The Apple-Orange Company Structure

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. 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 researchers 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. This has never been an issue before.

Lately, however, John and Carl have begun to see some problems due to their rapid growth (e.g., sales personnel calling on the same distributors within the same week, yet offering different prices). John and Carl both believe that it is now necessary to develop a more formal organization structure.

They have invited you, a noted management consultant, to help them. You have told them that there are two basic choices. The first is a functional structure, while the second is a divisional structure. These two basic forms are shown in the figure in the Appendix.

Based on your knowledge, experiences, and common sense, determine the best structure for the Apple-Orange Company.

Part Two

1. Imagine that you choose the functional grouping, and that as the company continues to grow, the decision is made to diversify into the following products: pears, eggplant, grapes, and broccoli. Now put yourself in the role of the Vice-President of Research. What problems do you foresee happening as the number of products proliferates? What will happen to the VP of Sales? The VP of Production?

Part Three

1. Now imagine that you chose the divisional grouping in Part One. As the company continues to grow, the decision is made to diversify into the following products: pears, eggplant, grapes, and broccoli. What problems do you foresee happening as the number of products proliferates?