Symphony Seed Case

Management Group 20

Analyze the environment and likely organization structure of Symphony Seed Sales and
Symphony Research Institute

Symphony Seeds Ltd (SS) is in the agricultural business, therefore, the environment seems to
be stable. From the opinion of current management, SS is a mature company. It implies that
the position of the company is steady. If we look at the overall picture of the company (SS), it
is divided into two main divisions according to their functions, Symphony Seed Sales (SSS)
and Symphony Research Institute (SRI). Each division has directors to manage their own
business. They have to follow the strategy setting by Board of Director of Land Development
Corporation (LDC). However, the strategy is only overall plan to pursue, director of each
division has the power to make a decision regarding their division operations. Authority and
power are spread down through the hierarchy. Therefore, the organization structure tends to
be decentralized. Although the power is delegated to directors of SSS and SRI, there is a clue
of centralize in some aspects. For example, capital expenditure above £50,000 needs to be
approved by the LDC board. However, SS is only the holding company for SSS and SRI.
SSS is responsible for trading function whereas SRI carries on research and development
function. As the functions are different, organization structure and environment involved with
these two divisions are also different.

For SSS, it produces mass quantities of seeds which are developed by SRI and sells them to
third parties by using agricultural merchants as distributors. There is stability in the
environment because it is in the agricultural business. The function of the company is
production and selling, so, work is not complex. There is not much change in consumer’s
demand for cereals, forage crops and potatoes, so, sales can be reasonably predicted.
Moreover, management of the company also think that 3-year forecasts are relatively reliable.
In addition, the materials (seeds) are supplied by SRI which is the largest UK seed breeder.
The company does not have any problems in the availability of resources to support its
operation. The environment of the company is very simple, stable and rich, as a result, the
level of uncertainty is low. The structure of company is well organized. There are specific
hierarchy and clear organization chart to determine the relationships of authority and
responsibility. This forms the formal organization structure. Work is very standardized and
simple. There are many routines and procedures. The structure of the company tends to be
mechanistic and machine bureaucracy. The decision making is centralized and operating staff
just follow the command and objective from the top. This selling company contains around
30 full-time salesmen (plus large back-up staff). At a size of medium to large number of staff
together with stable environment, mechanistic and machine bureaucracy structure seem to
suit well with this company.

For SRI, it develops new seeds and initial basic seed and sells them to SSS. It is facing more
uncertain environment and its operations are more complex because it involves with bio-
technology. Yet, almost all the seeds developed are sold to SSS, income or royalty of the
company is predictable. Moreover, it is the largest UK seed breeder, the company does not

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Symphony Seed Case
Management Group 20

need to compete for resources. Nevertheless, the main objective of SRI is to research and
develop a new seed which is the complex task and required high professional skills. The
environment of the company is complex but stable and rich. The company has formal
structure. Chain of command and reporting relationships can be obviously seen. According to
organizational model of Mintzberg, this company structure is the professional bureaucracy
because it relies on highly trained professionals who demand control of their own work. So,
while there is a high degree of specialization, decision making is decentralized.

Discuss the role and purpose of the Land Development Corporation and why Conglom
did not choose to operate SSS and SRI as a unified organization

Land Development Corporation (LDC) acts as a middle man between Conglom Holding Ltd
and Symphony Seeds Ltd (SS). Although Conglom wants to keep the managing style and
culture of the SS when it was managed by Richard Symphony, it is impossible that two
different people share exactly the same views and perspectives. Therefore LDC is established
to be the buffer between those two companies. As we can see, Board of Director of LDC
comprises of representative from Conglom and SS. They meet bimonthly and establish
strategy of SS. This could help compromising conflicts at the top before launching the
operating plan downward. Moreover, Conglom Holding Ltd is the parents company that owns
many subsidiaries. Management of Conglom do not have time to manage every subsidiaries
themselves because it takes a lot of time and effort. LDC is the organization that is
established to help monitoring performance of SS group. Every decision are making at LDC
board. It does not need to get the approval from Conglom. To match with Mintzberg’s model
of 5 basic parts to an organization, the role of LDC is strategic apex because board of LDC
decides overall strategy. LDC is established to deliver new managing style and culture to SS
by not letting staff feel about the changes or any uncertainties.

The reason why Conglom chooses to operate SSS and SRI as a separate company might be
because of his intention to remain the existing organization structure and operating style.
Originally these two companies are separately managed. If Conglom combines two
organizations together, it means that he has to restructuring them. The restructuring of
organization requires the coordination of everybody in the company from the top to bottom.
If the staff do not have the willingness or motivation to change, it is very difficult to make the
restructuring succeeded. Moreover, these two companies are very different. They operate
different functions. The environment and organization structures of both companies are not
the same. Combining the organization might bring the negative results rather than positive
ones.

Discuss the problems of evaluating the performance of the two Symphony companies
from Conglom’s perspective and comment on the problems of inter-company trading

At present, Conglom evaluates performance of SSS and SRI through management reports
which are composed of Income Statement, Balance Sheet and Cash-Flow Summary. These

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Symphony Seed Case
Management Group 20

reports provide only overall financial information. On the other hand, non-financial
information is ignored. Due to the current policy is to maximizing its position in the high
grade seed market, Conglom may need some information such as report on quality of
product, customer complaint, quantities return and current position of the company in the
market. This could help management analyze the customers’ view toward the company. By
knowing more information, management can set more precise strategy in order to push the
company to the higher position in the market.

In term of related companies, SRI produces an intermediate good and SSS transforms it into a
final product and sells it in the market. Therefore, revenue of SRI is cost of SSS. Due to the
goals of both SSS and SRI is to maximize the profits, problem in setting prices for
intermediate goods which are transferred from one company to another is usually occurred.
Management of both companies have to take a lot of time to negotiate price which may cause
the conflict between them and make the process delayed.

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