CATERPILLAR INC.

Improving the Caterpillar's Performance and its Effectiveness by Integrating the Theory of Intervention

Improving the Caterpillar's Performance and its Effectiveness by Integrating the Theory of Intervention

Introduction

Employing nearly 100,000 people all over the world, Caterpillar Inc. is the world's largest manufacturer of equipment for the construction and mining industries, as well as manufacturing turbines and engines. (Auskalnis, 2005) The characteristic yellow paint scheme of much of their equipment is as familiar to people in regions where those industries are dominant as are John Deere green and Coca-Cola red. A Fortune 500 company since the list's inception in 1955, it was ranked 50 in 2008, the most recent ranking. As the leader in its industry, it has been one of the 30 companies of the Dow Jones Industrial Average since 1991. (Haddock, 2001)

Organizational Development

The innovation with which the company is associated, and has been since its inception, is the caterpillar or continuous track. Such tracks, used instead of wheels, are made of rigid plates connected to each other in a belt, laying flat on the ground as the vehicle moves forward. (Leow, 2007) This allows for a much more efficient distribution of weight, significantly reducing the ground pressure of the vehicle. Caterpillar tracks are most associated with vehicles too heavy to use wheels like cars—such as tanks and construction equipment. Early attempts at making a useful continuous track often referred to them as a type of rail, but unlike rails, they allow for more flexibility of movement, remain with the vehicle, and do not need to be laid down ahead of time. The idea of the continuous track had been in circulation since the 18th century, and became the focus of various inventions during the Industrial Revolution when there was more and more demand for heavy vehicles for which wheels were inefficient or simply unusable.

Performance & Productivity

Caterpillar produces heavy equipment mainly for exploration, excavation and transportation of huge amounts of freight. Caterpillar machines and services—in gas compression, well servicing, oil and gas production and drilling support exploration and production, pipeline construction and other oil-and-gas-related infrastructure projects in virtually every region in the world. In Russia, Cat machines, engines, generator sets, Solar gas turbines and gas compressors are integral to the long-term development of the country's oil and gas resources. (Brat, 2008)

During 2004-2008 period, Caterpillar was an absolute leader on the market. This fact is clearly shown in the “Five-year Financial Summary” and approved by side-experts and objective writers. However, in 2009, when world economic crises loomed unpredictably high, Caterpillar was not able to resist it completely. Since the annual report for 2009 has not yet been published, this report's information on company's current financial stance will be based on side-researches conducted by objective independent experts. (Adobor, 2007)

In January 2010, however, Caterpillar announced that company's profit last quarter fell 65 percent, to $232 million, or 36 cents a share, from $661 million, or $1.08 a share, a year earlier2. Sales fell 39 percet, to ...