Organizational Behaviour and Organizational Development

Learning
Organization

Gaurav Goel
24/06/2009
 TABLE OF CONTENTS

1.0 Introduction

2.0 Problem Statement

2.1 Discussion

2.1.1 Critical Factor 1: People

2.1.2 Critical Factor 2: Culture

2.1.3 Critical Factor 3: Management

3.0 The Role of Strategic Communication

4.0 Diversity and the Learning the Organization

5.0 Systematic Thinking

6.0 Limitations

12

Organizational Behaviour and Organizational Development| 2

7.0 Effects of changing shell into a learning organization
13

8.0 References
14

1.0 Introduction:
The development of learning organization depends on the development of every
individual’s creativity and the thinking process within the organization. in order to
become competitive, the organization must needs to capture the organizational
knowledge. The change in developed economy focuses towards the knowledge work with
the continuous sophisticated workforce, the capacity for learning from the work
experience, independent thinking along with the awareness of interconnected nature of
business for learning. Many of these factors point to acknowledge the changes in the
business practices. It may astute the recognized and knowledge intensive company. A
learning organization can be defined as the organization where the people at every level
continuously increasing their ability and capacity for producing the better results which
they really care about (Baker and George 2007). This action is taken collectively by the
whole workforce of the company. For presenting the performance and the continuous
improvement requires learning which motivates the companies to become learning
organization. Learning is an ongoing process which hugely gives the personal satisfaction
and reward the employees/workforce. There would be the possibility of achieving the

Organizational Behaviour and Organizational Development| 3

performance together with the desired level of satisfaction for each of the individual
involved through learning. With this view this assignment report discusses the critical
factors in the context of Shell, a petrochemical company. The company is global group of
petrochemical and energy companies with presence more than 100 countries and
collective workforce of more than 102,000. The company’s product and services help to
meet the increasing demand of world for energy with the due consideration of
environment and social responsibility (Dessler, 2004).

2.0 Problem Statement:

Many of the business functions with in the company are facing the challenges and
struggling to operate, manage and improve the efficiency in wok process in order to
ensure the consistent delivery of product and services on time with quality. The major
challenge faced by Shell is the people, culture and the management of overall process
with in the company. Most the management in the company is lacking with the human
skills and in some of the departments there is cultural issues as mix race of people is
working under one roof. The problem of Shell is being addressed for Indian based
operations (Burgelman, Robert and Andrew, 2005).

2.1 Discussion:
As discussed above in the problem statement that Shell is facing the challenges with
respect to the culture, people and the overall management. All the three area of concerns
are the major as well as critical success factor for every organization. We have discussed
each factor below in detail (Brouwer and Maria, 2006).

2.1.1 Critical Factor 1: People

In Shell people are lacking with the skills as there are lack of people who do not have the
background in petrochemical engineering and management. This problem arises due to
lack of motivation and attraction in the job provided by Shell (Hoque, 2005). The
company should motivate, attract and develop the skilled and talented people with in the

Organizational Behaviour and Organizational Development| 4

organization who are committed to the mission, vision and values of the company. There
are the following strategies suggested for the improvement in such factor:

• The company should establish the working environment that could attract and
retain the talented and skilled people
• There should be effective commitment for developing the efficient leadership
• The company should give the authority to develop their skills with full potential
(Gibbons and Robert, 2007)
In addition to the above mentioned strategies the company should introduce a self
development program under which the people can develop the self mastery and can
launch the team development point. In the learning organization, this program will help
the individuals to cope with the significant changes with in the company which have been
implemented in recent years. For management level people, the company should launch
the coaching skill program under which the mangers can learn the management of
performance (Knight and Frank Hyman 2002). As an organizational behavior technique
there is a wide acceptance of recognizing the individual and team performance by
implementing the mission award process. the company should also develop the potential
within every individual through training so that the people can self define their mission
which should align with the company’s mission for obtaining the greater involvement and
shared vision (Lazear and Rosen, 2006).

2.1.2 Critical Factor 2: Culture

Culture is the second challenge faced by Shell. Since the company is a MNC therefore
people of mix race working together which create the cultural issues among them as an
obvious reason. In order to meet this challenge the company should implement the
continuous improvement in everything which company does. There are the following
strategies suggested for implementing the continuous improvement program in Shell:

Organizational Behaviour and Organizational Development| 5

 • The company should identify the improvement opportunities by measuring and
analyzing the overall work processes.
• The company should enable all the employees to participate and play an effective
role for the continuous improvement
• The company should establish the benchmark for all the work process so that
every individual employee can assess its work performance. This will divert the
mind of the employees from creating the cultural issues with in the organization.
(Miles and Snow, 2006).
Culture is a main driver in the multinational corporation for developing the cross
functional teamwork with in the company. The right understanding and better alignment
of the views encourages the people form different department to work together to solve
the specific issues of the company. In the organizational development, team work is
necessary as it encourages for having the systematic approach to solve the problem with
collective thinking. These skills with in the team develop through the creativity and
experience of every individual (Prendergast and Canice, 2008).

