It may be surprising to some observers to find out that the Royal Mail Group is still one of the largest organizations in the UK. It now consists of Royal Mail itself, which concentrates on the letter and small packet business by utilizing 60 mail centers, 8 regional distribution centers, and 1,400 local delivery offices. Post Office Counters is also part of the Royal Mail Group and still boasts a network of 12,000 branches throughout the UK. Parcelforce Worldwide, the group's parcel brand, is still a significant player in a highly competitive sector, and General Logistics Systems is RoyalMail's European parcel company.

The organization has not, however, always been in this form. As a nationalized business and later as a PLC wholly

owned by the government, Royal Mail has had to contend with a succession of differing government reviews and

policies and the loss of its prized letter delivery monopoly in 2006. An additional problem has been Royal Mail's industrial relations record, which, over the years, could be described as difficult to say the least.

The Internet also posed highly significant challenges to the business. A sharp reduction in social mail accompanied

the rise of email, although the greeting card business has held up well.The Internet did however provide an opportunity for Royal Mail and Parcelforce to deliver a growing number of items sent out by Internet retailers

such as Amazon.

Post Office Counters has faced structural decline of a different type. It has also been hit by a decline in demand for

letter post services, but more significantly it has ceded much of its role as an agent for paying pensions and child benefits as successive governments have tried to persuade customers to receive these payments through an electronic transfer system that is far less expensive to administer.Vehicle Licensing can now also be performed online. However, because of its heritage and presence in even the most remote parts of the country, it has been seen as a community service as well as a profit making enterprise. Consequently, politicians have often argued a case for keeping Post Offices in remote villages even if Post Office regional management have felt that it was not viable to do so.

Understandably, managing a group of this size has posed some major challenges in terms of designing organizational structures. BT was, in fact, originally part of the Post Office under the name Post Office Telecommunications and gained their own identity only in 1981. Subsequently, Royal Mail operated as a highly bureaucratic organization encompassing letter and parcel delivery and Post Office counter functions. There was a low degree of specialization and a high degree of multi-skilling in some parts of the organization, for example,

administrative staff could expect to serve on the counter and also work in the back office functions of Royal Mail. Sorting Office staff could also be trained on a variety of roles concerning sorting, distribution, and delivery of mail. A set of Post Office rules was available in several large volumes to consult in the case of almost any eventuality. In addition, there was a Postmaster/Postmistress in every city who took overall responsibility for the operation of the services within his or her district.

In 1986, a decision was taken to separate the organization into Royal Mail Letters, Royal Mail Parcels, and Post Office Counters, which itself became a limited company in 1987. However, the organization did retain a group board to coordinate overall strategy, and each separate business gained its own managing director. Staff working in a particular business when the split was announced largely stayed there. A significant reorganization was implemented in the early 1990's, when the Royal Mail introduced the "Business Development" initiative. The business was reorganized into nine divisions, instead of the 64 previous Postmaster/Postmistress districts.These divisions were given responsibility for their own budgetary performance and effectively possessed a great degree of autonomy. Layers of management were removed, thus considerably reducing the number of levels between frontline staff and board level in a move that was also designed to promote empowerment amongst the workforce. An emphasis on rulebooks was now replaced by an expectation of initiative. A further split was then implemented on the operational part of Royal Mail where delivering, sorting, and distribution functions were separated.

Meanwhile, the newly devolved Post Office Counters Ltd followed a different course. Many small Post Offices

were already being run on a basis that involved the Sub-Postmaster or Sub-Postmistress buying a Post Office

premises on the open market. They then receive a salary commensurate with the size of the business and can employ

their own staff if required.They often also run a convenience store within the same premises. At the time of

the split, larger offices were staffed by workers directly employed by the Post Office, mostly on a full time basis.

In recent years, increasingly larger offices have been bought by Sub-Postmasters and Sub-Postmistresses and

staffed by their own employees, many of whom are employed on a part-time basis. This trend has continued, and

the number of directly managed offices has fallen from 1,500 in 1988 to 373 in 2011.

The current coalition government have bold plans for the Royal Mail Group. They envisage gradual decoupling

of Post Office Counters from the rest of the group and favor a mutual structure for the future. Meanwhile, preparations have begun for the sale of Royal Mail. It seems that structural change is rarely very far from the Royal MailGroup agenda.42

Discussion Questions

1. Why did Royal Mail implement the "Business

Development" process?

2. Post Office Counters have pursued a policy of

increasing the number of Post Offices run

autonomously by Sub-Postmasters or Sub-

Postmistresses. Is this a form of centralization or

decentralization? Explain your answer.