Caterpillar Company’s Organizational Behavior

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Introduction to the organization

The company initially started as Caterpillar Tractor Co. in 1925 in the State of California. The name of the company changed to Caterpillar Inc. five decades later. The company tops all the other rivals all over the world in producing various machinery and hardware for construction. The organization likewise is the main service supplier through Caterpillar Financial Services, Caterpillar Remanufacturing Services, and Progress Rail Services.

The company was formed in 1925. Two companies came together to form in. The two companies are Holt Manufacturing Company and C. L. Best Tractor Company. The merger happened in 1925. Consequently, Caterpillar Inc. was formed in California. Caterpillar hardware is conspicuous by its traditional trademark “Caterpillar Yellow” uniform and the “CAT” logo (Bales, 2008).

Mr. Douglas R. Oberhelman is both the chairman and the CEO of the company. The vision is to make a situation in which all individuals’ fundamental needs are satisfied in a naturally practical way and an organization that enhances the nature of the environment and the surrounding community. The mission is to empower financial development through infrastructure and energy improvement and to give solutions that bolster groups and protect the planet. The strategy is to give workplaces, items, administrations and solutions that make beneficial and effective utilization of assets as we endeavor to accomplish the vision (Akroush, 2011).

The company applies development and innovation to enhance the manageability execution of Caterpillar’s items, services, arrangements, and operations. The company holds that sustainable advancement is improved by creating frameworks that boost life cycle advantages while additionally minimizing the financial, social and ecological expenses of possession, as reflected in the manageability standards.

The company’s items are sold through an overall system of dealerships, 50 of which are situated in the U.S. There are 141 other merchants outside of the U.S. CAT (Caterpillar Company) merchants reach out to more than 180 countries with CAT and CAT related offices traversing more than 500 areas around the world. This permits CAT to be near their worldwide client base. The company provides a wide range of products which are more than 300.

The company is based in the state of California. In addition, there are several offices located across the world. The organization’s structure is a top-down approach, where there is a central authority giving all the instructions and making the key decisions (Archie & Juha, 2007).

Role of information technology in enhancing productivity

In the current fast-paced business world characterized by innovation, newer and more efficient ways of conducting business have emerged. Technology has become a critical component in the life of any business to make it play on the same level as the competitors. One outstanding innovation in the life of business is the utilization of technological devices and software to enhance productivity.

Efficient communication is the driving force of any business as it is the link between the business and the customers or stakeholders. Some examples of technological devices and software used for communication include mobile technology, global positioning systems, virtual networking, Bluetooth systems and wireless fidelity Wi-Fi networking. Indeed, these technological devices have affected the mode of conducting business both positively and negatively (Gretchen & Porath, 2012).

To begin with, one positive effect of information technology is the improvement of service quality. It becomes easier for the customers to create new customer’s account in which they can inquire about the prices or services and be able to place their orders online. In addition, the customers will be able to pay for the goods or services via a wireless payment system rather than queuing on the tills.

Secondly, the business can use CRM (Customer Relationship Management) software to update the details of the customers; this is beneficial in identifying and meeting the special needs of the customers. Thirdly, the technological devices and software normally provide a fast and reliable means of communication. Board meetings can be conducted through teleconferencing, not every board member has to physically be present in the boardroom. All they need is a computer and a video link (Barnard, 2008).

Indeed, these positive effects are critical to the smooth running of the business. The business will be in a good position to gain from economies of scale and rapidly expand its networks. Utilizing the CRM software enables the business to build up a database that has the details of each customer (Porter, 2008). In this way, it is highly likely that there are minimal chances of losing a customer.

Virtual networking in the business environment helps in information sharing within the business. Information technology now significantly influences the pace, structure, and practice of everyday life all over the business community. In as much as there are positive effects, the development of information technology also affected the business negatively. To begin with, the business incurs very high costs when acquiring, setting up and configuring the technological devices and software.

