KBR CASE STUDY

Organisational Behaviour And Managing Change

Organisational Behaviour And Managing Change

Introduction

KBR (formerly Kellogg Brown Root) was established in 1998 when Halliburton acquired Kellogg as part of its merger with Dresser Industries. Brown and Root? which built the world's first offshore oil platform? had been owned by Halliburton since 1962. KBR employs more than 57?000 people in 43 countries (as of 2005) and provides its services to military and governmental entities as well as to the oil and gas? infrastructure? pulp and paper? power? and process industries. KBR has two divisions: Government and Infrastructure? which accounted in 2005 for about 80% of sales? and Energy and Chemicals. In April 2006? Halliburton announced that KBR became an independent subsidiary? and there are plans to float 20% of KBR's equity on the New York Stock exchange.

Before 2002? KBR accounted for less than half of Halliburton's revenues. In 2004? after the company was awarded nearly USD1.4 billion worth of contracts to aid in the repair of Iraq's oil fields and to provide meals in Iraq and Kuwait to the US military? it accounted for 61% of sales. The year after revenues declined as the US Army Corps of Engineers withdrew the contracts of KBR in Iraq due to allegations that they were awarded because of Halliburton's relationship to former CEO (1995 to 2000) and US Vice President Dick Cheney. Other allegations were that KBR overcharged for its contract work in Iraq. In addition? eleven of KBR's divisions were placed under Chapter 11 bankruptcy protection after 300?000 personal injury lawsuits were filed against the company. They emerged from bankruptcy protection in January 2005. In 2005? KBR's services in the Middle East? accounted for 59% of its sales (USD6 billion). KBR's contracts in the region include one valued at more than USD2 billion for Yemen Liquefied Natural Gas CompanyYemen Liquefied Natural Gas Company and a 4.5 million tons per year LNG train in Skikda in 2005. That same year? KBR signed with Egypt Basic Industries Corporation (EBIC)Egypt Basic Industries Corporation (EBIC) to build up a 2?000 tons per day greenfield ammonia plant at Ain Sukna at a cost of some USD540 million. KBR will operate and maintain the plant for EBIC for 15 years.

Key project drivers

Some sectors of the industry have reacted defensively to these changes in the operating environment. But KBR Production Services' management decided to treat them as a business opportunity. (Bambarger? 1993? pp14-18)

Our vision was to become smarter at transferring know-how across the organisation? particularly as we expand on a global scale to maximise the use of our intellectual capital for the benefit of our clients. The anticipated outcomes included changing the work and behavioural patterns of our staff and? of course? employing suitable techniques and technology to realise this vision and gain a competitive advantage. 

Our organisational ethos on business performance is closely linked to a 'line of sight' concept? where each employee is in a position to see where his or her present work aligns with the overall aims ...