Royal Dutch-Shell

Paper Summary:

This document discusses the Royal Dutch/Shell Corporation as it relates to its organizational structure. The topic of the paper discusses is the reorganization Royal Dutch/Shell underwent during the mid-1990s when it ended its matrix organizational model in lieu of one based on divisional lines. This new structure was a response to the global economies new demands on corporate strategy that found companies being forced to respond to competitive market forces around the globe where previously these pressured did not exist.

From the Paper:

"Royal Dutch/Shell (Royal) benefited greatly from its matrix organizational structure in that the matrix structure aligned neatly with its core business strategies. As the case points out, the petroleum industry is characterized by long-term business decisions being made on a daily basis for which the outcome of those decisions may not be fully known or understood for many years. Thus, the oversight of the dual executive management ensured that such long-term decisions would never be taken lightly and that they would, in all cases be weighed within the context of the local and regional environment as well as the strategic health of the company as a whole. Yet, one of the major negatives of such a structure is that decision-making becomes a lengthy process and the company in question cannot respond to market forces in an agile manner."

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