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    TABLE OF CONTENTS

    NO. CONTENTS PAGES

    Acknowledgement 1

    1.0 Background of the company 2 - 4

    2.0 Literature Review 5 - 7

    3.0 Main Contents .. 8 - 13

    4.0

    5.0

    Recommendations

    Summary

    14 16

    17

    6.0 Conclusion 18

    7.0 References 19 - 20

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    ACKNOWLEDGEMENT

    First and foremost, gratefulness to God for without His providence and help -

    granting us good health and courage we would not be able to accomplish this group

    assignment on the prompt time.

    Thanks to our MGT 751 courses lecturer, Dr Herwina Rosnan for the

    guidance given through out the working out of this assignment.

    Not to forget, the company of Shell Refining Federation of Malaysia (FOM)

    Bhd. Port Dickson, Negeri Sembilan for all the knowledge and information this had

    become very essential and useful during the accomplishing of this assignment.

    Last but not least, appreciation and thanks goes to our classmates, friends

    and family for support given in terms of motivation and money indeed.

    To all groups members: Nurul Nazurah Nasri, Sharipah Nor Asiah, Ahmad

    Shazeer and Noraini Saait congratulation for the success we had achieved. We had

    worked as a great and unite team. Thank you for all the effort and determination to

    make this assignment a success one. Hope that this project will become an

    inspiration to all of us.

    Thank you.

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    1.0 COMPANYS BACKGROUND

    SHELL REFINING COMPANY (FOM) BHD. PORT DICKSON

    The Shell Refining Company at Port Dickson produces a comprehensive range

    of petroleum products, most of which are consumed within Malaysia. In 1999, the

    company completed its RM1.4 billion investment in Malaysias first Long Residue

    Catalytic Cracking (LRCC). The LRCC represents an extremely important commitment

    to this companys future.

    At the same time, striving for maximum return to their shareholders, they

    also believe in giving equal attention to caring for their environment and to

    contributing to social development in their community. They actively encourage and

    support diverse wealth creation in the community, the development of new skills

    and expertise and the transfer of new technologies and best business practices to

    this country. They take pride in being a dependable and trusted participant in

    community initiatives and a caring and thoughtful neighbour.

    Shell Refining Company Port Dickson has been advocating the adoption of

    sustainable development by all industries in Malaysia. A sustainable future begins

    with their carefully planned investments today, which ensure that they do not harm

    their environment and inhibit their children from developing and prospering as they

    wish to themselves.

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    VISION

    To be the top performing and most admired refinery in Asia.

    MISION

    To continuously deliver shareholder value by:

    Manufacturing and supplying oil products and services that satisfy theneeds of their customers.

    Constantly achieving operational excellence. Conducting their business in a safe, environmentally sustainable and

    economically optimum manner.

    Employing a diverse, innovative and results-oriented team motivated todeliver excellence.

    OBJECTIVES

    They are committed to deliver sustainable excellence in business performance by

    focusing on the following:

    Benefit the shareholders. Realize the potential of their people. Meet the customer requirements. Maximize refinery margins. Safeguard asset integrity. Deliver structural cost reductions. Sustain a robust management system. Deliver continuous sustainable Health, Safety, Security and Environmental

    excellence.

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    MANAGEMENT LEADERSHIP TEAM

    Board of Directors

    Dato' Saw Choo Boon

    Chairman, Non-Independent and Non-Executive Director

    Raja Ahmad Murad bin Raja Bahrin

    Executive Director and Managing Director

    Dato' Seri Talaat Bin Husain Tan Sri Clifford Francis HerbertIndependent & Non Executive Director Independent and Non-Executive Director

    Dato' Jaafar Indot Mark Owen Stevens

    Independent and Non-Executive Non-Independent and Non-Executive

    Director Director

    Dato' Mohzani bin Abdul Wahab Thomas Michael Taylor

    Non-Independent and Non-Executive Non-Independent and Non-Executive

    Director Director

    http://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#sawhttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#rajahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#yahyahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#datohttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#mohhttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#thomashttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#thomashttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#mohhttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#datohttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#yahyahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#rajahttp://sww.shell.com/downstream/manufacturing/port_dickson/about/rmt/#saw
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    2.0 LITERATURE REVIEWIn this research study, we had found that the factors that contribute to

    change management in the organization are the major focus. We had looked at the

    past researches done by previous researches in order to identify the most popular

    factors. The factors are leadership style, empowerment, motivation and rewards,

    and dynamic relationship. On the other hands, the factors of leadership that can

    contribute to change management are inter-organizational relationship,

    organizational learning, processing information and making decision and

    interaction/communication.

