1. Integrative Case 12.0: Perdue Farms
MGMT 466.1, Dr. Blumberg
December 3, 2014
Jasoda Acharya, Jocelyn Arce-Flores, Elif Celik, Iolani Davis, Andrea Hosage

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Contents
Chapter One ..................................................................................................................................................3
Part One: Introduction of Team Members ................................................................................................3
Part Two: Poultry Product Manufacturing Industry History and Analysis...............................................3
Figure 1: Source-National Chicken Council.........................................................................................6
Chapter Two..................................................................................................................................................8
Part One: Company Overview..................................................................................................................8
Section A: Company History................................................................................................................8
Section B: Who They Are Now ............................................................................................................9
Part Two: Introduction to Key Company People....................................................................................10
Chapter Three..............................................................................................................................................11
Overview of Theoretical Framework Used in Analyzing Company.......................................................11
Management and Organizational Leadership......................................................................................11
Marketing and Domestic Retail ..........................................................................................................13
Operations...........................................................................................................................................14
Figure 2: Source-Organizational Theory and Design text, Daft .........................................................15
Research & Development ...................................................................................................................15
Environment........................................................................................................................................16
Logistics and Information Systems.....................................................................................................18
Industry Trends...................................................................................................................................19
Figure 3: Source- Author Generated...................................................................................................20
Figure 4: Source-Author Generated....................................................................................................21
Figure 5: Source-Author Generated....................................................................................................21
Figure 6:Source-Author Generated.....................................................................................................22
Plans for the Future.............................................................................................................................23
Chapter Four ...............................................................................................................................................23
Part One: Organizational Analysis using Theoretical Model and Identification of Problems................23
Chapter Five................................................................................................................................................24
Part One: Recommendations for Solving Identified Problems ...............................................................24
Part Two: Recommendations for New Organizational Structure and Processes, with diagrams............27
Figure 7:Source-Organizational Theory and Design text, Daft ..........................................................30
Chapter Six..................................................................................................................................................30
Summary of Findings and Conclusion....................................................................................................30
References...................................................................................................................................................32

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Chapter One
Part One: Introduction of Team Members
Jasoda Acharya--Chapter 5, Part 2: Recommendations for Business Structure, Chapter 6
Jocelyn Arce-Flores--Chapter 2, Part 1, Section: Who We Are Now & Chapter 3, Section:
Logistics and Information Technology, Chapter 6
Elif Celik—Chapter 6
Iolani Davis--Chapter 2, (Part 1 sec B: Who they are now) Part 2: Key People & Chapter 4 &
Chapter 5, Part 1: Recommendations for Solving Problems
Andrea Hosage--Chapter 1, Parts 1 & 2, Chapter 2, Part 1: Company History, Chapter 3,
Sections: Management and Organization Leadership, Marketing and Domestic Retail,
Operational Efficiency and TQM, Research and Development, The Environment, Industry
Trends, and Future Plans.
Part Two: Poultry Product Manufacturing Industry History and Analysis
The poultry product manufacturing industry, or broiler chicken industry as it was called
until the 1990s, is one of the most highly regulated industries, governed by the United States
Department of Agriculture (USDA) regulations, as well as, by the US Poultry and Egg
Association, and the National Chicken Council. The industry began in the late 1800s and early
1900s, as family farms began to raise dual-purpose chickens on their property. Initially, these
chickens supplied eggs and were used for the occasional holiday meal. Early poultry

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entrepreneurs began selling chickens for meat as a supplementary form of income for their farm.
By the 1920s-1930s, farmers began developing and breeding “broiler chickens,” which was a
type of chicken raised specifically for its meat. At this time, most broiler chicken production was
limited to the Delmarva Peninsula, Georgia, Arkansas, and New England. It was Wilmer Steele
of Sussex County, Delaware who is credited with pioneering the broiler chicken industry, when,
in 1923, she raised a flock of 500 chicks intended to be raised and sold for meat. By 1926, Mrs.
Steele was able to construct a broiler house to hold 10,000 chickens (US Poultry & National
Chicken Council).
During the 1940s-1960s, the broiler chicken industry experienced much growth, business
process integration, and the development of early USDA regulations. Early broiler chickens were
sold as “New York dressed,” which meant that only blood and feathers were removed from the
meat. In 1942, Illinois became the first state to gain governmental approval for “on-line
evisceration,” which is the removal of the internal organs; packing and processing ready-to-cook
carcasses would soon become the norm in the industry. Seven years later, in 1949, the USDA
instituted a voluntary meat grading program, which informed consumers of the quality of the
chicken meat they were purchasing. By the 1950s, the broiler industry was experiencing a huge
economic boom, where specially bred broiler chickens became more widely purchased than farm
chickens (US Poultry).
In order to streamline production and decrease costs and risk, farmers began vertically
integrating the business processes associated with raising and producing broiler chickens.
Previously, the feed mills, hatcheries, farms, and processors were all separate entities, each
relying on the success of the other for their own business. When vertical integration took hold, it

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meant that a single company was involved in all stages of production, processing, and marketing.
By the mid-1960s, approximately 90% of all broiler chickens sold came from vertically
integrated farms. Vertical integration allowed the broiler industry to take advantage of new
pharmaceutical, biological and production technologies to become more efficient, responsive,
and profitable (National Chicken Council).

