Introduction
Recent changes caused by the avalanche of technological advances and alterations in global society have created the foundation for a restructuring of the contemporary business environment. Particularly, the role and range of responsibilities that strategic managers have to face in the modern economic setting have been growing exponentially, thus putting a significant strain on the specified agents. Thus, a profound analysis of the effects that strategic management has on an organisation, its structure and form, performance levels, and the allocation of organisational resources, is required.
The goal of this paper is to explain the connection between strategic management (SM) and the structure of a company, its efficacy, and resources. For this purpose, Kahramaa, the Qatar General Electricity and Water Corporation organisation was chosen. An analysis of its current state and the effects that strategic management has had on its position in the local market will help determine further directions in which the organisation will have to develop (Kahramaa 2014). The outcomes of the analysis will show how well the strategic goals at Kahramaa were set and accomplished, as well as whether the approaches used for the specified tasks were feasible.
A recent project, aimed at improving water quality, will be the focus of the analysis. Due to the recent decision to expand its business and embrace a wider range of customers, Kahramaa has decided to set more rigid standards for water quality (Al-Naamaa 2014). This step has required the extensive knowledge of strategic management to promote the improvement of the existing approach toward water filtering and, thus, can be seen as an example of deploying strategic management principles. Due to the need to improve water quality, Kahramaa needed to redesign its performance system and the framework for managing organisational resources, as well as make minor alterations to its structure and form, which strategic management enabled.
Company Description
Kahramaa was founded in 2000 to supply water to the residents of Qatar. Over time, the organisation has grown to become the sole distributor of water and electricity in Qatar, having monopolised the sector (Ministry of Development Planning and Statistics 2015). Although Kahramaa itself is relatively new to the Qatar market, it has an impressive record and legacy since it was founded as a successor of the Ministry of Electricity and Water (Khatri 2015).
Created to introduce changes to the existing framework for managing water resources within the state, Kahramaa was initially intended to introduce innovations to the industry, hence the current focus on innovative solutions to the possible water crisis (Osman 2016).
The company expanded quickly from the energy sector, as its initial sole focus, to the management of other energy resources, including water, and is currently planning to embrace solar power opportunities (‘Agua: your partner in the water cycle’ 2016). Therefore, Kahramaa should be seen as a ground-breaking organisation that strives to make a positive change in the contemporary Qatar energy market.
The organisation has a fairly basic structure that allows it to accomplish key tasks and reduce the amount of waste significantly. Particularly, the managers at Kahramaa use the concept of the functional structure to navigate the key processes at the firm and ensure that set goals are completed. The specified structure contributes extensively to clarity and transparency within the organisation, thus making the process of managing essential data simpler. For instance, because of the transparency within Kahramaa, the threat of misinterpreting a particular piece of information or failing to disperse it across the firm becomes virtually impossible.
The company also has a certain amount of resources and assets, which make its performance within the Qatar energy market particularly efficient. Holding a monopoly in the specified market, Kahramaa has access to a plethora of supplies and technological advances, thus enjoying a wide array of opportunities for making its business sustainable and meeting the needs of its customers. The access to resources is critical to the company’s performance due to the ambitious goals that it has set. Specifically, Kahramaa seeks to provide all Qatar residents with improved water resources and electricity (‘Kahramaa: in the right direction’ 2015).
However, because of the geographical location of the state, the specified amenities are difficult to provide to the target population. In particular, the quality of water in regard to the lack of essential minerals and the presence of an excessive percentage of salt in it deserves to be mentioned. Therefore, Kahramaa has to adopt a financially and environmentally sustainable approach toward using the available water and energy resources by meeting the quality standards that it has set for itself.
At the same time, Kahramaa enjoys a number of opportunities regarding the use of the available resources since it holds the monopoly in the energy and water supply market in Qatar. Thus, while the organisation has to secure its position by using the principles of sustainability and environmentalism, it evidently has a plethora of resources that it can use. Therefore, the situation regarding the resources at the company’s disposal is presently regarded as driven by environmental factors rather than economic ones.
Finally, Kahramaa’s work performance system can be deemed as high since it embraces the crucial elements that ensure meeting the set standards. Specifically, Kahramaa employs a basic yet efficient organisational structure that helps to delegate tasks and manage its human resources, at the same time as keeping staff engagement levels high with the help of an elaborate reward system.
