CIRCULAR ORGANISATION AT HARELY DAVIDSON MOTOR COMPANY

1. Discuss the unique features of organizational design at Harley-Davidson.

After appointed as CEO, Richard Teerlink restructured Harley-organization Davidson's from a
traditional hierarchical structure to a circle-based one. This adjustment was made in order to
encourage employee collaboration and eliminate the command-and-control management
style. Circular structures are hierarchical, but rather than a straight ladder arrangement or pyramid,
they place high-level employees and leaders at the center and inner rings of a circle and lower-level
staff at the outer rings. This structure is intended to encourage dissemination of information and
inspiration from the center and allow different divisions to participate as components of a single
whole.

The structural adjustment has a significant impact on Harley-overall Davidson's output. The
organisation transitioned from a very informal to a formal structure, which resulted in fewer
employees being essential to the company and the elimination of needless titles. In general,
this circle system allows the structure of Harley-Davidson to become flatter, less hierarchical,
more fluid and even virtual.
After the year 1993, the Harley Davidson has become more centralized. The company has now
mainly shifted its focus to its performance faced with its competitors. One of the major steps
that has been by Harley Davidson was reducing the numbers of titles inside the organisation
structure of the company. Centralized approach focuses on creating a demand team instead of
individual string of title holders. This centralized system in turn will reduce the time that it
takes to produce as it aims to kill approval time from different bosses.
Harley’s organization chart comprised three overlapping circles. They are called:

✓ Create Demand Circle for sale and marketing.

✓ Produce Products Sale for engineering and manufacture.
✓ Support Circle (for legal, financial, human resources, and communications concerns).
The following are the basic characteristics of Harley-Davidson’s organizational structure:
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:
✓ CEO’s Office
✓ Communications
✓ Human Resources
✓ Harley-Davidson Foundation
✓ Global Demand
✓ Financial Services
✓ General Counsel/Legal
✓ Finance
✓ 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.

Q2. As Harley Davidson is a circular organisation, staff are constantly under pressure to keep
up with change. Despite the fact that the company has good vision and personnel that are
dedicated to the organisation, progress is gradual. There are certain employees who are
unable to adjust to the changing scope of their work. This circular organisation necessitates a
great deal of flexibility, which can be an issue for personnel.
Some precautionary measures are-

• Take Employees into Confidence- The most crucial step in assisting an employee in
adapting to change is to instil confidence in him. This will come in handy if there are
any organisational changes that are likely to trigger panic and worry among the
workforce.
• Make employee understand the change or condition completely.
• Illustrate the current situation, and explain every point so that the employee finds
itself in a better position and knows what exactly is happening.
• Help Employees to Adapt to The Change with Relevant Training: - Make no attempt
to persuade staff that they are unsuitable for the transition or that they are
insufficiently educated to continue working after the organisation undergoes certain
adjustments. Provide them with the necessary education, training, illustration,
coaching, practise, or whatever else is required to help them adjust to the change.