Hierarchical organisational structure- My organisation of focus is Saudi Aramco. For this organisation, they are normally operating by application of a hierarchical organisation structure. Operating in the oil and gas sector, having a hierarchical structure is critical owing to the need of operating in multiple departments to achieve varying organisation performance metrics. Like most huge organisations, Saudi Aramco uses a hierarchical organisational structure. There is a distinct chain of command here, beginning at the highest level of management and working its way down to the lowest level of staff (Indeed Career Guide, 2024). There are distinct hierarchies at Saudi Aramco, with executives at the very top and regular workers at the very bottom. Control and coordination are made more efficient as decisions are pushed below. This represent the underpinning reason for the organisation operating a hierarchical structure. This is since they operate in both onshore and offshore which demand an appropriate hierarchical structure.

An advantage of Saudi Aramco’s organisational structure is that it provides a clear chain of command and ensures that everyone knows their role (Organimi, 2024). Consistency and command over operations are guaranteed by the centralization of decision-making. The lack of autonomy and input possibilities for lower-level staff might impede creativity and adaptability, which is a disadvantage. To get around the restrictions of hierarchy, Saudi Aramco may try things like delegating more responsibility to lower-level staff and fostering an innovative culture.

Matrix organisational structure- According to EdrawMind (2024), Google’s organisational structure is a matrix. It encourages cooperation amongst specialists by combining functional groups with project teams. Employees are able to work on numerous projects at once, which boosts their creativity and problem-solving skills, and the framework encourages innovation and adaptability. The uynderpinning reason for Google using the matrix organisation structure is informed by its strategic focus in their business environment. Operating in a highly competitive business sector, having a matrix structure assists them in remaining competitive.

The advantages of Google’s matrix structure include the following: the elimination of departmental silos and the promotion of cross-functional cooperation, both of which promote collaboration and invention (LinkedIn, 2016). On the other hand, everyone’s duties may get mixed up due to all the moving parts. It can be difficult and time-consuming to manage disputes between different reporting lines. In order to overcome the difficulties caused by its matrix structure and encourage teamwork and flexibility, Google may implement measures like as open lines of communication, defined roles, and methods for resolving conflicts.

Reasons Underpinning

Because of its size and longevity in the oil business, Saudi Aramco requires a hierarchical structure to facilitate unified decision-making and operational leadership. In addition, Google’s matrix structure allows for cross-functional collaboration and agility, which are vital for the company’s quick invention and product development pace. This is especially true for tech giants like Google, who operate in a creative and dynamic industry.

1.2 Organisation Strategy

The term “organisational strategy” describes a detailed blueprint for the future of a company or other group. It includes things like how to position yourself in the market, how to allocate resources, and what to do to ensure long-term success (Dieffenbacher, 2022). Gaining a competitive edge in the market is the goal of organisational strategy, which is informed by Porter’s Five Forces model. Strategy development for increased profitability and long-term viability in a competitive market requires research into industry competition, supplier and buyer negotiating power, substitute product risks, and entry hurdles. Achieving a competitive edge under Porter’s Five Forces framework can be mapped out by an organization’s strategic goals and objectives. Organisations can maximise their chances of success and growth by directing their efforts towards these objectives. According to Creately (2024), having well-defined strategic goals and objectives is crucial because they give a sense of purpose, unity, and a yardstick by which to evaluate progress.

Products- Product and marketing strategy are frequently guided by overarching strategic goals and objectives. Hubspot (2023) demonstrates that they improve brand coherence and market positioning by making sure that products are in line with the organization’s overarching vision and objectives. Organisations may better address consumer requirements, seize market opportunities, and set themselves apart from competitors when they are aligned.

Services- An organisation’s creation of services, delivery, and improvement are all impacted by its strategic goals and objectives. According to Kanban Software (2024), organisations may better satisfy customer needs, boost value proposition, and stand out from competitors by ensuring that services are aligned with strategic goals. Satisfaction, loyalty, and standing in the market are all directly tied to this alignment.

Customers- When it comes to client segmentation, satisfaction, and retention, a company’s strategic goals and objectives are directly related to its customers. Businesses can better satisfy their customers’ expectations in terms of products, services, and promotion if they take the time to learn about their wants and requirements (LinkedIn, 2024). Alignment like this helps build loyal customers, boosts the reputation of the brand, and drives revenue growth and competitive advantage.

1.3 External Factors and Trends Impacting Organisations

A strategic method for evaluating the external elements that effect an organization’s operations and decision-making processes is PESTEL analysis, which stands for the following categories: Political, Economic, Social, Technological, Environmental, and Legal (CIPD, 2023).

External Factors

War in the world- Disruptions to oil production and supply could occur as a result of geopolitical difficulties involving Saudi Aramco, which include unstable politics, territorial disputes, and diplomatic relations (Widdershoven, 2019). These factors influence processes, investment decisions, and market stability.

