Agrium Inc. is the diversified, global organization that applies matrix business structure. It operates in different regions such as Canada, the United States, Australia and Europe, has different business functions: it produces fertilizers, nutrients like nitrogen, potassium etc., provides services to farming communities and emphases on the technological development of its fertilizers and promotes environmentally friendly products. Also, Agrium Inc. has shown a lot of successful growth over the past 20 years.
The matrix business structure is the complex scheme that has its advantages and disadvantages. It is essential to understand that multinational companies with multiple locations on three different continents like Agrium Inc. need to coordinate with one another. With matrix structure, organizations divide up their business into several dimensions like regions, functions etc. and one of those dimensions need to be dominant and oversee budgeting, financing, and strategy development. Agrium Inc. has a series of advantages in its business structure. It has two primary business units:
· Retail Business unit -operates in North and South America and Australia and provides crop inputs and services directly to farmers.
· Wholesale unit – operates in Canada, the United States, South America and Europe; manufactures and distributes all key nutrients such as nitrogen, potassium and phosphorus to agricultural and industrial customers for domestic use and international export.
· Other – the non-operating business segment that focuses on corporate and administrative functions and provides support to operating units. This business unit also deals with purchase and sale transactions between Retail and Wholesale business unit to eliminate inter-business transactions between two dimensions. This business unit eliminates the need for divisions to make their transactions with one another and coordinate business matters because this unit is responsible for doing it.
On the other hand, the main disadvantage of matrix structure is that the coordination and inter-transactions are over-formalized which results in unnecessary corporate staff hires and overwhelmed systems that slow down decision- making process. One of the disadvantages of Agrium Inc. is their lack of strong communication with partners and distributors outside of the American continent and it is caused by ineffective coordination.
There are certainly more advantages than disadvantages in Agrium. Company’s roots go back to the beginning of the 20th century. Agrium was formed as a business unit within the corporate structure of another company called Consolidated Mining in 1906 and then changed its name to Cominco Ltd. in 1966. Cominco Ltd. has been producing fertilizes and its byproducts and later has changed its name to Cominco Fertilizer Ltd. Currently, Agrium Inc. is the well-known international leader in product quality in the industry where high-quality products are the norm. Company’s reputation is built on more than 70 years of experience in different operations such as wholesale, retail, mining, R&D etc.
In 1997, Agrium Inc. was the second largest nitrogen producer in the Western Hemisphere and the third largest potash producer. Far along on, company’s CEO Van Brunt has decided to slow down the expansion process and focus on improving its financial statements and efficiency of their operations. After 2005, Agrium continued its expansion and acquired 12 retail farm centres in Argentina, multiple locations in Chile and expanded to Europe. Currently, Agrium Inc. is a global leader in the fertilizer industry.
1. How has Agrium created an effective organizational culture?
Agrium Inc. was listed as one of Canada’s top 100 employers and is one of the best Canada’s employers because of its exceptional workplace diversity and inclusiveness programs. “Organizational culture is a diverse cultural pattern that exists in the informal organization” or in other words, it is the way things get done in the company. An effective organizational culture is when the key values and attributes are commonly shared, and employees are being heard and respected in an organization. To be a successful company and achieve goals, employees must be happy with their workplace and make company’s goals their own personal goals and it takes a lot of work. Since Agrium Inc. is a global company, it tends to have not only one organizational culture but also subcultures for different divisions/ regions. There are three levels of organizational culture.
The first one is about artefacts: corporate logo, how employees dress and behave in the office etc., the things that people from an outside recognize. Agrium Inc. states that their success is directly connected to their employees because employees is their greatest asset. “Our employees are the core of Agrium’s success and the backbone of our high-performance culture” (“Agrium Inc., n.d.). At Agrium is a highly engaged and collaborative workplace, where employees are wisely matched against company’s needs. With more than 15,000 employees, Agrium Inc. organizational culture is driven by core values such as leadership, opportunity to change, integrity and the ownership mindset.
The second one emphases on principles and attitudes of an organization that employees carry on. These values are usually expressed in company’s mission statements. Agrium’s corporate culture is connected to employee well-being and emphases on employees’ health and safety, attraction and retention, diversity and inclusion, and development and learning. Agrium has developed the special safety program for its employees called “SAFESTART” that teaches their workers on how to change hazardous behaviours.
The third and the last level of organizational culture refers to “unspoken rules” and beliefs. Those are rules that have been embedded in the company’s culture for years and all workers know it, and nobody is ever trying to change it. In Agrium Inc., it is their health and safety program that has been the company’s top priority for years. Agrium Inc. extends their health commitment not only to their employees but also to their contractors, customers and neighbours. They constantly invest in learning and development and show continuous improvement. Agrium Inc. has a low voluntary turnover rate which is only 10.5%. The management of Agrium Inc. ensures the diversity and respects cultural diversity and needs of their employees in different countries where they operate.
Agrium Inc. invests not only in cultural and racial diversity but also in women diversity. They have the Agrium women leadership program that recognizes and develops women potential through mentoring, networking and developing opportunities to ensure women success in the workplace.