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EQUATE Petrochemical Company

Individual Assignment

Abdulwahab Al-Shatti

Student Number 40036385

Leadership & Organization Behavior

Dr. Zeyad Al-mutawa

5th of March 2021

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Executive Summary

EQUATE is a successful Kuwaiti Petrochemical company that operates globally.

However, many workers complain that EQUATE discriminates against non-Kuwaiti workers

during job promotions, lowering foreigners’ morale. The literature review explains models that

will apply in the “analysis” and “recommendation” sections. The “analysis” part uses concepts

like Organizational Culture Change, Attribution Theory, Expectancy Theory, and Cognitive

Evaluation Theory to showcase how marginalizing non-Kuwaiti workers in promotions lowers

their morale. Finally, the “recommendation” segment applies paradigms, like Change or Die,

Lewin’s Change Model, Goal-Setting, Transformational Leadership, and Transactional

Leadership, to suggest adjustments that will enhance EQUATE’s HRM practice and workers’

morale.
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Table of Contents

1.0 Background..............................................................................................................................4

1.1 Organizational Structure........................................................................................................4

1.2 Mission & Vision...................................................................................................................6

2.0 Problem Definition...................................................................................................................7

3.0 Literature Review....................................................................................................................7

4.0 Analysis...................................................................................................................................12

5.0 Recommendation...................................................................................................................14
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Individual Assignment LOB: Equate

1.0 Background

EQUATE is a Kuwaiti company the produces and sells petrochemicals globally.

Categorically, EQUATE is the world’s second-biggest producer of Ethylene Glycol (EQUATE,

n.d.). The firm commits to serve global clients by producing high-quality daily consumable

products. EQUATE’s current sustainability strategy has 16 initiatives that will be met by 2025

(EQUATE, n.d.). Briefly, the 16 programs aim to create sustainable operational & working

conditions, innovate energy recycling mechanisms, and conserve the environment. EQUATE has

succeeded through building strategic partnerships with other firms to exchange innovation, share

competent staff, and capitalize on each other’s technological infrastructure (EQUATE, n.d.).

Historically, EQUATE was found in 1995 and became the first Kuwaiti international

petrochemical company. So far, the company operates in all continents worldwide (EQUATE,

n.d.).EQUATE’s slogan “Partners in Success” has motivated it to collaborate with firms like

Qurain Petrochemical Industries, Dow Chemical, and Boubyan Petrochemical.

1.1 Organizational Structure

Another unique trait of EQUATE is its organizational structure. According to Almutawa

(2021), organizational structure defines how the information flows from the top to the bottom

staffers and vice versa. Notably, EQUATE uses a bureaucratic structure (SBU), where all

business units are functionally-organized with a central headquarter, as shown in Figure 1

(EQUATE, n.d.). Strategically, SBU attracts multiple benefits and cons to EQUATE. Positively,

SBU reduces equipment duplication, as each unit handles unique products and services

(Almutawa, 2021). For example, EQUATE’s Commercial and Technical Services departments

perform different tasks. Besides, SBU enhances efficiency because each business unit employs
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workers with relevant skills, thus optimizing productivity (Almutawa, 2021). For example,

employees in the Finance and Technical Unit have different expertise. However, SBU has flaws

like low flexibility, as employees can barely switch from one unit to another. For example, an

EQUATE worker in the finance department can hardly switch to technical services. Besides,

SBU can spark interdepartmental conflicts (Almutawa, 2021). For example, interdepartmental

disagreements could emerge when EQUATE’s manufacturing unit wants to optimize output, yet

the finance department aims to suppress expenses. Generally, EQUATE’s SBU business

structure is not perfect since it has strategic advantages and cons.

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Figure 1: EQUATE’s Organizational Structure (EQUATE, n.d.)

