and Mysella are merchandises that would be hard to replace because the merchandises have undergone much research before it was introduced to the market. Before a merchandise is released into the market, it is good developed by the assorted sections in its assorted sectors in the company hence the menaces of replacements is low.

Internal Environment

To work chances and minimise menaces in the external environment, directors must analyse a house ‘s internal strengths and failings. The most effectual schemes are based on a thorough apprehension of an organisation ‘s internal environment, ( Dess and Miller, 2003:74 ) .

SWOT Analysis

This is a tool that is used to analyse a company and its environment. SWOT analysis aid companies who aim for success channel its eyes on cardinal issues as it ‘s the first phase of planning. SWOT analysis is divided into two viz. the Internal and the External factor. The Internal factor consists of Strengths and Weaknesses while the External factor consists of Opportunities and Menaces from its rivals.

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Longevity in the market

More research

Strong public presentation in the market

Strong trade name image

Product/Service Differentiation

Affecting the populace positively


Gas flaring still in topographic point

Oil spillage

force still affects it

much focal point on oil


Discovery of new oil Wellss

Penetration into Danger zone

Embarking on new merchandises

Rapid response to environmental unfavorable judgments


Loss in net income as a consequence of fuel monetary value

struggle and force

competition from challengers

High involvement rate

Global recession


Shell has been one of the major leaders in the oil and gas industry and has adequate strength to execute in the oil and gas sector. It has its presence in over 72 states ( Shell 2010 ) . As a consequence it has a strong trade name image in Nigeria. It controls most of the oil Wellss in Nigeria.

Shell besides embarks on new undertakings as they have a dedicated subdivision of their services entirely committed to transporting out new undertakings to see how to break the lives of Nigerians and the universe as a whole.

In Nigeria, Shell besides organizes competitions like mathematics competitions and essays for pupils in secondary schools. Shell Nigeria besides awards scholarships to undergraduates in Nigerian universities from the Niger Delta part as a manner of helping their surveies. They besides aid station alumnus pupils from the Niger Delta to analyze either in Nigerian universities or abroad.

As one of the major leaders in the oil and gas sector, Shell Nigeria besides has a scope of first-class merchandises that are supplied to different industries. They include Lubricants and Natural gas. Shell has assorted scopes of lubricators and motor oil which include:

Shell Rimula

Shell Mysella

Shell Tellus

Shell Turbo

Shell besides supply natural gas through grapevines to large houses that are situated in Lagos province, Ogun province, Abia province and they have a strong trade name image.


Shell Nigeria still embarks on flaring of gas during extraction. They flare gas to take unwanted bi-products. This procedure degrades the environment as it causes airborne diseases to the communities and besides affects the ozone bed. Many of the people populating in the Niger delta where Shell operates are fishermen and husbandmans by business but most of their lands and beginning of support has been affected by Shell as a consequence of oil spillage. This affects the fishermen and the husbandmans as the fishes in the river dies and their farming area are destroyed.

Major focal point on the oil and gas sector entirely in Nigeria has made Shell non to seek for and put to a great extent into other sectors of the Nigerian economic system like agribusiness. Heavy dependance on the oil returns allows it to be exposed to rigorous market conditions and as new companies are besides emerging in the oil and gas sector, it puts it at a competitory disadvantage to its challengers who explore the other sectors of the Nigerian economic system and non the oil and gas sector entirely.


Opportunities abound for Shell Petroleum in Nigeria. Oil Wellss are still being found in assorted topographic points in Nigeria and as Shell is a major participant in the oil and gas sector, it has taken over these Wellss. Shell has besides been able to boom in the Niger delta country in Nigeria, a topographic point where many oil companies are endorsing out from. Inspite of the menaces and force coming from the activists, they have been able to win the bosom of some of the activists.

The power industry has improved in Nigeria and as a consequence of this, Shell besides has been able to ship on new merchandises and present them to the Nigerian market. This includes merchandises like the Shell Turbo.