2.1.3 Critical Factor 3: Management

The management in the Shell is lacking with the adequate human relation skills which
tend to avoid the most prominent and significant element in the company. The overall
work process are hence not operating with the care which directly impact the
development of the company. More over in the business decision making the company’s
management is lacking with the quantitative approach. The leadership quality within the
organization is not upgraded due to the insufficient and limited capital resources. Though
these issues are important for the company and it should solve it as soon as possible
through organizational development technique (Rayton, 2008). It would be essential for
changing these factors in order to change Shell into learning organization. Before doing it
we need to understand the main characteristics of traditional organization and the
learning organization as provided below:
Characteristic Traditional Learning
Elements Organization Organization
Organizational Behaviour and Organizational Development| 6
 Efficiency and Excellence
Shared Values
Effectiveness Organizational Renewal
Management Style Control Facilitator Coach
Top down approach Everyone is consulted
Strategy/Action Plan
Road map learning map
Flat structure Dynamic
Configuration Ladder
networks
Knowledge is power
People who learn people
Staff Characteristic Mistakes tolerated as
who know
part of learning
Distinctive Staff Skills Adaptive learning Generative learning
Both Financial and non-
Dimension System Financial Measures
financial Measures
Working Groups
Teams Departmental Cross Functional teams
boundaries

(Source: Prendergast Canice. 2006b. `Uncertainty and incentives’, Journal of Labor

Economics, vol.20. no 2, 115-137)

3.0 The Role of Strategic Communication:

The learning process of an organization is same as like the learning process of an

individual. In an organization, the individuals feel the circumstances and accordingly
respond to the situation. They have the capability to analyze and observe the results
which has been arisen due to their action of responsiveness. The individuals then
remember such results which will further help them in future to gain the better outcome
of their action. Apart from this they collect the information from various sources for
future reference (Schein, 2003). In Shell these processes of responding to the situation,
remembering the results and observation from results are missing by the individuals
because of the complexities in communication within the company between the senior
management and the junior management. Apart from there are many other companies

Organizational Behaviour and Organizational Development| 7

which also do not follow such processes. Therefore to convert the Shell into learning
organization, it would be necessary to seek the tools and methods by which Shell can
learn concisely and perform in pursuance of its goals. In search of such tools, dialogue is
the one which is very effective (Rossett, 2004). The word dialogue is inspired from the
Greek word called dialogos which means that the through meaning of the word. In case
of Shell the purpose for bringing in the dialogue is to filter the group of people in order to
develop the synergistic understanding of the individuals about the experiences and goals
among all the people who are involved in such processes. The other reason for using such
tool is that it would be the people with in the organization that have the capability of
sensing, responding, observing and then remembering. A company is nothing but just an
action and resultant articulator of its employees. Hence it can be summarize as whenever
an organization learn it means the individuals employed in that organization are learning.
The researchers in the field of organizational behavior and organizational development
believe that if an organization needs to achieve the desired goals and vision then it should
develop a unitary consciousness within the company environment. In the line of using
dialogue as a tool, the strategic communication refers to the sharing of ideas, information
and experiences among the employees of an organization which should have strategic
significance to that company (Mahoney and Watson, 2008).

4.0 Diversity and the Learning the Organization:

In Shell the prevailing culture encourage the people to keep their ideas with in their mind
and do not attach from the community which is a negative fact in the process of learning
organization. In learning organization there should be culture of diversification of ideas
and thoughts along with the attachment of individual from the community. The
development of learning organization is not an individual task and hence needs a team
work approach (Pfeffer, 2005). It would be essential for capturing the strength, ideas,
strategies, thinking and experience of all the individuals for developing the competency
in the company. On of the important faculty for a company are the customers of the
company as they are the people who actually consume the product and services of an

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organization. If a customer complaint about the product or service then the company
should focus on why this complaint occurs and where the company is lacking in the
quality of product and services. Therefore a learning organization can have the learning
which specifically comes from the people through the following ways:

• Identifying the unique role of every individual and assign the task according to his
capability

• Utilizing the best possible potential of the individual from the diverse background

• Providing the support to each individual

• Determining the various ways of contribution towards the organization’s goal

(Katz and Kahn, 2002)

The following structure defines the brief concept of learning organization.

Mechanism Organism

Structure

Technology Culture

Organization

Organizational Behaviour and Organizational Development| 9

(Source: Gibbons, Robert, 2007. `Incentives in organizations’, Journal of Economic
Perspectives, vol. 12/4.

5.0 Systematic Thinking:

A systematic thinking process is the last approach for developing a learning organization.
It will help the personnel to broaden the knowledge and frame the references for better
understanding to each other. Once the company will apply the knowledge and tools, the
systematic thinking process starts within the company. The implementation of total
quality management within the company would be an essential step for bringing in the
systematic thinking (MacDuffie, 2003).

