One of the most important functions for any organization to succeed in any particular direction is planning. Planning is an activity that enables companies and their employees to understand the company’s purpose and its strategic direction so that they can align themselves to it. This paper will discuss the importance of planning at Halliburton Company and analyze the extent to which it impacts the legal, ethical and CSR issues in the organization. Furthermore, it will discuss three factors that have an influence on the company’s strategic, tactical, operational and contingency planning.
Halliburton Company was established in 1919 in Houston, Texas with a second headquarter in Dubai, UAE. Currently employing over 50,000 people, it is a huge multinational and global leader in the energy services sector operating in more than 70 countries. Using its technological edge in its operations and assistance from its world-class human resource, Halliburton has demonstrated outstanding growth and development in the energy sector over the past several decades.
Its focus on innovation dates back to its early years when its founder, Erle P. Halliburton initiated his oil well cementing business by building a wooden mixing box only by hiring a wagon, a team of mules and a pump in Oklahoma. Careful planning and effective strategies have enabled Halliburton to remain as the market leader in the energy sector for almost a century now. Its planning strategies are comprehensive, focused on global changes and follow the “Think globally, act locally” theme.
Halliburton management realizes the fact that for global survival it is essential to adopt different methodologies in different countries. For this purpose, it operates from 2 headquarters – Texas, the oil hub of the West and Dubai, the trading hub of Asia and Europe. “The number one priority of Halliburton is to provide competitive, safe and superior quality products and services”. Halliburton management maintains that in order to ensure business continuity they must explore the unexplored parts of the world for newer energy reserves bringing in environmental concerns.
Thus, there are several instances when Corporate Social Responsibility and other issues have an impact on the planning of Halliburton and its strategy planning. There are often differences in the legal framework of different countries, for example, the British and American laws pertaining to environmental exploration have different clauses. This results in differences in the local planning of future steps to be taken by Halliburton in maintaining its market position and extending its operations. Ethics also play a key role in shaping up its policies and plans for the future.
Environmental concerns, consideration for animal and plant wildlife are some of the factors the Halliburton management takes into account when planning its activities. For example, if oil exploration in the Sahara will result in extinction of the sub-Saharan tigers living in the region, the company will develop an alternative plan. Global companies as large as Halliburton have to manage their activities and operations collaboratively; sometimes the ethical and legal frameworks of adjacent countries can render certain actions legal in one nation and illegal in another nation.
Thus corporate planning is a very extensive process at Halliburton which involves considerable amount of consideration given to regional subsidies of the company. Though corporate social responsibility and legal issues dominate the effect on the planning activities of Halliburton, ethical considerations also sometimes require plans to be modified. For example, Halliburton’s operations in Saudi Arabia have to be controlled differently than its operations in the US. The ethics standards and beliefs in the two countries are different and regulate different practices.
For instance, daytime operations during the fasting season where the temperature is very high is not restricted by law. Even the workers may be willing to work, but ethics and moral standards suggest that Halliburton operations should be continued at night during those days. There are several factors which affect the course of action of companies. Often we see changes in the stock market leading to important strategic planning changes in companies. However, most of these are short-term plans and do not affect the vision of the company by a significant degree.
Some of the most important factors which have a contribution towards the company’s strategic, tactical, operational, and contingency planning are as follows: Potential Energy Reserves: Halliburton thrives on its energy reserves and constant exploration of newer energy sites. Its strategic and international planning is based upon the potential energy reserves of a region. A region where there are high energy reserves would naturally be an area for long-term planning for Halliburton management while a exit strategy may be prepared for a dried up site in Japan.
Its strategy is the key to business continuity and profits and thus takes into account the future business that can be generated from a particular region. Taxation and Corporate Laws: The reason why Nevada is the registered as the corporate head office of thousands of companies is because of its tax-friendly laws. Halliburton’s expansion and acquisition strategies are dependent on the corporate taxation and regulations that are enforceable in a particular state or country.
These laws influence to a great degree the company’s operational and contingency panning as well. Avoiding over-taxation requires careful hindsight in operational and acquisition activities. Companies like Halliburton need to have effective planning strategies in order to save huge amounts in taxation and legal fees. Culture: The culture of Texas may be very oil-friendly however, that may not be the case in Brazil. The differences in culture, customs and therefore the code of ethics is important for Halliburton to realize and respect.
Companies not caring about these factors often face problems in the long-term. Nike could not stop the sweatshop crisis news from coming into the media which caused hundreds of thousands of dollars loss to the company and several protests were lodged against the company till it finally winded up its operations. Halliburton’s planning should take into account the resident cultural practices and base its plan according to them – violation of local culture is often taken very strongly by the people and is revoked at some point or the other.