As a consequence of the issues confronting Shell in the Niger delta part of Nigeria, Shell has been affected as some oil sites were collected from them harmonizing to a tribunal opinion in Nigeria and handed to local proprietors. Shell operates in the big oil and gas sector, and as the oil and gas sector is quickly increasing, there is intense competition from other oil and gas companies in Nigeria. These companies include Agip oil, ExxonMobil, Total.

Assorted struggles in the Niger Delta besides affect Shell Petroleum in Nigeria. Assorted hawkish groups kidnap exiles and oil Wellss and inquire for immense ransom. As a consequence of this, the company is affected greatly as they cough out immense money to procure their oil Wellss and protect their employees.

MOST Analysis

Like SWOT analysis, MOST analysis is besides a tool used to internally analyse the environment of a company. It defines the company through its Mission statement, its Aims, its Strategy and the Tactics it plans to utilize in run intoing these aims.


Shell Nigeria ‘s mission statement is toA enhance profitableness through advanced direction schemes while guaranting cost effectivity and tackling originative thoughts. This mission statement is the ground for the being of Shell. It strives to tackle originative thoughts by making more advanced and effectual ways of transforming energy to energy tantrum for human usage.


Shell Nigeria has stated aims that are intended for its operation. These aims are indispensable points that it intends to run into so as to maintain up with its mission. The aims are to prosecute in oil and its merchandise expeditiously and to beginning for energy to run into client ‘s demands and the universe ‘s turning demand for energy. By run intoing these aims, the company intends to hold an border over its rivals.


Shell Nigeria has in topographic point assorted schemes to do the company accomplish its mission and set aims. These schemes include calling development, authorization, and unfastened door policy. The undertaking and engineering sector in the organisation applies the needful factors in accomplishing these schemes. These schemes are long term schemes that have been set to profit non merely the terminal clients but besides the economic province of the organisation in return. It besides has schemes in topographic point for bettering its bing merchandises and besides bring forthing new 1s.


Shell Nigeria has used assorted tactics to implement its mission, aims and strategic mission. These tactics have helped the company have an border over its rivals thereby doing clients to go on to sponsor them. These tactics include:

Free auto service in every Shell crude oil filling station

Good shed for loosen uping

Assorted promos intended to do the client continue to sponsor them

The variables in MOST analyses are indispensible and can be analyzed besides from top to bottom. One can non make without the other. They work manus in manus by driving each other until the organisation is successful.

Organizational Structure

For an organisation to accomplish its proposed purpose, mission and vision, it needs to hold a sort of construction in topographic point that would enable it transport out these procedures. There have been assorted definitions of what an organisational construction is by different faculty members but John Martin and Martin Fellenz ( 2010 ) defined an organisational construction as “ the formal agreement of undertaking, communicating and authorization relationships that influence and command how people coordinate and conduct their work ” ( John Martin and Martin Fellenz 2010: p336 ) .

In the early 1990s, Shell operated utilizing the matrix sort of construction. They comprised of four companies which include The Parent Companies, The Group Holding Companies, The Service Company and The Operating Companies. The Committee of Managing Directors ( CMD ) managed the company. The commission of pull offing managers consists of five pull offing managers which includes the president, the frailty president and three other pull offing managers. The president of the Royal Dutch Petroleum and the Managing Director of Shell rotated the chairmanship of the commission of pull offing managers. The commission ‘s occupation was to supply a connexion and linkage between the formal constructions of the group and besides the direction construction of the group.

However in 1995, Shell Petroleum restructured the manner it operated. It dismantled the matrix runing construction of the companies and produced four concern organisations to achieve a closer integrating within each sector in every state where Shell Petroleum operates. The construction made each concern efficaciously control and program its operations good. The bureaucratism type of leading that had been in operation was removed paving manner for the construction to hold adequate strength to map out a defined function to the operating companies and concern organisation.