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In addition, vertical integration caused a reduction in the man hours needed for
production, because flocks were larger and technology evolved. Not only did technology
decrease man hours, but also the overall growing time for a broiler chicken decreased, which
meant less time, space, resources, and less impact on the environment. Advances in genetics and
nutritional technology reduced the amount of feed need per bird, and better processes for
managing the health and welfare of the chickens were initiated. For the consumer, vertical
integration technologies meant the ability to purchase a tastier, meatier broiler chicken, at any
time of the year, at a budget-friendly price. The following operations chart shows the typical
flow of operations in a vertically integrated poultry farm (National Chicken Council).
Figure 1: Source-National Chicken Council
By 1954, the National Broiler Council (later known as the National Chicken Council)
was started as a way to stimulate demand for broiler chicken meat. In 1959, USDA grading and
inspection for wholesomeness became mandatory. Television and print media advertising for
broiler chickens also became more widely used in the 1960s and 1970s. Today, more than 90%

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of the chicken sold in retail grocery stores has a brand name; either a processor’s brand or a
“private label,” which is a store brand produced by major processors for that store (National
Chicken Council).
After the 1970s, the industry evolved into its current state, with advancements in
nutritional discoveries, disease eradication programs, genetic improvements through traditional
breeding, and mechanization and automation technologies. By the 1980s, consumers began to
prefer cut-up chicken parts, as opposed to whole chickens, and this opened up opportunities for
the major poultry producers. By 1985, chicken had surpassed pork consumption in the US and it
surpassed beef consumption by 1992. In 1991, the government authorized the first shipments of
frozen chicken leg quarters to the Soviet Union, known as “Bush Legs” by Russian consumers,
in honor of the first President Bush. When the Soviet Union began to disintegrate, Russia opened
the door for international commerce and poultry exports expanded exponentially. By 2001, only
10 years later, foreign exports of poultry accounted for 20% of total production and about $2
billion in revenues (US Poultry).
In 1998, the USDA initiated its Hazard Analysis and Critical Control Points (HAACCP)
process control system program in all large poultry slaughter establishments. This program is a
modern approach to quality control that seeks to identify and control the points in processing at
which chemical, physical and microbiological hazards can be controlled, reduced, or eliminated.
Pathogen reduction is a key component of USDA’s initiatives. All of the advancements in the
industry have made today’s broiler chickens meatier, tastier, more affordable, and more
wholesome than the broilers of fifty years ago and even of those of just fifteen years ago. The

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poultry industry uses highly advanced scientific methods and practices to produce the highest
quality chicken for the consumer (US Poultry).
Today there are at least 40 major US companies involved in the production of poultry
products, and about 29,500 family farmers have production contracts with these companies.
Roughly 95% of broiler chickens are produced on the family-owned farms, with the remaining
5% raised on company-owned farms. In 2011, roughly 9 billion broiler chickens, weighing 50
billion pounds total, live weight, were produced. Almost 37 billion pounds of chicken product
was marketed, measured on a ready-to-cook basis. The US has the largest broiler chicken
industry in the world, and over 17% of production was exported to other countries in 2011.
Americans consume more chicken than anyone else in the world – 83.6 pounds per capita, and
chicken is still the number one protein consumed in the US (National Chicken Council).
Chapter Two
Part One: Company Overview
Section A: Company History
Perdue Farms was founded in 1920, by Arthur W. Perdue (Perdeaux), a Railway Express
agent, who left his job to start a small egg business at his small family farm near the town of
Salisbury, Maryland. By 1925, he changed from selling table eggs to selling baby chicks to other
farmers. He quickly gained a reputation for producing the best quality chicks by investing in the
best available breeding stock. In 1930, Mr. Arthur, as he was called, opened a second farm to
accommodate his rapidly expanding business. His only son, Franklin Parsons Perdue, who was
born in 1920, left college in 1939 to join his father’s business. By 1940, Mr. Arthur noticed that

