Organizational Change: Qatargas Case Study

Executive Summary

This report conducted an analysis of change conducted by Qatargas during the COVID-19 pandemic. The change aimed at adapting the operations to promote the health and safety of the employees and the community. Shortly after the COVID-19 was declared a pandemic, Qatargas created a taskforce that took command over the process of change. The Qatargas COVID-19 Taskforce developed and implemented a change plan that included risk planning and maintaining business continuity, engaging with stakeholders, supporting the communities, safeguarding employees, achieving environmental success, and employee training.

This report discusses the change through the lens of Lewin’s Force Field Model and Lewin’s Theory of Planned Change. The paper assesses internal and external environments to outline driving and restraining forces. The major driving force included WHO recommendations, growing environmental concern among politicians and the society, technological advances, increased focus on employee safety, effective management, viewing the employees as the key resource, and prioritisation of long-term success over short-term results. The central restraining forces were the economic crisis associated with the pandemic, low prices of liquidised natural gas, vaccination hesitancy, stable workplace culture, and focus on financial performance.

The change was successful due to two central factors, which were HR management and change management. Additionally, it is crucial to mention that stakeholder management and outstanding communication management contributed to the success of the change. Six recommendations were outlined for future similar changes.

Introduction

Report Objectives

This report aims to analyse change that was implemented as a reaction to the COVID-19 pandemic in 2020 by Qatargas. The pandemic put the government, companies, and societies into an extraordinary position, which made it adapt to unprecedented circumstances. As a response, Qatargas implemented a series of measures that allowed the company to sustain its operations and ensure the safety of its employees. This paper demonstrates how Qatargas management conducted a successful change by applying Lewin’s Theory and Force Field model.

In order to achieve this purpose, several objectives were outlined. They included: conceptualising change management, describing the company background and change in Qatargas, analysing change in Qatargas against change theories, and outlining critical success factors of change.

Organisation Background

Qatargas is a global energy operator with headquarters in Doha, Qatar. The company has been extracting, producing, and selling hydrocarbons from the world’s largest natural gas field (Qatargas, 2021). The company’s major specialisation is liquidised natural gas (LNG) production with a capacity of 77million tonnes per annum, which makes Qatargas the largest LNG producer in the world (Qatargas, 2021). In addition to LNG, the company exports natural gas, helium, condensate, and associated products.

The company’s vision is to be “the world’s premier LNG company” (Qatargas, 2021, p.5). The company’s mission is provided below:

“Qatargas provides quality LNG and other hydrocarbon products to the global market. We proudly and safely operate and maintain our facilities to premier standards, and we are actively developing new facilities on behalf of our shareholders to sustain and expand our capacity.

Qatargas protects its people, assets, and the environment. Our shareholders see consistently high value and return. We are proud to be known as a major contributor to the fulfilment of the Qatar National Vision (QNV) 2030 and the nation’s future” (Qatargas, 2021, p.5).

The company also clearly outlines its values, which makes it easier to understand its strategy and pillars of development. The values include: Incident and Injury-Free (IIF), focus on employees and talents, protection of reputation through open communication, emphasis on the quality of services and products, and customer centricity (Qatargas, 2021).

Change Description

The change that was implemented as a response to the pandemic was conducted on several levels by the management. These levels are briefly described below:

Risk Planning and Maintaining Business Continuity. The central priority of the company was to ensure business continuity, as it was impossible to attain its other obligations if there were no sources of profit. First, in March 2020, the company created Qatargas COVID-19 Taskforce that included experts from different spheres (Qatargas, 2021). The task force developed a risk-based strategy to help all the Qatargas stakeholders understand that all the major risks were addressed (Qatargas, 2021). The task force also developed and deployed the Qatargas Containment and Isolation Model (Qatargas, 2021). The risk-planning section was well-received by all the stakeholders. Qatargas Taskforce containment and isolation model is provided in Figure 1 below.

Engaging with Stakeholders. The company’s engagement with stakeholders and community initiatives were disrupted by the pandemic. In response, the company communicated with employees using a wide variety of online platforms as well as printed materials (Qatargas, 2021).