Organizational Strategy

Strategy is an articulated coveted way of an organisation that can be used by others to understand the organisation ( Linstead et al, 2009:711 ) . For Shell Nigeria, its strong thrust to implement its scheme can be seen by the resulted developments in Nigeria and as a consequence of this thrust and development, they retain their strong Image and name that they have both in Nigeria and the universe as a whole. Shell Nigeria ‘s chief strategic characteristics were:

They embarked on a strategic hereafter program. Most of Shell Nigeria ‘s rivals like Agip, Total embarked on a four or five twelvemonth program but Shell Nigeria embarked on a 20 twelvemonth program non because they wanted to hold a prognosis of what is traveling to go on within the 20 twelvemonth period but because they imagined scenarios that would go on and wanted to hold adequate solutions to the scenarios. The solutions they provided would let directors to see assorted ways to strategically react to any scenario that might blossom in the hereafter, ( blast 2010 ) .

They besides played a strategic function by holding a strategic hereafter program where they would hold adequate installations to develop organisational acquisition,

They besides focused on the approaching generational endowments. They were non excessively focused on fiscal public presentation. Assorted thoughts from different survey section like mathematics, economic sciences, and ecology were non thrown off by the Project section in Shell Nigeria alternatively they delved into it wholeheartedly so that their strong name would still be figure one and their repute would be retained.

They operate an unfastened door policy which means that they welcome thoughts and constructive unfavorable judgments from their employees and the general populace. They have a hearing ear by taking into significance the employees needs through assorted treatments with them either through councils or accepted trade brotherhoods.

They have assorted work forces from all walks of life which comprises of different accomplishments, civilizations, gender. These assorted work forces bring together and portion thoughts that help Shell Nigeria in its quest to acquire more clients and understand them better.

They employ extremely skilled, qualified and experient workers and as a consequence of this, it offers great wage to its employers. Shell crude oil besides reward outstanding employees with assorted fillips like health care allowance, closet allowance, house allowance. Shell crude oil besides gives one-year foliages and its entitlements. They besides engage in maternity/paternity foliages and its entitlement. They besides have a retirement program for the aged and experient 1s who have served the company for many old ages.

Assorted employees of Shell Nigeria who wish to foster their callings more than their current province are entirely supported by Shell Nigeria through assorted strategies like scholarship strategies. Shell Nigeria on its ain train its staff through assorted professional preparation and leading programmes. They do this to transfuse and implant leading and managerial values in their employees.

Shell Nigeria as a company embarks on assorted beneficent undertakings merely to better the lives of the people in Nigeria. Such empowerment programmes include assorted Scholarship strategies, assorted inter-school competitions, and assorted football tourneies. They besides invest greatly in research and development. Shell is one of the largest investor in research and development and spends much on the geographic expedition and enlargement of engineerings that would take to the coevals of more and pure energy with adept merchandises for its clients. ( Shell.com, 2010 )

Since the construct of scheme is based upon a company accomplishing its ends and aims ( Tony Morden, 2007:184 ) , Shell Nigeria has a dedicated focal point to accomplish it by using the needed factors needed to accomplish these schemes through their dedicated Projects and Technology Section of their organisation that provides efficient services. By making this Shell Nigeria now has a strong presence in the Nigeria oil and gas industry thereby overmastering its major rivals like Agip, Conoil.

Organizational Change

Change direction means using steps and engineerings to cover with alterations in concern milieus and to gain from altering chances. The characteristics of alteration include accommodating to alter, commanding alteration, and set uping alteration. Change has become an indispensable issue and features of contemporary companies and as a consequence of this, it poses a scope of cardinal challenges for all kind of organisations, whether private, public or voluntary, ( Stephen Linstead et Al, 2009:619 ) .

Assorted factors like direction, policies and tendencies of the authoritiess, complex organisational construction of a company, competition and menaces from other companies, causes a company to alter and the people mostly responsible for alteration in an organisation are the directors of that organisation.