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the future of the industry lay in selling chickens, not chicks or eggs. By 1944, Mr. Arthur had
made Frank a full partner in A.W. Perdue & Son, Inc. By 1950, Frank was given leadership of
the company, and by 1952, the company had begun vertical integration of its own business
processes, as well as, contracting with other farmers to grow chickens for them. By the 1960s,
Perdue Farms had continued its vertical integration process by purchasing a poultry processing
plant. In 1991, Frank became chairman of the Executive committee and Jim, Frank’s son, had
become chairman of the board and assumed leadership of the company. Jim focused on quality
control and strategic planning and by the 1990s Perdue Farms saw economic growth and market
expansion into the south and Midwest. By 1992, Perdue had an international division and within
6 years international sales were $180 million annually. Sales to commercial food service
industries grew, as did marketing and advertising, with the introduction of the “Fit & Easy,”
nutrition campaign. The 1990s also saw an increase in technology for scheduling deliveries and
coordinating with drivers (Daft, 2013, pp 625-627).
Section B: Who They Are Now
In 2010, Perdue Farms celebrated its 90th anniversary. They refreshed their vision,
values, reason for being, and aspiration statements in order to build on the foundation of trust
woven into the company’s fabric of existence. This refreshment included an update of the “base
brand,” which is fresh, young, ready-to-cook chicken with the Perdue brand. The “new” Perdue
chicken is the first poultry product manufacturer to give consumers the added assurance of
USDA process verified programs for “raised cage-free,” “humanely raised,” and “all-veggie fed”
poultry labeling. Perdue has also introduced a line of “better-for-you products”, which includes
whole grain breading and reformulated products low on sodium. This new movement has an

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obvious appeal to the health conscious consumer or anyone taking steps to eat and live healthier.
It is also up to par with some other companies, like KFC for example, who began making efforts
to offer chicken that is healthier for consumers. In order to continually foster trust between
consumer and producer, Jim Perdue has assumed the role of spokesperson and appears in most
all television advertisements. Currently, Perdue Farms employs nearly 20,000 associates and has
revenues over $2.5 billion (Our Company).
Part Two: Introduction to Key Company People
There are several key people in the Perdue Company who hold high level executive positions
however; we have chosen to introduce the following four influential executives. Unfortunately,
there was no information on Mr. Clint Rivers available for us to share.
1. Dr. James A. Perdue, grandson of founder Arthur, is currently the Chairman and Chief
Executive Officer of Perdue Farms. He holds a Master’s of Business Administration
and PhD in Fisheries from University of Washington. Prior to that, he earned his
Bachelor’s Degree from Wake Forest University. Dr. Perdue has been the CEO since
1991 after joining the company as an entry-level management trainee, and held various
positions in nearly every area of operations throughout the company (Company
Overview, Business week)
2. Mr. Clint Rivers is the Senior Vice President of Operations & Supply Chain
Management.
3. Mr. Mark Garth, Chief Financial Officer, Senior Vice President, and Treasurer. He
holds an MBA from Drake University and a BA in Accounting from Central College.
Mr. Garth joined Perdue Farms in 2011 as SVP of Finance and Accounting. That

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position expanded 7 months later to include Treasurer duties and he was promoted in
January 2013 to CFO to manage all financial and information technology operations
(LinkedIn Profile).
4. Roger C. Merrill, MD is the Chief Medical Officer of Perdue Farms Inc. He obtained
his Medical Degree from Virginia Commonwealth University, School of Medicine
(WorldCongress.com).
Chapter Three
Overview of Theoretical Framework Used in Analyzing Company
We will analyze Perdue Farms based on several aspects of its business. We are going to
examine Perdue Farm’s: a) Management and Organizational Leadership, b) Marketing and
Domestic Retail Operations, c) Operational Efficiency and Total Quality Management, d)
Research and Development, e) The Environment, f) Logistics (supply-chain) and Information
Systems, g) Industry Trends, and h) Plans for the Future. Our analysis will include the current
state of each category, as well as, where the company should be based on the best business
practices we have learned in our studies thus far. In the next chapter, we will discuss the findings
of our analysis and the problems we have identified within Perdue’s current operational outlook.
Management and Organizational Leadership

