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1 Best Organizational Structure for the Royal Dutch/Shell Group Name: Institution: Course: Date:

2 Best Organizational Structure for the Royal Dutch/Shell Group Advantages and disadvantages of the Shell Matrix Benefits of the Shell Matrix First, the matrix system simplifies the organization’s structure making it less bureaucratic and more apparent since it lays out all of its sections. This open structure enhances the easiness with which the company operates (Morozenko, 2018). Secondly, the system allows the company to provide its workforce with a conducive work environment that fosters innovation and creativity. This will enable employees with different talents and diverse professional understandings to collaborate and resolve emerging operational challenges. Lastly, the matrix is integral for the company when it needs to ward off competition (Cristóbal et al., 2018). For instance, the matrix helped Shell stay well ahead of other gas and oil companies due to its unique attributes. Disadvantages of the Shell Matrix One of the disadvantages of the Shell matrix system is that it augments the company’s complexity, making Shell the most complicated organization of all international organizations. The complication is characterized by increased intricacies in the chain of command when assigning employees to their project and functional managers (Cristóbal et al., 2018). Secondly, the matrix structure is characterized by increased oversight and management, creating leadership wrangles and conflict (Morozenko, 2018). The company also spends more when the workforce is accumulated at the top of the leadership hierarchy than when most employees are concentrated at

3 the bottom of the ladder. Hence, the complexity of the matrix structure may create unique problems in the company that are only inherent to the system. Why Shell has undergone so many organizational restructurings Shell has undergone several restructurings over the years occasioned by the realization that it needed to realign its operations and change the way of doing business if it was to maintain its position as the world’s third most international organization and largest chemicals and Energy Company. Secondly, the restructurings were precipitated by the need to create a suitable platform to instigate adequate shareholder returns amid an increasingly stormy industry (Aripaka et al., 2021). Thirdly, the company needed to restructure to reduce the bureaucracies in the chain of command resulting from vast positions in its upper management. This helped the company to cut its overall corporate costs further. Besides, the company needed to institute measures to acclimate its operations to the changing environment (Cristóbal et al., 2018) . For instance, the firm’s main competitors were restructuring their operations to incorporate new technologies. Therefore, Shell needed to follow suit to avoid losing its loyal customers to its opponents by sticking to obsolete functions (Gaspar, 2017). Shell also underwent many restructurings to focus on vital products that have better returns and are more aligned with the company’s core mission and objective. This, in effect, was designed to improve the conglomerate’s competitive edge against its versatile competitors. Shell's best organizational structure If I were to decide on an ideal organizational structure that best suits Shell’s operations, I would go for one that satisfies and ticks many boxes, including but not limited to efficiency,

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4 cost-effectiveness, transparency, and progress-based. The tri-dimensional matrix system is the only structure that meets most, if not all, of these parameters. This system would be ideal for Shell because it combines the attributes of divisional and functional approaches (Egelhoff et al., 2017). This functionality implies that the leader delegates tasks based on employees’ skills and specialization besides the capacity of subsidiaries or the company’s departments to function independently as self-contained entities (Grant, 2017). This matrix befits Shell because of its global outreach targeting consumers from diverse backgrounds. This market level requires a company to utilize a multivariate system, ensuring that its operations resonate with various regulatory and cultural dynamics and demands from its consumers. Lastly, I would recommend this system because it gives employees the autonomy to work independently and self-manage their operations. This would be ideal for Shell because it would relieve it from high oversight and management and unidirectional flow of command (Aripaka et al., 2021) . It would enhance collaboration and incorporation of junior employees’ input in decision-making, which would in effect, would improve employees’ and organizational performance.

5 References Aripaka, P., Donovan, K., & Weir, K. (2021, November 15). Key takeaways from the Shell restructuring plan. Reuters . https://www.reuters.com/article/shell-structure-takeaways- idUSL4N2S629D Cristóbal, J. R. S., Fernández, V., & Diaz, E. (2018). An Analysis of the Main Project Organizational structures: Advantages, disadvantages, and Factors Affecting Their Selection. Procedia Computer Science , 138 , 791–798. https://doi.org/10.1016/j.procs.2018.10.103 Egelhoff, W. G., Joachim Wolf, & Springerlink (Online Service. (2017). Understanding Matrix Structures and their Alternatives: The Key to Designing and Managing Large, Complex Organizations . Palgrave Macmillan, Uk. Gaspar, J. E. (2017). Introduction to global business: understanding the international environment and global business functions . Cengage Learning. Grant, R. M. (2017). Organizational Restructuring within the Royal Dutch/Shell Group. Focus on Catalysts , 2017 (11), 4. https://doi.org/10.1016/j.focat.2017.10.023 Morozenko, A. (2018). Investment and construction project matrix as the basis of forming the highly effective organizational structure. MATEC Web of Conferences , 196 , 04043. https://doi.org/10.1051/matecconf/201819604043

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