The General Systems Management and Its Implications
Discuss about the Systems Engineering for Systems Life Cycle Processes.
Systems engineering can be described as an interdisciplinary approach which enables the life cycle of service, enterprise and product systems. In includes the formulation and discovery of the problem, realization and definition of the solution, sustainment, operational use as well as disposal (Pickel, 2008). The Deepwater Horizon oil spill incident, which is also known as Gulf of Mexico oil spill, took place on April 20, 2010. It is considered to be one of the largest marine oil spills in the world’s history. The explosion took place on the Deepwater Horizon oil rig in the Gulf of Mexico. The Deepwater Horizon rig was leased by the oil company BP (Pallardy, 2018). The essay will give an account of the information related to the oil spillage case and analyse the factors responsible for it. The essay helps in the identification of the tools and techniques associated with the systems thinking and their relevance to any project as well as organization. The essay will argue that the incidents like this are a result of the ignorance or improperly developed management systems. In the end, it will also provide a few recommendations which can help in the prevention of such incidents and ensure proper management of the systems and operations in the organizations.
The general systems management is based on an approach which treats an organization as a system. The general systems theory offers with several opportunities to the management of any organization to manage the systems as well as processes in the organization. The theory was created by Karl Ludwig in the year 1934 and since then, the business organizations have been working on this theory to organize their structure, cultures and forms (Targowski, 2010). There are two types of systems – the open systems which interact freely with the environment through their inputs, throughputs and outputs; and the closed systems where the organization are not associated with the external environment which is extremely rare. According to Kast and Rosenzweig (2017), this theory has given rise to the development of a number of management and organization theories, which has also created certain unresolved dilemmas. According to them, the organizational theory must be foundation for the effective management practice in the organization (Kast & Rosenzweig, 2017).
In BP, the operating management system (OMS) is based on leadership of the operating leaders which ideally need to be competent and showcase the systematic and purposeful leadership. But in real, the managers of the company were always at conflict with each other and there was also a debate related to the accountability of the critical decision making (National Commission , 2011).
The Role of General Systems Theory in Organizational Culture Studies
The general systems theory has wide implication in the development and designing of the structure, culture and form of the organization. The systems illustrate the organization in the form of open systems which has to exist in an external environment and is affected by it in almost every organizational operation. Most of the organizations tend to organize their structure as per the traditional hierarchical structure which begins at the top where the CEO of the company passes the orders for the employees at the lower layers of the organizational structure. The systems theory allows the organizations to create an organizational structure as per their demand (Clawson, 2008). The theory promotes a matrix of the subsystems where the organization is divided into certain departments and each department has its own boss and sub-structure, for instance, development of separate departments for operations, technical, manufacturing, accounting and such others. These departments need to be interrelated and communicate effectively with each other. This system promotes the setting of multiple strategic goals and transforms its operations effectively. This fact has been confirmed by Cohen as well. He studied the role of systems thinking in the organizational culture studies. He adopted the global system philosophy to reach the findings and found out that the open systems contribute a lot to develop an understanding of the organizational culture as a system (Jamshidi, 2011; Pickel, 2008).
In BP, as most of the reports indicate, there was lack of adequate communication and the information was so much compartmentalized that it did not reach the departments properly. This led to decision making on the basis of incomplete information. The engineering team of BP knew the potential risks associated with the project at Macondo but still it was not able to communicate the risks to the employees or the contractor, otherwise they might have found some ways to mitigate the associated with the project (National Commission , 2011).
The engineering risks that are associated with the oil and gas industry need to be handled carefully and immediately. The offshore drilling operations are more dangerous than the onshore activities. The impact of the offshore accidents may prove to be disastrous to health, security, safety and the environment. The engineer’s risks can be defined as the mistakes of the engineers and their team. The engineers of the team took the risk of choosing the cheaper tools and equipments which cost a lot higher to them when the explosion occurred. The blowout prevention was aimed at controlling the leakage and it started malfunctioning. The engineers ignored this and carried on the drilling process. The leakage finally became the reason for explosion (Hammer, 2010).
