Purdue Farms Inc.Case Study

Table of Contents

IDENTIFICATION: 3

Key Facts 3

Symptoms 3

Problem Statement 3

ANALYSIS 4

Organizational goals & strategy 4

Organizational structures 4

Information system 4

Culture 4

Human resources management 4

Organizational effectiveness 5

ALTERNATIVES 5

Decision criteria 5

Alternative 1: Functional and horizontal Hybrid 5

Alternative 2: Matrix Structure 6

Alternative 3: Geographic Structure 6

RECOMMENDATION 7

IDENTIFICATION:

Key Facts

1. Purdue Farms (PF) is a family owned business that was founded in 1920 by Arthur Perdue and is one of the leaders in poultry industry.

2. PF's mission statement, vision, and values all emphasize the importance placed on quality.

3. In the 1990s, the company expanded within the U.S. as well as to international markets.

4. The company has strong R&D capabilities which have significantly improved productivity.

5. Jim Perdue, the current company leader, while still committed to quality control, has a stronger focus on strategic planning.

6. PF is proactive in managing environmental issues by establishing policies to comply with current legislation as well as prepare it for future challenges.

7. Purchased an information technology system to improve its operations processes, forecasting and inventory management.

8. The company's current operating strategy is to sell premium quality products at a premium price.

9. Jim uses a people first management style. So values its employees greatly!

10. The poultry industry is a highly competitive industry that's affected by customer choices, as well as industry and governmental regulations.

Nothing further to add then was previously mentioned with the other submissions.

Symptoms

• Perdue's vertical supply chain integration cycle is time intensive and does not support timely forecasting nor does it meet the need of a buyer's planning window.

• The current centralized organizational structure does not fit Jim's management style. So what is the symptom with this one then???

• Conflict between its core missions. For example, provide fresh chicken versus highly profitable frozen products.

Problem Statement

PF current vertical organizational structure is no longer congruent with their strategy of being flexible to adapt to the changing environment and responsive to customer needs. PF needs a structure that is designed for efficiency and that will facilitate faster responses and solutions to problems and environmental challenges.

ANALYSIS

Organizational goals & strategy

PF is the leader in the poultry industry with a reputation for producing high quality products since 1920. The company has used vertical integration as a strategy for continued growth, improved quality and increased profitability.

PF has always had a competitive advantage due to their differentiation strategy of having the highest quality products, however, customers today are looking for more than just quality. Jim Perdue is utilizing the Analyzer strategy (Daft, 2010) by trying to maintain its current successful business while continuing to innovate utilizing new technology, expanded product lines and expanding into international markets.

Organizational structures

A centralized and vertical hierarchy organizational structure was used during the leadership of both Arthur and Frank Purdue. This traditional functional structure worked well in the beginning, but as the business continues to expand into domestic and international markets this structure is no longer efficient, making it difficult to quickly respond to environmental changes and customer demands

Information system

PF purchased a multi-million-dollar IT system to improve product forecasts and delivery time. This system is more user-friendly for both customers and employees and was designed to reduce process costs. Without an effective horizontal organizational structure however, this technology might not be as effective as intended.

Culture

PF is using a centralized management style, which is limiting employees' decision making as well as any creative thinking and innovation.

Human resources management

In PF, most of top management has had little formal education, and has developed their career through work experience. This "career build through experience" philosophy might prevent the company from attracting well educated persons who can bring some innovative; fresh and talented ideas to encounter this rapid changing environment. However, Jim's educational background (PhD and EMBA) could change the culture and working atmosphere.

Jim Perdue has a people-first management style and has invested heavily on extensive employee wellness programs. He believes there is a direct correlation between an employee's job satisfaction and operational efficiencies.

Organizational effectiveness

The company is using the traditional effectiveness approach - "goal indicators" approach to measure effectiveness. However, this approach is not as effective as the balanced scorecard to measure overall performance.

ALTERNATIVES

Decision criteria

• Able to response to any changes in a timely manner.

• Improve customer service.

• Maintain competitive advantage in the industry.

• Enable the company to achieve its 3Ps (People, Products and Profitability).

Alternative