Communication Improvement in the Oil and Gas Industry (ADNOC)

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Tutor’s Name

18 April 2013

Table of Contents

Abstract………………………………………………………………………………………………………………………………….3

Introduction……………………………………………………………………………………………………………………………4

The Problem Background. 5

Purpose of Study. 6

Importance of Study. 7

Nature of Study. 8

Research Question. 9

Objectives of the Study. 9

Literature Review.. 9

Study Hypothesis. 13

Research Methodology. 14

Population, Sample, and Sample Selection. 15

Data Collection. 15

Interviews. 15

Group Discussions. 15

Survey. 16

Data Analysis. 17

Presentation of Results. 17

Ethical Considerations. 18

Limitations of the Study. 18

Recommendations. 19

Conclusion. 19

References. 20

Abstract

Cross-cultural communication and internal communication is core to most multinational companies. The world today experiences a great level globalization, therefore, leading to an increased number of multinationals. Since communication is key to any transaction and interaction, it follows that the multinationals in the present world must as well embrace and value communication for effective business. However, multinationals in foreign and new business environments are faced with the challenge of a new culture, which is different from that of the company’s domestic country. Therefore, cultural differences within the company, including employees from varying cultural bases results in a breakdown in communication, if appropriate strategies are not taken to ensure effective communication in the company. In this research proposal, a mixed methods research, which uses group observations, scheduling, conducting interviews, and carrying out surveys, is proposed for identifying different ways through which ADNOC company might improve its cross-cultural communication and internal communication in its exploration and production. This therefore, will help the company adopt the identified strategies, which will boost its performance in the international market.

Introduction

There is consensus that globalisation has indeed influenced business in the global arena. Multinational companies are presently engaged in strategizing how to obtain market leadership. However, one thing that remains a challenge for many is the ability to have effective communication at the organizational level. Of great significance is the notion that even people who come from the same cultural backgrounds may still misunderstand one another. This is because they could be having ethnic and cultural differences. There has been extensive discussion about the significance of poor internal communication together with cross – cultural communication towards the inability of companies to realize positive performance. The comprehension of cross – cultural and internal communication is crucial to the realization of organizational competitiveness.

It has been observed that communication challenges within organizations have made it difficult to manage and screen threats the performance. As workplaces increasingly become global, there is the need to ensure effective cross – cultural communication as well as maintaining internal communication excellence. Companies must comprehend how to pass information to their workers and clients in order to meet the organizations goals and aspirations.

The Oil and Gas Industry is one such global workplaces where there is the need to have excellent communication both internally and across other cultural groups. It is notable that the gas and oil company (ADNOC) is experiencing challenges in its internal and cross-cultural communication, which has affected performance in the exploration and production section of the corporation.

In order to rectify this challenge, there is a need to commission research to help understand how internal and cross-cultural communication can be improved. Therefore, this paper is a research proposal that seeks to explore how the company can improve its cross-cultural communication and internal communication in the exploration and production section. The paper discusses literature and proposes research methodology that is applicable in the study. The research methodology shall entail both quantitative and qualitative exploration strategies such as group observations, scheduling and conducting interviews, and carrying out surveys to complete data gathering.

The Problem Background

ADNOC Company is an integrated energy company founded in 1973, which employees more than 5,000 employees, and makes approximately US $3 billion profits. This company deals with the international distribution and marketing of petroleum products and services. This is located in the United Arab Emirates and owned by the state government (ADNOC Sustainability Report, 2009). Additionally, this company is known to produce oil and gas products that are of high quality, compared to other companies. Although this is a large and successful company, it experiences various challenges, which limit its productivity. Like most oil and gas producing companies, ADNOC faces great challenges in its organizational communication process, including cross-cultural and internal communication, during its processes of exploration and production. This has resulted in poor co-ordination of company functions, and therefore, negative effects on company total shares, budgeting, and capital investments, among others. As Cassidian (2001) notes, the oil and gas companies in the world today are located in environments that are highly challenging, therefore, any disruption in organizational communication, or any other business function, might cost the company greatly, thus, in case of distractions, a company must use the available resources to address the challenges. Nonetheless, improvement in communication is considered the ultimate solution to these issues (Salacuse, 2005).

