Both capability development and a well-established organizational structure play a significant role in a company’s success and productivity. This is due to aspects such as innovation, leadership performance, customer connectivity, organizational culture, and strategic unity that arises from the two concepts. Capability development involves the process organization, individuals, and communities acquire, maintain, and strengthen the ability to create and accomplish their development mission and vision over time. On the other hand, an organizational structure is a system outlining how specific functions and activities, such as roles and responsibilities, are managed to achieve the objectives of a corporation (Grant, 2019). The two concepts need to be considered when an organization implements its strategies. As a result, this paper will explore Saudi Basic Industries Corporation (SABIC), a KSA organization, as well as its processes of strategy execution.
SABIC is an international chemical manufacturing corporation located in Saudi Arabia. It is also supplementary to state-owned natural gas and petroleum organization known as Saudi Aramco. The company mainly produces fertilizers, petrochemicals, chemicals, metals, and industrial polymers. The mission and vision of SABIC are “to make innovative solutions by striving to do things others believe are impossible” (SABIC, 2019).
How Strategy Developed Translate into Actions of SABIC
The strategy of SABIC creates a blueprint for the organization to comprehend its mission and vision of becoming the best international leader in chemicals as well as a true worldwide powerhouse in the business by providing ‘chemistry that matters’. “We aim to deliver on our strategy by transforming SABIC into a leading global diversified chemical company that is able to deliver sustainable, profitable growth” (SABIC, 2019). As part of the strategy, the company focuses on offering differentiated goods and services in order to support the growth of buyers and make more effort towards improving efficiencies and productivity. In addition, the company remains to capitalize on innovation while establishing, maintaining, and strengthening corporations where they recognize sector-leading returns and superior growth.
Regarding the capital expenditure budgets, SABIC has a roadmap that states the timing and amount of fixed assets the company purchased. The budget is a section of the yearly budget used by the organization, which aims to organize activities for the forthcoming years (SABIC, 2019). These capital expenditures encompass an extensive range of expenditures such as establishing new businesses, upgrading or innovating the existing assets, and purchasing the equipment of manufacturing.
Considering the role of the operating plan, SABIC has a practical document that highlights the vital functions and objectives the company will do in a period, often a year. This operating plan is connected to the general strategic plan and the funding agreement of SABIC. In other words, the SABIC’s operational plan outlines targets and activities that a company will undertake to accomplish the objectives and aims developed from the strategic plan. It offers the blueprint of the day-to-day operation of the company. The senior staff members or the executive in SABIC are responsible for developing the operating plan, even though the management committee has to approve it. Focusing on reports contradicting the operational plan, the executive often reviews the progress to meet the strategic objectives (SABIC, 2019). In general, SABIC focuses on improving the fundamental areas of commercial, cost management, manufacturing, and supply chain.
Lastly, concerning the roles of performance management systems, SABIC has a continuous methodological process in which the human resource department transforms the company’s effectiveness by accomplishing the established mission, objectives, and vision. Essentially, the company has needed human resource functions such as goal-setting, well-established and frequent communication, worker training and development to enhance performance, rewarding improved performance, real-time feedback, and progressive review of progress (SABIC, 2019). All these functions enhance the company’s market share, facilitate the employees to achieve the SMART goals, and obtain valuable progressive feedback.
The Roles of Resources, Processes, and Motivations
Resources, processes, and motivation all play a significant role in strategy execution, even though there are various factors that hinder their efficiencies. To begin with the resources, in the economics and business context, there are the factors SABIC uses for strategy execution, including carrying out an activity and achieving an objective. In simpler terms, they are components SABIS needs to do business. They involve resources such as equipment, employees, capital, and working space (Tawse & Tabesh, 2020). These resources assist the company in establishing approaches that ward off threats and capitalize on opportunities during strategy implementation (SABIC, 2019). However, factors such as scarcity of resources, poor management, and lack of capital can prevent these resources from successfully achieving effective strategy execution.
