Essay Sample on Management Issues in SABIC Company

Paper Type:  Essay
Pages:  7
Wordcount:  1827 Words
Date:  2022-11-14


Saudi Basic Industries Corporation (SABIC) is an international leader in different chemicals whose headquarters are in Riyadh, Saudi Arabia. It deals with the manufacturing on a global scale in the regions of Asia Pacific, Europe, Middle East and America. The firm makes distinctly different types of products ranging from commodity, chemicals and high-performance chemicals as well as metals and agri-nutrients. SABIC has more than thirty-five thousand personnel and branches located in more than fifty nations. It also has innovation hubs in five major regions, that is, North East Asia, South East Asia, Middle East, Europe and USA. The government owns almost seventy percent of its shares while the remaining thirty percent is traded publicly on the Saudi stock exchange ("SABIC - SABIC at a glance", 2019).

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SABIC is comprised of four strategic business units. They include metals, agri-nutrients, specialities and petrochemicals. An executive vice president heads each of these business units. Besides, they support clients through the identifications and development of opportunities in major end markets such as medical devices, packaging, construction, electronics, agri-nutrients, clean energy and transportation. The firm has also significantly invested in technology and innovation since they are continually projecting the future. Their technology and innovation facilities are spread across the world with numerous scientists and specialists contributing to the continuing progress of new guarantees and copyrights ("SABIC - About Us", 2019).

Management Problems at SABIC

Currently, businesses are in rapidly changing times, and in a single generation, firms need to adapt to new marketing channels. The new marketing channels, in this case, include social and web. They also have to decide how to invest in and utilize new technologies and finalize on a global stage. Due to the rapid changes, it is evident that no chief executive officer or worker can be proficient in all matters. As such, management problems are bound to arise and have an effect on the performance of workers and thus the overall productivity of the company.

Despite SABIC being a global leader in different chemicals, it still has specific management problems that affect its efficient operation of activities. Its expansion has brought one of the critical management problems through the acquisition of more units. The development has resulted in the firm cutting on costs by freezing any internal and external hiring. As a result, it has led to high turnover and low morale among the employees ("Working at SABIC: Employee Reviews about Management |", 2018).

It is vital to note that when an organization expands or acquires more units, they should consider hiring more workers and further motivating them to deliver high-quality services as they were previously doing. In this case, the expansion process and acquisition of more units will be smooth and effective. However, since SABIC was seeking to cut on costs after acquiring the new unit, they opted to halt any internal and external form of hiring. As such, this implied the existing workers had more duties or responsibilities to undertake, an element which would lead to fatigue and eventually underperformance. SABIC failed to consider that they needed to hire more employees carefully due to the expansion that had occurred ("Working at SABIC: Employee Reviews about Management |", 2018). They can, therefore, be purported to have ignored the proper development of personnel needs, which they undertook when planning to acquire another unit and even marketing it as well.

On the other hand, it is vital to note that SABIC failed to consider the needs of their employees after the acquisition of another firm. Due to the expansion, they did not take the necessary measures to motivate the employees despite the additional duties with similar pay. The firm should have considered motivating them by increasing their salaries or even enhancing their working terms and conditions. The lack of motivation resulted in low morale among the employees, and eventually, most of them opted to quit due to the unfavorable working conditions. The motivation of workers is quite crucial as it allows the management to meet their goals easily. When employees are motivated, they become highly productive and in the end, assist the firm to accomplish their objectives easily. As such, SABIC's management failed to consider the welfare of their workers who are the most crucial assets of the organization, and this resulted to a high turnover rate ("Working at SABIC: Employee Reviews about Management |", 2018). Therefore, it is evident that despite SABIC being a global leader in various chemicals, the management is not quite knowledgeable concerning dealing with employees' motivation when there is an expansion.

The second management problem at SABIC entails the growth and development of workers in some departments. One of the notable ones is the customer service. The provision of growth and development opportunities enhances the quality of work experience of the personnel. As a result, the productivity of the firm will be higher. The human resource manager at SABIC failed to undertake the growth and development of workers. SABIC being a global firm has all the necessary resources needed to develop employees effectively. Also, it is important to note that training and development do not usually cost a significant amount of money or even time when well planned ("Working at SABIC: Employee Reviews about Management |", 2018).