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Jim Perdue has a people-first management style and his company’s goals focus on the
three P’s, people, products, and profitability. His personal philosophy is that customer needs
should be satisfied with quality products, and putting his associates first is the best way to put his
philosophy into practice. He believes that if his associates are satisfied, then they will strive to
produce a superior product and thereby satisfy customers. Jim Perdue goes to great lengths to
ensure his associate’s satisfaction by providing English-language classes to non-English-
speaking associates and assisting them in earning a certificate equivalent to a high school
diploma. Perdue also has an ergonomics committee that redesigns jobs that can cause the most
physical stress or harm to the body. The company also has several Perdue-operated medical
clinics that are staffed by doctors employed by Perdue Farms and are accessible to any Perdue
Farms associate. As a result of the programs that Perdue has implemented for the associates’
benefit, the company enjoys a reduction in loss of time for medical visits, lower turnover rates,
and a happier, healthier, more productive and stable workforce (Daft, 2013, pp 627-628).
As we have learned in our Human Resource courses, employees who are satisfied tend to
perform better at work. We have studied, in Dr. Gibney’s MGMT 321 course, Maslow at great
length, and Maslow developed a hierarchy of needs that is used to help explain employee
motivation as it relates to job satisfaction and performance. Maslow’s central theory is that a
person cannot advance to the next level until the lower order needs have been met. Lower order
needs are biological and physiological needs such as preservation of life needs (food, clothing,
shelter), and then safety and security needs (job security, financial security, health security) (Dr.
Gibney, 2014). The programs that Perdue has in place for its associate’s help in meeting these
basic needs allowing the associates to progress into belongingness (friends, family), esteem
(recognition, high achievement), and self-actualization (self-fulfillment, reach potential). The

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increased productivity, lower turnover, and commitment to quality are evidence that Jim
Perdue’s people-first management style are working very well for Perdue Farms.
We have also learned that the most sustainable form of motivation comes from positive,
intrinsic motivation which comes from within the individual. When there is a good person-
environment-occupation fit, the individual is more satisfied with their job and more motivated to
perform better. The individual works harder because they want to, because they like their job, the
company’s values align with their own, and they are happy at work (Dr. Gibney, 2014).
Marketing and Domestic Retail
The current challenge facing Perdue Farms is how to market a wide variety of products
under a unified theme to a wide variety of customers. Originally, Perdue chicken was marketed
as “fresh, never frozen” chicken, but with the increase in international, foodservice, and retail
consumers who prefer value-added and frozen products, Perdue had to find a new way to market
their product. In addition, with the new health-focused consumer, there has been an increase in
the amount of “cage-free” and “organic” chicken that is needed to fill orders (Daft, 2013, pp 628-
629).
Today’s grocery consumer is interested in ease and speed of preparation in products they
purchase, which is where the value-added products target demographic has come from. These are
the soccer Moms who do not have hours to prepare dinner for their family, or working
households who get home late and need to get dinner on the table quick. This demographic has
changed the meat department in the grocery store, and has caused conflict with Perdue’s central
“fresh young chicken” marketing theme (Daft, 2013, pp 628-629).

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Operations
Perdue’s guiding philosophies for operations are quality and efficiency. Quality is
emphasized over efficiency, especially through Perdue’s strict adherence to Total Quality
Management principles and slogan, “Quality, a journey without end.” Ever since 1924, Perdue
has been continually working on improving its processes to lead to higher quality poultry. One of
the biggest innovations that led to an improvement in quality was the vertical integration of
Perdue’s broiler chicken company. This allows Perdue to control every aspect of its poultry
manufacturing. It breeds and hatches its own chicks, selects its own contracted growers, builds
Perdue-engineered chicken houses, formulates and produces its own specialty feed, oversees care
and feeding of the chicks, operates its own processing plants, distributes and markets its chicken
through its own network of distribution channels (Daft, 2013, pp 629-630).
Vertical integration and total process control formed the basis for Perdue’s claim that its
poultry is higher quality than the competition. Total process control also makes it possible for
Perdue Farms to control its waste and monitor every product, every step of the way. Perdue also
buys and analyzes competitor’s products regularly and poultry inspectors grade these products
and report to top management. Perdue also displays their quality policies in each plant and
teaches them to all new associates during training (Daft, 2013, pp 629-630). The following chart
shows the integrated operations at Perdue Farms and how vertical integration works for them.
This chart makes it easy to understand the entire concept of vertical integration and why it is so
important to Perdue Farms and their ability to control every step of the process.

