Cat's Organizational Structure

Topics: Corporation, Corporate governance, Management Pages: 6 (1740 words) Published: April 21, 2013
Caterpillar’s Organizational Structure
Caterpillar is a corporation that designs, manufactures and sells diesel and natural gas engines, construction, and mining equipment. Since the year 1905 Caterpillar has been a corporation that has evolved by making significant improvements to its machinery by taking advantage of the available technology, and it has had the ability to adapt to the dynamic changes and demands of the construction industry. Many significant events have occurred in this business to make this company what it is nowadays, a very prestigious and successful company around the world. In the year 1906 in San Francisco California, when one of the most significant earthquakes took place, the company made a remarkable use of its machinery by helping with the clean-up of such disaster. Soon enough the company made a contribution to Europe, years before War World I started, 1200 tractors were shipped to England, France, and Russia for agricultural purposes; however, these governments sent those tractors to the frontline and put them to work halting artillery and supplies. Consequently they served as an inspiration for the British government to invent the tank, for they borrowed the track laying principle to provide the tank with its form of locomotion. Caterpillar has become the number one company in its industry with more than $70 billion is assets; these important achievements could have only been accomplished with a well-defined and functional organizational structure. Legal Form of Organization

Caterpillar is an organization that has the legal form of a corporation with more than $ 70 billion in assets. The main shareholders of the corporation are Vanguard group Inc., State Street Global Advisors Ltd., and Fidelity Management and Research Company with 30,863,961, 16,637,962, and 12,216,827 shares held respectively. Key activities of organization

Every year as many other corporations, Caterpillar does a deeply study of the actual situation of the company, and set its goals and strategies to maintain the corporation afloat and to improve their competence in the market. 1. The company’s expectations for the year 2020 are to be recognized as a leader around the globe, also it is very important for the company that their products help their customers succeed in their business such as construction, agriculture, and mining. They are very focused in making their distribution system a competitive advantage to the company, the business’ financial performance to reward consistently their stockholders, and their personnel to live their set of values which are integrity, excellence, teamwork, and commitment. These objectives are vital for the company to succeed and keep being the leaders of the industry.

2. The SWOT indicated the areas that might endanger the company’s situation : i. Weaknesses:
The increasing debt of the company: Caterpillar Inc. is rated second in total debt among competitors. The total debt of the industry is about $ 123.53 billion. (See Figure 1) Caterpillar represents about 29% of the total debt with $ 35.96 billion.

Fig. 1. Caterpillar Total Debt, company’s debt consists of 29.11 % of total debt of industry. Macroaxis Inc. Total Debt Breakdown for Caterpillar, 2012. <>. ii. Threats:

* Intense competitive pressures: Caterpillar shares the market with many other companies, and it faces a tough competition to maintain their leading position. Deree and Co, Komatsu Ltd, Kubota Corporation are a few companies in the industry. * Environmental regulations: Mining operations dependent upon material prices and political stability. * Foreign exchange and interest rate fluctuations

3. Values are really important issue in every company; without them the daily operations of the company could become a weakness, and advantage for competitors. As Caterpillar’s code of conduct mentions, the main focus in this area is shown...
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