Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Office of the Vice President for Academic Affairs
Business Administration Major in Marketing Department

DIVERSIFICATION AND INCLUSION: PILIPINAS SHELL PETROLEUM

CORPORATION

A Research Paper

Submitted to

Faculty of Human Resources

In Partial Fulfillment

Of the Requirements in Human Resource Management

By:

Pagaduan, Jessel P.

Villanueva, Anna Beatriz L.

BSBA MM 1- 4D

MAY 2019
 THEORY: DIVERSIFICATION

Diversity can be broadly defined as a difference between people. Whether those

differences are cultural, intellectual, or gender-related, employees in the business
community share a common goal of teaming together to ensure professional success.
Diversity in the workplace adds value to an organization by allowing workers to approach
their jobs from different perspectives. Many employers recognize the need for workplace
diversity and initiate strategies to maintain a diverse workforce (Scott, S., 2019).

Workforce diversity means similarities and differences among employees in terms

of age, cultural background, physical abilities and disabilities, race, religion, gender, and
sexual orientation. No two humans are alike, everyone has their own identity. People are
different in not only gender, age, culture, race, social and psychological characteristics
but also in their perspectives and prejudices in life. Society had discriminated on these
aspects for centuries. Diversity makes the work force heterogeneous. In current scenario,
employing diversified workforce is a necessity for every organization but to manage such
diversified workforce is also a big challenge for the management.

TYPES OF DIVERSIFICATION

 Horizontal Diversification
It is acquiring or developing new products or offering new services that could appeal to
the company´s current customer groups. In this case the company relies on sales and
technological relations to the existing product lines. For example a dairy, producing
cheese adds a new type of cheese to its products.

 Vertical Diversification
It is occurs when the company goes back to previous stages of its production cycle or
moves forward to subsequent stages of the same cycle - production of raw materials or
distribution of the final product. For example, if you have a company that does
reconstruction of houses and offices and you start selling paints and other construction
 materials for use in this business. This kind of diversification may also guarantee a regular
supply of materials with better quality and lower prices.

 Concentric Diversification
It is enlarging the production portfolio by adding new products with the aim of fully utilizing
the potential of the existing technologies and marketing system. The concentric
diversification can be a lot more financially efficient as a strategy, since the business may
benefit from some synergies in this diversification model. It may enforce some
investments related to modernizing or upgrading the existing processes or systems. This
type of diversification is often used by small producers of consumer goods, e.g. a bakery
starts producing pastries or dough products.

 Heterogeneous (conglomerate) Diversification

It is moving to new products or services that have no technological or commercial relation
with current products, equipment, distribution channels, but which may appeal to new
groups of customers. The major motive behind this kind of diversification is the high return
on investments in the new industry. Furthermore, the decision to go for this kind of
diversification can lead to additional opportunities indirectly related to further developing
the main company business - access to new technologies, opportunities for strategic
partnerships, etc.

 Corporate Diversification
It involves production of unrelated but definitely profitable goods. It is often tied to large
investments where there may also be high returns.
THE COMPANY

PILIPINAS SHELL PETROLEUM

CORPORATION

Shell Fuels aims to meet the energy needs of society in ways that are economically,
socially and environmentally viable, now and in the future. Learn about the business and
people, which grew from a small shop in London nearly 200 years ago to become a major
energy company.

Pilipinas Shell traces its roots to Asiatic Petroleum Company (Philippine Islands), Ltd.
which opened for business in the Philippines and began to import and sell motor gasoline
and kerosene in 1914. Asiatic Petroleum Company (Philippine Islands) Ltd. was renamed
The Shell Company of the Philippine Islands, Ltd. in the 1940s.
In 1959, Pilipinas Shell was incorporated under the name The Shell Refining Company
(Philippines), Inc. in compliance with the then required percentage of Filipino ownership
(25%) in large industrial ventures. In 1970, Pilipinas Shell was renamed Shell Philippines,
Inc. and was later renamed Pilipinas Shell Petroleum Corporation in 1973.
In 1976, Meralco Securities Corporation acquired 25% stake in the Company resulting in
the Company being 50% owned.