BP’s Operating Management System
These risks needed to be managed by the organization as well as the engineers. The risk management process needs to be extremely well developed and accurate in the oil drilling processes but in case of BP, the process was inefficient as well as inaccurate. Apart from the technical or the engineering risks, the oil and gas sector is exposed to a number of other risks such as the political risks, oil price risks, environmental risks and health and safety risks. For the identification of the risks in offshore oil drilling practices, the companies need to conduct the safety audits at regular intervals of time. Some of the other techniques and tools that can be used by the companies to identify the potential risks and their impacts on the employees are what if analysis, hazard indices, checklists, pilot plants, fault tree analysis, bow- tie method and such others (Lees, 2012). O’Dea and Flin (2001) studied the impact of safety leadership and site managers in offshore oil and gas industry. According to the authors, the management is highly responsible for the development of strategies for maintaining a safe environmental culture. They studied the relationship between the experience of the site managers in and their leadership style with the safety attitudes possessed by them. They found that there need to be a number of changes implemented in the standard practices adopted by the companies in the offshore operations (O’Dea & Flin, 2001). These issues were present within the management of BPM as well as discussed above. They also need to fill the gaps between the management of the company. The company needs to assess the risks at different time intervals to understand the potential risks and their impacts. The major risks that are associated with BP and other oil and gas drilling projects are natural risks, management risks, technological risks, individual risks, relief capability, economic risks as well as the political risks. These risks need to be analysed in a proper manner and appropriate mitigation measures need to be adopted (Zhendong, Huijuan, & Mei, 2010).
The portfolio alignment is one of the most important parts of the project as it evaluates, prioritizes and selects the project in alignment with the strategy of the business. Using this, all the projects that are going on within an organization are aligned with the overall business strategy. However, there is a lack of empirical evidences to promote the actual implementation of this technique in the organizations but there is a lot of scope of this technique in the coming future (Filippov, Mooi, Weg, & Westen, 2012). This approach could have allowed BP to plan the plan in an efficient manner and deal with the risk in an organized manner. The accident proved to be a catastrophe from the perspective of the environment as well as health and safety of the employees. If they planned the project in an efficient manner, all these issues could have resolved in the initial stages.
Risk Management in Oil and Gas Industry
The incident that took place proved to be disastrous for the reputation and the business value of the organization as well. The business value can be described as the measure of value which determines the worth of the business. After the incident, the shareholders and the stakeholders of the company demanded explanation for such careless attitude of the engineers in dealing with a job which involves risks at every step. The reputation and trust of the shareholders became questionable after this incident as the explosion took place due to the negligence of the engineers as well as the management of the company. The company had to take several image repair measures such as providing compensation to the family members of the victims and making significant efforts to pass the blame on others (Harlow, Brantley, & Harlow, 2011).
The process of portfolio management is adopted by an investor in order to meet his goals of investment. This process needed to be adopted by the company after the explosion as many of the investors of the company parted their ways after such a catastrophic incident. The portfolio management process cycle consists of four major steps. The first step includes the creation of policy statement containing the goals as well as the constraints of the investor in relation to his investments. The second step is the development of an investment strategy which combines the goals of the investor with the economic as well as the financial market. The step includes the implementation of the developed plan to meet the goals as well as the constraint requirements of the client. The final step is to monitor and update it as per the requirements of the market (Patanakul, 2015).
Organization maturity can be described as the measure of the capability and the readiness of an organization expressed in terms of its processes, workforce, technologies, evaluation practices and data processing. It serves as the baseline for measuring the need for improvement in the organizational processes. There are certain tools available in the market that can be used determine the level of maturity of the organizations. Financial Maturity Assessment is the similar kind of IT tool which measures the maturity of the organization against a list of parameters. Being a company which always faces a number of risks, BP must have undertaken the maturity assessment which covers four organizational aspects including data, people, processes and technology (Bititci, Garengo, Ates, & Nudurupati, 2015). The “process” assessment could have highlighted the technical and operational risks and the “people” aspect could have covered the management flaws.
