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Comparison of Sinopec and Dangote Group Multinational Companies Using High Performance Work System
Comparison of Sinopec and Dangote Group Multinational Companies Using High Performance Work System
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HPWS in Multinational Companies 2
Work System
Abstract
Spreading of delivery of quality services and grabbing a vast market are the main goals
set by most of the businesses in the contemporary world during their initial stages. They are also
among some of the factors that spearheaded the ramification of product sale in all parts of the
world. Heavy shipping fees from the points of production to the consumption destinations
incurred by a given company led to set-ups of their branches near to their prospective consumers
to minimize costs and maximize profits. By definition, a multinational company is an
organization that provides goods, services, or both in at least one state. A multinational company
is also called Transnational Enterprise (TNE), International Corporation, or Transnational
Corporation (TNC). A multinational company may be incorporated in one country and sells or
produces goods and services in other countries. There are two major characteristics of such a
company: it is large, and its wide-reaching tasks are centrally controlled by the main company.
Several activities are anticipated to be carried out by a multinational corporation. Firstly, an
international company imports and exports goods and services. Secondly, it makes rational and
lucrative investments in foreign countries. It is also concerned with selling and buying a license
in the foreign markets. Fourth, a multinational company indulges in contract production,
authorizing a given local manufacturer in a different country to manufacture their goods. Lastly,
an international corporation opens the requisite production facilities in foreign countries. The
magnitude of success of the international companies depends on various factors. The success of a
multinational company in China may not be as the one found in Nigeria due to various factors
ranging from the marketing strategies to competitive advantages. High-Performance Work
Systems (HPWS) is the managerial tool that is mostly used to compare two multinational
corporations in different countries.
HPWS in Multinational Companies 3
Introduction
Nigeria is one of the developed African countries whose businesses have been taken to
the next level. From the business point of view, the population of a place affects the demand for a
given product in a country. Nigeria has the highest population in Africa, which has offered a
fertile ground for both domestic and foreign investments. Coca-Cola is one of the US
multinational corporations that found their solace in Nigeria through the high demand for their
products. Moreover, Guinness from Ireland and Chevron from the US also opened their branches
in Nigeria. In response to that, both the national government and the local businessmen also
opted to take their business activities to the green pastures. One of the rapidly developing
Nigerian international companies, which is also important in this comparative essay, is Dangote
Group. Asia is another continent whose most countries have invested in business activities. With
their products used in almost every part of the world, the Chinese have depicted their business
expertise, and this has allowed many countries to give them a chance to set their companies in
various parts. Some multinational corporation such as Huawei, CITIC Group, Lenovo, Hisense
among others are headquartered in China, but they sell their products worldwide. Sinopec, which
is the multinational company of interest in this essay, is another company in the Oil and Gas
industry in China whose products are vastly used. With substantial evidence from various
sources, this essay uses the High-Performance Work System to compare the Dangote Group in
Nigeria and Sinopec International Company regarding their managerial skills, competitive
It is imperative to put the High Performance Works Systems (HPWS) phenomenon into
its social and historical contexts due to its long interesting history of how to improve the
performance of organization through promoting the management of both people and work, which
includes job enrichment, industrial democracy, movements of human relations, social and
technical systems, and scientific management. The notion of HPWS started in the US, which
competitiveness amid its economy. It is suspected that the invention and wide use of the
Japaneses production systems called lean production, such as just-in-time inventory system,
team-based production, and quality circles techniques, acted as the major stimulus of concern in
the creation of HPWS (Boxall 2012). Japan used these techniques to improve the cost, flexibility,
delivery, and quality of its products. Japan considered the US organizational models that
restricted the abilities and discretionary bids of the works as inferior. In their immense discussion
on the ways through which the companys employees are managed in the process of production,
HPWS became one of the main agenda regarding competitive performance in the process of
manufacturing and services. Therefore, according to Laura Newberg (2015), HPWS is the
organizational design that connects people, work, information, and technology in a way that
optimizes correspondence among all these parties to execute high performance regarding
efficient and effective response to consumer needs and the environmental opportunities and
demand. It also involves management practices that bring together all pieces of Human
Resources to create a favorable environment in the company where the workers are fully
engaged in responsibilities.