Strategic Management Functions: Description
The concept of strategic management and its functions in the environment of a particular organisation is rather basic. According to the existing framework, the proposed approach implies viewing a company’s progress as controlling a company’s performance by analysing the essential internal and external forces that shape its performance and determine its competitive advantage.
Specifically, strategic management implies approaching the management of an organisation by viewing it as a transfer from developing a strategic vision and corporate mission to the identification of key priorities and objectives, locating the existing resources, selecting a strategy for attaining the set goals to control the outcomes, and determining a further course of development (Dubey 2016). While seemingly simplistic, the suggested approach requires establishing a rigid control over the available resources and a profound analysis of the factors that affect an organisation’s performance in the target market.
The functions of the strategic management framework, in turn, mostly concern promoting change, supervising its implementation, and institutionalising it. Although the existing strategic management framework does not incorporate the phenomenon of continual change into its design, with a few minor modifications, one can construct the strategic management approach that will allow for consistent quality improvement. The specified framework is linked directly to the quality improvement strategy known as the Six Sigma (Pyzdek & Keller 2014).
Strategic Management Functions: Analysis
Organisational Structure and Form
The company envisions talent management as one of the essential approaches to ensure the delivery of expected results by retaining the existing system and supporting it extensively. The firm sees talent training as the gateway to consistent growth, hence the emphasis on communication and the active use of a cross-cultural dialogue. In fact, Kahramaa makes very efficient use of the strategic management principles by reconsidering the idea of time in general (Kahramaa 2018).
Specifically, the notion of corporate time is interpreted as a series of dialogues occurring in the context of the firm. Hence, maximising the number of dialogues and successful outcomes becomes one of the essential goals for Kahramaa.
In addition, the use of the strategic management principles allows restructuring the organisation by introducing better cohesion and communication between the groups within it. Indeed, by definition, a company represents a combination of different groups that aim at implementing particular goals. With the introduction of the strategic management principles, the process of accomplishing a particular goal becomes clearer, which, in turn, leaves more space for reconsidering the system of group interactions. Instead of unsystematic and fragmented communication, the process of interdisciplinary collaboration becomes orderly and smooth.
High-Performance Work Systems
With the shift of the management focus toward employees, the strategic management philosophy creates a range of opportunities for introducing a high-performance work system (HPWS) into a corporate setting. At Kahramaa, the active promotion of innovative thinking and employee involvement into the decision-making process creates the platform for HPWSs to become self-sustainable. As a result, the high standards set by the organisation are supported actively by employees (Min, Bambacas & Zhu 2017). Therefore, the promotion of strategic management within the organisational context enables employees to collaborate to create HPWSs.
Organisational Resources
Kahramaa owns a significant amount of its success in its performance and management of resources to the strategic management principles that it deploys to handle critical processes. For instance, at Kahramaa, employees strive to maximise the utility of the available resources, at the same time following the principles of sustainability. The specified approach becomes possible due to a combination of an environmentalist framework and the emphasis on waste management.
For instance, according to a recent report published by the organisation, Kahramaa has deployed technology allowing it to distribute electricity with the help of a newly created system involving the use of concrete (Kahramaa 2018). According to the press release issued by the organisation, “It managed to construct a distribution substation in 35 days using the ready-made concrete instead of 90 days by the transitions ways” (Kahramaa 2018).
Increasing the efficacy of the company’s performance is one of the primary functions of the strategic management principles used at Kahramaa. When considering the way in which the company implements its strategic management processes, one should also mention the fact that Kahramaa utilises it to improve its resource management strategy extensively. The identified choice makes sense since Kahramaa is forced to work in a setting that involves a rather tangible lack of resources.
Since water is scarce in the specified area, and obtaining electricity requires using expensive technology and devices, Kahramaa has to face a wide range of risks, which its strategic management helps to minimize (Kahramaa 2018). The focus on human resource management (HRM) processes might seem a less evident solution to the specified problem, yet the identified approach helps the organisation strive within the context of the energy market of Qatar.
Specifically, the use of talent management deployed at the company helps discover the potential of its employees and to use it to maximise organizational outcomes. Given the emphasis on innovation at Kahramaa, it is natural for the organisation to promote innovative thinking as one of the key tools for successful performance (Kahramaa 2018). Consequently, staff members participate in decision-making to a significant extent and, thus, develop rather high rates of engagement and motivation to excel in their performance.
