Development Strategies Of Organizational Structures Of Petrochemical Enterprises Management

Abstract

Designing petrochemical enterprises' organizational structure is a tool to improve the management system's efficiency and is a complicated and time-consuming process. The purpose of the study is to identify the features of strategies for the development of organizational structures of petrochemical enterprises and design the organizational structure of management following the strategy in the digitalization conditions. The research's methodological basis is based on General scientific approaches to the study of strategies for developing organizational structures of management of petrochemical enterprises-descriptions, structural-functional and system analysis, and cause-and-effect relationships. Although implementing resource-saving production systems in the industry as a whole and its sectors have long permeated the world scientific community, the issue of integrating existing scientific concepts in the field of organizing resource efficiency technologies in the conditions of digitalization of economic sectors is currently urgent. Currently, petrochemical enterprises are characterized by a linear-functional organizational structure of management, which complicates their modern changing operating conditions. In this regard, it is recommended that petrochemical companies have a divisional, project-based organizational management structure and a linear-functional management structure to introduce a project management center.

Keywords: Development strategiesorganizational structurepetrochemical companies

Introduction

Currently, the petrochemical complex is one of the leading branches of the Russian economy. Petrochemical enterprises require the introduction of improved management methods and advanced production technologies. To ensure the petrochemical industry's efficiency, it is necessary to design an optimal organizational structure and improve the level of technological processes using new resources and internal reserves of effective production organization, labor stimulation methods, and the development of advanced production management methods in developed industrial countries.

In conditions of continuous development and improvement of production, the organization implemented new concepts to increase efficiency and productivity, lower production costs, accelerate new products to market, meet the population's needs, and increase production competitiveness.

Problem Statement

A key problem in the organization of production processes in petrochemical plants is the use of resource-and energy-saving technologies to optimize the entire production chain of a petrochemical enterprise and related industries. Although the issues of implementing resource-saving production systems in the industry as a whole and its individual sectors have long permeated the world scientific community, the issue of integrating existing scientific concepts in the field of organizing resource efficiency technologies in the conditions of digitalization of economic sectors is currently urgent (Barsegyan et al., 2020; Gölzer & Fritzsche, 2017; Samaranayake & Laosirihongthong, 2015). On the one hand, new approaches to the use of digital technologies for optimal organization of petrochemical production systems are needed; on the other, a more in-depth study of the issues of engineering and operation of sustainable production facilities in the petrochemical industry is needed.

In order to organize systems for planning and controlling production processes of petrochemical enterprises, it is of particular importance to solve the problem of using resource-and energy-saving technologies to optimize the entire production chain of a petrochemical enterprise and related industries (Kudryavtseva et al., 2020; Shinkevich, Klimenko et al., 2020). The works of both foreign scientists, such as Nasiri et al. (2015); Ram et al. (2017); Sovacool (2015); are devoted to reducing the level of energy consumption in the petrochemical complex; and domestic researchers – Shinkevich, Kudryavtseva et al. (2020). The main directions of research in the field of the concept of sustainable consumption of energy resources in the conditions of digitalization of the economy are considered in foreign scientists' works. For example, Mintzberg (1979) justified the role of institutional values in energy transformation; With & Klein (2018) developed key factors for energy-efficient supply chains.

Research Questions

Designing petrochemical enterprises' organizational structure is one of the tools to improve the management system's efficiency and is a complex and time-consuming process. In this regard, it is necessary to restructure, redesign or design the organizational structure of management on a scientific basis at domestic petrochemical enterprises, switch to new management standards, eliminate the lack of qualified managers, which will allow us to develop an optimal organizational structure of enterprise management that contributes to the most effective achievement of goals.

Purpose of the Study

Currently, there is no single approach to building enterprise management structures. There are many large enterprises whose management structure is complex in the petrochemical complex, and formal structural parameters need to be designed. In this regard, the purpose of the study is to identify the features of strategies for the development of organizational structures of petrochemical enterprises and design the organizational structure of management following the strategy in the digitalization conditions.

