ORGANIZATIONAL BEHAVIOR

Salido, Maurren F. July 16, 2020

Section 1

Honest Tea: Organizational Structure

Summary:

The year 1995 when Seth Goldman was studying at Yale School under the Management
Program and his Professor Barry Nalebuff are doing a case study of the beverage industry that is
when he had an idea and an opportunity popped up in his mind. He started to come up with an
organic beverage which they called Honest Tea. He and his professor became co-owners him
being the TEO and the chairman was his professor. They started only in his house and innovated
from tea to juice drinks and now they have a wine called Honest Fizz as the company grew. They
always try to innovate by offering healthy, low-calorie products, at the same time applying
sustainable development and helping the agricultural system and creating economic opportunity.

1. The division of labor in honest tea has different types of specialization. Seth Goldman
mention which are the accounting system, production, tea filtration, marketing, and sales.
This shows that the work has been divided depending on their professional skills and
grouped into different kinds of department. Therefore this created a hierarchy in the
company where Barry Nalebuff serves as their chairman and Seth Goldman as their TEO.
The power was centralized to them Seth Goldman was the one leading them. They are the
This is base on their culture because they determine it as their strongest asset, and hiring
their manager must be in line with their culture.

2. The business strategy that they applied is seeing an opportunity to produce an organic
bottle of tea. With the help of economic theory, they are able to innovate and produce a
new type of drink. They innovated their products as the years go by to cater to different
types of people depending on what they prefer. Kids have their kind of drink as well as
drinks that are attractive to teenagers. And the impact of organizational size is that at
first there were only three employees and they have only limited specialization and their
workplace is the house of Seth Goldman. But as they have more employees and enlarge
their company they can widen their specialization as well as their innovation.

3. The mechanistic organization is known as the traditional bureaucracy where there are
hierarchal communication and centralized power. While the organic structure is a
company that is flexible and decentralized, in comparison to mechanistic they apply open
communication and focus on adaptability. In the case of Honest Tea, at first, they are an
organic organization. Because they started in the house of Seth Goldman with only three
employees with three employees by applying the economic theory. And later on, they
became mechanistic as their company grew they already had a centralized power as Seth
being their TEO and Barry Nalebuff as their chairman.