Question

Case Study: The Apple-Orange Company

The Apple-Orange Company grows and markets apples and oranges in the southeastern United States. Apple-Orange has been in the produce business for the past 50 years and has some of the finest land for growing these fruits. They have also been successful in marketing their products. Up until now, Apple-Orange has been a small family business run by sixty-year old John Graves, whose father and uncle began the business in the late Fifties. John’s son, Carl, has been serving as his assistant since Carl’s return two years ago from the war in Afghanistan, and the business has grown rapidly since that time. There are three major sets of activities that must be accomplished to grow and market Apple-Orange products: 1. A group of workers and managers work in the fields, handling the growing and harvesting of the apples and oranges. 2. Another group of workers and managers work in development research. This group is comprised largely of agricultural scientists who attempt to improve the varieties grown and to increase crop yield. 3. Marketing is handled by several sales personnel who call on wholesalers and fruit distributors in the region. The sales staff is now very large and has been, like all other employees, very effective. John and Carl have been managing Apple-Orange without many formal policies and procedures. The company has few set rules, procedures, and job descriptions. John believes that once people know their job, they should and would do it well. However, Apple-Orange has grown fairly large and John and Carl both believe that it is necessary to develop a more formal organization structure. In the process of the reorganization, John is also planning to retire from the operative business and Carl will take over the responsibility for the company. They have invited D.J. Blair, a well-known management consultant, to help them. D.J. has told them that they have, basically, two choices. One is a functional structure and the second is a product-based organization structure.

Question:

1. Which structure would you recommend to the owners and why?

Answer 1

Given the nature of the business, there are two products, apple and orange, which are entirely different from each other in terms of growing patterns, product development and quality control process, customer base,   end uses. The same set of people managing the process of harvesting, research and development, marketing and strategy development would be generalist in nature and not specialists. If the both product lines are managed by two independent teams, the efforts would be more focussed and results would be different. as the business grows further, such type of structure would be more helpful in givingg the two businesses right strategic direction. Thus, the product based structure would be more appropriate considering the nature of business and its future reuirements.