There are also additional costs incurred for training on how to use the gadgets. Secondly, portable devices like mobile phones and laptops can lead to the leaking of valuable business information to unauthorized users if there is no adequate precaution to secure the devices. This can expose the business in a negative way. Thirdly, virtual networking within the business normally slows down the systems, and if not well secured can lead to information leaks to unauthorized users (Barney, 1991).


Customer motivation includes two aspects, the antecedents of customer satisfaction and the consequence of customer satisfaction. Motivation is not a feeling at a particular time, it is the cumulative satisfaction which starts from the first time the customer uses a product and extends through the whole service period. CAT Company should make customer satisfaction as an important goal because satisfied consumers will use the service again. Actual care and appreciation of the consumer are significant for the firm. It is clear that if a customer is offered some good service, he/she is more likely to return again (Archie & Juha, 2007).

The customer might also let their friends know about the great service they got. Satisfied consumers are not only given a good experience but also save funds for marketing expenses. People have a relationship network, and they usually share the special experience of from their lives. That is why the marketing community needs focus on the consumers. The company has to know their consumers feeling when they are using the product. They also need to know the competing firms and make the necessary improvements. Many managers believe that satisfying the customers is important for business (Trivellas & Dargenidou, 2009).

The employees of CAT Company who have engaged in productivity for so long and are more involved in the organizational growth are known as motivated employees. Employee remunerations can be described as the inclination of an individual to exert high magnitude of efforts. The employees are able to exercise a large magnitude of energy when their capability and the job match are in balance.

Also, they can do this when due recognition is made for their attainments and achievements and when the prospect for growth are available to those employees who desire for that. Low morale among the employees is a sign of an organizational disease that signifies a lack of motivation and demands a high attentive treatment and cure. Hence, for CAT Company to accomplish its objectives and goals, high-spirited employees are the need of the hour. Employee remunerations have become an ingredient fact to make them give their best (Besser, 2005). The employees play a critical role in accomplishing the organization’s targeted performance.

In addition, teamwork among the employees has a major brunt on any organizational performance. Further, organizational culture with particular emphasis to employees will have a lasting brunt on an organization’s performance. It is to be noted that when a business organization imparts frequent training to its employees, there is a chance to have a positive impact on the organization’s performance.

Consequently, the company is considering alternative approaches to sustain their employee level of motivation. This plan has led to the adoption of payment systems in their employee compensation schemes. However, a conclusive theory or approach to human resource management has not been established to guarantee better employee performance. One of the payment systems that are commonly used by the company entails the integration of wages and salaries.

Wage implies the price of labor. The incorporation of wages and salaries in employee compensation processes has led to the integration of diverse wage management practices. One of the most notable methods entails the increase in wage levels. The company is linking pay to performance to remain competitive through improved employee productivity. However, in the course of designing the pay-for-performance schemes, it is imperative for the company to take into account the relevant factors that affect performance (Chernow, 2009).


The flow of information is seamless from the top management to the lower levels of management. The procedures utilized by the virtual teams in the company are not the same as those utilized as a part of the face-to-face coordinated efforts. In a development system taking after a “customary” association, the advancement procedure faces the limitation by area and time. At the end of the day, the advancement handle, for the most part, happens inside of the structure of physical workplaces and working hours.

In virtual teams, the people’s work does not have limitations of time and place, and communication is emphatically encouraged by information technology. Such an item improvement environment permits a more noteworthy level of opportunity to people included with the advancement venture. Thus, multinational organizations will probably turn out to be part of a worldwide research and development system than the littler unit. Dispersed groups can do basic undertakings with proper choice bolster advances (Archie & Juha, 2007).

Communication is enhanced by the use of technological devices to make it fast and reliable. Information technology has proved to be convenient in the life of the business community. Many business operations are centered on communication.

Without proper communication, the operations of the business can be stagnant. The gadgets add value to the services and operations of the business as they provide a fast and reliable mode of communication and information sharing. Despite the positive effects, the gadgets pose some challenges to the business. The use of the devices should be properly managed to avert the loss of valuable business information.

