Executive Summary

The project management landscape is evolving rapidly, and organizations must adapt to remain relevant in the global marketplace. This report critically evaluates the external and internal influences on Qatar Fuel Additives Company (QAFAC), considering government and industry structures, economics, stakeholders, organizational/project structures, and culture. Additionally, the report examines the emerging forces in the market and their influence on QAFAC. Finally, the role of ethics and corporate social responsibility within a global marketplace is appraised.

The report is structured as follows:

1: External and Internal Influences on QAFAC

2: Emerging Forces in the Market and Their Influence on QAFAC

3: Ethics and Corporate Social Responsibility in the Global Marketplace

4: Conclusions and recommendations

QAFAC operates in a highly regulated and competitive energy market. The company’s success depends on its ability to adapt to external and internal influences, including government and industry structures, economics, stakeholders, organizational/project structures, and culture. In addition to its internal and external environment, the company must navigate the emerging forces in the market, such as climate change, digitalization, new forms of funding, robots, and changing workforce. The most viable recommendation would be for QAFAC to operate with a sense of ethics and corporate social responsibility within a global marketplace to ensure sustainable and responsible operations. By critically evaluating all the factors affecting the business internally and externally, QAFAC can develop a strategic approach to project management that ensures effective project delivery and long-term sustainability.

Glossary

MTBE- methanol, methyl tertiary butyl ether

Qatar Fuel Additives Company (QAFAC)

H.S.E. standards- Health Safety and Environment

Introduction

Qatar Fuel Additives Company (QAFAC), located in Qatar, is a frontier global energy company that produces methanol, methyl tertiary butyl ether (MTBE), and other petrochemicals. The company was established in 1991 as a joint venture between Qatar Petroleum and a multinational company. Industries Qatar (I.Q.) holds the most significant stake in QAFAC (50%). QAFAC also has other shareholders, such as International Octane L.L.C. (20%), L.C.Y. Middle East Corporation (15%), and OPIC Middle East Corporation (20%). Over the years, QAFAC has become one of the most reputable producers of MTBE and methanol in the Middle East, serving customers in various industries such as chemicals, plastics, and fuels. Currently, the production capacity is 1,830 and 2,950 metric tons per day for both products, respectively. It exports to markets in Asia, Europe, and the Americas.

This in-depth investigation and analysis are warranted by the energy sector’s significant adverse effects on the environment and Society (Aljanadi and Alazzani, 2023; Zumbrägel, 2021) and the sector’s intense regulation and competition. In this case, operating ethically and responsibly is critical to QAFAC ‘s success in the energy market. The company needs to evaluate its projects’ impacts externally and internally, considering the concerns of stakeholders, economic conditions, governmental and industrial organizations, and cultural aspects. The importance of ethics and C.S.R. in a global market must be carefully assessed by QAFAC and extensively examined. It is not enough to study and appraise. QAFAC must develop structures and methods to make all this come true.

Discussion

 External Influences on QAFAC

External influences refer to factors outside QAFAC’s control that can impact project success, including government regulations, economic conditions, and market trends. These external factors can pose significant risks and opportunities for QAFAC’s projects and require careful analysis and management. Understanding how these external influences impact QAFAC’s projects is crucial for effective planning and decision-making.

Government and Industry Structures:

The government regulations and policies that affect QAFAC’s operations, including environmental regulations (Al-Hababi, 2022; Olawuyi and Athwal, 2022), tax policies (KPMG, 2022), and trade agreements (Heinemann et al., 2022), have a significant impact on QAFAC’s projects. Compliance with these regulations can increase costs and affect project timelines. Moreover, government policy and regulation changes can cause project delays and increased costs, leading to lower profitability. In contrast, industry structures, such as competition levels, technological advancements, and market trends, can provide opportunities and challenges for QAFAC’s projects. For instance, new market entrants, technological advancements, and changing customer preferences can impact QAFAC’s competitiveness and profitability.

