Today, crude oil is more important to industrial and economic development in the world than it has ever been in the history of humankind. This importance was particularly underscored in the aftermath of the Second World War; arguably, the war acted as a catalyst since technology and oil were some of the key factors that facilitated the victory of the allies over the third Reich. In contemporary society, oil is indispensable to most of the countries in the world as most of the energy forms are driven by it and its by-products. In veritably, the demand and supply for oil in the global market where the subject is inextricably tied to the social, political factors, there are bound to be challenges and problems as well as on the ground logistical, personnel and technical issues. Strategic problems in the oil industry can be categorized as wicked problems with three key dimensions, these three are; inventory management, especially because the inventory is defined according to which manager is currently serving. Then there is an issue of lack of adequate resources taking to account the high number of inter-global clients as well as the need to manage the dynamics of the supply chain as well as maintain quality. Finally, the purpose of this paper is the issue of quality that is bound to suffer in an environment where either of these two wicked challenges above exist.
Essentially, wicked problems are unstructured complex and unpredictable challenges, they tend to adapt and grown more complex with time (Grint, 2005). In addition, they have a high level of versatility and they can exist in a variety of setting such as social technological, economic and cultural aspects. The complexity is underscored by the interdependencies that arise when dealing with many stakeholders who hold different views (Calton and Pyne, 2003). Admittedly, the issue of wicked problems is relatively new in the USA, since international project management communities have a considerable short history of the wicked problem concept. Churchman (1967) advocates for a paradigm shift in project management through a combination of soft and hard approaches. Several studies have adopted the use of system theories to understand important aspects with regard to climate and allocation of resources. In addition, the theories are used in both the areas of research methodology and applied research. American and UK theorists have come up with various ways of addressing the wicked problem challenge by developing the overlying theory, the concept of the wicked problem has been applied to risk management by Hancock and Holt (Calton & Pyne, 2003) in Heathrow’s terminal five. It was used to demonstrate the flaws of the technical –centric risk management process that tend to neglect organic behaviors and other human related complexities. After Hancock’s book, “Tame messy and wicked risk leadership” literature on project management started to pay attention to wicked problems in management and several scholars were inspired to address the wicked problems in both organization and leadership research.
Justification for the popularity of the wicked problem approach is the fact that the public trust in retrospective risk management has in the recent past been greatly diminished by a series of ex post facto disasters such as the fiscal crisis of 2008 or the BP deep-water oil spill. Irrespective of the fact that these disasters have arisen from different risk management strategies, they all have one common denominator. They grossly underestimated the degree of complexity of the challenges at hand and ended up overlying on old systems that were ill equipped to deal with the situation. This is because traditional risk models tend to perceive risk in an objective and identifiable concept (Attwood, 2007). As a result, they tend to apply reductionist and linear processes such as mathematical and statistical models, this can be confirmed by the fact that extensive research has been done on the subject studying journals and books on the subject. With time, there has been a marked decrease in offshore resources. In addition the climate change challenge has radically changed the landscape of multiyear sea ice. Some countries have shown some interests in exploring oil in the Arctic. These countries are the USA and Canada. In fact, some other nations such as Russia have already exhibited high levels of willingness to drill oil in the Arctic region. Some of the wicked challenges are easily appreciated if one takes to account the environmental risks from and engineering and response and rescue point of view. When constructing offshore structures, for instance, the engineer’s needs must take into account the extreme condition such as ocean currents and storms not to mention escalating climate change. Wicked (2006) argues that poor infrastructure could negatively impact oil exploration and drilling. This could imply some proposed mega projects could stall in the future. Weick (2006) compares the risks to OGP in various part of America, in a survey of Alaskan project professionals and arrives at the conclusion that the OGP in Alaska is unique. This is especially pronounced in the external risk factors, which make approximately 91% of the identified risks. It is evident that the social, ecological impacts of Artic offshore developments on the Arctic ecosystem have not been adequately researched on nor understood. The supply and distribution segment has in the recent past undergone a paradigm shift with big oil companies monitoring the inventory systems in gas stations and this data is used to organize their supply throughputs. As a result of the myriad challenges facing the oil and gas sector, numerous adaptation strategies have been applied at different levels from the outlet to up to the supply chain to the refinery level. It is apparent that the prevailing circumstances have challenged existing methods of management and risk management and to this end the Wicked problem approach can be applied as it is designed to tackle adaptive problems by coming up with equally adaptive solutions. As a result, the inventory management techniques in a contemporary setting have transcended the individual service station with links being established at the refinery level.
With regard to the allocation of resources, there is a need for authorities to realize that the oil requires huge investments, in the form of skilled labor and equipment. Thus, the industry should be well controlled so that investors could reap from their huge investments. Oil and gas differ from other resources such as lumber and diamonds, which are popularly linked to internal conflict owing to the fact that they are fixed in their location and cannot be moved unless they have been exploited and extracted. This begs the question, which is the best placed to muster such resources? At the end of the day, the inevitable answer is the multinational corporations, oil companies and foreign governments. Unfortunately, when not mediated by strong democracies as well as efficient and transparent financial practices, the profits from the oil production can be very little and the originating country can end up being sidelined when it comes to sharing the proceeds. Thus, it is important for various stakeholders in the oil industry to evaluate the benefits with regard to oil that are obtained by both the countries with oil deposits and the oil exploration companies.