Organizational structure

Organizational structure

Virtual teams

Amid the most recent decade, words, for example, “virtual”, “virtualization”, “virtualized” have been all the time upheld by researchers and experts in the examination of collective and monetary matters, however, the points of interest and drawbacks of a virtual team cannot be outlined. Finding the adaptable and designable benchmark is among the main points of interest of light-footed virtual groups. The persuasive use of communication, particularly amid the early phases of the group’s improvement plays an essential part in building trust. Virtual research and development groups which individuals work in different times or places regularly confront tight calendars with a requirement to begin rapidly and implement quickly (Archie & Juha, 2007).

Dissimilar to a customary group, the virtual team works crosswise over space, time and authoritative limits with connections fortified by networks of correspondence advancements. Nevertheless, a hefty portion of the best practices for conventional groups is like those for virtual groups. Virtual teams are altogether not the same as customary groups. In the typical conventional group, the individuals work by each other, while in virtual groups they work in distinctive areas.

In conventional groups the coordination of undertakings is clear and performed by the individuals from the group together; in virtual groups, in contrast, errands must be a great deal all the more exceedingly organized. Additionally, virtual teams depend on electronic communication, rather than eye-to-eye correspondence in customary teams. Specifically, dependence on PC interceded correspondence makes virtual groups one of a kind from conventional ones. Customary innovative work groups have gotten to be uncommon (Besser, 2005).

The virtual teams’ components are in three unique classes. The first is design elements (for example, geographical scattering, IT elements and framework, or the way of the assignment). The second is an emergent group form (for example, overseeing conflicts, applying particular styles of administration, utilizing PC intervened correspondence or depending on formal behavioral control systems).

In virtual teams, every classification encompasses three sub-classifications, for instance, task, information innovations, and interpersonal. Task is the other name for activity procedures. The team configuration elements can influence diverse sorts of performance positively and/or negatively, through rising group procedures and states (Barney, 1991). Constructing and working in virtual groups is valuable for ventures that need practical or maximum gifted ideas and the way to their quality construction is to ensure a characterized methodology set up to defeat the concerns emphasized, particularly the time differences and social matters.

While correspondence is a conventional group issue, factors like geographic separation, social differing qualities, and dialect or accent challenges amplify it. For campaigns or comparative huge scale ventures, individual task administration competency, fitting utilization of innovation and systems administration capacity, eagerness for self-administration, social and interpersonal mindfulness is essentials of an effective virtual group. Innovation facilitator part could be fundamentally vital to virtual group achievement.


While speaking about different leadership models that are appropriate in the current organizations, it is discriminating to concede that consistent change is inescapable in the current business atmosphere and shapes the management models and the traditional measures of management. On the condition that visionary management is linked up, it must be brought together with imaginative methodologies to remain within the progressions. The management and execution of the firm have been identified to be most related by numerous analysts. Basically, the sort of management has been analyzed by different scholars to be discriminating in deciding the authoritative techniques and additionally inspiring execution among the models (Archie & Juha, 2007).

While many papers perceive the meaning of management in deciding the execution of the system, there is no meeting of minds on the powerful management. Irrespective of these omissions, it is broadly adequate that management stays discriminating in making a huge connection between the authoritative adequacy and the workers’ exhibitions at the lowest levels.

The excellent manager offers a sense of inspiration and motivation for the workers in the organization, and also at the same time, helping the workers to meet the organizational goals and targets. Management is an element that is enshrined in the behavior of an individual; this helps the individual to mentor a group of individuals to accomplish a specific target that is shared by all of them (Barnard, 2008).

Management consists of strategies that include motivating, inspiring, and encouraging individuals with the aim of spurring growth and development. It is always a philosophy that any management style directly reflects on the performance of the particular organization; there is a direct relationship between management and performance. Today’s business environment has evolved and it is highly competitive in nature, this call for pragmatic and visionary management that can spur invention and innovation for the sustainability of the organization.

Many studies that explore the relationship between management and organizational performance have revealed that efficient management has a positive impact on the development of the organization and also in the performance of the organization. The management provides a dynamic platform that equips the organization to handle new challenges that might come along with the organization’s operations (Bales, 2008).