Purpose of Study

Through this study, it will be possible to understand the process of communication in the oil and gas industry, with regard to oil and gas producing companies. By understanding the process of organizational communication in this industry, it will be possible to also establish and understand the usefulness of effective communication in the oil and gas producing companies. In addition, the different factors that shape and influence effective communication in this industry will be highlighted. Furthermore, this study will reveal the influence of communication, whether effective or ineffective communication on the oil and gas producing companies. However, for specificity of the study, ADNOC Company will be the focus of this study

According to Salacuse (1999) and Ayoko (2007), culture is an important factor in communication. Therefore, for multinationals in the oil and gas industry, the cultures of the foreign countries, in which the company is established, will highly influence how the company will conduct its operations. Therefore, communication in such multinationals will be affected by the national cultures of the foreign countries, since these help in the shaping of the behaviors, attitudes, and values of different members of the country, who might serve as employees of the multinational company. Therefore, the multinationals have to consider cross-cultural communication, as well as their internal communication, in order to perform well in the foreign countries (Ayoko 2007).

The level at which culture influences organizational communication, and the way business is conducted in various countries differs from country to country. Nonetheless, for oil and gas producing multinationals such as ADNOC, cross-cultural and internal communication is imperative for successful business operations. However, most of these multinationals, including ADNOC, have failed to achieve effective cross-cultural and internal communication, and this has derailed their profitability. This study focuses on ADNOC, and has the purpose of exploring various ways through which ADNOC could increase the effectiveness of its cross-cultural and internal communication in its section of exploration and production.

Importance of Study

The rate of globalization in the world today has increased at a rapid rate. Today, the number of people travelling to foreign countries has increased, as well as companies relocating or establishing their other branches in foreign countries. In addition, most companies today are going global, and conduct job outsourcing, therefore, the workforce in most multinational companies have to interact with people from different cultural backgrounds.

According to Ghauri (2003), cross-cultural and internal communication in companies is an important area of interest today, since this is the age of global economy. In order for companies to ensure effective cross-cultural and internal communication, these must adopt a new focus and new thinking to compete favorably in the present dynamic business environment. According to Wheeler (2006), cross-cultural communication involves understanding and respecting the position of people from different cultures during the process of business communication. Therefore, challenges in multinationals’ communication can be addressed by embracing effective cross-cultural communication (Wheeler, 2006). The process of interacting with people from different cultural backgrounds can be complicated, especially when the business parties involved fail to understand each other. People from different cultures have different perceptions of the world, thus different perceptions about various business processes.

Since this study addresses cross-cultural and internal communication, including communication challenges of a multinational company, it is crucial as it emphasizes the essence of embracing diversity in the business environment in different countries. Embracing diversity through effective cross-cultural and internal communication helps a company to avoid problems, which might result from cultural differences among company employees. According to Kerlinger & Lee (2000), cross-cultural communication is important for buyers and sellers, employees and employers, as well as between business associates, in which case these hail from different cultural backgrounds. This study offers an insight in the nature of international business communication, where a multinational has to embrace effective cross-cultural and internal communication for successful business process. Therefore, this study is significant, as its findings will reveal how ADNOC Company can improve its cross-cultural communication and internal communication in the exploration and production section. The recommendations in this study could be of benefit to other multinationals in the oil and gas industry, if the multinationals will use them to improve their cross-cultural and internal communication.

Nature of Study

This study is will apply both qualitative and quantitative methods of data collection. According to Kothari (2009), the choice of a research methodology a researcher makes is dependent on the nature of the study, as well as the type of data to be collected. In this study, therefore, both qualitative and quantitative data will be collected, thus, the use of mixed methods in the study. According to De Vaus (2001), this approach is capable of high-quality findings, since it allows an opportunity for a wider scope of results. Data in this study will be collected through group observations, scheduling and conducting interviews, and carrying out surveys (Berger, 2011). The qualitative methods of data collection in this study will help to reveal the behavioral aspects of respondents, which are embedded in their cultures and society (Myers, 2008). Therefore, these will help in the understanding of the subjectivity in the study (Sapsford and Jupp, 2006). On the other hand, quantitative methods of data collection in this study will help in understanding objectivity. In addition, unlike the qualitative methods, quantitative methods are fast in yielding data, thus saving time (Bryman and Bell, 2007).