Shell is one of the leading fuel retail players in the country.They aim to continue providing
quality products and trusted service to more Filipino motorists across the archipelago.
Filipinos can find our premium performance fuels, Shell V-Power Nitro Plus Racing, Shell
V-Power Nitro Plus Diesel, and Shell V-Power Nitro Plus Gasoline, along with our main
grade offers of Shell FuelSave Gasoline and Shell FuelSave Diesel in our stations all over
the country.
 THE SHELL BRAND
For more than 100 years the word Shell, our pecten emblem and distinctive red and yellow
colors have visualized the Shell brand and promoted our values and the quality of our
products and services all over the world.

The word Shell first appeared in 1891, as the trademark for kerosene shipped to the Far
East by Marcus Samuel and Company. This small London business dealt originally in
antiques, curios and oriental seashells. These became so popular – the Victorians used
them to decorate trinket boxes in particular – that soon they formed the basis of the
company’s profitable import and export trade with the Far East.

The word was elevated to corporate status in 1897, when Samuel formed the Shell
Transport and Trading Company. The first logo in 1901 was a mussel shell, but by 1904
a scallop shell or pecten emblem had been introduced to give a visual representation of
the corporate and brand name.

When the Royal Dutch Petroleum Company and Shell Transport and Trading merged in
1907, the latter’s brand name and symbol (Shell and the pecten) became the short-form
name and emblem of the new Royal Dutch Shell Group. And so it has remained ever
since.

The form of the Shell emblem has changed gradually over the years in line with trends in
graphic design. The current emblem was introduced in 1971. Thirty years on it stands the
test of time as one of the world’s most recognized symbols.
 The Shell emblem from 1900 to the present

The Shell name

The origin of the Shell name can be traced back to the seashells that Marcus Samuel
senior imported from the Far East during the late 19th Century. When his sons Marcus
junior and Samuel were looking for a name for the kerosene that they were exporting to
Asia, they chose Shell. As kerosene sales came to dominate the business’s turnover, the
name was adopted for the new import-export organization that was set up in 1897 – the
Shell Transport and Trading company. The Shell name briefly took a back seat in 1907
when the company was merged with Royal Dutch to form, the Royal Dutch Shell Group,
but the newly formed business quickly became known as Shell for short.
 100 YEARS IN THE PHILIPPINES

Shell celebrates 100 years of helping build a nation

100 years of using their energy for the good of the country.

From the moment they first opened their doors in 1914, they have always done all that
they can to help empower Filipinos everywhere. Their drive for innovation and desire for
nation-building has constantly guided their actions in pushing the Philippines forward.

This drive is seen in our Tabangao Refinery, one of the world’s most energy-efficient
refineries. It is evident in the Malampaya Deep Water Gas-To-Power Project, a
revolutionary joint venture which provides them with cleaner energy and promotes
Philippine energy-independence. It is also present in their many social programs – from
partnerships with Gawad Kalinga to educational programs like Gas Mo Bukas Ko to
projects on health, agriculture, sports and the arts, to name a few.

They take pride in their efforts to build a stronger nation. This has guided them in their
first 100 years in the Philippines. And it will remain with them as they turn a new page in
their company’s history. –From Shell Philippine.

PILIPINAS SHELL’S SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As at 30 June 2016, Pilipinas Shell does not have any Subsidiaries.

As at 30 June 2016, Pilipinas Shell has ownership in the following Associates:

Bonifacio Gas Corporation

Bonifacio Gas Corporation is in the business of construction, establishment,
ownership, maintenance and operation of a centralized gas distribution system.

Kamayan Realty Corporation

Kamayan Realty Corporation is in the business of acquisition, development and
management of real estate properties.

As at 30 June 2016, Pilipinas Shell is part of the following Joint Venture:

 Pandacan Depots Services, Inc.
Pandacan Depots Services, Inc. is in the business of management and operation
of storage, handling and distribution facilities and the implementation of projects
within said facilities.

Pilipinas Shell Foundation, Inc. (PSFI)

Established in 1982, PSFI is an independent non-profit organization that

implements social investment projects in the country designed to help
disadvantaged people become more productive and responsible members of
society. PSFI has benefited nearly 2 million people all over the country through its
community development programmes.

VISION, MISSION AND VALUES

Pilipinas Shell traces its roots to Asiatic Petroleum Company (Philippine Islands) Ltd. in
the Philippines back since 1914, and has grown to become one of the leading oil refining
and marketing businesses in the Philippines.