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Figure 2: Source-Organizational Theory and Design text, Daft
Research & Development
Perdue has long been recognized as an industry leader in research and the use of
technology to provide the highest quality products to its customers. As compared to the three top
competitors, Perdue spends more money as a percentage of total revenue on research and
development. This is a core competency of Perdue’s that has its roots in Frank Perdue’s efforts to

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continually differentiate his products based on value and quality. The company employs
microbiologists, avian scientists, nutritionists, geneticists, and veterinary scientists who utilize
their knowledge and expertise to give Perdue a competitive advantage. Perdue has the most
extensive vaccination program in the industry and often partners with the United States Food and
Drug Administration (USFDA) for field tests with pharmaceutical companies. Perdue has used
technology to increase productivity as well. In 1950 it took about 14 weeks to grow a 3 pound
bird and today it takes only 7 weeks to grow a 5 pound bird (Daft, 2013, p 630).
Environment
The natural environment and acts of nature present constant challenges for any poultry
processor, and Perdue is no different. Vertical integration of poultry processors means that the
company needs to operate with the utmost efficiency in order to keep costs at a manageable
level. There are always activist groups who think the process is dangerous to workers, inhumane
to the birds, and a strain on the environment, which leads to unsafe foods (Daft, 2013, pp 630-
632).
Perdue Farms tries very hard to stay ahead of environmental issues so that they can
manage them when they occur. In 1993, Perdue implemented an Environmental Steering
Committee, whose purpose is to oversee how the company is managing environmental issues
such as carcass disposal, hazardous waste removal, storm water, waste water, recycling, bio-
waste, solid waste, and health and human safety. The committee ensures that Perdue Farms is
being a good corporate citizen (Daft, 2013, pp 630-632).
Corporate Social Responsibility (CSR) is something that Perdue Farms takes very
seriously. Consider this quote from Jim Perdue, CEO of Perdue Farms,

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Perdue was built upon a foundation of quality. Arthur Perdue, Frank Perdue’s
father, founded our company by selling table eggs to select customers who
demanded high quality. That tradition continued as our company expanded; Arthur
later gained a reputation for providing area farmers with the highest quality chicks
and feed. When Frank Perdue launched the PERDUE® brand in 1968, he not only
put his family name on the package, he also insisted that his chickens be
measurably superior to the competition. (Corporate Responsibility)
In 2011, Perdue established what became their company’s CSR platform. It contains six
statements that make up Perdue’s pledge for CSR initiatives. The statements are:
1) We believe in responsibly producing safe, high-quality, affordable food for customers
and consumers worldwide.
2) We believe in responsibly helping customers prosper with flexible, forward-thinking
solutions for agriculturally-based products, from a uniquely trusted name.
3) We believe in being responsible stewards of the natural resources we utilize to produce
and market our products and services.
4) We believe in being a responsible employer, investing in our associate’s growth, health,
and well-being.
5) We believe in being responsible members of the communities where we do business.
6) We believe in responsibly contributing to the economic stability of our company and our
business partners, (Corporate Responsibility).
In addition to this CSR statement and initiatives that support the statement, Perdue Farms also
has a foundation, called the Arthur W. Perdue Foundation that donates money to any number of

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charitable and non-profit organizations annually. There is a place on the Perdue website where
organizations can go to apply to receive funding and donations from Perdue Farms (Corporate
Responsibility).
There have been improvements made in the disposal of dead carcasses and hatchery
waste, which are two of the most historically difficult wastes to manage. Perdue spent $4.2
million dollars to upgrade an existing treatment center to dispose of hatchery waste. Over 10
years ago, North Carolina’s Occupational Health and Safety Administration issued Perdue a
citation for too many repetitive stress injuries at its processing plants. This caused Perdue to
launch an investigation and research ergonomics and have seen tremendous results; worker’s
compensation claims came down by 44%, an 80% decrease in repetitive stress injuries, and a
reduction in time lost for surgeries of 50% (Daft, 2013, pp 630-632).
Even with all these advancements, there are still other issues that arise in the poultry
processing industry. These issues are: 1) How to maintain the trust of the poultry consumer? 2)
How to ensure that the poultry remains healthy? 3) How to protect the safety of the employees
and the process? 4) How to satisfy legislators who need to show their constituents that they are
taking firm action when environmental problems occur? 5) How to keep costs at an acceptable
level?
Logistics and Information Systems
Information technology has helped by shortening the distance between the customer and
Perdue Farms. In the 1980s, personal computers were placed directly on each customer service
associate’s desks, allowing the associate to enter customer orders directly. Then, a system was
developed to put dispatchers in direct contact with every truck in the system so they can have

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accurate information about product inventory and truck locations at all time. Recently, IT has
helped to improve the distance between the customer and the Perdue Farms service
representative by putting a PC on the customer’s desk. In the end, all of this has led to improved
communication and shortened times from order to delivery (Daft, 2013, pp 632-634).
Perdue Farms decided to purchase a multi-million dollar information technology system
to control the entire supply chain management process. It represents the biggest non-tangible
asset expense in the company’s history. The major goals of the system are to make it easier and
more desirable for the customer to do business with Perdue Farms. It also makes it easier for
Perdue Farms associates to get the job done and take as much cost out of the process as possible
(Daft, 2013, pp 632-634).
Industry Trends
Perdue Farms is the fourth largest ready-to-cook chicken manufacturers, with an 8%
market share, behind Tyson Foods, Pilgrim’s Pride, and Sanderson Farms, respectively. It is the
oldest poultry product manufacturers in the industry. The following graph shows the annual sales
comparison between Perdue Farms and each of its competitors (Hoover’s Company Profiles).

