“As the environment changes so should the company” (Thompson 1967 in Michalak, 2010). This a fundamental value that must be adopted by organisations in order to effectively adapt to change.
From experience working in a small local hotel business, I am aware of the importance of change and the challenges that change brings to a company. From my own personal perspective, I believe that reluctance to implement change by employees and managers can be a massive barrier to overall change. In the context of the Hotel a lack of willingness to accept and implement change has prevented the business from adapting to changing fashions and trends, leaving it stuck in the past, and has now made it hard to change strategy and catch up.
However, how does this apply to companies in the oil industry?
It is widely recognised that change is needed the oil industry in order to make it run more sustainably and alter to changing environmental conditions (Fraser, 2016). Macalister (2016) has identified that ‘oil “majors” are no longer fit for purpose. However, despite changes to the environment and supply of oil, the industry leaders are yet to make any changes (Fraser, 2016). When thinking about the Kübler-Ross change curve, it is clear to derive that oil industry executives are stuck in the ‘denial’ phase that change needs to happen, with oil executives being ignorant to declining oil (BBC, 2016). In a PwC report it has been suggest that the industry needs one dominant leading figure to get change kick started. Moreover, the PwC report has highlighted that a leader needs to come from a different sector, “to shake up inefficient, older-thinking of the existing regime” (BBC, 2016). This will require a massive transformational change, starting at the leadership level and being implemented throughout the company. (McKinsey, 2016) This will pose as challenging to an industry that has been operating in the same way for years.
References
Gaste, A. (2016) Transformational Change. McKinsey & Company. Viewed 21st October 2016. http://www.mckinsey.com/business-functions/organization/how-we-help-clients/transformational-change
Fraser, D. (2016) Call for urgent changes in oil and gas industry. BBC. 13th June. Viewed 19th October 2016. http://www.bbc.co.uk/news/uk-scotland-scotland-business-36512090
Macalister, T. (2016) Oil firms have 10 years to change strategy or face ‘short, brutish end. The Guardian. 5th May. Viewed 20th October 2016. https://www.theguardian.com/business/2016/may/05/oil-firms-environment-energy-climate-change
Weiner, B. J. (2009). A theory of organizational readiness for change. Implementation Science, 4(1), 1.
The Business of the Oil Industry 