The Gagliardi Model of alteration

The Gagliardi theoretical account of alteration was developed by Pasquale Gagliardi in 1986. The theoretical account describes that “ the primary scheme of an organisation is the care of its cultural individuality in footings of predominating values. A virtuous circle from the corporate experience of success through stabilized values to coherence and efficiency sustains the continuity of civilization. But if the options allowed for by the civilization are unsuited to new jobs, so the virtuous circle becomes a barbarous circle hindering alteration. The consequence may be evident cultural alteration, cultural revolution or cultural incrementalism ” , ( Gagliardi 1986 ) .

For Shell, alteration started as the consequence of the figure of alterations embarked by the universe crude oil industry in the 20th century but as at that clip Shell did n’t undergo any alteration because they had a stable direction construction, a construction without an bossy main executive officer. Gagliardi ( 1986 ) stated that if the options allowed for by the civilization are unsuited to new jobs, so the virtuous circle becomes a barbarous circle hindering alteration, the consequence could be an evident alteration in civilization, cultural revolution or civilization incrementalism but for Shell crude oil, it maintained its individuality in footings of predominating value that were in topographic point majorly from its rivals because its construction was stable. Shell began dawdling behind in footings of its fiscal statistics and because the fiscal statistics had characteristics of decreased fiscal public presentation and fake organisational construction, and because other companies in the oil industry had carried out organisational alteration and began to boom, Shell set up an internal squad in July 1994 that would analyze its internal construction and the squad would in bend come up with programs on how to ship on a alteration that would be effectual and better and recover its strong trade name image.

The motivation behind the demand for alteration in the company was the quest to hold a construction that would be easy for the corporate centre to exercise influence over the operating companies that would be effectual and besides the quest to better coordination between the operating companies. The squad embarked on its assignment and after much interview and sourcing of thoughts, the squad came up with assorted options for alteration by October 1994. They handed in a study to the Committee of Directors and spent yearss with the managers descrying out the objects of alteration. It was deliberated upon by the direction and an proclamation was passed to all employees in the company ‘s employ. The direction led by Cor Herkstroter, the president of the commission of managers in 1995 gave a address to Shell employees worldwide. He signified the kernel for alteration, outlined the chief facet of alteration and at the same clip told the employees to be ready for whatever alteration that would come. Gagliardi ‘s ( 1986 ) theoretical account makes leaders of organisations know how their companies would be affected culturally when they set up alteration thoughts in their organisations small wonder the commission for alteration was initiated. At the terminal, the organisational alteration affected most employees as many of them lost their occupations.

As a consequence of this alteration, Shell now operate a straight-forward direction construction where effectual power and control is exerted by the corporate centre over the assorted operating companies and the coverage relationships would be easier to follow. When the alteration was done, many of its staff was trained to get by and understand the alteration that has been carried out since they were involved in it, this is portion of the company ‘s scheme which is “ Shell operates an open-door policy with its employees ” .

Gagliardi ‘s ( 1986 ) alteration theoretical account explains the result of apparent, incremental, and radical alteration on cultural positions that exist in organisations. This alteration theoretical account that was implemented was to beef up and broaden the theory and values associated by the alteration enterprise, ( Latta 2009 ) .

Organizational Culture

Organizational civilization is now an indispensable portion in the apprehension of assorted organisations. A connexion or bond exists between the civilization of an organisation and other constructs such as leading, power, and organisational construction, ( Stephen Linstead et Al, 2009:151 ) . In any alteration happening in any organisation, the effects on the person and group behaviour are the most important. There have been assorted definitions of organisational civilization by different bookmans but harmonizing to ( Schwartz and Davis 1981: 33 ) , “ Culture is a form of beliefs and outlooks shared by the organisation ‘s members. The beliefs and outlooks produce norms that strongly shape the behaviour of single and groups in the organisation ” . Change dwells at the bosom of leading. Organizational civilization is one of many situational variables that are really of import in doing the attempts of leaders successful when alteration enterprises are implemented, ( Latta 2009 ) .