Dangote Group
HPWS in Multinational Companies 5
Aliko Dangote, who got $3,000 as a loan from his uncle (Dangote Group 2016). At the start, this
company commenced as a major supplier of some foods like rice, but it finally expanded to
importing and shipping cement. Today, Dangote Group has become a diversified conglomerate
whose headquarters are found in Lagos, Nigeria. It is the largest company in the conglomerate
industry in West Africa and one of the top largest corporations in Africa. This company has more
than 26,000 employees throughout its branches in Africa (Dangote Group 2016). The key people
in this company are Aliko Dangote and Sani Dangote, who are the Chief Execute Office (CEO)
and the Vice President respectively. The major products of this company include; salt, sugar,
cement, Oil and Gas, steel, fertilizers, and telecommunications. It has its branches in Zambia,
industry, Sinopec is specifically in Oil and Gas Industry. It was formed out of the joint entity
under the Sinopec Group in 2000. Sinopec was again listed in New York, London, and Hong
Kong later in the same year. The listing in Shanghai was completed in the middle of 2001.
Analysts claim that this company produces more oil products than PetroChina and it is the largest
refiner in Asia. Unlike Dangote Group that is privately owned, Sinopec Corporation is a state-
owned company in China, and its headquarters are located in Chaoyang, Beijing. Like Dangote
Group, Sinopec Corporation produces and sells fertilizer and fertilizer chemicals. Other business
activities carried out by Sinopec include; exploring, refining, and marketing oil and gas;
producing and selling chemical fibers and petrochemicals; storing and pipeline transportation of
HPWS in Multinational Companies 6
natural gas and crude oil; and importing and exporting all products mentioned above. It has its
As stated in this essay, HPWS comprises of the managerial practices and skills that are
used in a given company to make it succeed in its activities. It was also stated that the success of
a given company leans upon the decision made by the top managerial team in an organization.
The path that Aliko Dangote (the CEO of Dangote Group) and other top officials use to develop
their company is not the same highway that Fu Chengyu (the CEO of Sinopec Corporation) and
his management team use to run their company. The management practices under the HPWS
range from the strategies to the application of Information Communication Technology (ICT)
Management Strategies
One of the HPWS that the management team adopts is management strategy. A high
performing company should have competent, visionary, futuristic, and creative leaders who will
propel it towards the right and constructive direction. Dangote Group has also adopted a
management strategy called Niche Domination Strategy (NDS) that it uses as a high-
performance system. It is one of the strategies that the small business enterprises should use to
grow fast. Dangote Group has used this strategy to hold the West African market to ransom for a
long time. Such as strategy has also helped it to fully understand the commodity market. Through
NDS, Dangote Group has been put in control of almost 43% of the Nigerian commodity market;
a nation that blows its horn of a population that is over 150 million (Dangote 2017). The main
aim of this group is to control every part of the ecosystem it operates. To achieve this goal, they
HPWS in Multinational Companies 7
have bought over 3500 new trucks, increased their level of production, and advanced their
distribution networks (Dangote 2017). The NDS has also helped it to sell their products easier
and faster than their competitors at the same market price. Unlike Dangote Group, Sinopec has
adopted a management strategy called Unique Pricing Strategy (UPS). Because Sinopec faces
stiff competition from the other companies that produce and deliver the same goods and services
such as Sinochem Group, Yanchang Petroleum, and China National Petroleum Corporation, Fu
Chengyu came up with UPS to make the company be the industry leader. Chengyu, together with
his top managers and board of directors opted to apply the pricing strategy as an arsenal to
overcome the competition they face from their competitors. Today, Sinopec is successful because
of its good work performance and made high-quality goods feasible at a lower price and paying
Marketing Strategy
Marketing is another factor that heightens the performance of a company. Workers who
always dream and think about how their company could sell more and grab the vast market
makes an admirable and hardworking staff members. Each company has its marketing strategy
depending on the demand for the product, consumption of the product, and the level of market
competition. Dangote Group has its marketing strategy called Experiential Marketing. Such a
company has specific open days and exhibitions where the company representative travel to the
market to give free samples, educate their customers on the benefits of their products and allow
them to experience not only the product and but also the care and the attention the company
shows them. Dangote Group realized that fun demonstrations and games, as well as provision of
free samples, gifts, and prizes draw many people from a significantly big geographical area and
keep the customers singing about the product and days experience for several months.
