Restructuring Among the World's Leading Oil Companies, 1980–92

Restructuring among the international oil majors during 1980–92 involved simultaneous, system-wide changes in strategies and structures dictated by the demands of a more competitive, unstable business environment, but triggered by declining profitability and motivated by the desire to increase shareholder returns. Restructuring involved transition from one strategy-structure configuration, the 'administrative planning model', to another, the 'market responsiveness model'. The multiple strategic and structural changes were linked by a unifying theme: the quest for efficiency in a turbulent environment. This quest presented the companies with a strategic dilemma - reconciling economies of scale and scope with the benefits of flexibility; and a structural dilemma - reconciling decentralization with coordination. This paper draws upon the experiences of the world's eight largest international oil majors.