Research Methods

The research's methodological basis is based on General scientific approaches to the study of strategies for developing organizational structures of management of petrochemical enterprises-descriptions, structural-functional and system analysis, and cause-and-effect relationships. The research's theoretical basis was the work of foreign and domestic scientists in the research of approaches to the design of organizational structures and management systems, analysis of state strategies in resource conservation. The research was based on legal documents, scientific journals, conference materials, official websites of enterprises.

Findings

Solving problems of increasing the level of organization of production processes in the petrochemical complex is currently one of the most important issues, the relevance of which is confirmed by the relevant state programs, strategies, and legal documents: the state program of the Russian Federation "development of industry and increasing its competitiveness"; Decree of the President of the Russian Federation dated 07.05.2018 No. 204 "on national goals and strategic objectives of the development of the Russian Federation for the period up to 2024»; Strategy for socio-economic development of the Republic of Tatarstan till 2030; Strategy of information society development in Russian Federation to 2017 – 2030; the Program "the Digital Economy of the Russian Federation"; national project "Productivity and employment" and in other documents at various levels.

The effective use of hydrocarbon resources and the creation and development of integrated oil refining are based on a diversified petrochemical production strategy. The organizational structure of enterprise management is built under the strategy of its development.

The European Union countries, the United States and Japan, are traditional technological leaders in the market for the production of petrochemical products. Another powerful market for the production and sale of petrochemical products is China. The development strategies of the petrochemical industry in these countries are presented in table 1 .

Table 1 -
See Full Size >

Enterprises in the chemical and petrochemical industries differ in various ownership forms, structures, and types of products. However, all enterprises go through the same stages in the production process: identification of resource deposits, their extraction and transformation into a finished product for the consumer, product sales. In the petrochemical industry, major Russian companies are Gazprom, Rosneft, Lukoil, YUKOS, Surgutneftegaz, in the chemical industry – EuroChem, Sibur, Lukoil, Bashhim and several other companies that are difficult to manage organizations. Such organizational structures' management system is based on the divisional structure of the organization of links responsible for individual areas or processes of activity and is aimed at large-scale regional markets.

There are also several problems related to the enterprise management system, primarily in the field of design and development of the organizational structure, which are addressed by Akhavein & Porkar (2017); Tozzi & Jo (2017). For example, a study conducted as part of creating a program to improve labor productivity in the Republic of Tatarstan revealed that the number of management levels in business units varies and can reach up to 10, which leads to a low level of response to deviations from the plan. There is also an excessive number of administrative and managerial staff. Employees of enterprises do not always have an incentive to exceed the work plan or reduce the number of defects and are wary of any organizational changes and the introduction of new performance indicators.

The characteristics of enterprises in the Republic of Tatarstan's chemical and petrochemical industries in the context of their development strategies and corresponding organizational structures are presented in table 2 .

Table 2 -
See Full Size >

In the research Barsegyan et al. (2020); Shinkevich, Kudryavtseva et al. (2020); Shinkevich, Mashkin et al. (2020), the directions of reforming the organizational structure of management are considered from the point of view of production. Large enterprises with continuous production and large material flows of shipped products within the same transport direction are recommended to improve the enterprise's organizational structure in the direction of a divisional structure, and investment in the implementation of APS production management systems is recommended. Among the companies with a divisional organizational structure of management in the Republic of Tatarstan can be attributed PJSC "Nizhnekamskneftekhim", JSC "Kazanorgsintez".

As part of the development of petrochemical enterprises, the divisional management structure improves functional divisions' performance, enabling them to quickly respond to rapidly changing environmental conditions by separating operational and strategic management of the enterprise. At the same time, there is a high need for managerial personnel, which leads to an increase in management costs.

Highly specialized enterprises, low-tonnage by type of production, are offered a project organizational management structure; the direction of digitalization is the development of the CRM sector, focusing on stimulating the growth of material flows with high added value.

It is recommended that other cases preserve the linear-functional organizational structure, digitalization direction – organizational improvement of petrochemical production processes, and implement technological innovations.

Petrochemical enterprises are currently characterized by a linear-functional organizational structure of management, which complicates their activities in today's changing operating conditions.

Conclusion

Thus, the petrochemical industry is one of the priority sectors of the Russian economy, which enterprises must now implement effective management methods and new production technologies to improve the quality of products. To ensure the competitiveness of the petrochemical industry, it is necessary to build an optimal organizational structure and increase the technological level using new resources and internal reserves of effective production organization, labor stimulation methods, and the development of advanced production management methods in developed industrial countries.