Lack of training and development resulted in specific adverse effects at the company. One of this was unhappy employees. In most cases, workers are usually interested in performing their jobs properly to develop the firm and develop a sense of pride in undertaking their work correctly and even get to higher positions ("Working at SABIC: Employee Reviews about Management |", 2018). Therefore, the lack of training and development as observed at SABIC led to low morale of workers since they did not comprehend how to undertake their jobs correctly and in the end, a turnover would be apparent.

Another notable effect of the lack of training and development at SABIC was a risky work environment. Being a firm that has ventured in different chemicals, it would be necessary for the management to note that having untrained workers made them more susceptible to injuries. It would occur since employees lack the necessary skills and knowledge needed to utilize supplies and equipment safely. On the other hand, the lack of training and development of workers implied that there would be managers who would be inadequately capable of undertaking their duties as well. For instance, new managers would have issues managing people, solving conflicts between workers, motivating employees and further adapting to changes within the organization (Engetou, 2017).

Moreover, lack of training and development of employees has resulted in increased expenses by SABIC due to catering for medical attention costs incurred from the unskilled utilization of equipment and supplies. Besides, there is the issue of compensation to clients when defective goods are issued that has had a detrimental impact on their image. However, SABIC enjoys the privilege of being an international leader making it hard for them to halt production completely. It is still necessary to consider that employees who incur injuries end up filing lawsuits against the firm ("Working at SABIC: Employee Reviews about Management |", 2018). As such, the company incurs more costs defending themselves against the lawsuits filed by workers or from consumers who bought faulty goods.

The third management difficulty at SABIC is lack of accountability, and the individual in charge is the one who is responsible and even ends up being blamed for a legacy issue. The aspect of responsibility is connected to higher performance and an increase in the commitment to work. It is also tied to the morale of employees. The lack of accountability at SABIC, therefore, means that the management has not defined the priorities clearly. Responsibility in most cases is usually associated with higher performance and an increase in the commitment to work ("Working at SABIC: Employee Reviews about Management |", 2018). Therefore, the lack of this crucial element at SABIC implies that it reduces their performance as employees become less committed as their importance in the organization has not been well defined.

On the other hand, there is also the issue of incompetent managers at a higher level of the company. Some of the problems observed among the managers are lack of modernized knowledge and skills. As such, it makes it difficult for the company to attain all the established goals since workers will not be properly governed. The utilization of old management methods has resulted in change not being equal to progress ("Working at SABIC: Employee Reviews about Management |", 2018). Most firms usually stress on a culture of constant enhancement since as previously highlighted at the beginning, companies need to adapt to new forms of operation.

It has further been depicted that there is a lack of diversity at the corporate management level. Organizations usually have three management levels, that is, low level, middle level and top level. The lack of diversity at SABIC's corporate management level thus hinders innovation and even fails to create a diverse and inclusive workplace. When the company executives fail to observe the value in ideas from people unlike themselves, then it limits their capability, an issue that has been reported at SABIC ("Working at SABIC: Employee Reviews about Management |", 2018).

There is also the issue of integrity which is quite critical for an organization to record excellent results. Also, integrity usually comes from the management down to the employees. However, at SABIC, it has been reported that the administration lacks integrity and professionalism. Employees have further depicted that the lack of professionalism resulted in them being misled about their role in the company. As such, this means there is lack of trust between the firm and employees, an issue that eventually affects the overall productivity of the company ("Working at SABIC: Employee Reviews about Management |", 2018).

Management Theories

Management is described as an art and science. On the other hand, management theories are conceptions surrounding the recommended management strategies that may entail tools like guidelines and frameworks which can be adopted in contemporary firms. Professionals cannot depend on one management theory but rather introduce various concepts from diverse management theories that will be in line with their workforce and company culture as well.

One of the important management theories is scientific management theory. It was introduced around the twentieth century when the capability of science to enhance productivity was becoming evident. It employs information and measurements to enable firms to become more efficient. According to the pioneer, Fredrick Taylor, forcing people to work hard was not the best way to optimize results. However, he proposed the generalization of responsibilities to increase the level of productivity. Therefore, according to this theory, managers can observe and even evaluate processes in numerical terms and thus able to distill information that assists them to manage their business successfully and in a cost-effective way (Witzel & Warner, 2014).

The scientific management theory thus assists in attaining certain features. One of this is the enhancement of the ef...

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