Harley-Davidson Circle Organization
Harley Davidson’s remarkable success and turnaround from a company nearing extinction to a business model of success (James & Graham, 2004; Johan Van & Brian, 2000; Teerlink & Ozley, 2000) is secured by the environment developed at Harley-Davidson through the organizational changes led by former CEO Rich Teerlink. Mr. Teerlink fundamentally changed the structure of Harley-Davidson from a command and control, top down leadership company to one of collaborative organizational design (Teerlink & Ozley, 2000). This paper will describe the organizational structure at Harley-Davidson, how the organizational structure evolved, evaluate how the structure responds to environmental factors, and conclude with this authors opinion on efficacy. The organizational structural change at Harley-Davidson resurrected an American icon to a global leader in motorcycle manufacturing.
Harley-Davidson was founded in 1903 by William Harley and Arthur Davidson and continued to grow throughout the First and Second World Wars, before being absorbed by American Machine and Foundry (AMF) in 1969 (James & Graham, 2004; Johan Van & Brian, 2000). Facing stiff completion from Japanese motorcycle manufacturers, AMF sold Harley to a group of executives led by Jeff Bluestein and Vaughn Beal (James & Graham, 2004; Teerlink & Ozley, 2000). A tariff on imported heavyweight motorcycles and a public offering put Harley-Davidson on sound financial footing. Richard Teerlink joined the company in 1987 as President and brought about substantial structural change working with consultant Lee Ozley (Teerlink & Ozley, 2000). Today, Harley-Davidson is a cultural phenomenon consisting of Harley-Davidson Credit and Insurance, Buell Motorcycle, H-D Parts and the Harley-Davidson Motorcycle unit (James & Graham, 2004)
Before Teerlink joined Harley-Davidson, the company practiced a “command and control style of management”(Teerlink & Ozley, 2000) necessitated by floundering financial circumstance and market pressure from import motorcycles (James & Graham, 2004; Johan Van & Brian, 2000; Teerlink & Ozley, 2000). The aforementioned tariff intervention and public offering put Harley-Davidson in a financial position to evaluate how the organization was structured and implement change. A “strategic partnering” (Singer & Duvall, 2000) effort between management and unions formed the foundation of the” circle organization,” (Teerlink & Ozley, 2000, p. 137 with the express purpose of a customer centric organization able to react quickly to the demands of the consumer and marketplace (p. 88).
Harley-Davidson’s new organizational structure was a process based structure. Formulated under the vision of empowerment, the circle organization was designed to enhance interdependence and collaboration between functional circles: “Create Demand Circle (CDC), The Produce Product Circle (PPC), and the Provide Support Circle...