Case Study 1: Forest Construction

Forest Construction is a privately-owned regional construction firm established in the early 1970s as a civil engineering contractor near the south coast of England. The company currently has an annual turnover about £260 million and employ around 1,000 staff. Forest has enjoyed three decades of almost uninterrupted continuous growth. In particular, the company has achieved a significant rapid growth over the last ten years. Forest attributed such success to their long-term investments in building a network of five well-located and established regional offices.

The concept of 'organic growth' was used to describe the progressive development of the regional offices in order to ensure each regional office was established firmly in its local region. Forest also emphasised the importance of localised networks and staff as an essential means of sustaining the regional business. Each regional office operated as an autonomous unit led by a regional director. Forest's group directors saw each region's business as a localised market and put a strong emphasis on the importance of the regional director's local entrepreneurship. The role of the group board was limited to basic strategic guidance and to monitoring the regions' progress against agreed targets. Currently the group board recognises that particular market niches developed within the regional offices could usefully be projected nationally.

The company recently decided to establish two specialist divisions for the purpose of positioning against national procurement frameworks. Forest's business structure therefore combines a regional structure with two specialist divisions (see Figure 1). The specialist divisions were essential to develop appropriate modus operandi that fit the specialist sectors they serve. As a result, the company was able to continually sustain its competitive position within the emergent specialist sectors.

Case Study 1
Figure 1: Forest's Evolving Business Structure