Shell ‘s civilization covers assorted facets which includes its

Vision and Mission statements

Valuess and aims

Technology, merchandises and services

Vision and Mission Statements

Vision and Mission statements are stated by most companies so that they would cognize what they want to accomplish and where they want to be in the nearest hereafter. It is a manner of doing a company look really effectual. Shell Nigeria mission statement is “ toA enhance profitableness through advanced direction schemes while guaranting cost effectivity and tackling originative thoughts ” while its vision statement is “ to be the market leader and present the best value to our stakeholders. ”

Shell Nigeria has adequate trueness and dedication to its stakeholders besides holding its clients in head. They search out for more thoughts on how to be open uping in its pursuit for making energy.


Shell Nigeria ‘s values is “ to put high criterions of public presentation and ethical behaviours while its aims is “ to prosecute expeditiously, responsibly and productively in oil and its merchandises, and other selected concerns and to take part in the hunt for and development of other beginnings of energy to run into germinating client demands and the universe ‘s turning demand for energy ” .

As oil and gas can non be done without, as it is a major beginning of energy, Shell Nigeria ‘s exclusive value and aim is to beginning for oil and gas in the Niger delta part in ways that it would non impact the environment.


It has been the civilization of Shell Nigeria and Shell in other locations of the universe to tackle engineering and supply better merchandises and services for its clients. More ways have been found on how to better harness and procedure energy. Shell Nigeria has assorted merchandises and services which include lubricators and natural gas which is used for mundane life.

Power and Politicss

Power is needed in organisations because it is the major manner organisational ends can be achieved through assorted parts of thoughts. Therefore organisational political relations are activities used to derive and use power in organisations ( Martin and Fellenz, 2010: p518 )

Shell Petroleum had a powerful position after it was formed. The influence they had could non be matched because they had no ferocious rivals as at when it was created. They were even said to be one of the three most good known institutes. Shell Petroleum is alone in its construction and its twenty-four hours to twenty-four hours direction of its assorted groups is complex. The Committee of Managing Directors ( CMD ) had control over the group ; they were the 1s in charge of the personal businesss of the company. The Committee besides had its ain president which rotated between the President of the Royal Dutch Petroleum and the Chairman and Vice Chairman of Shell Transport and Trading.

Shell operates a individual grade leading. The overall leading construction is chaired by a non executive president, Jorma Ollila while the executive direction is led by Chief Executive Officer, Peter Voser. These managers, presidents link with other presidents and managers of Shell all over the universe to do certain that Shell lives up to its name. They make certain the image is retained and besides do certain that more ways to beginning for energy are devised and harnessed.

Shell began to construct a strong image and name for itself and became one of the largest crude oil companies in 1995. Shell crude oil drama a high degree of political relations and wield adequate power in the oil sector of Nigeria. The political civilization of Shell crude oil in Nigeria is one that has been ever criticized. The company was criticized for the portion it played in the sentencing of an militant, Ken Saro-Wiwa of the Ogoni land and of all time since the incident happened, they have gained more critics than friend both locally in Nigeria and Internationally.

The policies of the Nigerian do non look to impact Shell Petroleum because in malice of the clarion call made by dissenters in the Niger delta part of Nigeria of the continued oil spillage caused by their Shell, it has fallen on deaf ears because the company has been seen as a major participant in the oil sector of Nigeria. Shell crude oil still flares gas in Nigeria, a policy the Nigerian authorities has abolished but because of the untouchable nature of Shell, the Nigerian authorities was forced to switch the deadline of gas flaring assorted times.

