Vreugdenhil Dairy Foods - A Functional Structure’s Case Study

This company follows a functional structure i.e., an organization that works under a single management structure. This is a structure best suited for single product type firms and has the clearest relationship between hierarchy and specialization. This structure is for developing firms. The organizational chart of Vreugdenhil is shown below. 

Figure 1 : Organizational Chart Vreugdenhil (Vreugdenhil, 2023)

The manager interviewed, Pieter Hogendoorn, is the plant manager at the Gorinchem Production Plant. This comes under the supply chain, and operations section. His job involves overseeing efficiency, safety and quality in the production of powders, and managing day to day operations, such as equipment maintenance, coordinating production schedules. For example, ensuring milk reaches on time from the milk farm, about 70 kilometers from Gorinchem. 

An example of the challenges that comes with this is that fresh milk can not be kept very long. The milk is stored for a maximum of 3 days at the farms, whereafter it comes to the factory where it is processed the same day or the next day. The challenge is that the factory is always running and the process never just stops.  This constant process comes with its problems. For example, if there’s a disruption at the plant, or an animal disease at the supplying farms. Some time ago many cows had foot-and-mouth disease, which led to strict government regulations that completely disrupted the whole process . 

The organizational structure of Vreugdenhil can cause several problems. For example, when too many employees report to one manager, things can become inefficient and slow. If each department has only one manager, it becomes difficult for the company to develop new ideas or strategies. With multiple departments working separately, coordination can be poor, and each department may end up doing things its own way, missing the benefits of teamwork. Too much specialization makes each department dependent on others to get things done, and without collaboration, creativity and a broader perspective are lost. The heavy bureaucracy also slows down decision-making, making it hard for the company to respond quickly to changes in the market or environment. Additionally, there is often too much focus on internal processes instead of what customers actually want, which makes the company less customer-friendly. The rigid processes also leave little room for trying new things or improving.