Supporting the Communities. The taskforce also ensured the health and safety of the stakeholders. In particular, the company conducted a vaccination campaign targeting employees and their families for free vaccination. Additionally, a testing facility was created to monitor the health of the community and the contamination status of employees (Qatargas, 2021).

Safeguarding Employees. The company ensured that all the contractors followed the government regulations concerning the health and safety of employees. Qatargas also implemented a Work-From-Home (WFH) policy, which provided all the employees that were not immediately needed on site with the opportunity to attend to their duties from their houses. All the sites were adapted for maximum security of employees, including frequent decontamination, creation of isolation rooms, and provision of on-sight medical help.

Achieving Environmental Success. Despite the crisis, Long-Term Environmental Strategy was launched in accordance with Qatar National Vision 2030 (Qatargas, 2021).

Training and Development. All the training was moved to online platforms to promote the development of skills of the personnel. Several networking sessions were conducted during the year to promote knowledge sharing. The company introduced numerous innovations to ensure that the employees had a chance to grow (Qatargas, 2021).

Literature Review

Change and Change Management

Before beginning the discussion of the change management process in Qatargas, it is crucial to describe the key concepts. First, defining the concept of organisational change is central to the understanding the background of the paper. Stobierski (2020) defines change as “actions in which a company or business alters a major component of its organisation, such as its culture, the underlying technologies or infrastructure it uses to operate, or its internal processes” (para.5). In other words, organisational change is moving from one state of things to another in various aspects of the life of the organisation. Most company leaders understand that constant improvement through organisation change is crucial to survive in the current circumstance of quickly shifting political, economic, social, and technological factors (Sveningsson and Alvesson, 2015). Beer and Nohria (2000) stated that “not since the Industrial Revolution have the stakes of dealing with change been so high. Most traditional organisations have accepted, in theory at least, that they must either change or die” (p.133).

Organisational change takes place continuously as a reaction to alterations in the internal or external environment (Recardo and Jones, 2013). Change happens all the time regardless of whether the company leaders’ will. Thus, there are two general types of organisational change, managed and unmanaged. Managed change can be either adaptive or transformational. When we are talking about an adaptive change, we mean a small-scale change required to fine-tune business operations (Stobierski, 2020). Transformational change are tough endeavours that may affect mission and strategy, company or team structure, people and organisational performance, or business processes (Stobierski, 2020). Transformational changes are significant alterations in the company’s operations to achieve better performance (Stobierski, 2020). The change in Qatargas operations associated with the pandemic is a managed transformational change, as it affected all the aspect of the operations activities.

Change management is defined as “method of leveraging change to bring about a successful resolution” (Stobierski, 2020, para.5). In other words, change management includes all the methods, theories, and techniques used to conduct change. In recent years, change management has grown into an industry of its own. Apart from the consultancy firms and individual gurus, change management industries encompasses mass media, business press, high-profile corporate executives, business schools, and politicians (Sveningsson and Alvesson, 2015). Moreover, change management has become a matter of interest for scholars in medicine, business, and education (Rosenbaum, More and Steane, 2018).

Lewin’s Force Field Model

Lewin’s Force Field Analysis is a commonly used decision-making model used by change managers. According to the model, the current status can be explained by evenness in two types of forces, restraining and driving (Swanson and Creed, 2014). Driving forces are usually positive, reasonable, logical, conscious, and economic, while restraining forces are negative, emotional, illogical, unconscious, social, and psychological (Kruglanski et al., 2012). If the driving forces are stronger than the restraining forces, a change will happen. Therefore, managers need to understand both the driving and the restraining forces to manage change. Therefore, a good change manager will use a combination of two strategies, reducing the restraining forces and increasing the driving forces (Baulcomb, 2003). The Force Field Model is visualised in Figure 2 below.

Lewin’s Theory of Planned Change

Lewin’s Theory of Planned Change is one of the most frequently used models for managing change, as its usefulness was confirmed by numerous researchers and managers (Shirey, 2013). This theory is based upon a three-step model, including unfreezing, changing, and refreezing (Burnes, 2004). During the unfreezing stage, the managers look for ways to move from the current way of things to the desired way of thing. According to Lewin’s Force Field Model, there are three strategies to conduct the first stage. They include strengthening the driving forces, reducing the influence of the restraining forces, or a combination of two (Swanson and Creed, 2014). The purpose of the first stage is to spread dissatisfaction about the current way of things among stakeholders and prepare the grounds for the second stage.

