Case Study 2: Southern Construction

Southern Construction was established as a civil engineering contractor in the mid-1960s in the South of England. The company currently has an annual turnover about £250 million and employs around 1,000 staff. The annual turnover more than doubled over the last ten years. In particular, the social housing business has been a significant area of growth and is seen to be a strong area for future expansion. Southern's early engagement with a local housing association (HA) in the early 1990s provided the company with an opportunity to learn what was required in the sector, and to develop necessary expertise. The company began to recruit experienced people from HAs and local authority housing departments in order to acquire an understanding of social housing policy and grant regimes, as well as the specifics of HA working procedure and regularity.

As a consequence of its early success, Southern began to formalise a social housing division and develop specialist capability. Southern now has the capability to resolve problems for the HAs proactively, thereby enable the company to secure the majority of schemes on the basis of negotiation rather than competitive tendering. Southern consistently emphasised the importance of preserving the firm's reputation and maintaining close relationships with local HAs.

Southern also has to ensure that their senior mangers are networked across relevant policy arenas in order to keep abreast of changing policy and procurement trends to better position itself for the future.

Southern is currently structured into four specialist divisions which operate across several area offices (see Figure 2). Each area office has its modus operandi that fits the sector it serves. The company recently also set up a regional office in London in order to demonstrate presence to London-based clients. The establishment of the London office shows a trend towards adding a regional dimension to its current business structure.

Case Study 2
 
Figure 2: Southern's Evolving Business Structure