Saudi Electricity Company’s Objectives and Constraints

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Table of Contents

Description of the situation
System Description
Progression and Interconnectedness
Identifying the Objectives and Constraints
Routes to the Objectives
Implementation
Challenges, Risks and Recommendations
References

Description of the situation

The growth of Saudi Electricity Company (SEC) through advances system of technology and reliable information supplied all over the state. The technical state of the informative and substantive negotiation is attributed to improper management strategies. In this light, the development of such safety measures has not only become an issue haunting the current system of administration. Even with the mechanical and electrical measures initiated to provide highly safe precaution against electrical accidents, the problems do not cease to reappear within the SEC.

In fact, the cases of these accidents have been reappearing more frequently within the recent cases where sufficient and imperative addresses have been requested from the public and those who lose their loved ones. Some researchers argue that most accidents experienced in respect to the company are attributed to arrogance (American Bar association 2006, p. 65). While contemplating about the validity of this argument, SEC has applied advance precautionary measure to mitigate the rise of deaths through accidents. This development has been initiated by the establishment of policies and rules to control precautionary measures.

The SEC has encountered many challenges within the context of electric shocks, and fire accidents initiated by electricity among others (Pham 2010). The company has employed over 28000 people across the kingdom of Saudi in a bid to provide reliable and accessible electricity services. However, the company has not reached the acceptable limits as released by various literal media. For instance, it had been graded as the leading company to pose serious safety problem in this kingdom. In this regard, it is paramount to check how the development of these issues and their resolutions can be facilitated through the application of the Hard System Method (HSM).

In the application of the HSM method, thus paper addresses how these factors are made some of the most vital aspects allowing the assessment of each factor seen within the subject company. The following evaluation pays attention to these factors.

System Description

As described within the first paragraph of the paper, the SEC has employed adequate human resource base to provide reliable services in Saudi. The employees of this company include the internal workers, distributors and engineers, technician and managers among others who amount to 28000. The power sources from the company can be categorized into hydroelectricity, fuel, and nuclear energy. The generation of electric power and its distribution is based on the commitment of personnel employed by the company. The employees are segmented depending on the form of professionalism required on each case.

For instance, the energy from the generation factory is transmitted through aluminum wires throughout the nation. The sensitivity and laws set to strengthen the state of power production must be pragmatic when cover the wide distribution. Furthermore, the company has not managed to set up a security system to reinforce the company rules of power supply. In fact, it had been recorded that many people were using electricity without making the required payments. The people used faulty wiring to connect to the main line and tap current without meters. This unprofessional trial to compromise the billing system of providing electric energy deterred the right system of supply.

System Map of Sasudi Electricity Company

Progression and Interconnectedness

The orientation of safety measures must be established in a mutual strategy. Each arm of the management is affected by the safety regulation raised to facilitate a mutual advancement of the safety precautions and strategies. Primarily, the development of such approaches is related at every level of management. The SEC must utilize a multidimensional approach to boost the state of safety from the roots to the highest management.

It does not only involve the employees working on daily basis for the company, but also the energy consumers and the highest managements. In fact, the leadership is the highest pillar determining how operations are conducted. For instance, if the management enforces strict rules to regulate the terms and conditions for service delivery, the people implementing the lowest operations in the hierarchy can follow this direction. The tactical approaches of each subjective decision made from the company either affects (or is affected by) the industrial functionality.

For instance, the delivery of quality and safe services to the customers prior to effective marketing strategies may lead to higher demand and increased profits. Furthermore, SEC may become competitive allowing other companies within the industry to provide similar services. Researchers argue that a competitive market high many chances of offering quality services and better services. When one company poses a threat to the other, there are reactions on the competitors to reach the standards set by the leading organization. This aspect dictates that the advancement of the overall safety perceived from the company can trigger the safety in others.