Institutional theory is relevant in understanding the impact of government regulations on businesses, as it provides frameworks for why it is essential to comply and the downside (Aksom and Tymchenko, 2020). According to institutional theory, organizations must abide by external standards and expectations to be accepted and legitimate in their surroundings. In this context, compliance with government regulations allows QAFAC to gain legitimacy and social acceptance in the highly regulated energy industry. However, according to Amoako et al. (2021), institutional pressures can also lead to isomorphism, where organizations adopt similar structures and practices, leading to reduced innovation and competitive differentiation.

On the other hand, industry structures provide opportunities and challenges for QAFAC’s projects. For instance, emerging market trends such as the growing demand for renewable energy sources and the shift towards cleaner fuels can create new market opportunities for QAFAC (Zumbrägel, 2021): A.L.- Hababi, 2022. However, it can pose significant challenges, especially if QAFAC adapts slowly. The theory of the firm, known as the resource-based view (R.B.V.), is significant for understanding the impact of industrial structures on businesses. As per the R.B.V., a firm’s competitive edge arises from its unique resources and capabilities that enable it to create value and sustain its competitive position in the market (Lubis, 2022). Therefore, QAFAC must develop unique capabilities and resources to differentiate itself from its competitors and capitalize on emerging market opportunities.

Economics:

The economic factors impacting QAFAC’s projects include inflation, exchange, and interest rates. These factors can affect QAFAC’s financing costs, profitability, and competitiveness. For instance, fluctuating exchange rates can impact QAFAC’s competitiveness in the global market and increase costs. In contrast, changes in interest rates can affect financing costs, potentially affecting the feasibility of projects (Tok, Koc, and D’Alessandro,2021).

The COVID-19 pandemic has dramatically impacted global oil prices, affecting QAFAC’s profitability and operations (Gharib et al., 2021). With decreased global demand for oil and gas, QAFAC’s revenue streams were impacted, leading to reduced profitability and potential delays in project timelines. Moreover, Qatar’s economy heavily relies on oil and gas, with the energy sector contributing nearly 60% of Qatar’s G.D.P. (World Bank, 2022).

Qatar’s economic diversification efforts have had an impact on QAFAC’s projects. Qatar’s National Vision 2030 aims to diversify the economy by reducing its reliance on oil and gas and developing non-energy sectors such as tourism, education, and healthcare (Tok, 2018). This diversification strategy has led to the developing of new infrastructure and industries, such as the Qatar Financial Center and Qatar Science (Qatar Financial Centre (Q.F.C., 2023), and Technology Park, creating opportunities for QAFAC’s projects. However, this diversification also brings new challenges, such as increased competition from new market entrants and potential changes in demand for QAFAC’s products.

The economic environment of QAFAC can be analyzed using Porter’s Five Forces Model. As Isabelle (2020) explains, this model offers a framework for evaluating the competitive landscape of an industry. The Porter’s Five Forces Model includes five elements: the possibility of new competitors entering the market, the leverage that suppliers have in negotiations, the power that buyers have in bargaining, the likelihood of alternative products or services being used, and the intensity of competition among existing firms (Isabelle, 2020). The energy industry has high entry barriers due to the significant capital requirements, regulations, and technical expertise required. However, QAFAC faces competition from existing players in the market, such as Qatar Petroleum and Shell Qatar, which can impact its market share and profitability.

QAFAC’s suppliers include raw material providers and transportation services. Changes in the availability and cost of resources can impact QAFAC’s projects and profitability. This is because the bargaining power of these suppliers is relatively low. The power of buyers in the energy industry is typically high due to the availability of alternative energy sources and buyers’ ability to negotiate prices. Consequently, QAFAC must be mindful of customer preferences and trends to maintain its market share and profitability. The likelihood of alternative products or services in the energy industry, such as renewable energy sources, can impact QAFAC’s competitiveness and profitability. The intensity of competitive rivalry in the energy industry can impact QAFAC’s market share and profitability as existing players and new entrants compete for customers and resources.

 Stakeholders

They include suppliers, customers, and the community. Building and maintaining positive relationships with stakeholders is essential for QAFAC to ensure project success, as these relationships can affect project timelines, costs, and reputation. Moreover, changes in stakeholder preferences, such as increased environmental awareness, can impact project requirements and specifications.

