Perdue Farms Management Structure

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Perdue Farms was founded by Arthur Perdue in 1920, when he purchased five dollars worth of laying hens and originally went into business selling eggs. Perdue Farms remains a family owned business, however has expanded to 20,000 employees and a multi-billion dollar international venture. The company remained extremely small because of Arthur’s unwillingness to finance any business expenses. He was unable to feel successful owing money, so Perdue’s expansion did not happen until much later. Perdue Farms grew exponentially after The Great Depression, which lead to a high demand of eggs. During the 1940’s, they began to expand their product base and began selling chicken. By 1952, they were putting out over 2.6 million birds each year. Frank Perdue, Arthur’s son, was named president of the company and was determined to expand despite his father’s ultra-conservative business mentality. Under Frank’s direction, Perdue Farm’s expanded to the largest grain storage and poultry feed milling operation on the East Coast. The company had over 600 farmers breeding chickens. In 1968, Perdue Farm’s meat was offered at meat counters for the first time. They had faced a large amount of competition during economic hard times because many people were cutting out the middleman and going straight to the source of the chickens to purchase their meat.

From 1950 until 1991, Frank Perdue was the President of Perdue Farms and was the sole reason for their increased growth and successes. He used a centralized management style that allowed him to keep control of the company’s decision making processes. He hired executives that had been with the company for most of their careers and have worked their way up from the bottom. They were able to keep complete control of their vision and mission statement during the crucial start-up years of his company. “Centralized management keeps all major decisions with one specific executive group, while decentralized management allows company employees to have more say in the decision-making process.” (chron.com) This type of management structure is especially effective in an organization that manufactures similar products. Perdue Farms, as they began to expand, had several different products with multiple divisions that needed a change in management style in order to be most effective. Centralized management is often times less time consuming and can be very efficient, however, with a company as large as Perdue, Frank realized the benefits of reaching out to his employees. Frank also realized that he was missing out on extremely high levels of creativity and problem solving skills that would help his company be more effective and successful.

There was an increase in employee involvement in the later years of Frank’s management. He reached out to current employees for many of his operational decisions, as well as his quality issues. The employees are a valuable resource in this respect because of their daily involvement with the products. Management executives rarely get hands-on time with the products they are manufacturing so it is extremely beneficial to reach out to the employees. This change in management style reflected a shift to a decentralized management structure. “Decentralized organizations are becoming more popular as the ability for organizations to decentralize increases. Decentralization allows organizations to take advantage of division of labor by sharing decision-making across the organization. It also empowers employees and allows them to improve their performance by being able to act to improve deficient or inefficient areas immediately without approval from the top of the organization. Another advantage of decentralization is allowing for the managers of business areas to actually use their first hand knowledge and experience to improve their areas.”

Earlier, chicken was sold directly to a butcher shop, who would sell a mixture of different farm’s chicken...
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