Organizational culture

CAT Company is increasingly applying employee satisfaction and motivation through the employment of technique of empowerment. Empowerment is the process of giving the employees authority so that they can be more relevant to the business organization by participating in the decision-making process. By introducing empowerment, there will be no flow of control from the top echelons of the business downwards.

Empowered employees will make a decision on their own since they do have their own voice in what to do, when to do and how to do. For instance, in a product–manufacturing company, workers are never referred to as ‘workers or employees’ but they are referred to as ‘associates’. At the company, no authority has been assigned to each of the employee and people have turned to be leaders by gaining the reverence of their gurus.

Further, at the company, a distinctive lattice management setup establishes a non-hierarchical setup which is free from customary managers or bosses. Through the corporate stock option plan, every employee owns a part of the company. Thus, this unique type of corporate culture motivates their associates to discover, explore and to invent (Archie & Juha, 2007).

Performance management systems must give employees autonomy within their control area, manifest cause and effect relationships, give more authority to the employees, and develop a basis for dialogue, thus enhancing steady progress and support decision-making process. Therefore, performance appraisal and performance management have a mutual relationship and cannot be disconnected, heightening the responsibility of the manager in charge of talent relationships. The diverse environments in different organizations and human complication tally up to a volatile blend that is very hard to predict.

Organizational culture has gained more backing as an extrapolative and expounding concept in the organizational discipline, where if well-organized and regulated is helpful as an administration instrument for organizational efficiency and performance. Culture entails beliefs, ideals, and conducts which are present in different echelons and manifest in a broad range of features of organizational existence. One of the ways through which culture can be evident is through performance. Organizational culture is a significant element in the success of any organization with a specific focus on ingenuity and novelty. This shows that organization culture impacts the means by which ingenious and groundbreaking solutions are promoted.

Some schemes are widespread across all business organizations endeavoring to enhance the motivation of employees’. The paramount employee motivation initiatives will spotlight on what the employees believe to be significant. Giving the workforce more decision-making power and accountability augments their spheres of control over the assignments for which they are held accountable and efficiently equips them to accomplish those jobs.

At the outset, beliefs of disturbances developing from being held answerable for some action for which an employee does not have the sources to perform are weakened. Here, employee energy is side-tracked from self-saving to enhanced task achievement (Barnard, 2008). Habitually, these schemes ameliorate employees’ positions toward the customer and the business, while boosting self-confidence. Backing on this finding, an examination of elements which control motivation-to-learn established that it is straight away associated to the degree to which training members considers that such involvement will distress their career or job value.

Reward systems

CAT Company offers short-run incentives to its employees mainly to encourage them to give out the maximum output. These short–run incentives will assist the company to attain its business goals and also offer the due recognition to an employee if they deserve it. The company offers bonus schemes to its employees which are designed to extract the maximum levels of performance from them. The base pay of an employee in the company has been designed in such a way that it mirrors the employee’s role, his/her performance and his/her overall commitment and contributions to the entire company.

Every year, the base pay of each and every employee of the company is reviewed so that it remains competitive. For those employees who have been found extraordinarily skilled and have given a great performance, the company offers long-term incentives (Barnard, 2008).

The long-term incentives are designed mainly to offer them greater objectives to aim for, with greater monetary rewards to cheer them to remain with the company and to accomplish their goals. The company has two schemes of long-term incentives such as the shares from the CAT Performance Cash plan which is being reimbursed in cash as well as the CAT Performance share plan which is designed on an actual share. In addition, the company offers a variety of other fringe benefits like holiday schemes where every employee at gets a minimum of 23 leave days every year with bank holidays on a priority basis.