1.2 Mission & Vision

EQUATE’s paraphrased mission statement reads: “to provide the world with high-valued

commodities.” Next, the company’s paraphrased vision statement is to be an international leader

and world-class petrochemicals producer (EQUATE, n.d.). EQUATE’s central values include

integrity, respect, high performance, organizational learning, customer-oriented, acting as a

business owner. Lastly, EQUATE strives to ensure workers’ safety and society’s wellbeing.

1.3 Industry

EQUATE operates in the petrochemical industry, which has multiple positive and

negative features. Positively, strategic alliances between petrochemical firms enable firms to

share technology, thus enhancing efficiency (GVR, 2020). For example, after LyondellBasell

took over Schulman Inc. in 2018, the revenues and net margins increased (GVR, 2020). Besides,

the petrochemical market size has grown significantly over the past decade due to increased

demand in the automotive and aerospace markets (TMR, 2020). Predictably, the global

petrochemical market is likely to expand even further and hit US$ 676.5 by 2030 (TMR, 2020).

For example, the increasing construction in developing nations will hike plastic pipes’ demand

(TMR, 2020). Categorically, the Asia Pacific region occupies the largest segment (at least 50%)

of the global petrochemical market (TMR, 2020). On the negative side, sustainability concerns

discourage plastic consumptions to conserve the ecology (TMR, 2020). The current high

competition from big players like BASF SE, BP Plc, Total S.A., China Petroleum & Chemical

Corporation, and Mitsubishi Chemical Corporation also reduces average sales. Moreover, the

COVID-19 pandemic has also narrowed the petrochemical sector by suppressing commercial

activities and production (TMR, 2020). Lastly, China and the Middle East influence the
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petrochemical sector by reducing oil supply to increase market prices (TMR, 2020). As a result,

companies like EQUATE will incur high raw material costs (oil prices will shoot).

2.0 Problem Definition

EQUATE’s top challenge concerns how it treats workers from different nationalities.

According to employees’ reviews, EQUATE barely promotes non-Kuwaiti personnel despite

working hard and smart (Indeed, 2021). Strategically, marginalizing workers sparks multiple

HRM and productivity challenges. Employee discrimination effects can be described using the

three concepts below. The first is perception, and it entails organizing, interpreting, and giving

meaning to the environment (Almutawa, 2021a). Therefore, EQUATE’s non-Kuwaiti workers

perceive the company’s promotional structure as discriminative against foreigners. Another

relevant concept is motivation: a cognitive decision-making activity that initiates, energizes, and

maintains goal-oriented behaviors (Almutawa, 2021a). Hence, non-Kuwaiti employees who feel

EQUATE is marginalizing foreigners are unlikely to get motivated to pursue organizational

goals. Finally, the third relevant concept is the attitude-behavior consistency model. According

to the paradigm, folks always strive to match their attitude and behavior (Almutawa, 2021e).

Therefore, since non-Kuwaiti workers have developed a negative attitude toward EQUATE’s job

promotion structure, they are unlikely to give their best. Generally, EQUATE should neutralize

the negative perceptions towards its HRM strategy and motivate non-Kuwaiti workers to offer

their best.

3.0 Literature Review

The literature review section analyzes concepts, models, and theories that will apply to

the analysis and recommendation parts. The first relevant concept is an organizational culture

change, which entails transforming a firm’s values and principles to match the prevailing
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strategic circumstances (Almutawa, 2021b). Notably, firms should stay alert and keep pace with

environmental transformation to capitalize on opportunities and overcome threats (Meyer, 2019).

However, most people resist change even when the transformation initiator provides proof of

how the transition will benefit them (Almutawa, 2021b). While stakeholders often consider

change resistance as a problem, it gives firms many opportunities. First, the change resistance

enables the firm to introduce healthy debates that could result in better transformations

(Almutawa, 2021c). Change resistance also stabilizes the firm since stakeholders will not just

accept any transformation idea presented to them (Almutawa, 2021c). Generally, change

resistance can be immediate, deferred, or deferred. The organizational culture change concept

will apply to the “analysis “section of this report.

