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 KAZAKHSTAN International Business Magazine №4, 2009
 JSC KazTransOil: Development and Management Principles
JSC KazTransOil: Development and Management Principles

A few years ago the topic of social responsibility of businesses in Kazakhstan was not of so much of concern or widely discussed by public as today. It neither figured even in the socio-economic policy of the state, nor had any system in the business environment as well. Now, thanks to the President Nursultan Nazarbayev who has started paying more attention to this issue, the socially-oriented business was brought to the level of a national idea.

In the first place, the matter concerns large companies and corporations. Inside them the model of a socially-oriented state is reconstructed, owing to the combination in their activities of economic efficiency elements, based on profit earning, and morality common to all mankind. Ideally, up-to-date companies have to be some sort of a powerful social instrument, responsible not only for their own well-being, but for the well-being of the society and the state as well. Part of the responsibility for building up such a model was taken by JSC KazTransOil, the largest oil transportation enterprise in Kazakhstan. The company, trying to build up its activities to be in line with the level of developed countries, uses in its practice not only technical solutions and achievements of the progressive world, but also advanced methods in the field of preventing social conflicts and stimulation of public consolidation. The results are evident: A Social responsibility policy, both internal and external one, pursued by the top management of the company, has led to a multiplicative effect. In the eyes of consumers and investors, a company guarded by the principles of social responsibility, favorably differs from the others. It has a stable social climate that is important for investments and production activities.

 Development and management

This principle, throughout the entire existence of JSC KazTransOil, was basic and unchanged. Even external crisis factors have not affected the top management in the fulfillment of their obligations before the company’s personnel. The answer to the question “Why?” is clear and evident: The quality of the personnel composition is the key to the company’s prosperity.

Among the pluses of KazTransOil there are the promotion of the company’s employees and their carrier development, dictated exclusively by the need to raise the professional skills of the staff, paying of much attention to the needs and demands of personnel, the transfer of knowledge and experience, and the development and training of personnel. The company is interested in the attraction and training of highly-skilled specialists, it introduces advanced methods of personnel management, supports innovations and reorganizations carried out in KTO, and others.

The personnel policy pursued by the company is aimed to reach high efficiency in work. Among the instruments applied by the HR-Department of KazTransOil are the latest achievements in the field of personnel management. This is, for example, the introduction of the Key Performance Indicators system, allowing increasing the company’s management efficiency. According to the common saying, the philosophy of key performance indicators is quite simple: “If you try to manage something, you have to be able to measure it”. Considering that, we can say that KPI are the guiding lines, the performance of which directly influences the achievement of the common goal set before the enterprise. 

The practice showed that the main goal of the HR Department’s work is not only the increasing of effectiveness of work of individual employees, but the creation of prerequisites for setting up corporate responsibility for the common result gained through the activities of personnel. With this purpose, KazTransOil made a decision to introduce the personnel efficiency management system. They decided not to complicate the things, proceeding from the saying that “The ingenious is always simple”. So, they introduced jobs grading, the system of assessing the quality of job grading performance, and the system of encouraging those employees who attained very good results in their work. Along with that, the management of the company continues to apply those programs which have already proved their efficiency. In the first place, the matter concerns the training of KazTransOil employees and raising their professional skills.

The training is carried out in several directions. These are individual programs, corporate seminars, Master’s degree programs, and probation periods. In the last year alone, the company organized training for 4,529 employees. 602 company’s specialists took part it the open training programs. 3,734 employees attended corporate seminars, and 178 were trained at the seminars on various projects. Ten more employees were participants of an exchange program: They familiarized with the achievements of the largest oil pipeline network operator in northern part of the Western hemisphere, the Enbridge Inc. Company. It may happen that later on, the technologies which were presented for the employees’ attention will be introduced at KazTransOil.

Realizing the importance of getting education for employees outside Kazakhstan, currently four employees from the central office and branches have been sent abroad to study on MBA programs at some of the best business-schools of the world. Precisely so they will be able to give a new development impetus to KazTransOil, aimed at attaining new heights. Also, the company started paying much more attention to the work of its own training center, where mid-level personnel is trained – the basis, which provides the vitality of any enterprise. In the last year alone, 2,300 employees from the Western and Eastern branches attended the course of advanced training at the Western branch training center of KazTransOil. Of them, 1,589 employees were workers.

One more constituent part of the company’s social policy is the attraction of young specialists to work in the company from a number of the best students of leading higher education institutions in the country. By now, more than 100 students are on probation period at KazTransOil. Along with that, the seeking of “talents” among the youth still continues: The company signed a cooperation agreement with leading Kazakhstani higher education institutions providing the training of specialists in the field of oil and gas. They are the Kazakhstan-British Technical University, The Kazakhstan National Technical University named after Satpayev, the Aktau State University named after Yesenov, and the Republican State University “The Atyrau University of Oil and Gas”.

By building up the personnel policy in the way as above, KazTransOil is creating the entire social strategy. Focusing its work on personnel development and encouraging the successes and achievements of its employees, including incentive pays, the company, in fact, “insures itself” against the risks both for its business, and for social stability in the region, in which it operates. Wages or actual career development is half the work. The concerns of the top management about personnel are also evident, given the other example: Last year, the company completed the construction of a dormitory in Usharal and a sports center in Atyrau. 

All that is only one constituent part of the social responsibility strategy KazTransOil adheres to. One more niche the company succeeded in is charity and sponsorship.

Investments in the present

The top management of leading world corporations realized that the prosperity of their business directly depends on the well-being of the local community. This example has become a sort of a guiding principle for KazTransOil in its work. The specter of the company’s interests in the field of charity and sponsorship is quite diverse, ranging from support of state and sector-related programs to the problems of a certain individual. For example, last year, KazTransOil helped the State Fund “Sary-Arka Comprehensive Development Center” to complete the construction of an orphanage and the Zhanashir Fund of Social Protection and Support of the Population to pay the cost of water consumed by agricultural producers-oralmen. (“Oralmen” are the name of the ethnic Kazakhs that lived before in countries neighboring Kazakhstan and have now repatriated to Kazakhstan). The list of those to whom sponsorship was provided is big. These are Komek Corporate Charity Fund, “Pavlodar is Our Common House” Public Association, men of science, honored workers in the field of education, healthcare, art, and sports. The most important thing among the kind deeds of KazTransOil is the provision of help to the poor, the retired who live below living standards, veterans of war and labor, disabled, and child-orphans.

Unfortunately, because of the world economic crisis consequences that are still affecting the world, the expenses for sponsorship have been reduced in the company’s business plan for this year. Nevertheless, sponsorship and charity for KazTransOil is already a respected tradition. Thus, the company was a sponsor of the Eighth Eurasian Media Forum, Shyrak Public Fund for Disabled, and “Eurasian Economic Scientists Club” Association. It’s also very important that veterans of war and children still have KazTransOil as a buttress.

People say that all the difficulties are just for a time. For KazTransOil, the doing of kind deeds has become sort of a system, which will continue for sometime. The efforts of the company go in line with public policy, aimed to the achieving of prosperity of the entire Kazakhstani society. It is known that the strength of any undertaking is in its start.


Table of contents
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Macroeconomy. September 2009  Sergey Kasyanenko, Edilberto L. Segura 
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