Figure 1 Stakeholders

Internal Influences on QAFAC

Organizational/Project Structures:

The organization’s structure determines how resources are allocated, and decisions are made, while the project structure determines the project’s scope, schedule, and budget. For QAFAC, an effective organizational structure that aligns with project requirements is essential to ensure successful project delivery. According to Walden (2019), a matrix organizational structure allows efficient resource allocation across multiple projects. This structure ensures that resources are utilized optimally, and that project objectives are achieved within budget and schedule.

QAFAC’s project management approach involves a hybrid model combining agile and traditional methodologies. This approach helps adapt to changes and uncertainties during project execution while ensuring adherence to established standards and procedures. The project structure for QAFAC follows a well-defined project management methodology, ensuring that project objectives are aligned with organizational goals and that project performance is monitored and controlled. The project objectives are:

“To be the leading and reliable producer of quality methanol and MTBE.

Contribute to Qatar’s National Vision 2030 by creating value for the stakeholders.

To be a company that values safety. people, excellence, integrity, and responsibility.”

QAFAC uses cross-functional teams to ensure that projects are executed efficiently and that technical expertise is utilized effectively. In order to achieve all its objectives, the company aims to attract top talent in the market, foster a culture of excellence, and maintain the highest H.S.E. standards. However, these organizational and project structures can also present challenges. For instance, the matrix structure can lead to conflicts between functional departments and project teams, which may delay project delivery (Walden, 2019). Furthermore, QAFAC’s reliance on cross-functional teams can lead to communication challenges and coordination issues (Walden, 2019).

Culture

Culture refers to the values, beliefs, and behaviors defining the organization’s actions. QAFAC’s culture influences its project management approach, decision-making, and overall performance. The values of community and collaboration are emphasized in Islamic Culture in Qatar as a nation. The culture prevalent in an organization is analyzed by looking at how it manages its day-to-day affairs and how it treats employees. It can be further analyzed by examining project management and the decision-making process.

According to Paais and Pattiruhu (2020), positive organizational culture can increase motivation and job satisfaction, leading to higher employee performance. Effective leadership can also motivate employees and foster a positive organizational culture. By providing employees with clear direction, support, and feedback, leaders can help create a work environment conducive to employee satisfaction and high performance.

QAFAC’s organizational culture is built on collaboration, teamwork, and inclusivity. The company values its employees and strives to create a work environment that fosters creativity, innovation, and personal growth. QAFAC’s leadership team recognizes the importance of employee motivation and regularly organizes training and development programs to enhance their skills and competencies. QAFAC reinforces its culture through employee engagement initiatives such as the annual employee survey. The survey allows employees to voice their opinions and concerns about the company’s culture, values, and practices.

 Emerging Forces in the Market and Their Influence on QAFAC

Emerging forces in the market refer to new developments, trends, and changes that affect the competitive landscape in which QAFAC operates. These forces include technological advancements, consumer behavior changes, and market demands shifts. QAFAC must keep up with these emerging forces and adapt its strategies accordingly, competitive and relevant.

Climate Change:

The petrochemical industry has historically contributed significantly to greenhouse gas emissions, a crucial driver of climate change. As such, it is responsible for reducing its carbon footprint and mitigating the effects of climate change (Fragkos, 2021). The petrochemical industry is particularly vulnerable to the effects of climate change, such as increased frequency and severity of extreme weather events and changes in temperature and precipitation patterns (Pinkse and Gasbarro, 2019). These impacts can disrupt production processes, supply chains, and logistics, leading to increased costs and reduced profitability. Climate change has become a significant risk factor for the industry, affecting investors’ perceptions and willingness to invest in fossil fuel-based projects.

