Managing the Organizational Context

To many managers in the chemical industry, these concepts appear too far removed from the very practical challenge of organizing their businesses for optimum effectiveness and efficiency. They are looking for a structure that is both simple and robust, and that delivers their global and regional strategies. 

Our search for best practice in this area does not surface one right answer . Nevertheless, one option does come out on top in our experience, an organization with global business divisions (i.e., product-based business units with worldwide control of all critically important business functions) as the main driving axis seems to fit the needs of the chemical industry particularly well. This has also been recognized by many major players over the past years, decision making authority has in many instances been shifted towards such divisions. 

Global business divisions do have some disadvantages, such as a loss of some synergies in, for example, financial functions or in national sales operations. In our eyes, however, they are clearly outweighed by the advantages. The value of such global business units lies in several different areas  

The real profitability of different products becomes more transparent as crosssubsidies among product lines are exposed. This is a problem intrinsic to the highly integrated production processes of many chemical companies. 

Clear points of P L accountability are established, thus promohng personal ownership and responsibility for results along a clearly defined range of products - a prerequisite for a no excuses policy in any organizahon. Opportunities for building businesses arise, and these help to attract and retain entrepreneurial talent. This is especially important in an industry where separate product hnes have very different value propositions and incenhves, for example, New Economy businesses such as business-to-business (B2B) marketplaces for chemicals versus Old Economy commodity-type businesses such as polysterol. 

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The chapter then takes a look at so-called charismatic leadership to see how this too can be translated into everyday activities that a manager can do. The skills of intrapreneuring are also reviewed to show how managers can best go about pursuing their initiatives in an organizational context. 

Teamwork is not a simplistic, mechanistic work organization technique that can be appUed easily with immediate results. To the contrary, it can be a complex management approach that demands well-planned support in all its phases to be effective. Teamwork is not a panacea and is not suitable to all organizational contexts. 

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