Caterpillar Inc Strategic Management Research Journal
Introduction
Caterpillar Inc. is among the leading companies in the heavy equipment and construction sector. The company has established a solid customer base worldwide due to its high-quality products sold at a fair price. The company also provides solutions that help its customers build a better world. Its success is mainly founded on its organizational structure and effective strategic management. This is a review of Caterpillar Inc.’s strategic management, providing recommendations on strategies that can be implemented in operational changes to support the company’s strategic plan, future business decisions, and improvement in business performance
Assess whether Caterpillar Inc. uses the appropriate measures to verify its strategic effectiveness.
Caterpillar Inc.’s strategic management approach emphasizes putting customer needs first. The company is using the appropriate measures to verify its strategic effectiveness because the strategies focus on finding the most effective solutions to address the needs of its clients and attract more investors to establish a solid capital base. The company has also managed to remain competitive and create a good reputation as one of the leading companies in the construction and heavy equipment industry by maintaining high-quality products offered at a fair price.
Caterpillar Inc.’s organizational structure.
Caterpillar Inc.’s organizational structure is characterized by a short chain of command and decentralized management. The decentralized management structure is used to create collaboration between the company and its clients to enable the company to meet the client’s needs and continuously improve its products based on client recommendations and feedback. The short chain of command is embraced to facilitate the sharing of ideas among employees and improve the decision-making process by promoting faster decision-making.
Determine whether Caterpillar Inc.’s organizational structure is considered a traditional organizational structure or a Holacracy.
Organizational structures play a vital role in outlining how things are done in an organization to achieve specific goals (Achterbergh & Vriens, 2019). Caterpillar Inc.’s organizational structure is considered a Holacracy because it decentralizes the decision-making process to ensure that every employee is involved in making decisions. According to Schmitz (2018), the main characteristics of a Holacracy are distributing authority and decision-making through teams whereby team members operate autonomously to achieve a shared goal.
The importance of Caterpillar Inc.’s leadership team studying and understanding the company’s internal and external environments.
A company’s internal and external environments dictate the success of the company based on the strengths that the company can focus on to improve performance, weaknesses that need to be eliminated to attain the required level of success, opportunities that the company can consider to improve performance and expected threats that may limit organizational performance (Ramzaeva, 2021). An external analysis also gives the business team an idea of the factors in the business environment that could limit growth, such as political instability, economic downturn, strict government regulations, and cultural norms (Ramzaeva, 2021). The company can also set long-term and short-term goals based on the opportunities identified through an internal analysis.
Caterpillar Inc.’s competitive position and response to shifts in the external and internal environments.
Caterpillar Inc. has established a strong competitive position due to its reputation of offering high-quality products at favourable prices. The company has also been venturing into new markets, including emerging markets hence increasing its customer base globally. The company has also managed to effectively respond to shifts in the external and internal environments by adjusting product prices to attract more customers, maintaining existing ones, and venturing into many markets to maintain mass manufacturing, resulting in economies of scale.
Recommended strategies in operational changes to support Caterpillar’s strategic plan, future business decisions, and improvement in business performance.
One of the strategies that can support the company’s strategic plan, future business decisions, and improvement in business performance is partnering with contractors in charge of megaprojects in developing countries to increase sales and meet the various needs they may have for the effective completion of the project. This will enable the company to develop a good reputation, enhancing its competitive advantage. Another strategy is investing in research and development to innovate new products to meet changing customer needs.
Conclusion
Strategic management is one of the most important activities in a company because it enables a company to meet its long-term and short-term goals. Effective strategic management includes analyzing the company’s internal and external analysis to identify areas of improvement, opportunities that can facilitate effective improvements and threats that may hinder making the required improvements. It is also important to ensure that all stakeholders are involved in the decision-making process to generate ideas on implementing various recommendations in the strategic management process.
References
Achterbergh, J., & Vriens, D. (2019). Organizational structures. Organizational Development, 46-101. https://doi.org/10.4324/9781315695228-3
Ramzaeva, E. (2021). Analysis of the internal and external environment affecting the company’s financial strategy. European Proceedings of Social and Behavioural Sciences. https://doi.org/10.15405/epsbs.2021.04.02.135
Schmitz, S. (2018). Holacracy. Agenda HR – Digitalisierung, Arbeit 4.0, New Leadership, 183-198. https://doi.org/10.1007/978-3-658-21180-6_12
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Question 
Caterpillar Inc Strategic Management Research Journal
Review the following terms and concepts discussed this week to prepare for this assignment:
organizational structure
organizational culture
inertia
Holacracy
PESTEL model
Create a Word doc and title it Strategic Management Research Journal Part 3.
Write a 525- to 700-word response to the following prompts in your journal entry:
Assess whether Caterpillar Inc. is using the appropriate measures to verify its strategic effectiveness.
Summarize Caterpillar Inc.’s organizational structure.
Determine whether Caterpillar Inc.’s organizational structure is considered a traditional organizational structure or a Holacracy.
Justify why it’s important for Caterpillar Inc.’s leadership team to study and understand the company’s internal and external environments.
Evaluate Caterpillar Inc.’s competitive position and how they have responded to shifts in the external and internal environments.
Recommend strategies in operational changes to support Caterpillar’s strategic plan, future business decisions, and improvement in business performance.