Portfolio Alignment and Its Importance in Project Planning
System thinking tools help in the generation as well as organization of the information about the system followed by the organization. There are a number of tools that can be used by the companies such as brainstorming, conceptual model, affinity diagrams, sub-system matrices, input-output diagrams, graphical analysis, Quad of aims, balanced loop methods and such others (Association for Project Management, 2018). The company could have used the actor mapping technique to resolve the issues related to the individuals forming a system. World Cafe method is the conversational technique that could be used by the company to engage people in the decision making and sharing different perspectives and ideas as this was required that time.
Conclusion
The essay gives an account of the systems engineering and the tools included in it. Systems engineering is a discipline which includes a variety of operations which aim at identification of the problem, analyzing it and assessing its potential impacts, and the finding a solution to resolve the issue. The implementation of the systems engineering has been explained with the help of a case study based on oil spillage and explosion. The company which was associated with this incident was BP. The essay uses this case study to explain the different parameters undertaken by systems engineering in resolving the issues. It also gives an account of the tools and techniques that could be used by the company in every step to prevent this explosion at that time and in future. This has proved to be an effective tool to analyse the case study or vice-a-versa. It can turn out to be an effective technique for managing risks in almost every industry in an effective manner.
References
Association for Project Management. (2018). Systems thinking: How is it used in project management? Retrieved from Association for Project Management: https://www.apm.org.uk/media/17308/systems-thinking_final.pdf
Bititci, U. S., Garengo, P., Ates, A., & Nudurupati, S. S. (2015). Value of maturity models in performance measurement. International Journal of Production Research, 53(1), 3062-3085.
Clawson, J. G. (2008). Systems Theory and Organizational Analysis. Research Gate.
Filippov, S., Mooi, H. G., Weg, R. v., & Westen, L.-J. v. (2012). Strategic alignment of the project portfolio. Portfolio Management Strategy.
Hammer, D. (2010, September 5). 5 key human errors, colossal mechanical failure led to fatal Gulf oil rig blowout. Retrieved from Nola.com: https://www.nola.com/news/gulf-oil-spill/index.ssf/2010/09/5_key_human_errors_colossal_me.html
Harlow, W. F., Brantley, B. C., & Harlow, R. M. (2011). BP initial image repair strategies after the Deepwater Horizon spill. Public Relations Review, 37(1), 80-83.
Jamshidi, M. (2011). System of Systems Engineering: Innovations for the 21st Century. John Wiley & Sons.
Kast, F. E., & Rosenzweig, J. E. (2017). General Systems Theory: Applications for Organization and Management. Academy of Management Journal, 15(4).
Lees, F. (2012). Lees’ Loss Prevention in the Process Industries: Hazard Identification, Assessment and Control. Butterworth-Heinemann.
National Commission . (2011). Deep Water The Gulf Oil Disaster and the Future of Offshore Drilling. National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.
O’Dea, A., & Flin, R. (2001). Site managers and safety leadership in the offshore oil and gas industry. Safety Science, 37(1), 39-57.
Pallardy, R. (2018). Deepwater Horizon oil spill of 2010. Retrieved from www.britannica.com: https://www.britannica.com/event/Deepwater-Horizon-oil-spill-of-2010
Patanakul, P. (2015). Key attributes of effectiveness in managing project portfolio. International Journal of Project Management, 33(5), 1084-1097.
Pickel, A. (2008). Rethinking Systems Theory: The Problem of Culture. European Sociological Association 8th Conference (pp. 1-24). Glasgow: Semantic Scholar.
Targowski, A. (2010). Cognitive Informatics and Wisdom Development: Interdisciplinary Approaches: Interdisciplinary Approaches. IGI Global.
Zhendong, W., Huijuan, X., & Mei, C. (2010). Risk Assessment of Oil and Gas Drilling Engineering Cooperation Project Based on Fuzzy Comprehensive Evaluation. Proceedings of the 7th International Conference on Innovation & Management .
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