F and A Organization Design

Input Cooperatives

Input co-ops purchase feed, seed, fertilizer, fuel, and other inputs using their co-op size to obtain quantity discounts, reducing costs to its members.

The Functional Design (U-Form)

Based on functional departmentalization. The U stands for unitary or uniform approach to design. In a functional design, every part of the organization is dependent upon the rest; none can survive without the others. Therefore, functional design lends itself to centralized coordination.

Cooperatives

Co-ops are owned and controlled by their members. Their objective is to maximize the benefits they generate for their members. Owner-members have limited liability, equal votes, a share in the profits/benefits, and tax benefits. But, as the co-op grows larger, the individual control gets diluted. Co-ops are difficult and expensive to form and maintain.

Corporate culture

Corporate culture is similar to ethics, but they're different. People in a corporation have shared experiences, shared stories, shared beliefs, shared norms, and shared actions that characterize the organization and influence its design.

Divisional Design (M-Form)

Divisional design is about completely different businesses (apparel and sugar). It is popular with multinational organizations. It combines a product approach to departmentalization with a strategic business unit strategy. The M stands for multi-divisional characteristics. Each division is a strategic business unit (SBU).

Conglomerate Design (H-Form)

In a conglomerate design, the organization grows through the development of new and unrelated product lines (Nestle). The H stands for conglomerates holding companies for groups of diverse products. In a conglomerate design, units separate businesses headed by general managers. Conglomerate: anything composed of heterogeneous materials or elements.

The Matrix Design

In a matrix design, job roles intercross and turn into a matrix. There is superimposing product-based departmentalization on existing functional departmentalization. Each manager heads up a project that cuts across functional areas. In functional departments, the firm develops and retains unified and competent functional specialists. Product-based departments direct special and focused attention to individual products or product groups. The matrix design is used when the firm has a diverse set of products and a complex environment. It is used when there's a great deal of information to be processed. It is used when there is pressure for shared resources.

Horizontal or Vertical

The H-Form and M-Form result from horizontal growth (have to use other parts of the value chain for marketing). Vertical growth is expanding the organization's basic activities. In vertical growth, a firm can own 2 or more successive links in the value chain.

Output Cooperatives

Output co-ops provide marketing and branding for its members to increase their sales.

Organization chart

Picture or map of the organization. It is useful to newcomers and outsiders. The larger the organization, the larger the organization chart and the more difficult it is to use.

Support Cooperatives

Support co-ops provide services to members at reduced rates.

The Matrix Design continued

The matrix design is very flexible. Teams can be created, changed, and dissolved without any major disruptions. The matrix design improves motivation. It promotes the development of human resources. There is, however, some potential conflict by having a number of different bosses and coordination can be difficult. Furthermore, group work takes longer than individual work.