The specified framework encourages the contribution of employees and creates a positive environment for professional growth. Consequently, with the firm investing in its staff members, it ensures that their loyalty contributes to the future growth of the organisation.
Strategic Management Functions: Assessment
Analysis Process: Business Environment
In retrospect, the application of the strategic management functions to the context of the organisational setting allowed Kahramaa to elevate itself from being a local energy and water supply organisation to a monopolistic corporation that handled a vast array of resources and assisted in delivering them to the remote areas of impoverished regions. Due to the careful use of the available resources, which strategic management enabled, the organisation became capable of allocating the available resources successfully (Al-Naamaa 2014). As a result, Kahramaa managed to optimise its organisational processes and create the business environment in which it could thrive.
Indeed, the form and structure that the company has assumed allows optimising its internal and external processes, at the same time as ensuring consistent growth. Furthermore, the current organisational environment can be deemed as promoting the active professional development among staff members (Osman 2016). With the active focus on the search for talent and the provision for employee initiatives, Kahramaa has designed the platform to allow its staff members to evolve and improve their skills.
Apart from encouraging its staff members to grow and provide better quality services, Kahramaa also promotes the development of loyalty in its employees. As a result, staff members feel comfortable in the context of the organisation and are eager to contribute to its further growth (Shomar, Darwish & Rowell 2014). Thus, the use of the strategic management framework designed by Kahramaa affects the business environment directly, enabling employees to acquire essential business-related skills.
The organisation performs its business analysis by taking crucial factors, including economic, financial, organisational, and technological ones, into account. As a result, a balanced assessment of the firm’s performance in the context of the contemporary business environment becomes possible. Specifically, the firm adopts the principles of the PESTLE analysis as an integral part of the strategic management framework (Kahramaa 2018).
The specified tool helps pinpoint possible threats to the firm’s efficacy in the Qatar market, as well as the opportunities that it may enjoy. At present, the PESTLE analysis indicates that the focus on high-performance technology deployed by the organisation is a sensible step to take since it enhances the corporate integrity by retaining the performance quality at the required high level.
Systems and Processes: Response to Stimuli
In order to respond adequately to the constantly changing environment of the Qatar market, Kahramaa has to use the framework based on strategic management. The specified tool allows the organisation to adjust its responses to the stimuli that emerge in the target market. Specifically, the increasing demand for high-quality services encourages the organisation to use its strategic management techniques to analyse the available approaches and evaluate the resources at the company’s disposal.
In addition, the necessity for Kahramaa to expand has been defining its performance and setting expectations for the organisation to meet. Due to the lack of water and energy-related resources in the specified region, a range of remote areas remain in need of the specified supplies. Combined with rather unfavourable geographic locations, the high levels of economic instability that border poverty define the inability of citizens to access necessary services. This reduces Kahramaa’s area of reach and prevents the organisation to meet all the needs of the specified demographic.
However, with the application of the strategic management technique, Kahramaa has managed to introduce a sustainable framework that involves efficient allocation of the available resources. The application of the strategic management technique has helped the company design a project that is bound to improve the current water and electricity services considerably. According to the Water Security Mega Reservoirs Project, the Qatar National Utility Corridor will be used to power all areas of the state and deliver water to every house in the country:
First phase of the project, which is currently under implementation, will deliver storage capacity of about 2,300 million gallons of water in 24 huge concrete reservoirs and some 480km of buried ductile iron pipelines with diameter up to 1.6m. (Kahramaa 2014, para. 2)
Therefore, Kahramaa responds to the external stimuli respectively, adding the necessary improvements to its current approach toward managing its resources and meeting its goals. The application of the latest technological advances that will allow reaching out to the remoter areas of Qatar can be seen as an important step toward catering to the needs of the underserviced population. Thus, there is a direct connection between the application of the strategic management and the performance of the company. The company creates a strategic intent, particularly, the provision of the required water- and energy-related resources to the target population in accordance with its vision and mission, which focuses on supplying crucial amenities, such as water and energy, to all residents of Qatar.
Furthermore, the application of strategic management techniques allows the firm to comply with its vision, which incorporates the idea of constant improvement and the immediate response to an emergent request. Thus, Kahramaa manages to keep its attention focused not only on the general population of Qatar but also the people that are underprivileged due to their geographic location and economic constraints.
