Internal Communication as Value Creation in a Change Process: A Case Study of Norwegian Statoil

Abstract

IntroductionThe primary purpose of this case study is to investigate how the leaders in the Norwegian company, Statoil, could by relying on the extensive use of information communications technology (ICT), strategically use available communication tools to change from a matrix structure to a virtual and networked organization. Management believed that this new structure would not only allow better communications and knowledge sharing across this widely dispersed organization, but also enhance productivity and motivation among the employees by enabling them to access knowledge and share work experiences globally. The secondary purpose was to develop an understanding of how the leaders in a specific Statoil site, Stjordal in Norway, could use internal communication tools to sustain motivation and productivity among the employees during the change process into a virtual and networked organization.Background on Statoil's Changing Business PositionStatoil was established in 1972 as a state owned company to handle the Norwegian oil resources in the North Sea. Mobil, Exxon, Elf, BP, and others had already located large oil resources both in the British and Norwegian sector of the North Sea. Statoil started out as the enforced business partner and the Norwegian controller of the resources. For the following thirty years, Statoil focused handled only on the Norwegian market and did not bother much with global externalities. This changed in 2001 when Statoil was introduced into the global stock exchange. Today it has more foreign employees than Norwegian employees. Although Statoil depended for its first twenty years on government protection like those companies in South America and the third world get from their governments, it is today, as are its partners in the Norwegian oil service sector, competitive in all respects. Consequently, its current focus is more on the global scene than the Norwegian scene and the company has become a preferred partner, especially for other state controlled oil corporations. Statoil was in 2012 and 2013 the no.1 oil operator in finding new oil and gas resources. The main challenge is to make them profitable in spite of a higher cost level than their competitors.Norway has some unique challenges in its work force. Although its free educational and health care system has secured equality and high female participation in the work force (82% in 2013), immigration is important in filling the jobs. . There is an agreement in all businesses that Norway needs a strong immigration of skilled workers. Although Norway had the second largest European emigration in percentage of its population to USA in 1860-1930 (Lovoll, 1979), immigration in 2009-2013 was the third largest in Europe. This influx of workers gave Norway access to the unemployed working market in EuropeThe current global engagement has increased the external complexity for the company. The organization had moved from a hierarchy to a matrix organization but Statoil's management wants to become more of a team and network based organization as 80% of all activities are executed by contractors and partners. Statoil has a very close link to the Norwegian oil service companies and has facilitated their emergence into the world market. Many of them, like Aker Solutions, Aibel, and Subsea 7, are world leaders in providing engineering services to the energy sector. Statoil's Norwegian leaders continue to manage these networked projects thereby dramatically increasing the need for managing internal and external communication between teams, projects, and partners. The transfer of knowledge in and between projects is an important part of their knowledge and communication strategy. Creating effective communication linkages through ICT and team-/project leaders has consequently become crucial in fulfilling Statoil's overall strategy.The success story of Statoil has been explained as ordinary people delivering extraordinary results (Olaisen, 2012). …