Besides, processes in SABIC include a collection of structured and related tasks and activities developed by the management where a particular sequence produces products for consumers. The primary business processes in SABIC include product innovation and development, sales and marketing, administration such as human resource and finance management, accounting and technology, and quality and product delivery. Also, the business process in the company ensures that it achieves its mission and objectives after the strategy is implemented (SABIC, 2019). Nonetheless, among the factors that stand in the way of processes in SABIC can be implementation time and organizational culture.
Finally, concerning motivation in strategy execution, SABIC has a leadership structure established under the guiding principles that enhance values and commitments, including encouraging, inspiring, creating, and delivering. “It aligns with our 2025 strategy and allows us to create a dynamic and inclusive leadership culture that develops the right talent for the right challenges” (SABIC, 2019). In addition, the reward is among the key employee value proposition. This improves the efficiency of the strategy being implemented and reduces the levels of resistance to change. However, failure to motivate and explain to employees the need for the new strategy can prevent effective implementation.
The Capabilities to Support Implementation
Generally, corporate capabilities empower organizations to achieve their goals and maximize their performance as well. The key organizational capabilities are operational, strategic, meta or dynamic, and context. However, the specific capabilities SABIC ought to develop in order to support strategic implementation are agility, leadership performance, talent, customer connectivity, organizational culture, innovation, and strategic unity. Notably, the most admired and successful organizations have diverse elements that make them more competitive (Merkus et al., 2019). For instance, several people respect companies such as Disney, Starbucks, and Apple across the world, not because of their structure but capabilities. Their propensity for technological innovation and their enthusiasm towards the transforming needs of consumers make them relevant and trustworthy.
As a result, when SABIC uses the right mix of company capabilities as the ones mentioned, the business will deliver excellent services, operate effectively, implement strategies efficiently, and ensure customer satisfaction (Merkus et al., 2019). All these organizational capabilities encourage competitive advantage because information and resources are managed effectively, thus making the company meet its objectives and customer demand with quality products.
Moreover, the capabilities enhance the company’s ability to adapt to changes, such as implementing new strategies due to the continuously transforming industry demands. A company that aims at aligning its strategies with customers, employees, and emerging trends can better foresee and establish a new direction for the company (Merkus et al., 2019).
Additionally, the capabilities drive business performance in SABIS. Establishing capabilities enhances the identity and strengths of organizations. Connecting these intangible values and principles encourages stability as well as making the most of the factors employees have to provide (Merkus et al., 2019). This brings optimum performance.
Capability development and a well-established organizational structure play a significant role in a company’s success and productivity. The two concepts need to be considered when an organization implements its strategies. This paper explored Saudi Basic Industries Corporation (SABIC), a KSA organization, as well as its processes of strategy execution. It was established that SABIC is an international chemical manufacturing corporation located in Saudi Arabia. The strategy of SABIC creates a blueprint for the organization to comprehend its mission and vision of becoming the best international leader in chemical production. The company also has resources, processes, and motivation that play a significant role in strategy execution, even though various factors hinder their efficiencies. The capabilities highlighted to support implementation are agility, leadership performance, talent, customer connectivity, organizational culture, innovation, and strategic unity.
Grant, R. M. (2019). Contemporary Strategy Analysis (10th ed.). Wiley & Sons.
Merkus, S., Willems, T., & Veenswijk, M. (2019). Strategy Implementation as Performative Practice: Reshaping Organization into Alignment with Strategy. Organization Management Journal, 16(3), 140–155. https://doi.org/10.1080/15416518.2019.1611403
SABIC. (2019). SABIC – About. Sabic.com. https://www.sabic.com/en/about
Tawse, A., & Tabesh, P. (2020). Strategy implementation: A review and an introductory framework. European Management Journal, 39(1). https://doi.org/10.1016/j.emj.2020.09.005