Research Question

This research study aims at answering the following question:

How can ADNOC improve its cross-cultural communication and internal communication in the exploration and production section?

Objectives of the Study

The objectives of the research will be to:

Identify the challenges ADNOC faces in its cross-cultural communication and internal communication.
Establish various strategies, which ADNOC could use to overcome challenges and improve its cross-cultural communication and internal communication.

Literature Review

Cross – cultural communication entails that which takes place between people who necessarily have differing cultural perspectives. These differences might include a range of issues from nationality, age difference, and gender difference among others in the same workplace (Guffey & Almonte, 2009). Cross-cultural communication also connotes the capability to effectively form, foster, and develop relationships with people of a background different from one’s own (Stringer & Cassidy, 2009). This is founded on the knowledge of several issues including values in other cultures, perceptions, behaviours, social class, decision making strategies, and a comprehension of how people belonging to a certain group convey message orally, non verbally, through documentation, and in diverse business and common contexts (Stringer & Cassidy, 2009)..

Previously, authors and communication specialists have studied cross – cultural communication as well as internal communication under organizational contexts. The focus of such studies has been to attempt to develop a comprehension on how differences among people might affect the way they interact or fail to while with others (Stringer & Cassidy, 2009). The notion that some individuals in the course of their life adapt to one cultural orientation may present massive challenges whenever they meet people from other differing cultures. Furthermore, exposure to many other cultures has a direct influence on an individual’s ability to interact with others and realize meaningful results (Guffey & Almonte, 2009).

There are critical components of cross – cultural communication among individuals such as co-orientation. This represents the ability of individuals to know all features of their own culture in relation to another person’s culture (Stringer & Cassidy, 2009). This is the most important element of cross – cultural communication. It is notable that people who have interacted with other cultures find it easy to shift the way they communicate so that people from different cultural backgrounds can understand them. It is critical for global organizations such as those in the oil industry to provide their staff with training on cross – cultural communication (Guffey & Almonte, 2009). This is also crucial for ensuring effective internal communication.

It is noteworthy that cross – cultural communication and effective internal communication are the ingredients for escalating innovativeness. This is because they enhance peoples’ abilities to participate in the collective problem management and open sharing of ideas and thoughts (Stringer & Cassidy, 2009). In the oil industry the exploration and production team are expected to function in a similar way. The company section can benefit massively from new ideas. Competence in cross – cultural communication enhances the ability of a department to generate useful new information as well as provide appropriate information to clients (Guffey & Almonte, 2009).

The global workplaces must strive to eliminate communication norms associated with stereotyping or generalizations. The application of generalizations about certain communication norms rigidly in reference to some groups constitutes stereotyping. The differences in communication styles may lead to negative perceptions about other people (Stringer & Cassidy, 2009). Furthermore, negatively developing perceptions about other people in the workplace because of their cultural origin may be detrimental. This is because it leads to miscommunication among staff of the same department who needs to share information crucial to their success closely (Guffey & Almonte, 2009).

In order to eliminate these sources of miscommunication such as assumption of similarities, language differences, misinterpretations of non-verbal communication, preconceptions, stereotypes, and tendency to evaluate the way people from other cultures, companies must develop objective communication strategies (Stringer & Cassidy, 2009). The communication strategies will also be very crucial to promoting internal communication.

Internal communication takes place within an organization and encompasses both the official and unofficial communication within an organization. The tools for official communication include memos, strategies, regulations, and procedures (Guffey & Almonte, 2009). Unofficial communication includes all the informal interactions between and among workers leading to exchanging ideas, thoughts, and creation of personal relations. Internal communication is comparable to the lifeblood of a company.

Effective internal communication is critical to ensuring excellent performance among workers. This is because people in a section of an organization easily get appropriate information that enables them to work (Stringer & Cassidy, 2009). Internal communication also enables workers to know the things that concern them, offer people with clear information about performance standards, deliver feedback, offer assistance when undertaking difficult tasks, suggestions of fresh opinions about an on-going work, and proper comprehension of organizational goals (Guffey & Almonte, 2009).

