Royal Dutch Shell p.l.c. is one of the six “supermajor” oil and gas companies. S
ID: 375396 • Letter: R
Question
Royal Dutch Shell p.l.c. is one of the six “supermajor” oil and gas companies. Shell is unique for its organizational structure and its global presence. It was characterized as one of the world’s three most international organizations. Shell’s organizational structure is very complex. It is comprised of four types of companies: the parent companies, the group holding companies, the service companies, and the operating companies. Shell created a tri-dimensional matrix structure known as the Shell Matrix, which had functions, regions, and sectors. In 1995, a radical reorganization of Shell was announced. The new structure represented the move from a geographically-based company to a business sector-based firm. The restructuring also included the elimination of more than 1,000 corporate positions, the sale of a vast majority of its headquarters, and the redesign of its coordination and control systems.
Questions:
What are some advantages and disadvantages of the Shell Matrix?
Why do you think Shell has undergone so many organizational restructurings?
How would you decide what would be Shell’s best organizational structure?
Explanation / Answer
Answers:
1.Advantages of Shell Matrix:
-They have global presence and was one of the top international organization
-They have unique organization structure which led them to remain at top
Disadvantages:
-The organization structure was unique but it was very complex and difficult to understand
-The restructuring process led to elimination of more corporate positions so the employees were expelled from company
2.Shell had undergone so many organizational restructurings because they wanted to change their organizational structure .They wanted to move from a geographically based company to business sector based company.So this transformation required lot of new changes in their organization structure.They restructured the design of coordination and control systems according to the new structure ,which a business based firm requires.
3. The Shell's best organization structure would be tri dimensional matrix structure.This matrix structure focused on functions,regions and sectors.So by covering all the areas ,the company became one of world's top three international organization.Even though the organization structure was complex this structure led them to the world's top organization.so this is the best organizational structure for Shell matrix
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