Another vital attribute of interconnectedness may be perceived from the employees and the management. Employees may be partitioned into various forms of working segmentation. For instance, there are employees within the generation zone together with its management. Similarly, energy distribution zone comprises of these working compliments. If there is failure related to safety issues within the generation departments, a subsequent effect is felt within the distribution management. These effects may be exemplified by the strike of the employees due to lack of assurances, insurances, and satisfactory payments. Even such slight irregularities as theft of energy cause safety problems and failure of the company’s business stature. The management, competition, employment, and consumption are interconnected while striving towards the business prowess of SEC.

Interconnections of Safety

Identifying the Objectives and Constraints

The ultimate goal of the analysis is to improve safety in regard to the accumulating accidents within the company. The establishment of reliable objectives must address all the four connected groups. Each group must facilitate the achievement of a common outcome of reducing the number of accidents appearing in relation to the company. The management can implement policies to strengthen the human workforce through training and regulations depending on responsibilities. For instance, a policy can be set to discourage engineers on faulty wiring systems for buildings.

Other strategies may involve promotions to employees who are competitive on providing reliable workforce. Similar results may be achieved through the deployment and warning for failures resulting from the work done by the employees. In cases where such services as wiring are not reliable for SEC, most costumers may find alternative companies to handle demand. Essentially, the losses of property attributed to fire caused by electricity have been frequent. The profits attained prior to the delivery of these services may cease when the company’s delivery of reliable and quality services is deemed compromised. The objectives of the company aimed at boosting the safety and reduce the accidents are listed below:

To orient the management on safety-based proceeding
To train the employee on the advancements on technology and policies
To become a competitive service provider prior to low rates of accidents
To boost the consumption of electrical energy

However, attaining these goals has limits due to their unconditional appearances. An accident is an unexpected event that may occur due to many factors. Therefore, the precautions can only be taken to reduce the cases of accidents attributes to ignorance and arrogance. Even with the highest possible precautions and regulations, accidents may appear at any moment. For instance, the prevailing technology within the field of electrical engineering may require a lot of funding to replace the initial systems.

The lack of this funding prevents the installation of more secure approaches to facilitate safety and reduce safety through technological advancements. The training of the employees and the consumers of the electricity company may not be possible. This failure to enlighten people on working with electricity effectively leads to accidents. In fact, it is challenging for some employees to work with the current devices established to deliver electricity. Their work may by shoddy if there is no pre-training sessions to inform about the prevailing advancements in the area.

Routes to the Objectives

The implementation of effective strategies to facilitate the decrement of the accidents is availed through training programs. The training is in the form of instructions, observations from experienced workers, and reading of informative articles and company brochures. In this regard, training is used to teach the workers on how to deliver fast, efficient, and reliable services. Competition is based on the satisfaction of the customer, which creates loyalty. The rise of loyalty allows more customers to seek the services while other accesses the services for the first time. The implementation of the policies through the reaction of the management is paramount to this research finding. The factors of accident insurances and human assurances are paramount when reaching objectives. The effects felt the consumers and employees while being involved in the risky operation of electricity are particulate.

Implementation

Time, resources, and funding are imperative while striving to reach the objectives set for each level of segmentation. For instance, the training program as well as the prevailing electronic devices will require finances to pay the instructors. The company holds a large energy reserve in the world. However, it has experienced several challenges recently owing to the ever-changing national markets, demand, accidents and competitions. The company’s management has, therefore, foreseen a scenario where its fortunes are at stake due to national market demands. The company aims to achieve this through diversifying its business activities nationally (Strategy 2003).

Being a state-owned company together with geographical location of Asia, the company stands a better position to reach all markets for innovation since funding are released by the government. The company exports electricity and other products to regions such as Europe, CIS and Baltic States, and America and Asia-Pacific (Strategy 2003). The company’s marketing and trading arm has been vital in enabling the company to reach its markets. The entity has expanded the company’s markets reach from European markets to other parts of the world. The entity has also helped the company to monitor and respond to the ever-changing dynamic markets in energy operations.

To overcome the challenge of constantly changing national energy landscape, the company has employed experienced analysts. This team works tirelessly to satisfy their customers. This team monitors daily activities in the business as well as designs both the short term impacts as well as long-term investment strategies. Through this, the company has maintained their customers’ satisfaction globally without making losses.

