Strategic management and leadership (Royal Dutch Shell plc) Essay

Strategic management and leadership (Royal Dutch Shell plc) - Essay Example Before assessing a business performance indicator, it is important to delve into the ambiance so that a causal analysis may be put forward. This is called understanding the environment. It helps in establishing what-leads-to-what in a more objective way. Royal Dutch Shell p.l.c like all other multinationals is prone to such variable. According to Ben Van Beurden, CEO Shell, 2013-2014 remains tumultuous years for the company (Ben, 2014). The main variables that were held responsible for swerving performance of the company were related to law and order of their business countries. The operating environments which Royal Dutch Shell p.l.c had to face were confronted by deteriorating security situation. Citing Asia and Africa the CEO outlined that a depression was seen lower demand and an oversupply of global refining capacity. 2013 was the year which performed below the potential company has. Lack of competitiveness in capital efficiency and day to day operational performance was seen, as acknowledged by Ben in 2014 CEO Review note. The strategy in theory remains robust and calls for a change in focus only. Ben is of the view that improving cash flow performance and returns must be taken as challenge so that company’s strategy may emerge as sure success (Jeong, 2014). To an answer to how, Ben states that focus should be kept on: Dismal performance in 2012 and 2013 brought a paradigm shift in company’s plans for divestment and new acquisitions. This does not mean that Royal Dutch Shell p.l.c has not been able to perform at all. It means that company is gearing up to realign itself with current market forces and business environments. An abrupt response to the performance in 2012-13 has proven maturity of the company’s leadership. In 2013, earnings fell from $27 billion to $17 billion, and the net cash flow from operating activities went down from $46