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Figure 3: Source- Author Generated
As shown in the graph, Tyson Foods leads the industry with annual sales of over $34 billion
dollars annually, but as shown in the next graph, Tyson Foods’ net profit margin is very small in
comparison to Pilgrim’s Pride and Sanderson Farms. Perdue has annual sales of just over $3
billion, and their net profit margin data was unavailable.
Perdue is also the only privately-held, owned, and operated poultry product manufacturer in
the industry, resisting the urge to be publicly traded on stock exchanges such as NYSE and
NASDAQ. The following graph shows the net profit margin comparisons of the other top
$0
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
$2.68B $3.17B
$8.41B
$34.37B
2013 Annual Sales
Annual Sales (in Billions)

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competitors in the industry (Hoover’s Company Profiles).
Figure 4: Source-Author Generated
Another notable figure is the number of pounds of ready-to-cook chicken produced by
each of the top four firms in the industry. The following graph shows this figure in millions of
pounds produced for each firm (US Poultry).
Figure 5: Source-Author Generated
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
Tyson
Foods
Sanderson
Farms
Pilgrim's
Pride
Perdue
Farms
2.72%
7.27% 8.07%
0.00%
2013 Net Profit Margins
2013 Net Profit Margin
0
50,000,000
100,000,000
150,000,000
200,000,000 168M
138.33M
58.47M
56.2M
Ready-to-Cook Production
Ready-to-Cook Production (in
Millions of Pounds)

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Tyson Foods also leads this category with over 168 million pounds of ready-to-cook
chicken produced annually, whereas Perdue Farms produces about one-third as much with 56.2
million pounds annually (US Poultry).
The poultry product manufacturing industry is a relatively stable industry, with the main
industry risks stemming from environmental and regulatory sources. Opportunities to expand
into the industry are not easily found, and there is a barrier to entry for new competitors due to
the market shares of the top four companies comprising 61% of the total poultry product
industry. The following pie chart shows the individual percentages for the top four companies, as
well as, the remaining percentage for the 36 other poultry product manufacturers (Meat, Industry).
Figure 6:Source-Author Generated
25%
23%
8%
5%
39%
Market Share of US Poultry Industry
Pilgrim's Pride
Tyson Foods
Perdue Farms
Sanderson Farms
Other Producers

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Plans for the Future
Perdue’s plans for the future include continual improvement of its operational processes
and improving the quality of its chicken. In the new, twenty-first century market, high quality is
the name of the game, and Perdue plans on using exceptional customer service to differentiate
itself further from its competition. There will be a greater focus on taking cost out of the product,
while still being able to provide exactly what the consumer wants. Jim Perdue has been quoted in
saying, “Perdue Farms wants to become so easy to do business with that the customer will have
no reason to do business with anyone else.” (Daft, 2013, p 63)
Chapter Four
Part One: Organizational Analysis using Theoretical Model and Identification of Problems
1. When analyzing their supply chain management and logistics we found that they were
having difficulty in forecasting supply and timing their deliveries. Processors need to
know 18 months in advance how many broilers are needed in order to size hatchery
supply flocks and contract with growers to provide live broilers. Fresh poultry has limited
shelf life (measured by days). Therefore, forecasts must be extremely accurate and
delivery must be on time.
2. Analysis of their current market strategy: Their current marketing strategy is basically to
advertise to the masses about their extensive line of chicken products. Their extended line
of chicken caters more to either the new health-focused consumer (“cage-free” and
“organic” chicken) and also the ever growing on-the-go population seeking quick and
easy value-added products more conducive with their lifestyle; (previously prepared,

