Micro-economic reform in Australia, under the emphasis of the National Competition Policy, is changing the face of what were once thought to be natural monopolies like the electricity supply industry.
Since the fateful meeting in 1991 of the heads of the commonwealth and state governments which agreed to the aim of a national electricity market by the year 2000 AD, momentous changes have taken place in Victoria where the single, vertically-integrated monopoly, the SECV, was split up and the resultant distribution companies fully privatised, the individual power stations prepared for full privatisation, and a timetable for retail customer contestability put in place. As time progresses more and more Victorian customers will be entitled to select the electricity retailer of their choice - any it may not even be a company which owns any network of its own, just someone who pays the local "wires" company to send electricity to the customer.
And before too long, this or something like it, will be happening in Queensland. What is worse is that the Victorian retailers will have had years of experience, and their sales and marketing teams will be very formidable competitors for the local utilities.
With this prospect in mind SEQEB in the early 1990s considered its options for positioning itself so as not to be squeezed. It had already undergone serious downsizing since 1985, coupled with a programme of continually improving its performance in terms of efficiency and effectiveness, so just 'tightening the screws' a little harder (or even a lot harder) would not guarantee survival.
Something different was needed, especially when the privatised Victorian distributor/retailers were being 'made over' by their new US owners. SEQEB chose to change the way it did business, in a fundamental way - it embarked on a long-term project to become both process-focused and process structured so that the non-value adding processes could be stripped away.
The objective of this study was to examine what this process-structuring actually looked like in a reasonable level of detail, especially in the light of the relevant organisation design literature, and to look ahead to see what SEQEB could look like in the early 21 st century. As part of this analysis, an attempt was made to identify the most appropriate structural model to use in describing SEQEB in each of three periods: the early 1990s (before the first process restructuring), the late 1990s, and early next century.
Because it was a single-organisation case study no attempt has been made to generalise any conclusions beyond SEQEB itself, but every opportunity has been taken to see whether SEQEB's experiences agree with, or diverge from, the literature.
The results indicate that, despite the popular belief among many in SEQEB, the same structural model applies throughout the entire 1990s (ie: SEQEB did not successfully shift to a new paradigm with its 1995 restructure), but the direction of the changes to date give hope that a significant paradigm shift will take place in the 21st century, producing a totally different SEQEB with a totally different structural model.
One likely cause for the failure of SEQEB to breakaway from its old ''pyramids and silos" models was the decision to structure SEQEB on the basis of the ownership of the processes rather than the operation of the processes, in the mistaken belief that, by giving such power and authority to process owners, the process owners could ensure that the processes were both appropriate and followed.
Of course, if the possible outcome of SEQEB being a network organisation in the 21st comes to fruition, then the failure to become a horizontal organisation in the interim may not really matter.