    LEADERSHIP STYLE

    According to Abraham, Griffin and Crawford (1999) in their research titled

    Organization Change and Management Decision in Museums; the leadership style

    plays successful change outcomes, which emphasized involvement, participation and

    empowerment.

    EMPOWERMENT

    Based on the research titled Non-liner Change in Organizations: Organization

    Change Management Informed by Complexity Theoryby Styhre (2002), the research

    was done in Telecommunication Company. The researcher was found that one of

    the purposes for organization change was top management wanted to examine

    whether more empowered workers would be able to be more productive as an

    effect of the broader and deeper work assignments. Abraham, Griffin, Crawford

    (1999) supported his idea and that leader can emphasized involvement, participation

    and empowerment in order to get successful change outcomes.

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    MOTIVATION AND REWARDS

    One of the factors that can contribute to change management in the

    organization is motivation and rewards. According to Abraham, Griffin and Crawford

    (1999) in their research titled Organization Change and Management Decision in

    Museums, the importance of aiding the transition by recognizing and rewarding

    employees involved in the improvements.

    DYNAMIC RELATIONSHIP

    Based on theJournal of Management and Development, one of the research

    titled The Learning Organization New Lessons/Thinking for the Management of

    Change and Management Development? by Carr (1997), the researcher consider

    planned change in terms of dynamic relationship involving two groups of forces

    which are driving forces and resisting forces.

    INTER-ORGANIZATIONAL RELATIONSHIP

    According to Testa (2002) in his research titled A Model for Organization-

    based 360 degree Leadership Assessment, one of the factors of leadership that can

    contribute to change management is inter-organizational relationship. From an

    economic perspective transaction, cost economics suggests that inter-organizational

    relationship is useful in reducing the cost of production.

    ORGANIZATIONAL LEARNING

    Refers to the researchA Model for Organization-based 360 degree Leadership

    Assessmentdone by Mark R. Testa (2002), organizational learning plays important

    role in leadership that can contribute to change management in the organization. A

    more recent rationale for strong stakeholder relationships is support for

    organizational learning.

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    PROCESSING INFORMATION AND MAKING DECISIONS

    According to Pech (2002) in his research titled Developing a Leadership

    Knowledge Architecture: a Cognitive Approach, managers programmes like

    scheduling time, processing information and making decisions remained deep inside

    their brains. He claimed that researchers often describe managerial programmes

    with words such as judgment and intuition, but that they seldom stop to realize that

    these are merely labels for describing our ignorance.

    INTERACTION/COMMUNICATION

    Communication plays important role in change management. Refers to the

    research A Model for Organization-based 360 degree Leadership Assessment done

    by Mark R. Testa (2002), the researcher mentioned that clearly, communication and

    mutual understanding on behalf of all parties involved is essential in ecosystem-

    based relationships. The process of 360 degree feedback used so often today in

    leadership development may be applied to this organizational dilemma.

    This point also supported by Abraham, Griffin and Crawford (1999) which

    they stated the importance of communication. Successful change outcomes would

    most likely be associated with communication strategies that emphasized direct

    communication and proof by managers of commitment to the change process as

    well as a variety of media emphasizing written or symbolic communication.

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    3.0 CHANGE MANAGEMENT IN SHELL REFINING CO. (FOM) BHD. PORT DICKSON

    Organizational change involves moving an organization and the functions,

    teams and people within it, from a current state to a desired future state. Change

    management involves the effective facilitation of this move within the scope of the

    people management policies and practices of the respective business. The effective

    management of change is a core capability in nowadays organizational environment

    and consulting approaches have proven to be highly effective.

    Change management applies to change initiatives that have an impact on a

    number of people or where change extends across organizational units, typically

    referred to as transitional or transformational change. With the world becoming

    increasingly competitive, it is necessary for organizations to run as efficiently as

    possible. This is especially true for a large multinational company such as Shell,

    which generated billions of dollars worth of revenue from various businesses across

    the globe.

    Reviews such as the Business Improvement Review (B.I.R), serve to identify

    opportunities for improvement so that initiatives can be developed to exploit those

    opportunities and ensure that precious resources are channeled where they can

    yield the greatest benefit to the organization at the right time.

    The B.I.R. at SRC Port Dickson was held in November 2006, culminating with

    the Handshake with Mark Stevens, RVP East Manufacturing, on 18th January 2007.

