Royal Dutch Shell Group Strategic Management Essay

Royal Dutch Shell Group Strategic Management - Essay Example These definitions highlight both the internal and external roles of strategic management in terms of the organization. Further definitions will be given in following sections. Shell’s approach leading up to the new millennium was mainly internal, with massive restructuring of the organisation through divesting unprofitable business areas, eliminating unwanted bureaucratic levels of administration, and placing more power in the hands of a few executives, with the main control and authority coming from the corporate centre consisting of the committee of managing directors (CMD). This was established by flattening the organization’s structure and resulted in minimizing the channels of communication between the corporate center and the operating companies, thus making reporting less complicated. By 2000, Shell’s management structure consisted of the corporate center as the central authority, with executive officers from each of their business units reporting directly to the corporate center. The operating companies, in turn, reported to the business units. This constitutes a flatter organisation structure with a strong central leadership where the overall objectives and goals of the organisation are clearly communicated through the different entities, and problems facing the operating levels in different geographical regions can be effectively made known to the corporate centre for further strategic actions (see Dubrin, 2004; Mullins, 1999). In effect, it can be safely assumed that Shell was headed towards an authoritative style of management starting from the corporate center and continuing down through the executive offices of the business units and finally the operating units. A simpler structure is also helpful for the management in assessing more clearly employees’ performances in order to carry out appraisals and give rewards (Mullins, 1999; Brooks, 2006).