Lewin’s Change Model presented a three-step process that guides corporate

transformations (unfreeze, change, and refreeze), as shown in Figure 2. Lewin used the three

steps to explain how someone wanting to transform an ice-cube into a cone should maneuver.

First, the person should melt the ice (refreeze) (Burnes & Bargal. 2017). Step two is pouring the

ice into a conical container (change) (Burnes & Bargal. 2017). Lastly, the individual should

freeze the ice in the conical container (refreeze) (Burnes & Bargal. 2017). Notably, a similar

approach applies to organizational culture change. In the unfreeze step, a firm should identify

what requires changing, offer leadership support, create a transformation need, and address all

concerns (Almutawa, 2021c.). For example, if workers feel like organizational change will spark

layoffs, the management should assure them that nobody will lose a job. Next, the change step

entails communicating to stakeholders, neutralizing rumors, empowering actions, and engaging

all stakeholders (Almutawa, 2021c). For example, if a company wants to make a new product, it

should train workers, provide relevant inputs, and communicate progress. Lastly, refreezing
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requires the company to adopt measures that will sustain the change, like transforming

organizational culture, celebrating success, and offering necessary support (Almutawa, 2021c).

For example, after changing corporate culture, a firm can introduce punishment for deviants.

Lewin’s Change Model will apply to the “recommendation” part of this report.

Figure 2: Lewin’s Change Model (Almutawa, 2021c).

Victor Vroom’s expectancy theory is another relevant paradigm to this report. The

expectancy theory holds that people’s behavior depends on reward expectations (Almutawa,

2021a). Precisely, people are motivated to behave positively, when they expect attractive

rewards. On the contrary, employees barely work hard when they expect limited appreciation

from the employer (Almutawa, 2021a). Therefore, employers should instill positive expectations

in their workers to attract high performance and boost innovation. The expectancy theory will

apply in this paper’s “analysis” section.

Goal-setting is also a relevant concept to this report. As Han & Lu (2019) assert, goal-

setting ideology holds that workers are often motivated to achieve their targets. Conversely,
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staffers without goals are hardly-energized to work hard and smart to accomplish them.

Therefore, managers should set goals for all workers to challenge them to give their best (Han &

Lu, 2019). Goal-setting also enhances fairness in promotions, as the employer will only elevate

workers who meet their targets, irrespective of biographies. The goal-setting model will apply to

this paper’s “recommendation” part.

Another resourceful concept in this essay is “change or die.” This ideology holds that the

organizational environment is always changing. Consequently, the firms that fail to keep pace

with changes could become irrelevant and die (Meyer, 2019). For example, when cellphones

emerged, telecom service providers with booth lines that failed to adjust collapsed due to market

failure. Therefore, organizations should be willing to embrace positive strategic adjustments. The

change or die model applies to this report’s “recommendation” part.

Attribution theory is also a relevant model in this analysis. According to Almutawa

(2021a), people use cause-effect relationships in comprehending worldly occurrences.

Consequently, the attribution theory is also called perceived causation. Most folks associate

occurrences with a given cause (Martinko & Mackey, 2019). For example, in a multi-ethnic

company, if the management only promotes workers from a given race or religion, others will

perceive the leadership as discriminative. Therefore, to prevent negative attributions, corporates

should create fair conditions for rewarding and punishing workers. The attribution theory will

apply to the “analysis” segment.