    The 2006 B.I.R. focus was on Organizational Effectiveness (OE), Operational

    Availability (OA) and Margin & Energy to develop sustainable improvement tactics in

    those areas.

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    Business Improvement Review (B.I.R) Logo

    The B.I.R. logo shows Shell moving towards clearly defined targets by

    focusing in the five work streams represented by the legs of the arrowhead. The

    orange colour represents the burning desire of the staff to achieve the targets.

    What is a B.I.R.?

    The Business Improvement Review or B.I.R. process is a Downstream-One

    initiative rolled-out to all Shell manufacturing sites worldwide. It is intended to

    define and priorities the improvement agenda for manufacturing sites based on

    identified financial and performance improvement opportunities. A full B.I.R. would

    cover five areas of focus or work streams. These are:

    1. Health, Safety, Security and Environment or HSSE

    2. Non Energy Cost Coverage or NECC

    3. Margin & Energy

    4. Operational Availability or OA

    5. Organizational Effectiveness or OE

    The goal of a B.I.R. is to identify gaps in performance in each work stream

    with respect to accepted benchmarks and generate realistic and sustainable tactics

    to close those gaps. The B.I.R. will present us with a comprehensive plan for the

    coming few years to improve and sustain their performance, and deliver significant

    savings to the business. The Organizational Effectiveness aspect also looks at soft

    issues that aim to improve productivity and the sense of fulfillment for the

    employees in the organization.

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    Each new initiative that is developed will first be prioritized using an Initiative

    Prioritization Tool. Approved tactics will be tracked in terms of progress (progress

    against planned timeline) and performance (actual results versus intended outcome)

    via the Business Improvement Plan Tracker (BIPT) which is maintained at each site by

    the Business Improvement Manager (BIM).

    How will the B.I.R. be conducted?

    The B.I.R. will be conducted by a team comprising of visiting consultants from

    Shell Global Solutions International B.V. (SGSI) as well as local site representatives.

    The event at Port Dickson will be coordinated by the site Business Improvement

    Manager (BIM), Mr. Razif Rashid.

    The roles and responsibilities of the various local functions that have a part to

    play in the B.I.R. are given in detail in a separate document. However, in brief, each

    of the three work stream teams will consist of:

    i. Workstream SponsorAn Organization Member Leadership Team (OMLT) who will serve to advise the

    team and provide support to gain access to essential resources.

    ii. Workstream LeaderA SRCPD staff who will head a work stream team and liaise with the visiting

    consultant to collect all the necessary data, arrange interviews and meetings

    with various people and coordinate the activities of the team members.

    iii. Team ParticipantA SRCPD Staff who will assist with the collection of data, communication of

    ideas, and discuss the results to understand the key themes in the area of

    interest. The team will then develop a number of practical initiatives to close

    the identified gaps over a specified timeline. There will be 5 core team

    participants in each team.

    iv. Visiting Team LeadThis will be an SGSI consultant who will facilitate the proceedings of each work

    stream.

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    Apart from these core roles, a great number of refinery staff will be either be

    interviewed or called upon to contribute their knowledge when clarification is

    needed on a subject. All staff is encouraged to provide feedback or suggestions to

    the BIM or any B.I.R. team member. All suggestions would be taken on board with

    enthusiasm. The B.I.R. team will also serve as ambassadors to communicate with the

    site regarding the B.I.R. The key phases of the B.I.R are described in a later part of

    this document.

    How long is the B.I.R. process?

    The B.I.R. can take anything from two weeks to several months to complete

    depending on the degree of complexity at site and the number of work streams

    taken into focus. In the case of SRC Port Dickson, the management team has

    decided to focus on three areas:

    i. Margin & Energy:This will allow them to take maximum advantage of the current high oil prices

    environment to maximize the Return On Equity (ROE).

    ii. Operational Availability or OAReliability and asset integrity are essential in achieving maximum utilization,

    and to minimize reactive maintenance

    iii. Organizational Effectiveness or OEA sound organizational structure and distribution of responsibilities will lead to

    better efficiency and higher productivity. A sensing survey will be sent out

    earlier to map the characteristics of the organization based on the 9 Box Model.

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    B.I.R.The Journey

    i. Groundwork / PreparationThe main steps during Groundwork/Preparation will be:

    1. Gathering of the data needed for the B.I.R.2. Forming a Local Team to participate in the B.I.R.3. Completing a B.I.R. Kick-off Visit, which will include the

    Business Objectives workshop.