24. 24
breaded and or frozen chicken). Seeing as how Perdue chicken was initially marketed as
“fresh, never frozen” and “fresh young chicken” one can see how the change was in
direct conflict.
3. Unfortunately their future plans did not highlight or even mention the diversification of
their employees, particularly executive positions that should include more women, to be
specific.
4. When analyzing the environmental concerns, there were five questions that every poultry
processor needs to be concerned with. First, is how to maintain the trust of the poultry
customer? Second, is how to ensure that the poultry remains healthy? Third, is how to
protect the safety of the employees and the process? Fourth, is how to satisfy legislators
who need to show their constituents that they are taking firm action when environmental
problems occur? The fifth and final question is how to keep costs at an acceptable level.
Chapter Five
Part One: Recommendations for Solving Identified Problems
Supply-Chain and logistical concerns in this industry are of extreme importance to the
operation of a poultry processor. There are specific timing concerns, especially when dealing
with live birds or ready-to-cook carcasses. Forecasting demand in order to have an accurate
supply is not a precise science. One idea we came up with was for Perdue to have a more
automated system that tracks supply and demand metrics, and notifies management when supply
or demand fluctuate. For example, during the winter months and holiday times, whole, fresh
chickens might be in more demand than through the warmer chicken months when consumers
prefer to grill chicken parts. If the supply-chain system were able to accommodate these kind of

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fluctuations, Perdue may be better equipped to keep the right amount of flock birds to fill the
hatcheries, which in turn raises the right number of birds, and therefore demand is met, without
overages that may cause a loss.
It may be beneficial to reach out to consumers through a specific marketing campaign
that is differentiated from their current commercials (which are already informative and very
well done). This campaign would highlight the benefits of Perdue chicken in a simple and
detailed way for consumers to understand. It could also be partially consumer generated and
engaging with street talk and surveys to accurately see where the American people stand and
how they feel about the chicken they are consuming. Prizes and a free give away would make the
campaign more appealing and fun.
Due to the extensive line of products that have strayed from the original vision of Perdue
chicken never being frozen, we felt that a new tagline should complete every advertisement of
said forms of chicken with the following: “It may be frozen, but it’s STILL Perdue!” This
reinforces the high standards and unwavering quality of the chicken that consumers have become
comfortable with and appreciate. This may ease potential concerns of the masses such as retail
restaurants, institutions, international buyers, college students and on the go families. A
complementary method is to focus a targeted message that is concentrated on the health
conscious varying demographics. “Fit and easy” is the current slogan that can be found on the
healthier choices and leaner Perdue chicken products. In any and all campaigns the quality needs
to remain the unique selling proposition to consumers. This should include mentioning the four
principles that set Perdue apart from its competitiors: 1) The chickens are fed an all-vegetarian
diet including corn, soybeans and marigolds, 2) The diet has no animal byproducts or animal

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fats, 3) The chickens are always raised cage-free, and 4) The chickens are never injected with or
given steroids or growth hormones.
As Perdue moves forward into the future, one area that they could improve on is
intentionally seeking out more female professionals to fill top executive positions. In our
research we found that the top management of Perdue Farms is ripe with men, but there are no
women who hold executive positions. In order to give Perdue a more diverse organization and a
greater pool of innovation to draw from, they might consider recruiting women for top
management positions.
Finally, with respect to the environmental concerns that plague every poultry processor,
we found that one of the best defenses is a good offense. For most of the environmental issues
raised, Perdue is already handling most of them very well. One thing that Perdue has not done,
and it would help to keep consumers trust, keep costs low, and combat legislators, is to be
transparent. Perdue would benefit from being a more transparent company. Transparency is
basically issuing high-quality, easily understood, clear, and concise financial statements. This is
something that Perdue has not done, partially because they are still a privately-owned company
that is not traded on any of the big stock exchanges. Being a privately-owned corporation is a
double-edged sword for Perdue because on one side it allows them to control every part of their
business process and wholly fund their own endeavors. On the other side, their financial
statements are not released to the public, which is why we were unable to locate what Perdue’s
net profit margin is in relation to its competitors. We recommend that Perdue remain privately-
held but allow some of their financial information released to the public, so that the consumers
and legislators do not think that Perdue is hiding something.

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Part Two: Recommendations for New Organizational Structure and Processes, with
diagrams
According to the textbook Organization Theory and Design page 627, “The late 1980s a
period of considerable expansion and product diversification, a consulting firm recommended
that the company should form several strategic business units, responsible for their own
operations, which means the firm should decentralize. Unfortunately, the decentralization had
created duplication and enormous administrative cost”. Frank Perdue mostly used a centralized
management style that kept decision making authority in his hands or only few of the employees
he trusted.
Perdue has vertical structure, which means the company is dependent on Jim Perdue and
the few trusted top management leaders to make decisions. Implementing a horizontal structure
would make Perdue more effective. Moreover, when customer needs and demands change
rapidly, learning and innovation become critical to organizational success. We recommend that
Perdue implements a horizontal structure, rather than continue operating under its current
vertical structure.
A horizontal structure will work more effectively for Perdue Farms, because according to
the text book page 124, “The most significant strength of horizontal structure is improved
coordination, which intensely increases the company’s flexibility and response to changes in
customer needs.” It also directs the attention of everyone in the company toward the production
and delivery of value to the customer. Each employee has a broader view of organizational goals
and promotes a focus on teamwork and collaboration. It also improves quality of life for