VISION

To be the most admired and trusted company that powers progress for the Filipino
through high-quality energy products & services.

MISSION STATEMENTS

 They delight their Customers with high quality fuels, lubricants & specialties, and
best-in-class technical & convenience services.

 They attract and retain the best Employees through very competitive remuneration
and growth opportunities.

 They engage the most professional Business Partners in long-term and mutually-
beneficial relationships.
  They partner with Government and Communities in promoting social investments
and advocacies that contribute to national development.

 They deliver consistent, attractive and increasing returns for their

Shareholders through operational excellence, superior value propositions and
strong corporate governance.

VALUES

Their core values are honesty, integrity, care, humility, commitment and respect for
people. The Shell General Business Principles, Code of Conduct and Code of Ethics help
everyone at Shell to act in line with these values and comply with all relevant legislation
and regulations.

DIVERSIFICATION STRATEGY (IN WORKPLACE)

Their people are essential to the success of Pilipinas Shell. They strive to recruit, develop,
and retain such talented individuals; to continuously support and elevate their
performance to a global standard; and to maintain a healthy, productive, and stable
organization. Pilipinas Shell’s Employee Value Proposition (EVP) includes ownership and
accountability for the Shell brand and reputation. Their corporate culture enhances their
drive for excellence and builds on opportunities for personal development and
professional growth, as well as ways to contribute to nation-building. The Human
Resources (HR) Department, together with the Company’s leadership, ensures that their
managers and supervisors engage, enable, and motivate their staff to perform, in
accordance with the Shell values and business principles.
 A CULTURE OF DIVERSITY IN SHELL

DIVERSITY AND INCLUSION INITIATIVES

Pilipinas Shell aims to maintain a diverse workforce, working collaboratively in an

inclusive workplace. They encourage and nurture diversity of talent, practicing equal
opportunity in recruitment, career development and promotion, training, and rewards for
all employees. One of the key levers that help drive their Diversity and Inclusion (D&I)
approach is their talent acquisition targets, cascaded down locally to ensure that their
resourcing team can implement a deliberate and purposive recruitment strategy. There
are also efforts to provide greater flexibility in terms of job roles and functions.
Furthermore, they adhere to their non-discrimination policy in hiring and they hire
employees based on merit and capacity to fulfill the job functions.

As of 31 December 2018, Pilipinas Shell employs 703 people and almost all of them are
Filipinos. In its effort to recruit from local areas where it has business presence, Pilipinas
Shell has developed the following programmes jointly with the Pilipinas Shell Foundation,
Inc. (PSFI) such as Gas Mo Bukas Ko (GMBK), Sanayan ng Kakayahan sa Agrikultura
(SAKA), and Sanayan sa Kakayahang Industriyal (SKIL) to encourage hiring and training
to upskill local communities.

Pilipinas Shell also aims to close the gender gap through increased representation of
women among senior leadership. In various areas of the business, female leadership is
in place and is increasing. They have two Board-level female executives, whereas female
leaders comprise 21% of senior management, 33% of middle management, and 48% of
frontline supervisors and operations heads. Finally, they are increasing the potential of
women joining a male-dominated engineering labor pool by supporting STEM-focused
programs (such as NXplorers). Their biggest test of D&I would be the diversity of thought
in the Company, that allows them to come up with creative solutions to current and future
needs.
DIVERSITY OF GOVERNANCE BODIES AND EMPLOYEES
Closing the Generation Gap

7 years ago, Shell had a challenge around employee engagement. The leadership’s
views differed from the millennial employees in the centre. And General Manager of SBO
Manila Mr. Ed Payongayong took these challenge. And so, he tried to close this gap and
get everyone aligned behind Shell’s core values of honesty, integrity and respect.

So, he create a platform that works for both generations and delivers meaningful results.

He created Go Green, an inter-floor competition in which people gain points for adhering
to Shell principles and programs, such as energy conservation and management, waste
management, and safety, as well as diversity and inclusion initiatives and their Shell Core
Values. The underlying idea was to create a harmonious relationship between leaders
and staff, while increasing productivity and engagement.