    4. Preparing Logistics for the B.I.R.5.

    Preparing an Interview and Group Sessions Schedule for the B.I.R.

    ii. Confirmation and Set UpNo formal set up meeting was held at SRC Port Dickson. Preparations for the

    B.I.R. will be finalized via email and telephone communication with the visiting

    team members. The information gathered during the groundwork /

    preparation phase will be reviewed by the Local and Visiting B.I.R. teams.

    iii. Conduct B.I.R. Sensing SurveyThe B.I.R. sensing survey will sent out to all staff. The survey, which is based on

    the 9 Box Model, will be rolled out online and the data collected will be used by

    the Organizational Effectiveness (OE) team to develop their hypotheses about

    the organizational effectiveness at SRC Port Dickson. The results will be re-

    affirmed via interviews with a cross-section of the refinery.

    iv. On-BoardingThe B.I.R. program and deliverables will be finalised and agreed during On-

    boarding, along with team building between the Local and Visiting B.I.R.

    Teams.

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    v. DiagnosticsThe Diagnostics Phase will run for 1-2 weeks. Data gathering tools and

    interviews will be used to assess the current situation at the Port Dickson

    Refinery by each of the 3 B.I.R. teams:

    1) Organizational Effectiveness (OE)

    2) Operational Availability (OA)

    3) Margin and Energy

    vi.

    Business Improvement PlanBusiness Improvement Plan development will run for the OA, Margin and

    Energy and OE work streams. During this stage, potential benefits will be

    substantiated, solutions will be developed and a tracking/governance structure

    will be put in place.

    vii. Prepare for ImplementationDuring this phase, the Business Improvement Plan will be converted into firm

    action plans, which will then be integrated into their Business Plans.

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    4.0RECOMMENDATIONS

    The Shell Refining Company in PortDickson was implemented change in their

    company for many times ago. In implementing the change company need to take

    into consideration both internal and external factor such as environmental,

    economics, social and so on to ensure the company successful implemented change

    in their organization.

    We are suggest some recommendation for the Shell Refining Company in

    Port Dickson to improve their productivity and enable to implement the change

    effectively and efficiently.

    Non-environmental policies in such areas as taxation, industrial policy, credit,and agriculture play a critical role in sustainable development. Too narrow a

    focus on environmental policy could lead to unintended and potentially

    unsuccessful consequences. Shell company need to take a systematic way in

    facing the environmental policies to ensure it will not give harmful impact on

    business operation.

    The Shell Refining Company should cooperate with governments individuallyand in concert because it play a critical role in helping business foster

    sustainability by creating stable, market-based frameworks that encourage

    and enable innovation.

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    Shell company also needs to have a good relationship with the private sectoras they plays a critical role in addressing the challenge of climate change in a

    world of increasing demand for energy. Profit-driven technological innovation

    is crucial. Two key factors affect meeting growing world demand for energy

    which is resource availability and innovation. Energy resource constraints are

    unlikely until 2025 or even after; research and development in new energy

    technologies are going forward rapidly. So, it is important for Shell to have a

    good relationship with other private sector in organizing their future plan.

    Besides, Shell have to build a relationship with publicprivate partnershipsand the vital role of technology are the building blocks in creating a

    revolution in energy affairs that would benefit developed and less developed

    countries alike. For example The United States whose research and

    development on climate equals the rest of the world combined will play a

    decisive role in fostering that revolution.

    In addition, Shell need to see how Europe Company has adopted a moreintegrated approach to sustainability than its American and Asian

    counterparts. Europe Company integrates sustainability goals directly into

    their ideology and socioeconomic programs in a more holistic manner. By

    using this approach, Shell is near to reach their vision for the long term

    period.

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    Given rising population and increasing affluence particularly in developingcountries, such as Malaysia, environmental burdens will become weak

    without new or dramatically improved technologies. In the case of air

    pollution over the next 50 years, to completely offset effects of population

    growth, new or improved technologies must reduce emissions by 98 to 99

    percent. Shell need to implement the high power technology system in order

    to overcome this problem for the present and past beneficial.

    Companies, governments, financial markets, and academia all have importantand complementary roles to play. It is imperative to train a new generation of

    leaders in sustainable development. Education is a vital part of the Shell

    Center for Sustainabilitys mission. Business cannot succeed in a society that

    fails. So, we are suggest Shell to have an institution same as Petronas have

    nowadays in order to born a new great generation with the valuable

    knowledge to be a leader for future.