The use of the next stage of the strategic management process, which requires a careful analysis of the firm’s advantages and disadvantages, helps Kahramaa make choices regarding the allocation of the available resources, as well as the approach taken toward communicating with target customers and branding its product in the target market. Although it might seem comparatively easy to promote a product from a monopolistic organisation, retaining the economic power in the water and energy industry is quite challenging due to the threat of misallocating resources.
Much to its credit, Kahramaa has succeeded in embracing its opportunities by not focusing just on traditional sources of energy but also looking to solar power as potential resource as well (Chen, Delmas & Lieberman 2015). This change in the organisation’s direction became possible due to a careful SWOT analysis (see Table 1). According to this study, the company has strong potential due to its active promotion of innovative strategies, use of the latest technologies, and the powerful emphasis on quality improvement.
Table 1. Kahramaa: SWOT Analysis.
As the SWOT analysis provided above shows, it is critical for Kahramaa to follow the strategic management framework that it has set for itself. Specifically, the proposed approach will make it possible for the firm to reinvent its current quality management strategy and incorporate the idea of the continuous development in it. As a result, innovative decisions will become the driving force behind the organisation’s success, which is important given the recent emphasis on the search for providing water and energy to all citizens of Qatar in a timely and effective manner.
Owing to the use of the strategic management principles, the current framework for managing the available resources makes it possible for Kahramaa to retain its position in the Qatar market, yet possible problems in communication need to be addressed before they spin out of control. At present, the organisation needs to consider improving the dialogue with its customers since the communication within the company occurs at a natural pace. However, as soon as Kahramaa decides to expand, it will be necessary to update the communication system across its supply chain in order to ensure timely delivery of the necessary raw materials, resources, and end products.
The strategic plan at Kahramaa is realised with the help of an approach that involves the promotion of a resource-based approach toward handling corporate issues. The suggested technique involves the analysis of the corporate dynamics grounded in the use of the resource-based theory (Wojciechowska 2016). As a result, Kahramaa can adopt a flexible technique of managing its internal and external processes. For example, the organisation maintains the competitive heterogeneity of its products by taking the latest technological innovations and the current needs of its target demographic into account.
Specifically, with the rise in the levels of water contamination, Kahramaa responded with the technological solution that provided a more efficient water sanitation (Wojciechowska 2016). The resulting increase in satisfaction levels among the company’s customers proved that the proposed approach was a viable and sensible solution to the problem.
In addition, with the recent promotion of environmentalism and the increasing concern for natural resources, Kahramaa managed to respond with a program aimed at studying the opportunities associated with solar power (Kahramaa 2018). The specified choice aligns with the key tenets of the strategic management principles since it represents a timely and efficient solution to one of the contemporary issues that have permeated the water and energy industry.
In particular, it helps identify the industry dynamics and uses appropriate tools for managing the changes within it. Applying the principles of the Five Forces Analysis (see Table 2), one will see that the organisation has a huge competitive potential in the specified domain, primarily due to the low bargaining power of customers and even lower competition rates.
Table 2. Porter’s Five Forces.
As shown in Table 2, Kahramaa currently holds a favourable position in the Qatar market, mostly due to the use of the strategic management framework mentioned above. By holding the monopoly in the Qatar market, Kahramaa does not face the need to fight new competitors. However, the threat of substitutes needs to be addressed since the current source of energy that Kahramaa uses is mostly oil.
While being an important figure in the oil and gas industry does not harm the company’s revenues, there is a possibility of a new firm emerging and making efficient use of alternative sources of energy, such as solar power. Herein lies the need for Kahramaa to update its current strategic management framework and consider placing a stronger emphasis on the application of non-incremental innovations in the company’s design.
Specifically, the search for a new source of energy, such as solar power, needs to be regarded as a crucial step toward improving the firm’s performance. In fact, the active promotion of the specified solution has been planned for quite a while, with the recent project focused on the possible use of solar energy as the means to power remote areas of Qatar (Kahramaa 2018). Therefore, Kahramaa has been developing rapidly in accordance with the principles of the strategic management framework.
The current economic environment does not imply numerous hindrances, yet the company needs to deploy new innovative techniques for energy retrieval and water purification (Chen, Delmas & Lieberman 2015). Otherwise, the levels of discontent among its target demographic may reach the critical point at which Kahramaa will find it very difficult to recover.
