1.1.1 Strategic Management and Direction
The Royal Dutch/Shell Company maintains a structure of decentralized management and decision making. This led to increased and uncontrolled costs within certain operating companies. Also from the case, this structure “has become part of the problem – reducing accountability, blurring responsibility and increasing costs”. With this type of structure it is difficult to maintain control and enforce policies. There is also not much visibility on the activities or rather “hidden” agendas that seem to be taking place. An effective strategy will ensure that any organisation gain and retain a competitive advantage over its competitors. In the case of Royal Dutch/Shell, there was no monitoring, feedback and improvement plans in place for the continued growth of the company. From the case it is evident that the organisations growth was impeded due the fact that it did not have trading shares hence not much available capital for investments. They also failed to expand by means of mergers or buyouts, something the major competitors leaped into. To further stifle their growth perspectives, the organisation failed to spend sufficient funds for exploration of mineral resources. The organisation clearly lacks vision and is unable to set goals for achieving objectives of strategic importance, based on its critical success factors. This benefit can be achieved by introducing the Balanced Scorecard Programme Management (BSPM) system, as proposed by Steyn (2009:online). This system enables an integrated and coordinated management of the organisation’s value chain processes from suppliers to external customers, including implementation of project-portfolios that enhance the effectiveness and efficiency of the value chain. A lack of strategic direction in an organisation will lead to dismal failure and this inefficiency can only be attributed to the top management. To overcome a problem of this nature, the organisation or board of directors needs to consider a change of radical strategic transformation. This can be achieved by implementation of a programme office in which an external team of consultants will drive this project. This will be discussed in more detail in the solution section of this report. 1.1.2 Organisation Structure
Poor organisation structure as the strategy is not a top down approach and does not focus on the critical success factors of the organisation. The various national companies operate in isolation and this is one of the major problems experienced in bureaucratic organisations. Within this type of organisation decisions are made by top management only therefore decisions takes longer and this ultimately slows down the response to change. An improved organisational architecture must empower human talent, including project managers and team leaders, to achieve effective managerial decision making. This can be achieved by changing the structure of the company to that of a learning organisation. To achieve this, this organisation would first need to undergo a process of radical transformation. This change will be discussed in more detail in the solution description section.
1.1.3 Absence of Programme Management
Programme management architecture provides a vehicle to ensure that strategy is effectively and efficiently implemented and that the benefits of strategic importance are measured, appraised and reviewed. From the structure presented, it is clear that this organisation does not implement a programme management project structure. The absence of this structure does not allow for effective and efficient platform for management of projects. The introduction of this office will streamline the process for managing projects for continuous improvement, something which is also clearly lacking. This organisation needs to focus on these types of projects so that it can become a learning organisation, thereby continuously improving its strategy to maintain it...