Transnational leadership style also resonates with this report. Theoretically, a

transformational leader uses followers’ emotions to encourage positive organizational changes

(Gandolfi & Stone, 2018). For example, if workers complain of harsh HRM practices, a

transformational manager will convince them to support transitions, yielding fair human resource
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strategies. Usually, transformational leadership can assume any of the following dimensions. The

first is charisma influence, where the leader serves as the role model for the juniors (Almutawa,

2021d). For example, if a manager wants workers to embrace diversity, she should always form

inclusive groups. Besides, transformational leaders can adopt inspirational motivations by

articulating appealing visions to members (Almutawa, 2021d). For example, if workers complain

about low payment, a transformational manager should convince them that embracing a new

organizational policy will elevate pay. Moreover, transformational leaders can embrace

intellectual situations by taking risks, challenging assumptions, and soliciting juniors’ ideas

(Almutawa, 2021d). For instance, a transformational manager can ask employees to suggest

ways of bettering the HRM strategy. Lastly, a transformational leader can utilize the

individualized considerations by attending to all members’ needs and mentoring followers

(Almutawa, 2021d). The transformational leadership model will apply in the “recommendation”

section.

Accordingly, the transactional leadership style also resonates with this evaluation. As

Gandolfi & Stone (2018) notes, transactional leadership entails clarifying workers’ roles and

guidelines and defining rewards & punishment for deviations. In other words, transactional

leadership is a fair trade between workers and employers. Often, transactional leaders exhibit the

following traits. The first characteristic is contingent rewarding, where a head establishes a

constructive transaction with subordinates (Almutawa, 2021d). For example, a marketing

manager can establish commissions for sales agents who hit a given target. Next, transactional

leaders manage by executing rewards or punishment, as per the transaction rules (Almutawa,

2021d). For example, an HRM manager can demote team leaders who fail to meet the targets.

The transactional leadership rationale will apply to the paper’s “recommendation.”

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Cognitive evaluation theory is the last relevant concept. The paradigm holds that people’s

motivation is positively-depended on intrinsic and extrinsic rewards (Almutawa, 2021a).

Therefore, decreasing extrinsic and extrinsic rewards for a behavior demotivates people. For

example, reducing workers’ salaries lowers employees’ extrinsic (purchasing power) and

intrinsic (the urge to earn high income), then demotivates them. The cognitive evaluation theory

applies to the report’s “analysis” segment.

4.0 Analysis

One of EQUATE’s main challenges is allegedly limiting promotion opportunities for

non-Kuwaiti workers, which demotivates foreign personnel and lowers the company’s HRM

image. Critically, the following are the relevant concepts to showcasing how EQUATE’s HRM

strategy lowers employees’ morale.

Organizational Culture Change: This refers to adopting better values and dropping

nonstrategic principles to improve the company’s efficiency and performance (TMR, 2020).

Currently, EQUATE’s corporate culture has a weakness of allegedly marginalizing non-Kuwaiti

employees during elevations (Indeed, 2021). As a result, the company has earned a negative

corporate reputation for having a discriminative HRM strategy. Non-Kuwaiti workers are also

demotivated to give their best because they think the company will ignore them during

promotions. However, EQUATE can redeem itself by adopting a fair HRM strategy that gives all

workers equal appraisal opportunities. Eventually, non-Kuwaiti staffers will be motivated to give

their best.

Attribution Theory: This model holds that people use their perceptions to create a cause-

effect model, and then apply it to interpret the world (Almutawa, 2021a). In EQUATE’s case,

workers attribute career promotion to one’s nationality, such that only Kuwaitis have high
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chances of getting elevations (Indeed, 2021). Consequently, non-Kuwaiti employees are

demotivated to give their best because they will not be considered for promotions. So, EQUATE

should focus on neutralizing workers’ negative perception of its promotional framework to

motivate non-Kuwaiti staffers.

Expectancy Theory: This model asserts that employees’ motivation and reaction depend

on the expected rewards’ attractiveness, as shown in Figure 3 (Almutawa, 2021a). Specifically,

employees get energized to give their best when they expect attractive rewards. Unfortunately,

EQUATE’s negative HRM reputation has made non-Kuwaiti workers believe they cannot get a

promotion (Indeed, 2021). As a result, non-Kuwaiti staffers are demotivated to work hard

because they expect to be overlooked during career appraisal. Therefore, EQUATE should

enhance fairness in the promotion to change non-Kuwaiti workers’ expectations and motivation.