One of QAFAC’s initiatives is to improve energy efficiency and reduce greenhouse gas emissions by adopting advanced technologies and best practices. For instance, QAFAC has invested in cogeneration technology, allowing it to produce electricity and steam from the same fuel source, reducing its overall energy consumption and emissions (Frankgos, 2021). Additionally, QAFAC is exploring using renewable energy sources, such as solar and wind power, to supplement its energy needs. Another critical aspect of QAFAC’s climate change mitigation strategy is its efforts to promote a circular economy. They include initiatives to reduce waste and emissions, such as using recycled materials and waste reduction programs (Abadli and Kooli, 2022).

Digitalization:

Digitalization is transforming the energy industry, and QAFAC must leverage digital technologies to improve its operations and customer experience. For instance, the increasing demand for sustainable products and the shift towards a circular economy can present new opportunities for QAFAC to innovate and differentiate its offerings (Abadli and Kooli, 2022). QAFAC can develop new products that are more environmentally friendly or explore new business models that promote sustainability (Al-Hababi, 2022).

According to Ghobakhloo (2020), digitization has become increasingly important in the energy sector with the rise of digital transformation, the Internet of Things, and data analytics. For QAFAC, this means adopting new digital technologies to optimize production processes, reduce costs, and improve efficiency. An example is implementing real-time monitoring systems for production processes can help identify and address issues more quickly, reducing downtime and increasing productivity. Digitization has created new opportunities for customer engagement and communication (Ghobakhloo,2020). QAFAC can use digital platforms to connect with customers, provide information on products and services, and gather feedback to improve offerings

New Forms of Funding:

There is a growing trend of investing in sustainable projects and companies prioritizing E.S.G. factors (environmental, social, and governance). As a result, traditional forms of funding may not be attractive to investors looking to support companies that align with their E.S.G. values. Obtaining bank loans can be time-consuming, which can delay project implementation. Similarly, equity financing may dilute the company’s ownership and control and require sharing profits with investors. This can limit the pool of potential investors for QAFAC’s projects and impact its profitability.

Russo, Mariani, and Carignan (2021) state that green bonds are debt securities created to fund environmentally sustainable initiatives. Green bonds direct the funds raised towards financing environmentally sustainable projects, ensuring that investors who purchase these bonds can trust that their funds are utilized for promoting eco-friendly initiatives. Green bonds can serve as a means of financing the transition to a cleaner energy economy or funding innovative projects (Russo, Mariani, and Carignan, 2021). These bonds can boost projects focusing on green energy and help avoid environmental disasters, leading to higher yields and long-term rewards.

QAFAC can utilize green bonds to finance its environmentally sustainable projects, such as its carbon capture and utilization initiatives. By issuing green bonds, QAFAC can tap into a growing market of environmentally conscious investors looking for socially responsible investment opportunities. QAFAC is committed to reducing its environmental impact and enhancing its sustainability credentials by using the proceeds for the stipulated projects. Credibility can attract new investors and strengthen its relationships with existing stakeholders.

Shifting economic tides

Economic trends have a significant impact on QAFAC’s business operations and profitability. Fluctuations in oil prices and global economic conditions have affected the demand for QAFAC’s products. At the same time, changes in interest and exchange rates have influenced financing costs and competitiveness in the global market (Aljanadi and Alazzani, 2023). According to Al- Habibi (2022), QAFAC must maintain a flexible approach to its operations, such as diversifying its product offerings and exploring new markets.

QAFAC can leverage emerging technologies and alternative financing options, such as green bonds, to stay ahead of the curve and position itself as a leader in the industry (Russo, Mariani, and Caragnano, 2021). Ultimately, QAFAC can continue to thrive and succeed in the market by staying vigilant and adaptable to changing economic conditions.

Changing customer preference

According to (Aljanadi and Alazzani, 2023), consumers are placing a greater emphasis on sustainability, ethical production, and environmental responsibility. They are increasingly demanding products that are eco-friendly, and this shift is influencing QAFAC’s operations. For example, QAFAC is investing in research and development to explore the potential of alternative feedstocks, such as biomass and waste materials, which are more environmentally sustainable and align with changing customer preferences. The company is also exploring new technologies and processes to reduce its carbon footprint and minimize waste (Fragkos, 2021).