He created this gamified platform because Generation Y does not want to be told what to
do; they are motivated by competitions and receiving rewards. While the Gen X’s could
be fully intentional about their learning and champion their beliefs, it also offered an
element of visual fun and competitive engagement for the millennials in their team.

The Go Green programme created a lot of cohesion, as well as eliminating any safety
incidents and conflicts of interest; none have been reported in the five years since the
program has been running. Now everyone feels ownership of their safety initiatives, and
He have seen people actively intervene to maintain these behaviours, from the bottom-
up, not the top-down.

These challenge taught them that they just need to have a creative style of leadership in
their environment. And, a traditional one simply won’t work.
FEMALE EMPOWERMENT
Women have joined every aspect of the business, from field operators all the way to
female executives, including three female directors in the current Board. As of last count,
women account for 35% of the employees. Pilipinas Shell enables women to compete
professionally and on equal footing with colleagues and peers.
This is our new normal:

Women work in physically demanding jobs. Andrea Nicole Acorda is a field inspector in
the refinery—a job that entails working at heights, confined spaces, and biking during site
inspections. Being one of the few female inspectors, she has fought against stereotyping.
“I remain persistent and determined to give my best in everything I do because I’ve
wanted to prove that Shell is right for entrusting such position to a woman like me. Thanks
to Shell for its strong advocacy in diversity and gender equality, for recognising females’
strengths that shifts the mind-set of the majority of the population,” she said.

Women benefit from inclusive leadership. Mae Ascan serves as the Regional Technical
Lead for Asia at Shell Global Solutions. Her team has one male scientist; the rest are
female. Not too long ago, she started work as the first female chemist assigned to the
(now defunct) Pandacan Terminal laboratory. “Within four years’ time, I became the lab
manager, and it was probably 90% female,” Ascan said. She describes the transition to
a more diverse laboratory as a natural outcome of the intent to be more inclusive. “It’s a
work in progress,” she said.

Women pursue higher studies and maintain a full-time job. Mae Mojares credits Shell with
supporting her dream: she pursues her law studies while working full-time as a legal
administrative assistant in Pilipinas Shell. “Sometimes, I need to leave the office earlier
than usual to attend to some school requirements. This is when I am grateful to my line
manager and teammates in Legal, they are very considerate and sympathetic. They
understand the situation and will remind you of the work that needs to be done.”

Women negotiate a flexible schedule to achieve work-life balance. Kath Valentin-Ringor,

HR Process and Systems Advisor at Pilipinas Shell, experienced a dilemma in 2013 when
her prematurely born daughter needed to be brought to therapy thrice a week. Pilipinas
Shell offered a flexible working arrangement. “It is the ideal setup for me to be able to
attend to my daughter’s needs and at the same time pursue my career in Shell,” said
Valentin-Ringor. “I am able to look after my priorities without giving up one over the other.”
Opportunities to lead and work in physically demanding jobs; educational support; and
flexible working arrangements are only part of what makes Pilipinas Shell an ideal
employer.

Benefits

Since January 2018, Pilipinas Shell employees are able to avail of 16 weeks or 120
calendar days of paid maternity leave, which is twice more than the 60-day mandatory
leave. The initiative is intended to support working mothers and their families.

Since Shell makes employee decisions based on qualifications, merit, performance and
other job-related factors, the company also welcomes qualified women into traditionally-
male dominated and physically-demanding jobs. Shell’s gender diversity in more
physically-demanding jobs has allowed 37% of women to be on front line supervision and
54% for front line operations. More women are doing on-ground responsibilities because
of their capabilities more than anything else.

Like their male colleagues, women working in Shell also benefit from flexible working
hours, good and safe working conditions, and competitive terms and conditions of
employment.

“The women in Pilipinas Shell know their potential and have the drive to show their
commitment to the job in more ways than one. We love our job, so we make it our
responsibility to balance it with family,” says Rivera.

Women’s Network

Female employees also benefit from Shell Women’s Network, one of Shell’s many social
groups and support networks that have been established to bring the company’s diverse
workforce together. The Shell Women’s Network helps female staff to connect, share
ideas and support each other in reaching their potential.

Established in 2016 as part of Pilipinas Shell’s 105-year legacy of promoting the welfare
and wellbeing of its partners and employees, the Women’s Network is one of 20 thriving
in countries where Shell operates around the world.