Oil and gas producing companies should master effective cross-cultural communication during the processes of exploration and production. For instance, when these companies plan to conduct offshore oil and gas exploration, these must ensure to uphold important measures, with regard to consulting and communicating with the surrounding indigenous community where the company wants to explore the oil and gas. This is an example of cross-cultural communication, which the company will have to undertake, since there will be communication between two parties from different cultural backgrounds. Therefore, the company should ensure effective communication, which will allow for an understanding with the local community in order for the oil and gas exploration process to be successful (Arctic offshore oil & gas guidelines, n.d).

In addition to consulting with the local community, a multinational must pay attention to the culture of the local community. It is important that the company embraces and adheres to the cultural values, practices, heritage, and rights of the indigenous communities. In addition, the company ought to ensure that it uses the resources of the local community in an appropriate way, following the guidelines of the local community. Furthermore, the company must respect and avoid intruding in the community’s archaeological sites, historic shipwrecks, sacred sites and other cultural sites, since most communities value these historic and pre-historic sites, and therefore, would detest intrusion by strangers (Arctic offshore oil & gas guidelines, n.d). By upholding all these, a multinational company will be involved in an appropriate cross-cultural communication with the local communities, during its exploration process. The cross-cultural communication process embraces respect and understanding between parties of different cultural backgrounds.

From the on-going discussions, which expose the challenges organizations face due to ineffective cross – cultural and internal communication, there is the need to improve them in order to enhance organizational performance. The application of technology in enhancing communication cannot be overemphasised. The members of a team such as the exploration and production department may sometimes work in globally distributed places (Stringer & Cassidy, 2009). Therefore, the use of effective digital technologies may motivate and influence them to approach communication and intercultural information exchange with superior sensitivity, comprehension, and moral awareness. This is crucial in bringing about positive international relations (Guffey & Almonte, 2009). People have the ability to enhance their diagnostic skills and influential abilities in diverse kinds of argumentation. Furthermore, this is critical to building cross – cultural communication competencies and compassion to global contexts (Guffey & Almonte, 2009).

Study Hypothesis

According to Babbie & Mouton (2002), study hypothesis is the formal relationship between two or more different variables in the population under study. However, this specific study is not experimental in nature, therefore, this does not have a hypothesis.

Research Methodology

The study will employ both quantitative and qualitative exploration strategies to complete data gathering. This will include group observations, scheduling and conducting interviews, and carrying out surveys (Berger, 2011). It is notable that these approaches are highly appropriate since the process of researching on culture and cross-cultural communication presents massive challenges due to the intricacies involved (Berger, 2011). These research methods shall enable the researcher to ascertain the crucial issues, which are applicable in comprehending the effects of culture on communication. This will be possible by focussing on different groups of people interacting normally. Furthermore, the researcher will undertake surveys studies and interviews with the members of the section in order to establish the different ways workers are communicating with each other internally (Berger, 2011).

The study will rely on participants mainly members of the company. Although, the research is interested in studying how to improve cross-cultural communication and internal communication in the exploration and production department of the industry, participants will be drawn from other sections to boost the numbers and the sample (Berger, 2011). The participants in this study will include workers and senior managers at the company. The research will request members to participate voluntarily in the study. However, every person agreeing to participate shall sign a consent form.

Population, Sample, and Sample Selection

The company has 1,265 workers of which 41% are women while men constitute 59%. The research seeks to interview 300 people from the organization. Of the 300, the researcher will not give a lot of significance to the number of men and women. The research will use random sampling to identify research participants. This will be done until the target is reached. However, the research shall ensure that the studied population includes people from every cultural background represented in the institution (Berger, 2011). The notable issues that shall be studied will include the variations and similarities in communication approaches and their effect in nurturing relationships. A field-based approach will also enable the researcher to study the factors that escalate exchange of information among diverse cultures (Berger, 2011).