When states have access to oil revenue that are not proportional to the other sources of revenue, such as farming or manufacture, there is a trend where they tend to neglect the enforcement of taxation regimes. In addition, foreign firms end up eroding the connection of funds between the people and the central government since the trickle-down effect of the oil revenues do not reach populace. The wickedness of the resource challenge is further evinced by the fact that, in countries where there is no political legitimacy. Central governments have tended to show a propensity to apply unorthodox methods to get control of the oil and gas generated revenues, through a variety of corrupt and abusive techniques such as military or political force or through direct financing or protracted conflict with political challengers (Tenkasi & Hay, 2004).
At the end of the day, based on the various researches that I have explored on the subject, it is evident that the wicked problem approach is undoubtedly one of the few that are capable of bringing about lasting change in the oil and gas industry. Prior to this paper, I would have proposed the more traditional methods, but in light prevailing evidence, it is apparent that the problem, is a new one and the solutions must be equally so.
The quality of service in the oil and gas sector has been plagued by various challenges, this range from field related problems in the process of extraction such as the recent oil spill in the Mexico gulf to frequent shortages of oil in filling stations owing to logistical challenges. Research with regard to the issue of quality of service has uncovered a great deal of project management literature that focuses on systematic bias that characterized organization in the decision making process such as group thinking overconfidence as well unhealthy organizational project culture (Bryson & Mobolurin, 1997). In many cases, such biases are evinced in the distortion of the decision-making process and they tend to reflect viewpoints that tend to emerge less than rational-based on the given context setting. From the cognitive psychology of decision making, there is a succinct overview of retrospective research on how human beings perceive risk and its underlying effect on decision making (Weick, 2006). According to the researcher, there are variations with regard to how an expert and nonprofessional could conceptualize risks. For example, a nonprofessional could define a risk on the premises of health-related aspects without attaching any form of financial loss. On the other hand, an expert conceptualizes a risk based on a holistic approach.
To improve efficiency and boost efforts in the tackling of wicked problem challenges, several factors can put into account, among these is the employment of local knowledge and labor. By utilizing the local stakeholders who often have unique and singular knowledge, the oil and gas risk managers will be placing themselves in a unique situation where they can benefit from the largely untapped resource of local knowledge. In addition, there is a lot to be gained from the distribution of risk and benefits which are not fully spread out in the current social and economic landscape. Thus, all stakeholders should be represented with regard to risk management processes on the basis of their perceived risks that are associated with their shares. Recent scholarship dedicated to the management and benefits of all inclusive and participatory decision-making techniques have found that the institutions can best achieve trust and buy in which are the tenets of institutional sustainability. They are best achieved when the process of making decisions takes to account personalized calculations based on the individual and collective interests (Tekansi and Hay, 2004).
Wicked challenges tend to be tackled by teams from the same organization or industry and, as a result, their perceptions are closely aligned and often homogenized ergo biased. However, through the wicked problem framework, this can be addressed in a much more objective by bringing out a new level of awareness, of the possible biases among the team member and the experts addressing the problem. Ultimately, it makes the whole process more likely to be successful (Strachan, 2011). Team members from different cultural, professional and economic backgrounds are encouraged under the wicked problem framework to apply their diverse perspectives as opposed to all submitting to existing perception and bias within the industry that have so often resulted in bias. It is unequivocal that the conflict is bound to arise among shareholder and groups engaged in the solution of various problems even under the wicked problem framework (Weick, 2006). This is particularly true when there is an active communication or they hold conflicting interests in the problem-solving endeavor. However, despite these, when the wicked approach is effectively applied, there is a higher possibility for greater support and the solutions that are arrived at can be more enduring and sustainable based on the multiplicity of factors and perspectives that were explored in their discovery.
Attwood, M. (2007). Challenging from the margins into the mainstream—improving renal services in a collaborative and entrepreneurial spirit. Action Learning: Research and Practice, 4(2), 191-198.
Bryson, N., & Mobolurin, A. (1997). An action learning evaluation procedure for multiple criteria decision making problems. European Journal of Operational Research, 96(2), 379-386.
Calton, J. M., & Payne, S. L. (2003). Coping With Paradox Multistakeholder Learning Dialogue as a Pluralist Sensemaking Process for Addressing Messy Problems. Business & Society, 42(1), 7-42.
Churchman, C. W. (1967). Guest editorial: Wicked problems. Management science: Application series, 14(4), 141-142.
Grint, K. (2005). Problems, problems, problems: The social construction of ‘leadership’. Human relations, 58(11), 1467-1494.
Strachan, D. (2011). Making questions work: A guide to how and what to ask for facilitators, consultants, managers, coaches, and educators. San Francisco, CA: Jossey-Bass.
Tenkasi, R. V., & Hay, G. W. (2004). Actionable knowledge and scholar-practitioners: A process model of theory-practice linkages. Systemic Practice and Action Research, 17(3), 177-206.
Weick, K. E. (2006). Faith, evidence, and action: Better guesses in an unknowable world. Organization Studies, 27(11), 1723-1736.