QAFAC also adapts its marketing and branding strategies to reflect changing customer preferences. The company is positioning itself as a socially responsible and environmentally conscious business committed to sustainability. For example, QAFAC has supported environmental awareness campaigns, health and safety awareness initiatives, and education and training programs for young Qatari nationals. Its communication materials, product offerings, and corporate social responsibility initiatives reflect this. By aligning its business practices with changing customer preferences,

Ethics, Corporate Social Responsibility, and a Global Marketplace

In a global market, companies’ corporate culture is significantly influenced by ethics and their commitment to corporate social responsibility (C.S.R.). The concept of C.S.R. goes beyond merely obeying laws and regulations and actively contributes to social and environmental well-being. As a leading petrochemical company, QAFAC recognizes the importance of C.S.R. in not only promoting sustainable development but also enhancing its reputation and attracting stakeholders (Tahir, 2019).

One of the primary responsibilities of QAFAC as a corporate citizen is to minimize the impact of its operations on the environment. In response to the increasing concerns over climate change (Aljanadi and Alazzani, 2023). QAFAC has implemented several initiatives to promote environmental sustainability. For example, it has invested in energy-efficient technology and has set a target to reduce carbon emissions by 15% by 2025. QAFAC also adheres to strict environmental standards in its production processes, such as limiting the discharge of harmful pollutants and ensuring proper waste disposal. QAFAC has set ambitious targets to reduce its carbon footprint, and in 2018, it achieved a reduction of 4% in its CO2 emissions (Qatar Energy, 2021). Furthermore, QAFAC has also initiated the Carbon Capture and Utilization (CCU) project (Frangkos, 2021)), which involves capturing CO2 from its plants and converting it into valuable products. These efforts contribute to the global fight against climate change and position QAFAC as a responsible and ethical player in the industry.

QAFAC has established a set of ethical guidelines that specify the expected behavior of its staff and affiliates. This code prohibits any form of bribery, corruption, or other unethical practices and provides channels for reporting any violations. QAFAC provides frequent training and awareness initiatives to ensure its employees comprehend and comply with ethical principles.

Furthermore, QAFAC’s commitment to C.S.R. extends beyond its operations to its engagement with the local community. The company recognizes that it is responsible for supporting and giving back to the communities in which it operates. In 2020, it donated QAR 20 million to the Qatar Charity organization to support its efforts in providing aid and relief to those affected by the COVID-19 pandemic (Doha, 2020). QAFAC has also launched the “Education for All” initiative, which aims to provide educational opportunities for underprivileged children in Qatar.

QAFAC joined the Women’s Empowerment Principles in 2019, a collaborative program of the United Nations Global Compact and U.N. Women, intending to promote women’s empowerment in the workplace, marketplace, and community (U.N., 2019). Furthermore, QAFAC has also launched the “Women in Leadership” initiative, which provides women employees with leadership training and development opportunities. In 2020, it launched the “Zero Harm” initiative to eliminate all workplace accidents and injuries. QAFAC has implemented various safety measures such as safety audits, safety training, and safety drills to ensure a safe work environment for its employees

Conclusions and recommendations

In conclusion, QAFAC has committed to sustainable development and corporate social responsibility through various initiatives and strategies. The company has demonstrated its awareness of the changing business landscape and has implemented measures to adapt and thrive in a highly competitive market. The emergence of new market forces and technological advancements have presented opportunities and challenges to QAFAC. The company has responded proactively by diversifying its offerings, exploring new forms of funding, and adopting innovative solutions.

Recommendations

QAFAC should adopt a hybrid structure to mitigate risks associated with matrix structures. QAFAC should prioritize data analytics investments to gather insights into market trends and consumer behavior to prioritize digital technologies, stay competitive, and explore new growth opportunities. Furthermore, QAFAC should align its operations with sustainable practices by investing in renewable energy sources and carbon capture and storage to reduce its carbon footprint. These recommendations will enhance QAFAC’s competitiveness and contribute to sustainable development, positioning the company for long-term success in a rapidly evolving market.

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