One might argue that the complete absence of competition serves to the detriment of the company. Indeed, without the organisations that could provide Kahramaa with decent competition, the company may face the threat of failing to set new quality standards. The existence of competition in a particular market fuels the innovative thinking of organisations operating in it, thus ensuring the presence of progress (Wojciechowska 2016). However, because of the unique approach of strategic management adopted at Kahramaa, the firm can advance in the water supply and energy market even without other organisations creating a competitive setting (Kahramaa 2018).
The specified goal is achieved with the help of the innovative techniques combining cost-efficient use of the traditional resources for producing energy and the search for alternative power sources. Specifically, the R&D department of the company has been focusing on deploying the use of solar panels as the tool for obtaining energy. Although the specified project is currently aimed at supplying energy to local business organisations, this approach can help deliver the necessary resources to remote areas with economic issues (Chen, Delmas & Lieberman 2015). As a result, the organisation can provide an adequate response to the external economic stimuli.
Overall, Kahramaa has been using the principles of strategic management efficiently. The company’s ability to utilize disruptive technologies as the platform for improving its performance should also be regarded as an important aspect of aligning its systems and processes with the external stimuli in accordance with the strategic management principles (Chen, Delmas & Lieberman 2015). In particular, the fact that the firm has deployed a revolutionary approach toward water purification should be recognised as an important step toward improving its services in accordance with the strategic management principles (Wojciechowska 2016).
That the specified decision meets the company’s values and mission, particularly the promotion of change across the state, also serves as a sign of Kahramaa following the principles of strategic management precisely. Indeed, a closer look at some of the company’s recent projects aimed at delivering water of improved quality to remote areas of Qatar indicates that Kahramaa is ready to invest in long-term projects.
In addition, the focus on the continuous promotion of innovations within the context of the organisation indicates that Kahramaa views change as an essential element of its functioning in the Qatar water supply and energy market. The observed decision not only meets the criteria of strategic management but also improves the specified framework since it allows institutionalising change (Pyzdek & Keller 2014).
By incorporating the concept of disruptive and incremental innovations into the realm of organisational processes, a company becomes capable of not only responding to an emerging demand but also predicting it and reinforcing its competitive advantage in the specified market (Oncioiu 2016). As a result, Kahramaa’s dominance in the Qatar water supply and energy market is likely to remain in place for a substantial amount of time.
The processes associated with the control of the organisational change and performance levels at Kahramaa become viable due to the effective measurement system and a communication system allowing for reporting the assessment results and informing the further choice of corporate strategies. As stressed above, Kahramaa has a very basic organisational structure, which serves as the means of reducing the time taken to deliver essential information from a manager to an employee (Pyzdek & Keller 2014).
As a result, not only are the crucial organisational and production-related processes implemented fast but also the threat of misunderstanding or misinterpreting the data is reduced significantly. The identified outcome is instrumental to the successful management of the corporate processes at Kahramaa since the company needs the extensive support of its suppliers, financial partners, and other participants of its business processes. As a result, the efficiency of Kahramaa’s supply chain management rises greatly (Wojciechowska 2016). Furthermore, the use of proper communication strategies makes it easier for Kahramaa to brand and promote its product to the target population.
Although water and energy belong to the types of resources that are typically termed as unique and, therefore, always enjoy high demand, Kahramaa needs to ensure that it is willing to satisfy the needs of every customer. Otherwise, the threat of new entrants in the Qatar energy market will start to increase. Thus, the fact that Kahramaa uses the communication model that allows for a fast analysis of customers’ feedback is essential to its success.
Conclusion
The use of strategic management techniques at Kahramaa aligns with the essential principles that the proposed framework implies. However, to secure its position in the Qatar market and ensure future economic growth, the company will have to focus on the active use of innovative techniques for communication with customers and location of innovative solutions. As a result, the organisation will be able to reach out to a larger number of potential customers, thus cementing its position in the Qatar market.
In addition, the strategic management technique deployed by the company aligns with its structure and form, yet also requires a change in the firm’s existing approach toward managing change. Despite the fact that the present-day strategy of promoting positive alterations within the organisation can be regarded as marginally efficient, Kahramaa needs an improved framework that will allow it to include the very concept of continuous change into its management approach.
As a result, Kahramaa will be able to use non-incremental innovations as the means of improving its performance without the fear of disrupting the internal consistency of the corporate performance processes. Despite the specified suggestions, the general levels of Kahramaa’s performance in the Qatar market show the importance of using strategic management as a tool for enhancing the company’s efficacy. Thus, the concept of strategic management should be seen as an integral part of any company’s functioning.
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