Regalado views the Women’s Network as a safe space where every woman of Shell is
welcome to be herself.

“It’s a very good mechanism to share issues that are common to Filipino women,” she
says. “We don’t want to be conscious about our positions, status in life, or education—it’s
just us women being women, empowering each other in every way we can.”

There is an opportunity to do just that during the

“Women Who Drive the Future,” a luncheon
hosted by the Women’s Network to enable the
women leaders within Pilipinas Shell to connect
with key women executives and influencers in
other industries.

In holding activities like the luncheon, the

Women’s Network gives opportunities for
women to showcase their effectiveness in
promoting collaboration in the workplace, adds
Rivera.

The activity scheduled on April 3 at The Manila House is aligned with the National
Women’s Month Celebration theme “We Make Change Work for Women,” which
highlights the empowerment of women as active contributors to and claimholders of
development.
Regalado, Dimailig, and Rivera are just three of hundreds of women employees in the
country and thousands more around the globe who attribute their career development
and success to Shell’s progressive and inclusive work policy.

Pilipinas Shell remains steadfast in providing a safe space that respects women, develops
them for leadership roles, and increases their level of participation in the workforce, so
they can raise their voices to celebrate National Women’s Month together.

SUPPORTING LGBT TALENT

Visible Pride: International Coming Out Day at

Shell On October 11, International Coming Out
Day, a riot of rainbow colours marked the lobby
and various floors of Shell House in Valero,
Makati. Shell delivery trucks and fuel tankers at
the Tabangao Refinery in Batangas City also
sported rainbow flags. In operational sites,
including Shell stations, Diversity Walls – with the
challenge, “Let’s make our workplace more
inclusive for everyone” – prompted employees
and the general public to scrawl uplifting
messages. All of these signified solidarity with the
lesbian, gay, bisexual, and transgender (LGBT) community.

International Coming Out Day raises awareness on the challenges faced by the LGBT
community and the individual struggle to be authentic to oneself. Pilipinas Shell, on its
second year of joining the global celebration, adopted the theme of “Empowering Every
Employee to Bring Their Whole Self to Work.” This asserts the Shell value of respect for
people, and reinforces the standard of a safe workspace for everyone – or in Cesar
Romero’s words, “in Shell, you can be who you [truly] are.”
Shell celebrates difference to make a difference – that is, to #MakeTheFuture by
discouraging workplace discrimination.

Pilipinas Shell remains undaunted in its advocacy. “I am a genuine believer that

establishing a truly diverse and inclusive culture, despite the challenges, can be a real
source of competitive advantage for the Company. A diverse and inclusive workplace,
embedded with our principles of honesty, integrity, and respect, brings together
remarkable people and enables them to be themselves,” said Romero.

Shell’s support for LGBT equality includes:

 Workplace Pride – Shell is a member of Workplace Pride, a non-profit umbrella

organisation foundation based in Amsterdam that strives for greater acceptance of
LGBT people in the workplace and society. In 2012 we became a co-signatory of
the Workplace Pride Declaration of Amsterdam in support of an LGBT inclusive
workplace.
 Ally programmes – Shell has established a number of ally programmes that serve
to make senior leaders more aware of the challenges of being LGBT across Shell,
as well as having leaders visibly and actively supporting the work of the various
networks.
 Flying the flag for Pride –As a public sign of corporate support, Shell flies the Pride
flag outside many offices during Pride weeks and International Coming Out Day.
 Awareness training – We provide awareness training on sexual orientation as part
of our D&I Learning Portfolio. We incorporate LGBT inclusion in all D&I training
globally wherever Shell operates, including countries where being LGBT may be
subject to restrictive legislation.
PEOPLE WITH DISABILITIES

They are committed to creating an environment that enables all employees to achieve
their best, regardless of circumstance. This belief underpins how they work with
employees with disabilities, ensuring they’re given a platform from which to reach their
full potential and become the boundary-pushing innovators of the future. At Shell they
create a space in which people with disabilities can thrive. From making the recruitment
process open and transparent for everyone, right through to ensuring the workplace is a
safe and empowering environment.

