Throughout the World Governments – Central and Local – are Wrestling with How to Manage: Strategic Management and Leadership Assignment, SMU, Singapore

Case Study: Cordia LLP: service reform in the public sector

Throughout the world governments – central and local – are wrestling with how to manage increasingly pressured budgets, increase efficiency, and improve the quality of services. Glasgow City Council in Scotland has made structural changes to its services that are amongst the most radical in local government. Cordia is the result of one such change. Previously Cordia was a Council department. In 2009 Direct and Care became a Limited Liability Partnership (LLP) with the remit to develop its services as a business operating at ‘arm’s length’ from the Council. But what would be involved in developing and implementing a strategy to deliver the benefits of such a change?

Introduction

Direct and Care Services (DACS) was a department of Glasgow City Council. It provided school catering, home care services, and facilities management to other departments of the council and more prestigious catering services to public and private sector customers through Encore Hospitality Services. The department had been led by Fergus Chambers as Executive Director. Changes were triggered when, in 2008, Glasgow City Council settled an equal pay dispute which resulted in manual pay rates for DACS employees increasing by an average of 20 percent.

Organizational structure and culture

The new business inherited disparate service divisions from its former status as a council department. In 2009 these remained unaltered as Fergus held the view that the classic division of labor by service type was the most efficient way to organize the affairs of the LLP.

The metamorphosis of Cordia

By the end of 2009, Fergus faced a dilemma in terms of how he should structure his organization. He recognized the success that the current structure had brought to the business, but also acknowledged that this might not be the best model for the challenges and changes that lay ahead:
‘There are different views. Should our organizational structure reflect a more flexible commercial and fluid design? Cordia is changing into something quite different from Direct and Care.

Questions:

1. Assess the strategic position of Cordia, paying particular attention to an organizational culture perspective.

2. What modes of strategy development are evident in Cordia, and which would you expect to be prevalent, given the strategic change described?

3. What strategy should Cordia adopt and why?

4. What organizational structure should Cordia adopt and why?