For those employees who are on the managerial level, the company offers four different types of Healthcare scheme covers which have been designed to suit their individual preferences. The company offers liberal and flexible benefits to its employees. These flexible benefits of the company have been divided into three different groups namely Finance, Healthcare and Lifestyle. Under the group ‘Lifestyle’, the company offers the following employee benefits:

  1. Learning Fund: Through this scheme, the company makes monthly payments into the employees’ funds and can top it up by 50%.
  2. Shopping vouchers: the company offers liberal shopping vouchers to its employees to motivate them.
  3. Vouchers for Childcare: This scheme has been intended to safeguard both the national insurance and tax savings on the employee’s first £ 243 per month that a worker expends on childcare. If the employee signs up for the scheme, he can save up to £1195 or even more in a year. Under holiday scheme, the company assists its employees to either sell or buy up to five days holiday on an annual basis.

Under the group ‘Healthcare’, the company offers the following employee benefits:

  1. Health Assessment: The health assessment scheme offers discounted health assessments which help to have periodic health check-ups. Further, employees are given an option to purchase a health assessment both for him/her and for his/her spouse.
  2. Dental Insurance: The dental insurance schemes offer three plans to the employees. The plans can be used to cover for their spouses and children. Further, the employees are given liberty to select their own dentist and have their treatments from them. Dental insurance at the company is another free benefit which motivates its employees to increase the productivity.
  3. Eye care Cover: Under this scheme, an employee can purchase an extra cover to assist with the contact lenses and to buy glasses. This scheme is also available to the employee’s children and spouses.
  4. Health Cash Plan: Under this scheme, an employee is allowed to get reimbursement of the cost of the health care expenses.

Under the group ‘Finance’, the company offers the following employee benefits:

  1. CAT Pension: This is open to each and every employee of the company and it is really an award winner scheme. The company pays up to 10% of the employee’s salary and the employee is allowed to contribute as much as he can make. For its Muslim employees, the company offers a sharia pension scheme which is administered by HSBC, a famous provider of Islamic banking around the globe.
  2. Coverage for Travel Insurance: the company proffers bighearted travel insurance coverage which facilitates a risk-free travel holiday and to meet any fatal tragedy during the travel. To meet any catastrophic risk during the holidays, the employees are provided with this cover at a very reasonable price.
  3. Critical Illness Insurance: If any employee or his partner suffers a serious or terminal illness, the critical illness insurance cover provided by the company will take care of their financial needs at that crucial juncture of their life.
  4. Health Cash Plan: Under this plan, an employee can get reimbursement of the health care expenses already met by him.

Control and budget

The standard objective of CAT Financial is to give retail and wholesale clients financing choices to buy CAT items. CAT uses its financing role to drive interest for its items everywhere throughout the world, yet particularly in third world and second world nations where financial resources to make such expensive buys are quite difficult to access. Notwithstanding expanding the volume of sales for CAT items, CAT Financial likewise generates financial revenue in terms of the amount of interest receivable.

CAT Financials real rivals incorporate business banks and other monetary foundations. In view of the examination of the company’s current method, brand qualities and shortcomings, aggressive business position, and possible key course for the future, another incorporated advertising correspondences crusade can be created.

The main concentration of the company’s IMC campaign will be on two levels – first and foremost, to convey an engaged, exceptional brand picture to possible clients and secondly, to construct passionate customer brand association by advancing the psychosocial advantages of its consolidated faithfulness plan. The campaign will go for the satisfaction of the accompanying goals inside of a 12-month period, which began in June 2015.

Corporate targets

  1. To be the fastest growing machinery production firm through acquisition of new clients;
  2. To re-assemble brand personality to dispense with the current brand picture related disarray among customers.

Business targets

  1. To expand total turnover by 25% in the one-year period;
  2. To develop the present dynamic client base by 20% in the one-year period;
  3. To build a piece of the overall industry by 1% in the one year period.

Advertising and communications targets

  1. To improve the brand’s premium, by moving concentration far from its value coordinating action;
  2. To plainly characterize brand character and make a convincing message to bolster it;
  3. To make a passionate bond with potential clients by emphasizing the advantages of the brand for the clients.


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Appendix 1. Sales and revenues by geographic region

Sales and revenues by geographic region

Appendix 2. Work standard

Work standard

Appendix 3. Remunerations


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