Multinationals and Global Business essay Example | Topics and Well Written Essays - 1500 words

Multinationals and Global Business - Essay Example Before the merger, these companies had been rivals and the process of bringing them together ensured that both of these companies were able to put aside their rivalry and cooperate in an international level; becoming among the most dominant oil and gas companies in the world. Since its formation, Royal Dutch Shell has continuously grown and evolved according to the different circumstances that it has encountered; essentially ensuring its success where many others have failed. According to Jones (2005, p.164), in the twentieth century, â€Å"firms sought to access knowledge to develop technology that are distinct from but contemporary to those created by their parent companies.† At the period of its formation, the two parts of Royal Dutch Shell were not merged, but were kept separate as a result of nationalist sentiments in both the Netherlands and the United Kingdom. The result is that these two parts of the company continued to be run as separate entities with one based in The Hague and the other in London. The portion based in The Hague took on the responsibility of production and manufacture while the one in London took over the transportation and storage of the products. Thus, in order to cater for nationalist sentiments in both countries, Royal Dutch Shell chose not to go ahead with the merger because to do so might have hampered its operations. This strategy can be related to Alfred Chandler’s structure follows strategy theory which s tates that the structure of a company is often determined by its strategy and this is based on the formation of independent units that operate under the umbrella of a parent company (Chandler 1990, p.61; Gopalan and Stahl 1998, p.32). Thus, through its headquarters, Royal Dutch Shell was able to continue coordinating the activities of its Dutch and British units without compromising their independent nature. Royal Dutch Shell chose to begin its