INTERNATIONAL FINANCIAL MANAGEMENT - Case Study Example

Management Structure Shell is a truly global company with presence in many countries and an organizational set up which is truly global in nature. The top management of the firm has historically been dominated by the Dutch or British executives however, since 2005; both the Chairmanship as well as the CEO of the firm is both non-Britain as well as non-Dutch. It is also important to note that the Shell has the regional presence wherein regional centers are mostly controlled by the local as well as international representatives of Shell appointed as country managers.

As such what is also critical to note that management structure of the firm is largely de-centralized with Regional control exercised through regional hierarchy of management and structure is largely decentralized with strong delegation at the local level.Corporate Governance Shell has extremely decentralized organizational environment wherein most of its subsidiaries work independently under the Regional control. As such the corporate governance issues that are faced by local subsidiaries of the firm.

At the international scene, Shell therefore faced mostly the local corporate governance regulations and modeled itself according to the local regulations rather than forming a centralized corporate governance mechanism. It is however, also important to note that Shell has been criticized for the higher compensation of its executives and it was because of this reason that shareholders in 2009 rejected the executive compensation plan.(Lublin & Chazan,2009). It is also critical to note that the existing corporate governance structure of the firm may also be formulated in order to take benefit of the lose regulatory environment.

Industry Shell works in petroleum industry in which the overall cost of doing business is really high because of high cost of capital involved. Apart from this, the output in the industry is mostly dominated by the States wherein the direct control of oil resources is in the hands of the State. OPEC is the largest cartel in the world which controls the output of oil to be produced and as such industry is largely concentrated in nature.Competitors Shell Plc is the largest organization in the world in this industry however; major competitors included British Petroleum, Exxon Mobil as well as Total.

(Hoovers, 2010). It is however, also important to note that competition is largely concentrated and firms are mostly price takers with little influence over the output as well as prices.Business Particulars and motivation to operate as MNC Oil and Petroleum products are not manufactured rather they are minerals which are extracted from the soil. As such their presence depends upon the availability of reserves in any particular market therefore Shell has to operate at the international level in order to take advantage of the international reserves and continue to ensure that it gets enough raw materials in the shape of petroleum to sell out in the international market.

It is also important to note that its basic motivation to operate as MNC is also its need to expand to new markets in order to generate more value for its shareholders.References1. CHAZAN, G (2009). Shell Investors Revolt over Executive Pay Plan [online]. [Accessed 22 April 2010]. Available from: .2. Hoovers.com (2010). Royal Dutch Shell Competitors [online]. [Accessed 22 April 2010]. Available from: .