Harley-Davidson’s Organizational Structure Analysis

Harley-Davidson Inc. motorcycles organizational structure features characteristics advantages disadvantages recommendations case study and analysis
A Harley-Davidson motorcycle at Rockanje, the Netherlands. Harley-Davidson’s organizational structure emphasizes centralized control. (Photo: Public Domain)

Harley-Davidson’s organizational structure facilitates centralized control of the business. The organizational structure is the company’s arrangement or design of its components in terms of their interactions and functions. As the fifth biggest motorcycle manufacturer in the world, Harley-Davidson Inc. maintains an organizational structure that suits its current focus on a limited number of markets. While the business continues to grow, its global expansion is relatively slow. As such, Harley-Davidson’s organizational structure focuses mainly on the fact that most of the company’s revenues are generated in the United States.

Harley-Davidson’s organizational structure is based on the company’s aim to ensure centralized control of business activities. This organizational structure has limited support for the company’s potential global expansion.

Features of Harley-Davidson’s Organizational Structure

Harley-Davidson has a functional organizational structure that is based on the company’s current focus on the motorcycle markets in developed countries, especially the United States. The following are the basic characteristics of Harley-Davidson’s organizational structure:

  1. Function-based groups
  2. Centralization
  3. Global hierarchy

Function-Based Groups. This feature is the most notable in Harley-Davidson’s organizational structure. Each group was developed based on specific business functions in the motorcycle manufacturing and sales business. The following are the main function-based groups in Harley-Davidson’s organizational structure:

  1. CEO’s Office
  2. Communications
  3. Human Resources
  4. Harley-Davidson Foundation
  5. Global Demand
  6. Financial Services
  7. General Counsel/Legal
  8. Finance
  9. Motor Company Product & Operations

Centralization. Harley-Davidson uses centralization in its organizational structure. This characteristic involves a central command system. For example, Harley-Davidson’s headquarters are the main control base for the global business. This feature of the organizational structure ensures direct and immediate control and corresponding action throughout Harley-Davidson’s international organization.

Global Hierarchy. Harley-Davidson’s organizational structure has a global hierarchy that relates with centralization and the function-based groups. For example, the corporate headquarters have the highest authority in the global organization. Concerns experienced in local motorcycle markets are escalated toward the corporate headquarters in the United States.

Harley-Davidson’s Organizational Structure Advantages & Disadvantages

Harley-Davidson’s organizational structure has the advantage of strong control on all business activities. Also, the company can easily monitor changes in the market and corresponding business performance. However, Harley-Davidson’s organizational structure has the disadvantage of low flexibility in handling differences among markets. In addition, a disadvantage of this organizational structure is that it does not strongly support autonomy of regional or local operations. Thus, the recommendation is for Harley-Davidson to reduce the centralization and global hierarchy of its organizational structure to address these issues.

References
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  • Harley-Davidson Leadership.
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  • Martin, R., Muuls, M., de Preux, L. B., & Wagner, U. J. (2012). Anatomy of a paradox: Management practices, organizational structure and energy efficiency. Journal of Environmental Economics and Management63(2), 208-223.