Talisman Energy Limited

Currently, Talisman Energy Limited (TLM) utilizes a matrix departmentalization approach when they conduct business around the world. Both the functional and geographic departmentalization methods are being utilized within the organization. Talisman is a global business with operations separated in to International, North American and New Exploration (Geographic Departmentalization). Each of these geographic areas has four Vice Presidents'; Health and Safety, Drilling & Completions, HR and Finance that report to an Executive Vice President. Talisman also has teams within the company like Corporate Services and Corporate Finance who support all areas (Functional Departmentalization).

The current geographic structure of the organization may not be the best approach for a company of Talisman's size and asset base. Many of their peers utilize functional departmentalization to a much greater extent; the organization is very top heavy and there is a lot of repetition of work. I believe that groups like Health and Safety and Human Resources amongst others would be better managed functionally as opposed to geographically. For example, with the current poor natural gas prices, Talisman is able to benefit from its oil production in the international areas, however, this structure results in lots of work for the areas that support oil operations and the teams that support gas assets have little to do and cannot be easily redeployed because of the structure of the company. The end result was areas hiring more staff as they get busy and having excess staff if things slow down, this geographically departmentalized hiring practice resulted in Talisman needing to lay off over 500 employees over the past year to sustain their business. There are difficulties with planning to try and improve organizational performance as there are duplicate functions throughout the company in various regions. Each regional functional will present a plan, while another regional function will present an entirely different plan that may not be in sync with one another. This many result in planners being detached from the implementation phase of planning.

At Talisman authority is delegated by the board of directors based on the financial impact to the company, and depends on the manager's roles and responsibilities what their grant of authority (GOA) will be. Talisman employees in most situations report to only one boss (unity of command), and each manager will generally have between 6 and 15 people reporting directly to them (span of control). A manager will give tasks to his subordinates in the chain of command and those will be passed down until they are completed by the appropriate people (line authority). Talisman also consists of groups like HR, finance and legal that advise all areas of the company but do not contribute directly to the operating portion of the company (staff function), they also have groups like Drilling, Completions and Marketing that directly impact the companies day to day operations (line function).

With the structure of the current organization, the location of most authority is at the upper levels of the organization