Caterpillar Inc. is a leading global equipment manufacturer for the mining, oil and gas, construction, railway, and industrial industries. The company has three operating segments: the construction industry, the resource industry, energy, and transport. The first and last segments generate the largest revenue in the company’s consolidated revenue structure. Caterpillar Inc. also provides financial and related services through a number of subsidiaries. The company regularly conducts external audits and SWOT analysis to assess its effectiveness. These measurements help to identify the shortcomings of the organization in time and promptly eliminate them. I think these measurements are practical, and the firm’s successful work in the global market confirms this.
The company’s organizational structure is guided by a board of directors and a global management team who work on overseeing the company’s actions, performance, and management policies. Caterpillar Inc., having suffered from the actions of competitors in the mid-1980s, reorganized in order to establish internal accountability relationships. Caterpillar’s Board of Directors presently has 11 associates (Lysak et al., 2020). This number allows one to diversify the experience without hindering practical discussion or reducing individual accountability. Previously, if something went wrong, the heads of departments blamed the managers of the central office for everything. The clear accountability provided by the new structure has forced people to look for solutions to problems rather than looking for the guilty. Accountable employees of the company work in various departments, factories, and testing sites.
The company’s organizational structure is closer to the traditional rather than Holarctic. The company does not form autonomous groups and teams within divisions but centralizes management in the main office (Lysak et al., 2020). This helps the company to make global decisions and achieve their implementation effectively. It is also vital for an organization’s leadership team to be able to identify external and internal environmental factors. This is important to effectively compare their activities with the operations of competitors and win a competitive advantage in the market. External environmental factors also indicate in which direction the company needs to develop to meet the changing market. At the same time, internal factors make it clear to the company’s management how quickly it will be able to increase efficiency with increasing competition. In addition, understanding the internal environmental factors helps to understand the internal problems of the company and provokes work to eliminate them. The fewer weaknesses an organization has, the more chances it has to take a competitive position in the market and hold it for as long as possible.
Caterpillar’s global presence, a wide range of products, a comprehensive package of related services, and financial strength allow it to occupy a leading position in modern competitive markets. The company responded to changes in internal and external environmental factors by introducing additional advantages in order not to lose its leading position. Among such advantages, there are such as equipment characterized by high performance reliability and minimal total cost of ownership over the entire service life (Lysak et al., 2020). As operational management improvements for Caterpillar, we can suggest expanding the number of middle managers. Thus, individual dishonesty will be divided into several more links, and errors in the work will be detected and eliminated even faster. Such an innovation will also have a positive impact on future business decisions since they will be made with the involvement of a larger number of interested employees.
Reference
Lysak, A., Marmon, R., & Schoen, E. J. (2020). Whistleblowing and Caterpillar Inc.’s Swiss tax strategy. Journal of business ethics education, 17(1), 237-250. Web.