The changing stage includes planning and implementing change. A change can be seen as a project, during which the initial push for change is made (Shirey, 2013). The final stage is turning the initial push into a standard operating procedure (Burnes, 2004). In other words, the final aims at ensuring that the restraining forces do not negate the results of the initial push.

Case Analysis

External Analysis

In order to identify the driving and restraining forces of change, it is crucial to conduct both external and internal analysis of the organisation, as change occurs due to the changes in the internal and external factors affecting a company. PEST analysis is one of the basic techniques used to analyse the external environment of the company. This technique takes into consideration political, economic, social, and technological factors affecting a company. PEST analysis is outlined below.

Political Factors

Push for environmental sustainability. Regardless of the situation associated with the COVID-19 pandemic, the governments and international non-profit organisations were pushing for environmental sustainability (Qatargas, 2021). As a result, Qatargas adopted a long-term environmental strategy.

Qatar diplomatic crisis. Qatar’s blockade had a significant impact on the company, as Qatargas experienced difficulties with supply chains and distribution channels. However, this factor did not appear to affect the change process.

WHO recommendations. The recommendations of the World Health Organisation had a significant impact on the change process, as the change was designed in accordance with these recommendations (Qatargas, 2021).

Economic Factors

Low prices on LNG in 2020. During the change, the company was forced to operate under the conditions of the lowest prices on LNG since 2015 of $1.88 (Macrotrends, 2022). This fact had a negative impact on the change, as it was a significant restraining force.

Economic decline due to the pandemic. The economy of Qatar was declining due to the pandemic (World Bank, 2022). This was associated with significant financial uncertainty.

GDP of the country. In 2020, Qatar experienced a significant decline in terms of GDP per capita due to the pandemic, the country’s economic position was still strong with GDP per capita of $50,124 (World Bank, 2022).

Social Factors

• Increased concern about COVID-19 contamination. The society experienced significant concern about being infected with coronavirus. Therefore, stakeholders required that all the recommendations of the WHO were followed.
• Vaccination hesitancy. Some of the stakeholders experienced some vaccination hesitancy, which may have affected the decisions concerning vaccination of some stakeholders.
• Growing environmental awareness. People around the globe were becoming increasingly aware of the problems associated with the environment. As a result, people became more demanding about the corporate responsibility concerning the environment.
• Technological
• Vaccine and testing system development. Medical company rapidly developed vaccines and testing systems for coronavirus. Qatargas was able to use these advances to serve the community and employees. In other words, technology allowed the company to implement its plans and follow its mission.
• Distant work software development. Software development companies created numerous solutions for people to start working from home. Qatargas used these advances in technology to adapt its operations and protect the safety of the employees.

Internal Analysis

The analysis of internal environment revealed several factors that affected the change process. They are listed below:

• Increased focus on employee safety. Qatargas stated that IIF was the top value of the company. The company also values its reputation of being honest and clear in their intentions. Therefore, stayed true to its key value and implemented the change that protected the health and safety of the employees as soon as possible.
• Effective management. The company had a clear power structure and an effective team that could manage change well. As a result, Qatargas was able to implement change efficiently, which minimised the impact on the operations flow.
• Stable workplace culture. Before the change was implemented, Qatargas had a strong corporate culture, which included rituals, values, and underlying assumptions. While values and underlying assumptions stayed mostly untouched, the rituals needed to be change, which spurred significant resistance.
• Employees as the key resource. The company saw employees as their main source of competitive advantage. As a result, the company put their main focus on saving all the benefits for employees and promoting employee development even if it was associated with significant financial investments.
• Focus on financial performance. The company’s main purpose was to remain profitable. Thus, the cost of change was a significant factor that contributed to change management.
• Focus on long-term success. The company’s culture rated long-term success over short-term financial stability.