28. 28
employees by offering them the opportunity to share responsibility and to make decisions, and be
held accountable for outcomes.
A weakness of the horizontal structure, which is determining core processes, is difficult
and time consuming. It requires changes in culture, job design, management philosophy, and
information and reward systems. It also requires significant employee training so they are able to
work effectively in a horizontal environment and traditional managers may struggle with
relinquishing power and authority. A horizontal structure could also limit in-depth skill
development.
In the current context, Perdue can consider virtual networks and outsourcing as an
alternative source to enter into the global market, which will make the company more
productive, unique, and profitable, while learning how to operate in the international
marketplace. Some advantages are that virtual networks will enable Perdue to obtain aptitude and
resources worldwide, provide the company immediate scale and reach without a huge investment
in the company and equipment, enable Perdue to be highly flexible and responsive to changing
needs, and reduce the administrative overhead costs. Some disadvantages to virtual networks are
that managers do not have hands on control over many activities and employees. Also, virtual
networks require a great deal of time to manage the relationship and potential conflict with
contract partners and there is risk of company failure if a partner fails to deliver. Finally,
employee loyalty and corporate culture might be weak.
When Perdue was founded the organizational structure was more centralized, meaning
the decisions were made by Perdue’s owner and the few executive board members. The old
culture of Perdue was concerned with (taken from uwf.edu):

29. 29
· Top down management, Poor communication, Short term planning, Commitment to
Quality, Profitability focus, Limited associate training, Limited associate recognition, Short term
cost reduction, Annual goals as end target, and Satisfied customers.
And the new culture of Perdue is focused around:
· Team management, Focused message from senior management, Long range planning,
Expanded commitment to quality, Focus on people, product, and profitability, Recognition is a
way of life, Commitment to training, Long term productivity improvements, Continuous
improvement, and Delighted customers.
The basic idea is that the organization can glide smoothly between a highly formalized,
hierarchical structure that is effective during times of stability and a more flexible, loosely
structured one that is needed to respond well to unexpected and demanding environmental
conditions. According to textbook page 106, “managers need to recognize that the strongest
horizontal linkage mechanisms are more costly in terms of time and human resources but are
necessary when the organization needs high degree of horizontal coordination and knowledge
sharing are needed, building relational coordination into the culture of the company.”
However, if Perdue follows those guidelines then Perdue will improve and create more
valuable operational processes within the company. The following chart depicts an example of a
horizontal organizational structure, and how information flows across the organization, rather
than from the top-down.

30. 30
Figure 7:Source-Organizational Theory and Design text, Daft
Chapter Six
Summary of Findings and Conclusion
Perdue began as and has remained a beacon for high quality and impeccable standards
when it comes to all of their chicken products. Although they remain private this allows them to
exercise control over the health and processing of their chickens. The implementation of our
recommendations will help to ensure the continued success of Perdue farms.
We have shown given the circumstances that Perdue has done remarkably well since its
inception in the 1920s. Although their percentage of the poultry processing industry market share
is relatively low compared to their competitors, you must keep in mind that they are still a

31. 31
privately owned company. We feel that in order for them to keep their product standards and
quality expectations high it may even be best for them to remain a private family owned
company without the pressures of conforming to the desires of stakeholders, who are most often
driven by money.
In addition, continuing to vertically integrate their operations and organization structure
will help them to maintain their competitive advantage. Perdue is unique from its competitors in
that it wholly owns all of its operations and has several contracts with private farms. Also,
Perdue has a separate business entity called Perdue AgriBusiness, which controls growing and
purchasing of grain, soybeans, and oil seed. This aspect of Perdue’s business has long been
recognized as a means of attaining superior quality products. This separate entity, along with the
wholly owned and vertically integrated operations is a recipe for poultry success (Our
Company).
In conclusion, we have found that by following the established values, solid mission, and
strong vision of the founder, Mr. Arthur, Perdue Farms will continue to be one of the world’s top
poultry product manufacturers. Perdue has solid leadership and Jim Perdue’s management
philosophy is one that inspires his employees to love what they do, where they do it, and who
they do it for and thus consistently rise to any challenge put before them. We highlighted some
issues with logistics, marketing, environmental concerns, and plans for the future that Perdue
might address to further ensure its future success. Perdue has a superior CSR platform and that is
an issue that Perdue takes very seriously. If Perdue Farms continues on the path it is on, it will
surely be successful far into the future.

32. 32
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