Data Collection

Interviews

The notable topics that shall be captured during interviews will include opinions about the communication atmosphere in the company, the experiences and interactions with employees from diverse cultural backgrounds, processes for international communication, challenges that individuals have faced in their interactions with others even before the research period, and how they think they could improve communication between and among them

Group Discussions

The research shall also put the same participants in groups to undertake discussions with them on the key research topics. During the group discussions, the researcher’s centre of attention will be the key words and expressions used by the participants. These shall be categorized accordingly into appropriate themes. Six cultural measurements of acceptance, disagreement, individualism, collectivism, risk, and distribution were used to predict participants’ nationality (Berger, 2011). Table 1 below defines these variables of the research. The nationality of participants shall be used as the dependent variable since it directly affects culture. The validity of the findings shall be obtained by continuous redefinition of key words and expressions made by the participants. The feedback obtained from the respondents shall be very critical in the formation and characterizing cross – cultural communication approaches (Berger, 2011).

Survey

The research shall develop a survey tool that shall consist of different items about the topic of study. These items shall be rated at five points according to the Likert Scale. This shall include from 1=strongly disagree through to 5 = strongly agree (Berger, 2011). These items shall evaluate diverse aspects of the six cultural measurements.

Table 1: Variables in Cross-Cultural Communication Study

Variable	Description
Acceptance	This is a measure of the importance of liking and acceptance of individuals with other
Disagreement	This is a measure of how individuals can manage to work together with colleagues who they do not agree with
Individualism	This is a measure of autonomy people employ in making decisions and how they behave
Risk	This assesses the level to which people can be open to trying out new aspects of their lives including forming relationships.
Collectivism	This is a measure of how people are willing to work in groups or teams
Distribution	This assesses the level to which individuals are ready to share their thoughts, ideas, and feelings.
Nationality	This represents where the participant comes from – has a direct influence on culture

Data Analysis

The findings of the study shall be analysed using the multiple regression approach to enable the researcher comprehend how the six multicultural variables would show the nationality of a participant (Berger, 2011).

Presentation of Results

The results shall be presented in the form of reports, graphs, and charts, since this study employed both qualitative and quantitative strategies of data gathering.

Ethical Considerations

This study will be conducted within the important ethical codes, as required of researches. According to Bryman (2008), these include beneficence/non-maleficence, informed consent, and autonomy. In conducting this study, all participants will be provided with a sheet bearing important information about the research. They will also be given a consent form. The data of all the participants in this study will be kept anonymous. In addition, all the participants in this study will be informed of their right to withdraw from the study when they felt like doing so. Furthermore, upon the completion of the study, participants will be informed about the findings of the study, as these are entitled to the information. Most importantly, the participants will participate in this voluntarily in this study and will not be coerced into participation.

Limitations of the Study

The major limitation of this study involves the researcher of the study, who does not have vast experience, and perfected research work. On the other hand, the number of respondents is limiting to the study. This research seeks to involve only three hundred participants from the company. Compared to 1,265, the study population seems quite small. Therefore, the data collected and participant response might be too little to act as a basis of a great analysis and capable of reliable findings. Furthermore, the focus of this study is mainly on one company in the oil and gas industry. Therefore, the applicability of this study might be limited to the studied company only, or to the multinationals in the gas and oil industry only.

Recommendations

This study must be considered as a step in the efforts toward the strengthening of international business communication within ADNOC Company, as well as other multinational companies in different parts of the world, which have established themselves in foreign countries with foreign cultures. It is quite clear that failure for any multinational company to communicate appropriately in its new business environment might have adverse effects on the company. Therefore, in order for multinationals, and specifically ADNOC, to adopt and experience effective international business communication, it is essential that various challenges in the company, which hinder effective internal communication, as well as effective cross-cultural communication be identified and addressed. This way, a multinational, ADNOC, will experience effective communication, which will influence the entire company positively.

Conclusion

In summary, this paper has recognised that globalisation has added different pressures to the global business arena. Cross-cultural communication is an area that continues to attract massive debates. Business leaders around the world are every time involved in strategizing how they can enhance the competitive edge for their businesses. In the context of global organizations, cross-cultural communication has become a challenge since most workplaces that do not put strategies in place to achieve excellence may perform poorly. This paper has presented literature on cross-cultural communication as well as internal communication of an oil and gas producing multinational. The paper has also proposed a research methodology that will be applicable in conducting studies on how to improve cross-cultural communication and internal communication within the oil and gas industry.

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