Support in numbers

To support their employees with disabilities, they have a number of supportive internal
networks in place, most notably the enABLE Network. First launched in 2005 in the UK,
there are now six enABLE Networks across the globe, including the UK, the Netherlands,
France, the USA, Canada and Brazil.

The enABLE Network provides people with disabilities and people whose lives have been
touched by those with disabilities an open forum to engage and share experiences.
Through this open discussion, the network raises awareness and understanding of the
challenges faced so that line managers and colleagues have the knowledge to be able to
thrive in the workplace. It allows employees with disabilities the opportunity to improve
the work environment and processes to make it more inclusive for all.

Creating a space for this dialogue is crucial to facilitating the kind of open collaboration
that is required for employees with disabilities to thrive. –From Shell

Shinning a light on an invisible disability

Sometimes the hardest disabilities to live with are the ones you can’t see. Stuart, a
Recruiter, tells his story of overcoming a sometimes stigmatised condition.
Stuart Young joined Shell having been top of his graduating class at the University of
Alberta in Canada.

With a degree in Commerce and Business Law, he’d originally planned to become a
lawyer, but, after meeting a Shell recruiter at a university open day, he was inspired to
join. And eventually he was hired by the company.

But there was something about Stuart that he had not yet shared with his colleagues. He
arranged a meeting with his HR advisor and shared his condition: Stuart has Attention
Deficit Hyperactivity Disorder (ADHD) and has been struggling with it since childhood.

Together with his HR advisor and manager, Stuart devised a plan for dealing with his
condition. They decided he would take part in an external 12-week course to help him
deal with ADHD and tackle his workload in a more focused, effective way. To support
this, Stuart, with the approval of his manager, arranged time every Friday afternoon for a
mental health professional to visit him in the office.

Now, in his role as a Graduate Recruiter, Stuart is in a unique position to help students
and graduates with similar disabilities find their way at Shell, and to continue promoting
an inclusive environment where everyone can achieve great success. One of the key
pieces of advice he gives is that you need to speak out to receive help: the support is out
there and if you have an invisible disability, you shouldn’t be afraid to expose it.

For Stuart, speaking out and the support he received from his manager and colleagues
was the key to overcoming his disability: “People need the resources, but more than that
they need to feel they’re not alone.”
FINDING THE RIGHT TALENT

703 *Based in Annual & Sustainability Report 2018

Regular employees

As the demand for energy rises, we will need more talented people who are dedicated to
pursuing a better energy future for all. Our recruitment process answers several
questions:

1. “Is the applicant skilled enough?”

2. “Does the applicant have potential and learning ability?”

3. “Is the applicant motivated to work?”

4. “Do the applicant’s values align with Shell’s values and principles?”

In 2018, there were 57 new hires at Pilipinas Shell. The turnover rate for the past two
years has been steady at 3.68%.

Pilipinas Shell takes pride in prioritizing hiring and development of locals for key strategic
positions, a strategy that more multinationals have begun to adopt.
REACTION

Nowadays, an insights regarding human resource management has become one of the

central roles in part of organizational development or in a company. This insights indicates

that human behavior management is getting more and more important because human

is compared as the main engine for making an organization achieve its desired goals.

Since most private businesses and public businesses today have a new policy ‘global

organization’ in order to expand the market, many organizations offer an opportunity

for all employees whether they have differences in terms of age, cultural background,

physical abilities and disabilities, race, religion, gender, and sexual orientation, as long as

they perform according to the values and business principles of the company. And one of

these companies is a Shell Group of companies. They recognize that the heart of their

Company is their people. Pilipinas Shell Petroleum Corporations that stands as a

conglomerate of Shell Group of companies here in the Philippines, enables to comply for

giving a great opportunity for all of their employees. They continue to improve their

employee value proposition to attract, develop, and retain world-class talent. They

engage them through various initiatives to maintain their culture of care and safety. And

by this performance, we can say that they acknowledge the importance of making an

actions towards social justice issues. And they acknowledge that business, talent, and

social challenges are among the tremendous forces working together that reshape a

potential leaders to run their business. Our world grows increasingly complex and

diverged by the day, thus making diversity and inclusion are vital for modern- day

business. And those who embrace it are more ready to respond to an ever- changing
world and are in the best position to reap the growth opportunities and benefits offered

by a diverse ad inclusive workforce.

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