PRE LECTURA Y PRE ESCRITURA

ABC is an Australian owned company established in 1978 to provide specialist computer services to the Australian securities industry. It had the major share of the Australian securities services market and with a staff of 30 – 40 it had an internal structure that was described as ‘flat’. Mintzberg (cited in Morden 1996, p. 38) stated that large organisations were more likely to be departmental and have formal and rigid operational patterns; a view also shared by Hope & Hope (1997). Given that ABC was at that time a small, flat structured organisation its development was not constrained by the operational or behavioural style consistent with large organisations of the same period.

Following its listing on the Australian and New Zealand Stock Exchanges in 1994, ABC embarked on the acquisition of securities systems software businesses that serviced Australian and New Zealand key market participants. In 1997 when new regulatory requirements were introduced to these markets the company set about acquiring securities service businesses in both New Zealand and Australia. John describes the rationale behind ABC’s development:

‘The parents of the company saw this opportunity, through vertical integrating, to actually buy those securities operations, which it did’.

‘After a lot of soul searching we decided that we'd not take the risk. We didn't want to take the risk that someone else with a different software solution might buy our major customers. So we'd try and buy them and, we ended up buying securities businesses in New Zealand. Once we'd done that people with their own securities businesses in Australia said these businesses are worth something, we never thought they were worth anything, let's take the money and run. So we picked up a couple of the large ones in Australia fairy quickly’.

During 1997 the company seized an opening in the United Kingdom which effectively gained them entry to the overseas market. From here they were able to extend their range of propriety-based business systems and related services to the international securities industry. John explains the initial process:

‘When the Royal Bank of Scotland, which was one of the big securities services businesses in the UK, were looking for a new technology they did a global search, found ABC and said you're right for us you have the right technology. So we started doing that and we did for nine months until they said this is all too hard because our end of converting our data to your computer technology is too hard, just buy the business. So we bought the business, which gave us 35% market share in the UK’.

John told of a similar experience in Ireland where ABC was ‘virtually given’ a couple of securities services business because their Government had little confidence that their own industry providers had the technology to process 55

the required transactions. In South Africa there was no one with the perceived technological knowledge to handle an exercise on the scale required. ABC was asked to provide these services and in doing so acquired ‘a couple of small securities businesses’, and in the case of South Africa ended up with 60% of their securities services market. John’s account of the company's progress to date is reflected in the following statement:

‘Since then we've basically just bought businesses in Ireland and the US and Canada. So that's the securities services business. Growth by acquisition - growth by cheap acquisition’.

By the end of the 1990s, the company had evolved into a global securities and technology services organisation providing business systems and professional services to the securities industry worldwide. An organisation is described as a global operator when it invests in multiple world regions (Hope & Hope 1997). However, the securities businesses that ABC brought were components of accounting firms or banks, and according to Paul, their business practices were heavily controlled through departments, divisions, and heads of business. Once acquired, these businesses were merged into its securities services unit. Morden (1996) describes the divisionalised organisation as a hierarchical configuration of superordinate-subordinate relationships where divisional managers make decisions rather than corporate executives. He also suggests that an organisation’s structure can be influenced by its industry type and its underlying historical factors, a combination of which will determine the organisation’s corresponding management style.

The technology arm of the business, Computer Services (CS), which evolved from the original organisation, is said to have a ‘very flat structure’. Similarly, ABC’s support units; finance, marketing, human resources, business development and analytics for example, which were formed to stand the company up, also have ‘flat’ structures. This type of organisational configuration is similar to what Morden (1996, p. 47) describes as the ‘organic structure’ where the organisation is innovative and flexible, and ‘…..strongly oriented to the customer, the market and the technology’.

What emerged over the years were two very distinct organisational structures; securities services (businesses acquired from the securities industry), and CS and ABC’s support units (the technology business and those units designed to support the greater organisation). Paul, Victorian Manager, Securities Services, describes – with a hint of frustration the configuration of the company:

‘The current organisational structure is a difficult one because it depends on which part of the organisation you're looking at. If you look at the securities services part of the business it's got a structure. It's got a structure within Australia, it forms part of the global securities services structure, and it in turn forms part of the total ABC group. So it depends on which part of the organisational structure you are looking at’.

ABC’s global securities business evolved into a consortium of regional, national and local operations blanketed by the company’s technology and support units. When combined these businesses form the greater ABC. The 57

securities businesses have to some extent similar operational and management structures and corresponding departments and divisions. For example, in each state and/or locality in each country of operation there is an investment unit responsible for a specific work flow within its geographical area and there is little or no cross pollination from other divisions within that securities business.

The configuration of ABC’s securities business sits within Morden’s (1996) analysis that organisations can perpetuate historical characteristic of an industry. Both John and Paul state that the securities industry globally is said to be entrenched in traditionalism with some structural and operational similarities between the securities businesses in each country. This is not the case with the less formal, innovative and flexible attributes of ABC’s organic structures that provide support beyond the existing industry environment.