Other achievements that the company has achieved through its international strategies include:

Exploration of all investment opportunities that exists in global markets
Potential long-term trade relationships with other states
International regulations that govern trade on energy so that the company is not barred from conducting its normal activities

It is, therefore, evident how the company has evolved to maintain its customers and global markets.

The company has also realized the need to produce high-quality products and services. They have brought to fruition some of the best-quality products into the market. This aspect has been prompted by their competitors who try to overcome them in countries where SEC has settled its businesses.

The company has also achieved balance of trade equilibrium. Through its involvement in international trade, the state has earned trade surplus. This attribute motivates the government to invest more in the firm by supporting its operations (Black 2013, p. 47). Asia, as a result of annual trade surplus from the electrical trade, has experienced an immediate and straight addition to her Gross domestic Product. It is anticipated that producers gain from the production that maintains goods and services at a cheap charge. The government has, therefore, increased her infrastructure geared towards developing SEC to become one of the leading electrical and gas exporters globally.

Conclusively, SEC has achieved a lot through its national and international trades. A lot of profits, foreign earnings and hence the stability of the business have been realized by the company. This aspect has boosted the economic and social standards in Asia. The international trade strategy has also benefited other countries socially and economically, where the company has established its businesses, for example, Armenia. Hence, the international strategy was the best strategy that the company formulated.

Challenges, Risks and Recommendations

In the case of international companies such as SEC and Chevron carrying out a joint business, the legal risks might arise from the following:

Sharing of price information
Customer information
Cost information
Marketing and strategic plans
Technology
Bidding information
Future plans and forecasts

Sharing pricing information between the two companies dealing in the same products seems to have some legal implications. When the two companies share crucial information such as their pricing policies, it is possible that one company will not comply with the other’s policies. Pricing information could include crucial data concerning the past, present, or the company’s projected price trends. The information can also include one company’s strategies to offer discounts, rebates and even payment terms. SEC, being a state-owned business, may not give complete information on the price. It might lead to the other company feeling challenged, which might result in the company seeking legal action against SEC.

There are other legal risks that may arise from technology issues. Technology information that can be shared between the companies includes their on-going production research, and the manufacturing techniques. Also, the companies are bound to share information on the involved cost. It entails the costs that are normally attributed to their specific products and services. It may also include information about their suppliers and even the sources of raw materials. Lastly, the bidding information that the company work with is also shared. The bidding information may contain the terms of the bid and allocation (Lane 1998, p. 97). All the above-mentioned information seems to have a legal binding between the two companies.

Another legal risk is the international laws on pricing of the electrical products. One company may be favored by law while the other disadvantaged. Take, for example, the European Union regulations on the electrical pricing may be an advantage to SEC. The other international company, operating at high production cost will have to sell their products at a higher price. When the two companies agree to form a joint venture, they will have to harmonize their prices. This will lead to slight hike in the SEC products. SEC domestic customers may shift their tastes in turn. The legal risk that might arise from the international laws will have a great implication in the operation of the two companies.

There are several legal risk-mitigation measures that may assist international contracts irrespective of the jurisdictions. The first mitigation measure is to choose a counterpart with a lot of care. It implies that Chevron will have to understand all the operations of SEC before they enter into a joint venture. It goes concurrently with understanding ones’ clients and their relations.

To ensure the success of the joint business, there are several techniques that can be employed. These techniques include structuring the transactions in respect to the allocation of realizable companies’ assets, ensuring efficient and effective security structures, and supplementing structural deficiencies accompanied with highly credible collaterals.

References

American Bar Association 2006, Section of Antitrust Law, Chicago, IL.

Black, K 2013, Business cycles and equilibrium, Wiley, Hoboken, N.J.

Lane, M 1998, Customs modernization and the international trade superhighway, Quorum, Westport, Conn.

Pham, P 2010, SEC’s Monopoly Faces a Triple Threat, Web.

Strategy 2003, Web.

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