Identifying Drivers for Change

The internal and external analyses revealed several drivers for change that need to be outlined. External drivers included WHO recommendations, growing environmental concern among politicians and the society, and technological advances. The WHO recommendation encouraged the company to act quickly and provided a framework to minimise contamination, technological advances allowed the company to implement the WFH policy and support the communities through staring the vaccination and testing programs, and the push for environmental sustainability encouraged the company to launch the long-term sustainability programme regardless of the financial risks.

The internal factors promoting change included increased focus on employee safety, effective management, viewing the employees as the key resource, and prioritisation of long-term success over short-term results. The effect of these factors was briefly described in Section 3.2 above. However, it is crucial to add that the focus on long-term results helped the company to explain the stakeholders the short-term losses.

Restraining Forces

The analysis also revealed several restraining forces that had a significant impact on the change process. The central external factor that affected the company was the economic crisis associated with the pandemic which was accompanied by the lowest prices on LNG. These two factors caused a significant worry among the stakeholders, as the financial performance of the company was at stake. Among other external factors that affected change was vaccination hesitancy, as some of employees and community members did not want to participate in the vaccination programme. However, such members were rare, and vaccination hesitancy had a low overall impact on implementation of change.

The internal restraining factors included stable workplace culture and focus on financial performance. A large number of traditions had to be changed due to limitations associated with the pandemic, which caused significant employee resistance. Additionally, as it was mentioned earlier, the focus on financial performance made the stakeholders concerned with the cost of change. However, the matter was mitigated by the fact that the company valued long-term success over the short-term financial losses.

Success Factors

The change conducted in Qatargas can be called a success, as all the goals were achieved. There are several success factors that contributed to the success of the change. Outstanding strategic HR management should be mentioned as the central reason for the change’s success. The analysis revealed that Qatargas put increased emphasis on its employees as the central competitive advantage. The fact that the pandemic had a significant impact on the financial stability of the company, Qatargas continued to work towards its strategic goals in HR, which we’re developing the personnel to have high-efficiency workforce, ensuring the trust through putting increased focus on employee satisfaction, and careful strategic human resource planning.

HR management also helped to push the change forward by addressing resistance. According to Lewin’s Force Field Analysis, the central restraining force was employee resistance due to strong workplace culture on the level of rituals. HR managers communicated with the employees effectively demonstrating that the current practices were no longer valid due to the pandemic. HR managers used all the available communication tools to help the employees make sure that their current status will be unaffected. As a result, the employees demonstrated a high level of trust, which was crucial for reducing the resistance and moving from the unfreezing stage to the changing stage.

Another crucial success factor was change management. The change was carefully planned by the best leaders of the company that were included in the COVID-19 taskforce. The taskforce planned and implemented the change perfectly from Lewin’s change theory’s perspective. During the unfreezing stage, the managers ensured to reduce the influence of restraining forces and increase the effect of the drivers for change. For the changing stage, the managers planned the entire process carefully and implemented it quickly so that all the stakeholders were satisfied with the process. The stakeholder management was outstanding, as the task force ensured that the community, the government, and the employees were informed about the coming change and their benefits. As for the refreezing stage, all the changes were carefully documented and added to the company’s official policy. Additionally, employee training was conducted to embed the new norms in the corporate culture.

Organisational Structure

Organisational structure is of extreme importance to the project, as it helps to understand the hierarchy of power in a project. Organisational structure is composed of people and groups of people who can be seen as purposeful, goal-orientated teams. Sandermoen (2017) describes organisational structure as an arrangement of relationships within a company or a project that is usually represented in a chart. Organisational charts are the most convenient ways to visualise a n organisational structure, as it helps to see how different responsibilities and functions are allocated (Sandermoen, 2017). This project had a clear organisational structure that is provided in Figure 3 below.

There are several theories that can be applied to organisational structure. Peltonen (2016) describes four basic approaches to organisational structure, including the classical approach, the neo-classical approach, the decision-making theory, and the systems approach. The classical theory concerned the best ways of dividing the tasks among the stakeholders to work efficiently (Peltonen, 2016). The aim of the classical theory was to clearly identify tasks and responsibilities as well as the authority. However, the classical approach did not take into consideration the human aspect of organisational structure (Shafritz, Ott, and Jang, 2015). The neo-classical theory made a significant addition to the classical theory by introducing the human factor to organisational structure (Peltonen, 2016). The neo-classical theory acknowledged that the organisation did not consist of job description, as people that take these positions influence the operations. Thus, managers need to take into consideration the individual needs of employees.

