Organization design and leadership

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Organization chart of SCG

From the figure above is SCG's organization structure in the whole company. When SCG was established in 1913 by King Rama VI, at the beginning, organization structure was centralized or bureaucratic. Its mean when managers at the upper levels of the organizational hierarchy retain the authority to make the most important decisions.

After 1997, economic crisis occurs in the world and, also affect to Thailand. Most companies were suffered from this impact likewise SCG, the company need to restructure organization to be decentralized, it is delegated to divisions, functions, managers and workers to less levels in organization. From delegating authority, managers can reduce the complex communication and coordination problems because the top of organization can make decision from information that does not have continually send. Moreover, the employee at lower levels are given the right to make important decision. This is one of the best way to build empower and influent participated from the employee.

Figure .. Evolution business restructuring

The organization structure was developed by divined the business groups to five companies namely




Building materials and


SCG's organization structure is related the multidivisional structure that consists of operating divisions, each representing a separate business or profit center in which the top corporate officer delegates responsibilities for operations and business unit strategy to division managers. Each division represents a distinct, self-contained business with its own functional hierarchy.

Kan Trakulhoon, SCG CEO made decision to restructure organization when the company face to crisis. This is good opportunities to change the status from threats and build sustainable growth to the company.

In this report will focus only cement group name Siam cement company Limited. From figure ….is shown the flat organization of the company.

Figure … Organization chart of Siam cement company limited

A flat organization structure is designed to minimize bureaucracy and make employees more productive by empowering them to make decisions. Communication occurs more easily between upper managers and baseline employees, allowing for more rapid change and problem resolution.

The basic premise of the flat organization structure is that having well-trained workers who have a true voice in daily operations means they will be more productive because they'll have a viable interest in seeing the company succeed, since they're also now responsible for operations.

The flat organizational structure has three basic benefits: communication, flexibility, and degree of supervision.

Communication in this type of organization is generally faster, more reliable, and is usually more effective. Because the staff has direct input into the business, there is less likelihood of behind-the-scenes fighting and disagreement. Staff will usually get onboard with new decisions much quicker due to the fact that they've been able to provide input.

The flexibility to make decisions on an as needed basis means the company will be better able to serve its customers. Customers won't necessarily have to wait while the staff hunts down a manager who then has to hunt down a supervisor before a decision could be made. The staff member would be able to take care of the customer immediately.

Finally, the flat organization structure is a bottom-up approach and relies on having highly qualified, competent staff which frequently equates to happier employees and low turnover rates. There are also fewer upper management employees which can result in an increased profit margin.

The organization structure not only of Siam cement group but also Siam company group are flat organization which refer to an organization structure with few levels of intervening management between staff and managers, and focus on employee participate. Moreover, The flat organizations model promote employee involvement through a decentralized decision-making process.

The result from restructured organization, SCG can survive from economics crisis and to reduce loss profit. New organization structure was work closely together across companies and inside company that make respond quickly to market and external change. Moreover, goal was to encourage entrepreneurial spirt in order to nurture a dynamic management.

Leadership strategy

From the organization chart ,this report will focus on president and CEO, He is Mr.Kan Trakulhoon. ( President and CEO, SCG)

Kan Trakulhoon, leads a new generation of progressive management team with a pivotal goal of developing SCG into a leading innovative organization.

Since 1977 when he first joined SCG, Kan has held several key positions in the Group, including executive vice president of a joint venture with Indonesia's leading petrochemical (Aromatics) company - where he successfully spearheaded the establishment of one of the largest petrochemical plants in Asia, Executive Vice President and CFO of the Siam Cement Public Company Limited

While being president of Cementhai Ceramics Co.Ltd., Kan played a crucial role in recovering the ailing ceramic business from the Asian economic crisis in 1997 and transforming the company into a long-term profit-making unit of SCG through strategic re-branding of commodity goods into value added fashionable products.

In the business world, strategy leaders have to effective because without that all strategies cannot be formulated and implemented for the purpose of achieving. Broad of SCG are recognized in this point , Kan Trakulhoon were promoted to CEO and president. The role of CEO during the company face on economic crisis is challenged to him prove his status. He has been working for SCG since 1977 , his 34 years experience enable him inside fully understand operation and constraint of the company. This is an advantage for him to manage all situations that occur to the company.

There are three major styles of leadership : Authoritarian, Participative and Delegative. By characteristics of Kan are lead to be Participative style.

The characteristics

R&D spending : in the organization SCG pay high investment to research and development not only production line but also inside organization provide continuous improvement. There are build organization by Learning organization. These mean there exists a shared vision which everyone agree on. People discard their old ways of thinking and the standard routines they use for solving problems or doing their jobs. Members think of all organizational processes, activities, functions, and interactions with the environment as part of a system of interrelationships. People openly communicate with each other across vertical and horizontal boundaries without fear of criticism or punishment. People sublimate their personal interest and fragmented departmental interests to work together to achieve the organization's shared vision.

Innovation Level : From leading of CEO SCG focus on innovation for sustainability, innovative culture as foundation stage to high value products and service.

Figure…Innovative culture

Flexibility Needs : Flexibility and adaptability in not being bound by a plan are important success factors in leadership. The leader must move easily from one set of circumstances the plan to the next plan is not going as expected and take them all in stride, even when the circumstances are unexpected. The good leader has to embrace change and see it as opportunity. The leadership skill of adaptability is another example of a critical skill.

Risk taking :

Communication : One of those factors of good leadership is communication. Communication is one of the most key elements of leadership. Good communication skills need to be learned to effectively become a good leader or manager. When communication occurs, the leader will be able to accurately convey the ideas and thoughts to those that work for them. In fact, simply being able to convey these things in the first place, much less accurately, puts leader in the right direction for leadership. If employees have no idea what is on leader mind. If there is a problem a certain employee is experiencing, good communication can filter the problem out. The leader can dissect the problem and offer solutions in various ways. Ideas that are given to employees work both ways, as well. Employees can give helpful feedback and generate new ideas to you that help the company as well, when good communication is present.  Leaders need to learn to be proficient in both the communication that informs and seeks out information and the communication that connects interpersonally with others. Communication is another example leadership skill that must be cultivated by all leaders

Vision/strategy : A leader must have a clear idea where his or her organization and unit are going beyond this month's results or this year's budget. Where is it going in the long term? Even tactical leaders must be clear about this and need to refer frequently to the vision, mission, and values of the organization in their communications with others. Vision is another example of an essential leadership quality.