Figure 3: Expectancy Theory (Almutawa, 2021a)

Cognitive Evaluation Theory: This model argues that people’s motivation depends on

internal and external rewards, as shown in Figure 4 (Almutawa, 2021a). Hence giving workers

insufficient extrinsic and intrinsic rewards demotivates them from giving their A-game.

Unfortunately, EQUATE’s discriminative promotional strategy reduces extrinsic and intrinsic

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rewards for non-Kuwaiti workers by marginalizing them during promotions (Indeed, 2021.). As

a result, most non-Kuwaiti staffers are discouraged to work hard because EQUATE will not

promote them regardless of their contribution. Therefore, EQUATE should start considering

non-Kuwaiti workers in promotions to raise their intrinsic & extrinsic rewards and morale.

Figure 4: Intrinsic & Extrinsic Rewards (Almutawa, 2021a)

5.0 Recommendation

The following are useful models in purifying EQUATE’s HRM reputation and enhancing

workers’ morale.

Change or Die: This concept holds that firms should keep pace with environmental

transformation or become obsolete and collapse (Meyer, 2019). Currently, scholars like

Mahadevan & Mayer (2017) encourage corporates to embrace diversity and motivate all workers

to give their best. For example, an inclusive employer should not marginalize some workers

based on biographies. Unfortunately, Indeed (2021) reports that EQUATE discriminates against

non-Kuwaiti personnel during career elevations, which lowers foreigners’ morale. However,
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EQUATE can enhance the situation by embracing diversity and promoting all employees based

on merit. As a result, non-Kuwaiti workers will be encouraged to give their best knowing they

stand a change during career appraisals.

Lewin’s Change Model: This a three-step paradigm explaining how organizational

change should happen (Almutawa, 2021c). Therefore, EQUATE should apply Lewin’s Change

Model in establishing a fair HRM strategy. During the unfreeze stage, the change initiator should

convince EQUATE’s management that establishing a fair job promotion framework will

motivate non-Kuwaiti staffers to work smart. Next, during the change phase, the initiator will

engage managers to repeal policies that discriminate against non-Kuwaiti personnel during

promotions. Lastly, the refreezing phase will entail formulating a new career elevation

framework that gives all workers equal opportunities. Eventually, the morale of non-Kuwaiti

staff will rise significantly.

Goal-Setting: This entails establishing targets for every employee and rewarding the

achievers (Han & Lu, 2019). Fair employers should set targets for all workers and promote those

who meet theirs without favoritism (Indeed, 2021). Unfortunately, EQUATE’s promotion

structure discriminates non-Kuwaiti workers without considering their performance (Indeed,

2021). As a result, foreign workers are discouraged to work hard because their efforts will be

overlooked during promotions. However, EQUATE could improve the situation by setting goals

for all workers and promoting the best achievers irrespective of nationality statuses. In the long-

run, all staffers will feel entitled to the promotion and work hard to meet targets and get

elevation.

Transformational Leadership: This style involves shaping the followers’ emotions to

support crucial organizational changes (Almutawa, 2021d). EQUATE’s job elevation framework
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is allegedly biased against non-Kuwaiti workers, thus demotivating them (Indeed, 2021).

Therefore, the company’s CEO can explain to other leaders how establishing a fair HRM

strategy will enhance foreign workers’ morale. Eventually, other top-level and middle-level

managers will accept to develop a fair HRM strategy and boost foreigners’ morale.

Transactional Leadership: This style holds that workers contribute outcome equals to

what the managers offer (Almutawa, 2021d). In EQUATE’s circumstance, the discriminative job

appraisal structure means managers under-appreciate exemplary non-Kuwaiti staffers (Indeed,

2021). Consequently, foreign workers also respond by contributing little to EQUATE’s a

success. So, the management can enhance employee satisfaction by establishing a fair job

promotion policy that rewards non-Kuwaiti. In return, the foreign workers will be motivated to

give their best to reciprocate the management’s contribution.

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References

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