HPWS in Multinational Companies 8
Experiential Marketing strategy, through the competent and high performing staff members, has
improved the social responsibility image of Dangote Group. On the other hand, Sinopec
Corporation has adopted its marketing strategy called Marketing Mix Strategy. In this strategy,
the company considers four basic aspects that they term as 4Ps: Price, Promotion, Product, and
Place. In the product part, it looks at what it produces (petrochemicals, lubricants, and fuels) and
explores the market. In the place part, Sinopecs marketing and distribution segments have
promoted its operational quality and capability by upgrading and optimizing the current networks
and distribution channels. It has changed some policies that provide the pricing strategy
Competitive Advantage
A company that has a competitive advantage signifies a high work performance. HPWS
has been discovered to be beneficial to the companies that apply it in such a manner that they
obtained by a company when it offers the same amount of goods and services as that of its
competitors at a relatively lower price or high prices through the provision of differentiated
goods. The brand popularity is one of the factors that has kept Dangote Group in the market for a
long time. The high demand for both steel and cement in Nigeria, Zambia, and Ghana have given
Dangote Group a competitive advantage. Its good reputation has also earned it the competitive
advantage through selling authentic and high-quality products. On the other hand, Sinopec has
not earned a genuine and outspoken competitive advantage because of its low volume
production. Sinopec Corporations level of production fluctuates due to erratic sources of raw
materials and high importation charges because of high import tax. Therefore, such factors make
HPWS in Multinational Companies 9
Dangote Group have a better competitive advantage than Sinopec Corporation although some of
Employee Security: One of the advantages of HPWS to a company that adopts it is employee
security. The managers that indulge in this practices have improved the bottom line of their
Selective Hiring: It helps the HR department to evaluate the candidates with skills, for example,
marketing techniques and creativity who would be an important asset to the company.
the vitality of coherent identification of objective and goals. In the implementation of goals,
HPWS helps the company to delegate decision-making all over the organization.
system, which aims at rewarding the corporation workers at all levels when it achieves some of
its goals.
Encourages Training by Commitment: The organization that has embraced HPWS stresses on
HPWS allows training the employees on how to deal with various issues that may emerge within
an organization.
Reduction of Status Barrier: HPWS takes the assumption that organizational improvements and
ideal ideas come from all employees across all levels. Some activities that signal inequality such
HPWS in Multinational Companies 10
as wage inequality and racial and religious discrimination impart the organizations hierarchical
and marketing strategies are made easy in an HPWS organization. In addition, sharing of
performance, financial, and strategic information shows the employees that they are important
Conclusion
The success of the company leans upon the strategies used by the management. A
corporation with incompetent and irresponsible leaders is likely to collapse and not achieve the
goals it set at the beginning of the business. When a company grows and realizes that its products
have high demand in the market, it decides to expand its supply of goods and services by having
branches all over the country and even outside the borders. When a companys service delivery
goes beyond the borders of its native country, it becomes an international corporation. Several
companies across the world started as a small business enterprise, but they have grown to
international companies. Nigeria is one of the most developed countries in Africa whose business
companies have been lucky enough to serve more than one nation in Africa. The essay focused
on Dangote Group, which is owned by Aliko Dangote and gave out various factors that led to its
expansion. As one of the largest corporations in Africa, Dangote Group delivers its goods and
services majorly in the West African countries such as Ghana, Zambia, Benin, and so forth. On
the other hand, Sinopec Corporation is a Chinese international company that sells the
petrochemicals and petroleum products to several countries. These two companies differ in terms
different ways of application of HPWS. HPWS comprises of the management practices that
incorporate work, employees, information, and technology in a manner that will lead to high
work performance and productivity. In the management strategies, while Dangote Group uses
Niche Domination Strategy, Sinopec uses Unique Pricing Strategy. In the marketing strategies,
Dangote Group uses Experiential Strategy while Sinopec Corporation uses Marketing Mix
Strategy. Lastly, Dangote Group has a better competitive advantage than Sinopec because it has a
good reputation and its constant supply of the products in the market.
Recommendations
Dangote Group should look for the ways of penetrating the world market so that it can try to
compete with some international companies from other developed countries such as the US, the
Sinopec Corporation does not have a competitive advantage because the production of its
products is erratic. Therefore, it should try to better its means of transporting its raw material to
Both of the companies should try the Strong Brand Management Strategy. It is the strategy that
allows the company to produce many products, but it puts more effort into one product to make it
Reference List
Bhasin, H. (2017). Marketing Mix of Sinopec - Sinopec Marketing Mix. [online] Marketing91.
Boxall, P. (2017). High-performance work systems: what, why, how and for whom?.
Dangote Group (2017). Dangote Group::: HISTORY. [online] Dangote.com. Available at:
http://dangote.com/aboutus/history.aspx
http://www.mytopbusinessideas.com/successful-strategy-models/
http://www.mytopbusinessideas.com/example-companies-competitive-advantage/
https://www.slideshare.net/LauraNewberg/high-performance-work-systems-48203610