Decentralized Organizational Structure

An organizational structure is the outline of a company’s framework and guidelines for managing business operations. Organizations are usually responsible for creating their companies' organizational structure, which is usually an extension of the owner’s or board’s personality, management style and characteristics. Two types of organizational structures are found in the business environment: centralized and decentralized. Each structure offers advantages and disadvantages for organizations. One company who wholeheartedly operates under a decentralized organizational structure is British Petroleum. BP is a British multinational oil and gas company headquartered in the United Kingdom. It operates in over 80 countries and is the second largest oil and gas producer in the United States. The company employs over 23,000 people in the United States. BP relies on a team environment at different levels in its business. Individuals at each level of the organization have some autonomy to make business decisions. British Petroleum utilizes individuals with a variety of technical expertise and industry knowledge for running its wide array of business operations. A broad-based management team helps to ensure the organization has knowledgeable directors or managers to handle various types of business situations. One challenge that BP has faced is that it being a global organization, it meant having national managers in different parts of the world that sometimes operate under a different management paradigm. One area where BP believes it must excel in to continue its growth is in drilling operation. As drilling around the globe relies on ever changing technology, it must find ways to not only recruit, but retain and expertly train these employees of the future. To gain the most value from technology, it becomes imperative for BP to move highly trained drilling professionals to areas of high activity so it can apply the latest technology. To do this successfully,