Strategies and Use of Strategies - Essay Example

This is because the company’s top-down structure could not fully exploit the expertise, experience, and knowledge of its skilled workers. In essence, there was a lack of specialization in the structure and processes of the company. Poor adoption of technology by the management also exposed the company to increased competition and pressure from competitors (A New Caterpillar Emerges 63). The poor organizational structure resulted in disharmony, comparably low-quality products, and poor marketing strategies.

The change strategy adopted by Fits basically revolved around changing the organizational structure to reflect the Japanese decentralized model (A New Caterpillar Emerges 63). Fits integrated marketing staff, manufacturing engineers, and product designers into the different product development teams (A New Caterpillar Emerges 63). Fits also decentralized the marketing processes to the regional levels from the corporate headquarters. The third strategy was the incorporation of the aspect of modernization into the manufacturing processes for enhancing productivity and efficiency.

This third approach enhanced the productivity of Caterpillar to 30 % (A New Caterpillar Emerges 63). The splitting of the company structure to 14 divisional teams enabled each unit to work in a semi-autonomous manner so that specific performance could be assessed. In the revised organizational structure, the different manufacturing teams were now responsible for the performance of the divisions. The overall impact of the decentralized model was an increase in performance in all areas of the company.