The decision-making theory states that organisational structure should be made based on the decision-making points. The systems approach views an organisation as a system that consists of a wide variety of variables. This approach is concerned with interactions between these variables, that may include people, technology, and environment (Shafritz, Ott, and Jang, 2015). The crucial characteristic of the systems approach is that it does see an organisation as a static entity. Instead, the systems approach sees an organisation as an open constantly-changing system, as the it adapts to the changes in the environment (Peltonen, 2016).

The organisational structure of Qatargas supported the success of the project. The fact that the company quickly created a new branch within the organisation can be explained by the systems approach. Qatargas reacted to changes in the outside environment and created the COVID-19 taskforce to address the new challenge.

The organisational structure of the project, however, is good example of neo-classical approach to organisational structure. Figure 3 provided above demonstrates a classic tall organisational chart that clearly describes the responsibilities of different stakeholders. However, it is clear that the chart was created keeping in mind the individuals’ skills and needs. The project team was created of the best specialists from different spheres of specialisation. The organisational structure was created with the understanding who will be best in different positions, and responsibilities were given out based on their skillsets and competences. Such an approach to organisational structure allowed the project team to be effective at all points of the implementation process.

Cultural Perspective on International Management

International management has a become a significant bother of managers in the environment of globalisation. Qatar has become a centre of international communication due to an increased number of culturally diverse expatriates. In 2016, 88.4% of the Qatari population reported to be non-Qatari in origin, while there were only 11.6% of the population that claimed to be Qatari during the census (PSA, 2017). Even though the project was not directly associated with international management, as it was aimed at internal changes, international management practices were crucial for the project’s success.

Qatargas is an international organisation, as it exports LNG to different countries around the globe. Therefore, in order to save its reputation, it needed to comply with the WHO recommendations for addressing the pandemic. Using these recommendations as a backbone of the project, an implementation plan was developed. Moreover, Qatargas used the best practices of international partners and implemented them with adjustments according to Qatargas’ corporate culture.

Qatargas’ staff consists of a large variety of culturally diverse groups. The company leaders needed to be aware of the differences in the cultural values and underlying assumptions (Luthans and Doh, 2018). The company leaders should also ensure that all the formal policies are followed to ensure lawfulness of all the actions (Luthans and Doh, 2018). Thus, the company’s corporate culture is based upon the principles of cross-cultural management. In particular, the corporate culture of Qatargas encourages the employees to participate in the decision-processes through open communication (Qatargas, 2021). This allows the company managers to benefit from culturally diverse employees. As a result, the innovation level in the company are high.

The project was implemented using the principles of cross-cultural management. In particular, the COVID-19 taskforce included representatives with different cultural backgrounds. The incident management team and the control team included representatives from Qatar, GCC countries, Europe, and Asia, which allowed the project management team plan the change in accordance cross-cultural management principles (Qatargas, 2021).

It also crucial to notice that cultural diversity of the project management team allowed the company leaders to understand individual needs of all the employees. According to the statement of values, employees and their safety are the most important aspects of the company’s workplace culture (Qatargas, 2021). Therefore, including culturally diverse representative in the project management team was crucial for being loyal the principles of the corporate culture. In other words, the Qatargas’ corporate culture supported international management.

Conclusion

The change in operations flow conducted by Qatargas in 2020 to adapt to the COVID-19 pandemic was successful. The analysis provided in this paper identified two crucial factors that contributed to the success of change, including outstanding change management and strategic HR management. The Qatargas COVID-19 Taskforce developed a clear change plan in accordance with the recommendation of the WHO and best practices. The taskforce was quick to implement all the changes as all the stakeholders were carefully managed by close communication using all the available channels. The change was embedded in the company’s culture by altering the norms of behaviour and conducting training concerning these norms. As a result, the company adapted to the operations during the pandemic without much interference into the production processes.

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