    The concept of sustainable development provides a framework foraddressing issues on an integrated basis in economic development, social

    development and environmental quality across generations so that

    development maximizes the long-term benefits to society through new

    engineering and managerial technologies, training related to sustainability,

    and the development of public policy focused on enhanced sustainable

    development. As a conclusion, Shell needs to practice this concept on

    managing their business operations to ensure the company gets both social

    benefit and market share increase.

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    5.0SUMMARYShell Refining Company is company that produces a comprehensive range of

    petroleum products, most of which are consumed within Malaysia. In 1999, the

    company completed its RM1.4 billion investment in Malaysias first Long Residue

    Catalytic Cracking (LRCC). The LRCC represents an extremely important commitment

    to this companys future. For the change process, they choose to do Business

    Improvement Review (B.I.R), which serves to identify opportunities for

    improvement so that initiatives can be developed to exploit those opportunities and

    ensure that precious resources are channeled where they can yield the greatest

    benefit to the organization at the right time. The B.I.R. at SRC Port Dickson was held

    in November 2006, culminating with the Handshake with Mark Stevens, RVP East

    Manufacturing, on 18th January 2007. The 2006 B.I.R. focus was on Organizational

    Effectiveness (OE), Operational Availability (OA) and Margin & Energy to develop

    sustainable improvement tactics in those areas. The goal of a B.I.R. is to identify gaps

    in performance in each work stream with respect to accepted benchmarks and

    generate realistic and sustainable tactics to close those gaps. The B.I.R. will present

    them with a comprehensive plan for the coming few years to improve and sustain

    their performance, and deliver significant savings to the business. The Organizational

    Effectiveness aspect also looks at soft issues that aim to improve productivity and

    the sense of fulfillment for the employees in the organization. At the end, the change

    process had been implemented. These were supported by the change manager

    which is act as a director, navigator, caretaker, coach, interpreter and nurturer.

    These changes give many benefits to the Shell because it makes their performance

    improved and thus, lead to make high profit.

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    6.0 CONCLUSION

    Change process is important for every organization in order to ensure that

    the human aspects of introducing new processes and technology are addressed.

    These include creating an organizational structure aligned with new strategies and

    processes; having jobs and skill sets that support the new organizational direction;

    employing effective communications strategies; ensuring customers, suppliers and

    other stakeholders understand and support the effort, and minimizing resistance to

    change. Besides that, the organization also will get greater organizational

    effectivenessby addressing their peoples concerns, it can accelerate the adoption of

    new processes and technology that boosts organizational effectiveness and

    efficiency. Moreover, it also will improved work quality and morale. These are

    dividends we receive for placing people front and- center in the change process.

    Change process also will enhanced collaboration and communication by

    encouraging dialogue and circulating the information people need to know leads to a

    more cooperative, and more productive, environment. Furthermore, by doing

    change process, the organization will get higher retention rate for employees. A

    carefully thought-out approach to change reduces stress and turmoil and encourages

    people to stay loyal to our organization. The change process also will make

    organization do better customer service.An effective organization with good morale

    and knowledgeable employees can deliver the benefit most changes are designed to

    provide - better and more cost effective service to clients.

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    7.0 REFERENCES

    Styhre, Alexander (2002).Non-linear Change in Organization: Organization

    Change Management Informed by Complexity Theory. Retrieved August 8, 2008,

    from the World Wide Web:http://www.emeraldinsight.com/Insight/

    viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0010371

    001.pdf

    Abraham, Morris, Griffin, Des and Crawford, John. (1999). Organization

    Change and Management Decision in Museums. Retrieved August 8, 2008, from the

    World Wide Web: http://www.emeraldinsight.com/Insight/

    viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0260160

    401.pdf

    Carr, Andrian (2007). The Learning Organization: New Lessons/Thinking for

    the Management of Change and Management Development. Retrieved August 8,

    2008, from the World Wide Web:

    http://www.emeraldinsight.com/Insight/viewPDF.jsp?Filename=html/Output/Publis

    hed/EmeraldFullTextArticle/Pdf/0220230605.pdf

    Pech, Richard (2002). Developing a Leadership Knowledge Architecture: A

    Cognitive Approach. Retrieved August 8, 2008, from the World Wide Web:

    http://www.emeraldinsight.com/

    Insight/viewPDF.jsp?Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0

    220260604.pdf

    Testa, Mark R. (2002). A Model for Organization-based 360 Degree

    Leadership Assessment. Retrieved August 8, 2008, from the World Wide Web:

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