In order to optimize the organizational structure of the petrochemical enterprise management, it is recommended to perform the following actions:

- reduce vertical and horizontal duplication of functions;

- reducing the number of management levels;

- development of a unified approach to the formation of the management structure and distribution of responsibility between departments;

- equal distribution of functional responsibilities and powers between posts at the same management level;

- even distribution of responsibility between non-production divisions.

Acknowledgments

The reported study was funded by RFBR, project number 20-010-00655

References

  1. Akhavein, A., & Porkar, B. (2017). A composite generation and transmission reliability test system for research purposes. Renewable and Sustainable Energy Reviews, 75, 331-337.
  2. Barsegyan, N. V., Salimyanova, I. G., & Kushaeva, E. R. (2020). Typology of innovation strategies for petrochemical enterprises. Journal of Physics: Conference Series, 1515, 042090.
  3. Dellano-Paz, F., Calvo-Silvosa, A., Iglesias Antelo, S., & Soares, I. (2015). The European low-carbon mix for 2030: The role of renewable energy sources in an environmentally and socially efficient approach. Renewable and Sustainable Energy Reviews, 48, 49–61.
  4. Gölzer, P., & Fritzsche, A. (2017). Data-driven operations management: organizational implications of the digital transformation in industrial practice. Production Planning and Control, 28(16), 1332–1343.
  5. Kudryavtseva, S. S., Shinkevich, M. V., Malysheva, T. V., & Ishmuradova, I. I. (2020). The specifics of training for the industrial sector in the context of digitalization. Journal of Physics: Conference Series, 1515, 022014.
  6. Mintzberg, H. (1979). The structuring of organization: A synthesis of the research. Englewood cliffs, 4.
  7. Nasiri, M. R., Ramazani Khorshid-Doust, N., & Bagheri, M. (2015). The status of the hydrogen and fuel cell innovation system in Iran. Renewable and Sustainable Energy Reviews, 43, 775-783.
  8. Ram, S., Rahi, O. P., & Sharma, V. (2017). A comprehensive literature review on slip power recovery drives. Renewable and Sustainable Energy Reviews, 73, 922-934.
  9. Samaranayake, P., & Laosirihongthong, T. (2015). Production planning and scheduling using integrated data structures in ERP: Implementation and numerical simulation. International Journal of Management Science and Engineering Management, 10(3), 176–190.
  10. Shinkevich, A. I., Kudryavtseva, S. S., & Ershova, I. G. (2020). Modelling of Energy Efficiency Factors of Petrochemical Industry. International Journal of Energy Economics and Policy, 10(3), 465-470.
  11. Shinkevich, M. V., Klimenko, T. I., Ostanina, S. Sh., & Garipova, G. R. (2020). A dynamic model of the impact of engineering services on the parameters of the economic system. IOP Conference Series: Materials Science and Engineering, 862, 062015.
  12. Shinkevich, M. V., Mashkin, N. A., Ishmuradova, I. I., Kolosova, V. V., & Popova, O. V. (2020). Management of sustainable consumption of energy resources in the conditions of digital transformation of the industrial complex. International Journal of Energy Economics and Policy, 10(5), 454-460.
  13. Sovacool, B. K. (2015). The political economy of pollution markets: Historical lessons for modern energy and climate planners. Renewable and Sustainable Energy Reviews, 49, 943-953.
  14. Tozzi, P., & Jo, J. H. (2017). A comparative analysis of renewable energy simulation tools: Performance simulation model vs. system optimization. Renewable and Sustainable Energy Reviews, 80, 390-398.
  15. With, A., & Klein, J. (2018). Digitization and Industry 4.0 Optimization Potential in the Value Chain & Priorities of the Industry. Wochenblatt Fur Papierfabrikation, 146(12), 718-721.

Copyright information

This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

About this article

Cite this paper as:

Click here to view the available options for cite this article.

Publisher

European Publisher

First Online

16.04.2021

Doi

10.15405/epsbs.2021.04.96

Online ISSN

2357-1330