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Most chemical companies do business in many countries, have extensive

product ranges and


serve either multiple market segments or multiple applications. This
complexity translates
into one pivotal issue: how should the company be organised to best
accommodate and
balance all the demands upon it?
“Organisational design” is far more than creating a diagram of the
management hierarchy
in the company (an ‘organogram’). It addresses the whole set of issues
that commence with
the debate of whether the company should be structured primarily on a
geographic
operating unit basis or a global business unit basis. In the vast majority of
cases there is no
clear-cut answer, and some form of matrix structure is required – which
drives the necessity
to address a number of complex questions - including:
• Precisely which activities should be managed and controlled centrally
and which
regionally or nationally?
• What should be the balance of power between the different
management groups to
ensure that all core activities are executive effectively?
• How can the matrix structure be stabilised, so that ongoing internal
squabbles between
internal groups are eliminated and continuous power shifts (which are
very disruptive)
are minimised?
“Organisational design” then means creating and installing structures,
reporting lines,
metrics, reward systems and processes (etc) to ensure that the company
as a whole is set up
in the best way to execute its chosen strategy and business model
effectively.
Our Services
We assist chemicals and materials companies by:
1. Thoroughly reviewing the effectiveness of their current organisational
structure and
identifying areas for improvement
2. Defining and designing the optimum organisational structure, given the
requirements of
customers and the strategic positioning of company
3. Gaining internal acceptance and support for whatever changes will be
involved in
moving to this
4. Planning and implementing the necessary changes
5. Utilising all of the available levers and mechanisms to lock the changes
in place
The Basic Issue
At the extremes, a company can adopt a completely decentralised
structure (with a
dominant geographic hierarchy – regional and national managers totally
responsible for
everything that happens in their territories) or a completely centralised
structure (with
dominant business unit managers, who are responsible globally for a
particular part of the
business). Both have very distinct advantages and disadvantages:
Most companies recognise the trade-offs, so endeavour to find a mid-way
solution.
Unfortunately, even in sophisticated matrix organisations, almost every
employee still works
for either the central structure or geographic operations, and they
inevitably try to gain
more independence and/or power for themselves and their part of the
organisation. In many
companies, power vacillates between regions and the centre (the
”pendulum effect”), and
with this a great deal of time and energy are taken up firstly in ‘internal
politics’, and
secondly in adjusting processes and reporting lines to reflect the shifting
power split.