Organizational Structure

Caterpillar, Inc. utilizes a matrix structure within their corporation.  They implemented this strategy in the mid-1990s in an effort to organize their product groups and geographical units.  The product managers at Caterpillar are responsible for the development, manufacturing, and distribution of their respective product line.  The managers of the geographical regions are responsible for the profitability of the businesses in their region.  For example, Caterpillar has some manufacturing plants in Asia.  The product managers are responsible for the product being developed, manufactured, and distributed properly, while the manager of the geographical region is responsible for the manufacturing plants in Asia being profitable.  The matrix organizational structure is a combination of the functional and divisional structures that tries to overcome the inherent inadequacies that the other structures have.  It is a structure that has allowed Caterpillar to become a thriving multinational company.