Shell crude oil has been the major cause of civil agitation in the Niger delta due to the political influence they have on the Nigerian authorities. They have seized the lands of the people populating in the Niger delta and alternatively of the company developing the Niger delta part, they spill oil on it. The authorities does nil touchable to halt them because of the influence they have. The federal Government of Nigeria has failed to put tougher countenances for companies prosecuting in oil spillage. The regulations are being dead set whenever Shell crude oil wants to be affected.


Organizations do cognize that they may confront hazards at some certain times in their concern life and as a consequence of this they analyze their houses to understand what hazards would endanger their assets. They propose steps to forestall these hazards afterwards.

Shell crude oil understands that they may in the future face hazards from altering conditions in economic, competitory, legal, political, finance and concern field which would hold consequence on their public presentation and as a consequence, they have analyzed this hazards and proposed safeguarded solutions to the hazards due to their accomplishment in detecting where their concern is most susceptible. The analyses include:

Fluctuation in the monetary value of rough oil and oil merchandises

The demand and supply of oil could be affected by assorted factors like natural catastrophes and political instability which would ensue in the fluctuating monetary values of rough oil and its merchandises. These fluctuations could impact the finance conditions of Shell Petroleum and could do long term undertakings in its upstream sector less profitable. This poses a possible hazard to the finance state of affairs of the company and as a consequence Shell Petroleum has moved to increase their oil militias so that in the nearer hereafter, if the hazard happens, they would non be affected.


Competition from other major participants in the Nigerian oil sector like Total, Agip are going a major menace to the being of Shell Petroleum. These competition forces are strong because the merchandises of Shell Petroleum are viing in trade good type markets which make other crude oil merchandises known. The ability of Shell Petroleum to achieve its set schemes depends on the company ‘s reaction to these competition forces. Shell Petroleum as a consequence of this has moved to pull off their disbursals through cost-effective budgets.

Brand image and Company Reputation

Shell Nigeria has mostly dominated the Nigerian oil sector since its creative activity through the acquisition of oil Wellss, larger oil militias, oil lands from the authorities. All these are the major assets of Shell Petroleum which constitutes their trade name image and the repute of their company. An eroding of this repute would hold an inauspicious reaction on the company ‘s operation and the entree to new assets. By placing this hazard, Shell has moved to guarantee rigorous conformity to the codification of behavior and rules of her concern by doing all CEOs of assorted Shell companies all over the universe guarantee that their employees are invariably being reminded of these regulations by subscribing the moralss signifier.


Assorted sensitive parts in Nigeria, most particularly the Niger Delta could expose the employees to hazards, accidents and even loss of life. Social unrest, natural catastrophes, offense, wellness of the employees, detonation all contribute to hazards that poses menaces to Shell Petroleum which could impact its operations negatively and convey a bad repute to its image. Shell crude oil identified this hazard and made sure that all employees who operate in these parts are made cognizant of the fact of working in these parts, they besides made certain that the employees are Health Safety Security and Environment ( HSSE ) certified. They besides made certain that they are good trained on what to make in the event of any natural and unnatural catastrophe.

Reliable Information Technology

The universe is turning into a planetary small town and it is the duty of companies to follow the tendency in the alteration in Information Technology. Shell Petroleum is cognizant that in the nearest hereafter, information engineering may neglect to present her services in an efficient mode due to reliance and resettlement of information engineering services. The company has moved to work out this job by puting more in Project and Technology section. More technological undertakings are being carried out in all parts where the company operates. This is to do certain that the company continues to present quality and improved services all the clip as invention and engineering are its major elements.

Climate alteration

Climate alteration like the emanation of nursery gases, the depletion of the ozone bed are hazards and concerns that could take to the hold of assorted undertakings. Shell Petroleum ‘s aim to be the major manufacturer of energy tantrum for human usage would take a downswing if clime alterations continue to impact it. As a consequence of this hazard, Shell Petroleum has found alternate ways of bring forthing energy from alternate beginnings by increasing the rates of its C dioxide strength and emanation rate. This is to do certain that the company does non worsen in the production of energy.