Royal Dutch Shell is a large, multinational oil and gas company with over 90,000 employees operating in more than 80 countries. It has a highly centralized and bureaucratic structure with formalized roles and decision-making concentrated at the top levels of management. This mechanistic structure is effective for Shell given its large size and stable yet low complexity environment, allowing it to operate uniformly across countries.

1. BUMGT2615 – Designing Effective Organisations
GROUP PRESENTATION
The Environment and Structure
“Royal Dutch Shell”
GROUP MEMBERS:
SITI RIZKY MARDHANI 30109011
NURUL FARHANA 30109077
NUR FARIDA 30109154
RITHANYA 30109108

2. COMPANY OVERVIEW
 Royal Dutch Shell is a multinational oil and gas
company
 Second largest company in the world
 One of the six oil and gas super majors
 Vertically integrated and active in every area of the oil
and gas industry

3. HISTORY/OWNERSHIP
 Ownership of Royal Dutch Shell is centralised
 Decision making has made by top management
 Highly Bureaucratic
SIZE
 Large organisation with 90,000 employees and more than 80
countries operating
 Highly formalisation
 Highly centralisation
 Vertical differentiation

4. TECHNOLOGY
 As a technology leader, Shell is the world’s biggest distributor
 They provide innovative way to bring more efficient energy for
their customer
 Invest in developing vital technology
STRATEGY
 Generate profitable growth
 Aims to deliver benefits by making more energy efficient
products by reducing the impact of their operations
 To improve the way they design, build and run their operations

5. ENVIRONMENT
 Shell Company attract and deliver profitability in an environmentally
and socially responsible ways.
 They work closely to their customers and partners
 To advance more efficient and sustainable use of energy and natural
resources.
PEOPLE
 Their people are working steadily around the world
 The varied skills and experience of people from different cultures benefits
business in Shell Company.
 Helping them to better understand their customer across the world

6. BURNS AND STALKER
 Two structure that can be define:-
 Mechanistic structure
 Organic structure
 Mechanistic structure has relate to Shell because:-
 Large company
 Have many employees
 It is also known as bureaucratic organisation

7. DUNCAN’S COMPLEXITY AND CHANGE
FRAMEWORK
 Two dimension of work :
 The rate of change of environments
 Environmental complexity
 Shell  combination of a stable environment and low
complexity leads to low uncertainty for organisation
 Nature of the environment they face permits them to
centralize their operations

8. Key Considerations Of Designing Structures
 Shell  really large organisation with enormous size
 Large organisation is usually bureaucratic
 2 out of 6 key considerations of designing structures in Shell
 Formalisation
 Centralisation
 Formalisation of Shell
 Highly formalised because it is a large organisation
 Used mechanistic structure that characterised by high complexity,
formalisation and centralisation

9. Key Considerations Of Designing Structures
 Centralisation of Shell
 Decision making concentrated in a single point, usually the top
management
 Highly centralised because Shell applying formal structure
which only concerned by the centralisation
 Top management of Shell used formal authority to make
discretionary choices to permit employees minimum input to
their work

10. Impact On Organisational Effectiveness
 Large organization applying bureaucracy like Shell hardly to be
effective but can be effective
 Shell less complex but high in formalization and centralization
 Less complexity, Shell has few forces in environmental changing Still
can be effective even centralised because of less complexity
 Highly formalized, all job descriptions and rules are clear stated to be
followed
 Employees producing products and services day to day and try to be
close to customers, which lead to the company effectiveness

11. Conclusion
 Shell Company is a large size organisation
 Once government owned and highly bureaucratized, it had become
one of the world’s most dynamic, profitable, and widely admired oil
majors
 Stability of Shell environment leads to centralisation and high
formalisation
 Operations are mechanistic in nature, Shell differentiates itself into
many different departments to meet the environmental elements as
Shell has more than 80 countries operating the organisation

12.  Based on Burns & Stalker
 Shell used mechanistic structures in their organisation
 Characterized by high complexity, formalisation and centralisation
 Duncan’s complexity theory
 Dimension identified is environmental complexity. The greater the number
of elements there are in environment, the more complex the environment
 Oil companies like Shell face a complex environment because of the large
number of environment elements they face
 Shell Company has a stable environment combined with a low level of
complexity leads to low uncertainty