The following diagram includes the key elements that are important for developing Shell
as learning organization.

Awarene
ss

Environme
Leadership
Learning nt
Organization

Empowerme
Learning nt

(Source: Dessler, G. (2004). Human resource management, (8th edition). Upper Saddle
River, NJ: Prentice-Hall, Inc.

Organizational Behaviour and Organizational Development| 10

There are the following skill sets required by an individual to support Shell into
developing as learning organization:

1. Capability to analyze the culture of the organization

2. Capability to give up the old parables

3. Should posses the ability to identify new patterns which should be multitasking, and
miniaturization with the low level of depression within the company

4. Should capable enough to develop the clear and open perspective i.e. to relax, sense
of humor - ability to laugh and capacity to scan the information and extract the key
point for the success of the company

5. Capacity to establish synergy among the employees of the company and take the
results from such synergy

6. Should eager to learn forever

7. Should have the capacity to create the comfort zone for other and safe working
environment

The visionary step of converting Shell into learning organization would be quite difficult
as it has both the strong as well weak points. In reality the weak point of the company is
the attitude of the employees as it will be changed massively for the development of
learning organization. The positive point for Shell is that the individuals in the company
are keen to learn. In contrast to this, they do not accept that they are lacking with the
skills and knowledge. Therefore it would be necessary to change the attitude of the
people employed in Shell for the successful creation of learning organization. The
successful implementation can be achieved through the exchange of knowledge which
should be available readily (Brouwer and Maria, 2006). In such practice the knowledge
would be the power for Shell and also guarded the employees from jealously. The other
factor which needs to be changed is the culture of openness as it could be the difficult
task. With respect to change this factor, the positive point of Shell is that the individuals
are aware about the prevailing culture and agreeing that this is not obvious in Shell. In

Organizational Behaviour and Organizational Development| 11

contrast to this point the weak part of Shell is that the majority of people do not want to
change the culture as they arte habitual of it (Christensen, Clayton, Joseph and Bower,
2002). The employee engagement and knowledge management can support Shell to
change its culture. Since, it will include the communication structure, employee
involvement schemes, reward systems and industrial relations among the employees. In
the process of developing Shell into learning organization there might be some challenges
as provided below:

• The company might have the operational fire preoccupation which means that the
company is not capable to create the environment so that the employees can sit
back and think strategically
• The company might focused towards the systems and process which would be
exclusion of various other factors
• The upper management might reluctance to provide training due to financial
crunch and motive of cost cutting and more keen to invest in immediate needs
• The individual employees might have the hidden personal agendas which they do
not want to disclose
• All the processes in the company follow the top-down driven approach with lack
of supervision and hence lack of leading the real empowerment
(Foss, Nicolai and Keld Laursen, 2005)

6.0 Limitations:
In the development of learning organization, the most significant problem exists at the
conceptual level. Every individual organization has its own intelligence which might
clash to the intelligence of people employed in the company. Therefore an individual can
claim that it does not have the understanding of new system till he will conceive the
change as a whole. There could be another limitation for Shell as the organizational

Organizational Behaviour and Organizational Development| 12

change will not be possible to isolate the individual action within the company. It will be
hard to say that the company has the existence level beyond the level of its employees
and finally become a problem for changing the organization into learning organization.
Apart from these the other limitation will be that the senior management has the
boundless faith in the continuous development within the organization which will lead
the non-acceptance of reason for changing the Shell into learning organization (Rayton,
2008).

7.0 Effects of changing shell into a learning organization

As we saw in the beginning that how shell faced many difficulties but after using certain
steps and measures shell changed the organization structure and culture to form a
learning organization. There is no longer a right way to do a thing as they came to a
subject of re-examination. They changed themselves to systematic thinkers and believed
that the current reality is one of the many possible realities which lead to a critical
thinking process from top level to lower level. They came up with a scenario planning
system where many scenarios are kept into mind and the company actually rehearses that
will be there reaction if any of the few possible scenarios turn into the eye reality. This
helped shell to analyze and sustain even when the oil price dropped to $25 a barrel. The
process of learning organization in the company is not over yet as this process can never
be over as it’s an on-going process and will always help the company to sustain and
remain at the top 10 in several kind of economic crises and disasters.( Kline, Peter and
Saunders, 1998)

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8.0 Reference:

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• Burgelman, Robert . A.& Andrew S. Grove 2005trategic dissonance’. California
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• Christensen, Clayton M. and Joseph L. Bower 2002 customer power, strategic

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• Dessler, G. (2004). Human resource management, (8th edition). Upper Saddle
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• Prendergast Canice. 2006b. `Uncertainty and incentives’, Journal of Labor
Economics, vol.20. no 2, 115-137.
• Rayton, 2008. `Rent sharing or incentives? Estimating the residual claim of
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