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Strategic Management Research Journal Part 3.

Lauro Teopengco

MGT/498

Debra Grisamer

11/8/20

Caterpillar INC assessment of strategic effectiveness.

Strategic effectiveness revolves around the company’s ability to set the right goals for the entire organization and achieving them on a consistent basis. I am in line in the belief that Caterpillar INC is effectively using the right measurements to achieve its success. Their strategic direction is clear and had developed a well-versed roadmap on how to achieve this vision. It has double energy, machinery, and transportation services sales, amounting to $28 billion by 2026 from the 2016 baseline (Hendricks et al., 2017).

The company defines its services regarding its value after the equipment purchase. It has everything from the maintenance agreement to financing in its inventory records to aftermarkets parts, and to deliver the best customer service experience as their goal. The company has invested time, effort, and resources in service offering to customers' value. Besides, the corporation provides unique insights and customer-focused solutions throughout the lifecycle of our products.

Caterpillar Inc.'s organizational structure.

Caterpillar Inc. has a large and complex organizational structure that spans the globe. It operates in three product segments, including the resources industries, energy and transportation, and the construction industries. Caterpillar Inc. also offers finance and related services through its financial product segments. The corporation has a total of 12 members (Hendricks et al., 2017). The corporation has three product segments with various products being manufactured in every segment. Also, the corporation has many job specialties and several reporting levels. It manufactures the products simultaneously across its subunits, while each subunit can adopt new changes to fit the marketplace's requirements.

Determine whether Caterpillar Inc.'s organizational structure is considered a traditional organizational structure or a Holacracy

A Holacratic organization structure is what Caterpillar INC.’s embodies because of their decentralized system of management. The organization's decisions are made across managed groups, and not the administration ladder as the board of directors in the corporation is independent. Holacracy permits the distribution of decision-making and allows every individual to contribute to decision making. The organization had a restructuring in its company’s support system as the mining sector has been condensed with the global mining business divisions to streamline marketing, operations, and sales. Caterpillar Inc. has been divided into smaller divisions to enhance fast and effective decision-making, thus reducing complexity.

Reasoning for Caterpillar Inc. leadership to analyze and understand the company's external and internal environments.

It is important for Caterpillar Inc. to do a deep dive analysis of both the internal and external environment. Extensive information regarding Caterpillar's internal environment will give it leaders an excessive deal of influence over the business, which will enable them in making daily decisions of the business. Understanding the internal environment will also enable the management to understand employees' strengths and determine measures to improve their strength (López‐Pintado et al., 2019). It will also enable the management to assess the relationship and processes within departments to improve efficiency and effectiveness by understanding its strategic and financial risk. This will aid in the production of quality products and services

Caterpillar Inc. will run into challenges when they grow and become innovative without the external business environment. The external business environment will help the business learn and adopt the essential strategies that will help the company deal with the competition as it will be to recognize both the threats and the company's opportunities. Also, it will help caterpillar Inc. to establish accurate plans and ensure effective implementation.

Competitive Position

Caterpillar Inc. uses modern technology to produce high-quality products, giving it a competitive advantage over its competitors. The corporation also has its economies of scale and reliable inventory network, which gives customers priority in all its operations. Caterpillar can also expand tremendously and sells its products worldwide (López‐Pintado et al., 2019). The company is also priced competitively and therefore attracting a large volume of clients making a significant impact in the market. Not surprisingly, the company has a competitive advantage over its competitors because it offers quality products relatively low.

References

Hendricks, J. A., Defreitas, D. G., & Walker, D. K. (2017). Changing performance measures at Caterpillar. Strategic Finance, 78(6), 18.

López‐Pintado, O., García‐Bañuelos, L., Dumas, M., Weber, I., & Ponomarev, A. (2019). Caterpillar: a business process execution engine on the Ethereum blockchain. Software: Practice and Experience, 49(7), 1162-1193.