Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
|Product Teams||Team-Based||– Self-managing, cross-functional product teams. Teams include designers, product developers, and marketers.||– High collaboration and innovation. – Quick decision-making.||– Potential challenges in coordinating across multiple product teams. – Possibility of overlapping responsibilities.|
|Retail Stores||Divisional||– Separate divisions for company-owned stores and e-commerce. Each division has dedicated leadership.||– Specialization in retail and e-commerce operations. – Efficient management of different sales channels.||– Potential variations in customer experience between retail and online. – Challenges in standardizing operations across divisions.|
|Environmental and Social Activism||Functional||– Functional department focusing on environmental and social initiatives. Functional managers oversee these activities.||– Specialization in activism and corporate social responsibility. – Effective management of sustainability efforts.||– Potential disconnect between activism initiatives and other business functions. – Challenges in aligning sustainability goals with profit-oriented activities.|
|Customer Service||Functional||– Functional department responsible for customer service operations. Functional managers oversee customer support.||– Efficient handling of customer inquiries and concerns. – Specialized expertise in customer service.||– Limited integration between customer service and other operational departments. – Challenges in ensuring consistent customer experiences across channels.|
|Supply Chain and Sourcing||Divisional||– Separate divisions for supply chain management and product sourcing. Each division is led by dedicated managers.||– Specialization in managing the supply chain and sourcing activities. – Efficient sourcing and production processes.||– Potential coordination issues between supply chain and product teams. – Risk of supply chain disruptions affecting production.|
- Ownership Disposition:
- Patagonia’s founder, Chouinard, placed the company’s ownership under two non-profit entities.
- The structure is designed to align with the company’s values and mission.
- Patagonia Purpose Trust:
- Holds 100% of the voting stocks.
- Responsible for defining the company’s strategic direction.
- Ensures that the company’s decisions are in line with its purpose and values.
- Holdfast Collective:
- A non-profit entity.
- Holds 100% of non-voting stocks.
- Focuses on reinvesting dividends from the brand into environmental causes.
- Mission Alignment:
- Patagonia’s organizational structure reflects its commitment to social and environmental causes.
- By involving non-profit entities, the company emphasizes its dedication to its purpose beyond profit.
- Innovative Model:
- Patagonia’s structure goes beyond conventional profit-driven ownership.
- It exemplifies how an organization can embed its values into its ownership structure.
- Holistic Approach:
- Enables Patagonia to prioritize its purpose and allocate resources to causes it supports.
- Demonstrates a unique way to create a lasting positive impact.
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