Organisational Structure – Structures for Growth

Summary Rexam Plc has articulated that part of the company’s strategy is to make a carefully managed expansion into the emerging markets. In this report I suggest an alternative structure for Rexam to enable implementation of such a strategy and propose a business process for designing effective organisational structures. The work of Chandler (1962) charts the evolution of company organisational structures from the early centralised structures of the 1920s to the multidivisional structures still used by multinational companies today. The findings from academic research conclude that structure follows strategy and company structures evolve and adapt to facilitate the deployment of strategy. Rexam Plc has a history of structural change that closely resembles the history of many of the world’s leading organisations during the last eighty years. The company has diversified and rationalised, it has used autonomous structures and centralised structures with each change occurring as a result of strategic change. Rexam business leaders recognise that the process of designing organisational structure is still driven by the needs of the business at a point in time depending upon the strategy. This traditional method of organisational assessment and design is now being challenged. Companies such as Unilever are now improving returns and sales growth aided by a business process that assesses the effectiveness of the organisation. Robust assessment triggers and targets are embedded into the company’s business process enabling the quantitative measurement of the organisational effectiveness. This report assesses the principles of good organisational design and suggests how the internal effectiveness of the current Rexam organisational structure can be improved. If organisational structures can be designed to be more effective they can lead to competitive advantage and the successful implementation of strategy. This paper supports and recommends that Rexam Plc considers a process for assessing the effectiveness of the organisational structure during and after changes to the current structure. The process should take a holistic view and measure the effect on the rest of the organisation. Finally this report suggests a new approach and organisational structure for strategy deployment in the emerging markets of India, the Middle East and Asia. By incorporating the proposed process and feedback from internal the Rexam studies this paper proposes that the recommended organisational structure is developed as a pilot project that could have wider reaching benefits for the ongoing global sectors and business units within Rexam Plc