Promptly, Saudi Aramco’s income and profitability are boosted positively in the near term due to the increased demand for oil caused by high geopolitical tensions, which drives up prices. On the other hand, operations can be disrupted, security concerns can grow, and market instability can result from heightened geopolitical tensions.

Rules and regulations pertaining to the environment– Saudi Aramco is subject to environmental restrictions that demand technological developments and sustainable practices in order to comply with waste management laws, conservation rules, and emissions requirements. These regulations have an impact on the company’s operations, investments, and reputation (Kingdom of Saudi Arabia, 2024).

Positive impact: Saudi Aramco might be positioned as a sustainability leader and attract investors who are concerned about the environment if strict environmental regulations around the world encourage investments in cleaner technology and programmes to reduce emissions.

Consequences- expenses may rise and profit margins may fall as a result of the necessary expenditures in capital and adjustments to operations to meet these standards.

Emerging trend

Increasing adoption of renewable energy sources– It is imperative for Aramco’s long-term sustainability to move towards cleaner energy options due to the increasing acceptance of renewable energy sources, which is changing the energy environment, affecting the company’s investment strategy, and making Aramco less competitive in the market.

Positive Impacts- The long-term benefits to Saudi Aramco’s bottom line, public image, and environmental impact from a shift towards renewable energy sources outweigh the short-term costs.

Negative Impact – There is a risk that short-term profitability may take a hit as a result of the massive investments in R&D and infrastructure that will be required to make the switch to renewable energy sources (Carboncollective, 2023).

Top Priorities

After reviewing the external causes and trends, Saudi Aramco has prioritised the following three areas:

Restructuring- In order to meet environmental requirements and secure its future, Saudi Aramco must reorganise its operations and switch from fossil fuels to clean technology and renewable energy.

Contraction- Contracting some oil and gas assets can free up funds for investments in renewable energy projects and technology. We can’t afford to rely on fossil fuels any longer, and this will aid in that transition.

Rerganisation- To create a specialised renewable energy and clean technology division with its own management team, strategic plan, and goals, a rearrangement of departments is required. As a result, efforts to create new, environmentally friendly revenue streams will be better prioritised and funded.

1.4 The scale of technology within organisations

In order to efficiently adapt and scale, Saudi Aramco has been boosting the usage and incorporation of new technologies across all of its processes, including AI, predictive analytics, automation, and augmented reality. There are benefits and drawbacks to this change. According to Aramco (2024), the technologies provide optimal asset performance by allowing for remote surveillance and predictive maintenance based on real-time sensor information from oilfields. Automating potentially dangerous processes increases productivity. Nevertheless, substantial upfront expenditures are necessary to scale unproven technology, and the complete advantages could not materialise until much later. Additionally, retraining employees may become necessary if human jobs are supplanted by machines. Without adequate supervision, our more dependent on technology also makes us more susceptible to hacking and data thefts in the realm of cybersecurity.

Types of Technologies used

Artificial Intelligence

Saudi Aramco utilises artificial intelligence technologies like machine learning and computer vision. AI helps automate tasks, analyse vast amounts of data from oil wells and pipelines, predict equipment maintenance needs, detect anomalies, and optimise operations to improve efficiency and productivity across the organisation’s facilities (Abdalla, 2023).

Impacts on Employees- The use of AI at Saudi Aramco is transforming job roles and the skills needed from employees. While some routine tasks are becoming automated, AI is creating higher-skilled jobs in data analysis, IT, and AI development. Employees require continuous learning and training to work alongside AI systems and leverage them to be more productive. AI is aimed to augment human work rather than replace people, benefiting employees by helping make their jobs easier and safer.

Impacts on working practices- By automating dangerous and repetitive tasks, AI is helping to make work sites safer for Saudi Aramco employees. It is changing how employees perform their jobs and collaborate with each other. AI-powered systems provide data-driven insights that improve decision making. Workers now spend more time on complex problem-solving and value-added tasks as AI handles routine processing and monitoring of operations.

Smart Glasses Equipped With AR

Vmatch (2024) shows that Saudi Aramco uses AR-enabled smart glasses for maintenance and repair work, allowing workers to view information without using their hands. To speed up problem resolution without taking their eyes off the equipment, engineering staff can superimpose schematics, checklists, and technical documents precisely in their point of view.

Effects on staff members- The usage of augmented reality smart glasses has a positive impact on the morale, imagination, and productivity of Saudi Aramco employees. Physical strain and uncomfortable stances are both reduced with hands-free access to information.

Effects on Occupational Routines- Workers are able to maintain their focus on tasks while receiving technical information using augmented reality smart glasses, which increases workplace safety (Kim et al. 2016). Collaborative quality checks and clearances from offsite specialists are made easier with remote transmission of video and sensor data, which speeds up solving problems in the field.