Managing Organisations in a Global Context. Chevron Corporation Essay

Managing Organisations in a Global Context. Chevron Corporation - Essay Example Global scale of its operations, scarcity of skilled workforce, and a highly competitive commodity based business makes Chevron highly vulnerable to the external environment. For Chevron to retain its market leadership in a competitive global knowledge-based economy, it has to depend on efficient knowledge exchange between its operations groups (customer facing) and the technology center staff (responsible for technology and support). Therefore, it is important for Chevron to actively engage in knowledge management activities to increase operational efficiencies and overall cost-advantages. The report analyses the structure, organizational culture and leadership of Chevron to study its internal capabilities. Chevron has a decentralized organizational structure that poses both a threat and advantage to implement necessary changes for knowledge sharing and team collaboration. The principles of â€Å"The Chevron Way† that acts as a learning tool to communicate and reinforce the va lues and goals of Chevron is a key artifact for its team and learning-based organization culture. Chevron leader ­ship has been instrumental in driving key initiatives as best practice sharing, operational efficiency management system and benchmarking wrt industry practices. The key issues that are important to be addressed for Chevron’s long-term future are low-cost competition from state-owned oil companies, global communication challenge regarding environmental concerns and its existing decentralized structure. Introduction The financial crisis of 2008 highlighted once again two key lessons for organizations all over the world: firstly, that organization cannot operate in vacuum and is not invulnerable to what is happening in the external environment and secondly, the world is so interconnected that positive and negative effects in organizations can have ripple effects across the globe in a matter of minutes. External environment comprises of factors such as administrati ve and legal (international, non-governmental policies and regulations, legislatures and legal frameworks), technology (innovations, research and development), politics (government support and political systems in the geographical region), economics (inflation, labour laws, opportunity costs, currency restrictions etc.), society and culture at local, national and regional levels and stakeholders (Harrison, 1970). There are evident examples of organizations that have been deeply impacted due to pressures of the external environment such as Kodak at the advent of disruptive innovation in digital imaging (Forbes, 2008), Lehman Brothers bankruptcy due to 2008 global financial crisis (Investopedia, 2009) etc. Globalization has transformed contemporary business environment into a knowledge-based economy that makes organizations even more vulnerable to changes. Oil and Gas companies are no exceptions to this turbulent environment. The relevance of geopolitical tensions, environmental consi derations, oil economics and market dynamics make them complex entities to operate. They deal with a number of complex tasks, which reason the necessity of knowledge management system in the oil and gas organizations. Globalization, innovative technologies, outsourcing and offshoring, new joint ventures, government regulations and scarcity of experienced personnel have amplified the need to share and mobilize knowledge, expertise and best practices across multi-national organizations to retain their competitive advantage (Leavitt, 2002). This report addresses the above factors in case of CHEVRON Corporation, and