Harley Davidson Is the World\'s Largest Producer

Harley Davidson is the world's largest producer of heavyweight motorcycles. The company is structured around operating business divisions and along functional lines including retail stores, Buell and the flagship line. The company operates four major manufacturing facilities: vehicle operations in York, PA produces touring bikes; Tomahawk, WI produces saddlebags, windshields and other parts; Kansas City, MO produces several bike families and some powertrain; Menomonee Falls, WI produces powertrains. Head office is in Milwaukee, and there are also facilities in Valley View, OH and Ann Arbor, MI (Harley-Davidson.com, 2011).

Harley Davidson has 9700 employees worldwide (Ibid). Most factory employees are unionized under the United Steelworkers (USW) and International Association of Machinists and Aerospace Workers (AIM) (Fisher, Wilson & Hahn, no date). Recent years have seen a turnaround in the company's fortunes, but this has led to some conflicts with workers. In York, a strike occurred as workers sought to gain improvements to their compensation as the company was engaged in a successful turnaround of its business (Meyer & Waddell, 2007). The company has a tiered wage system that "creates divisions between older and newer employees," indicative of a situation where the company had offered generous wage and benefits packages in the past, then began to suffer as foreign competitors entered the market. Younger workers are forced to take less in order to keep the company competitive in today's market (Ibid).

In response to the company's poor performance in the competitive marketplace, Harley needed to make changes to its organizational structure in the late 1990s. The company adopted the concept of the circle organization, a system that encourages openness, resulting in teamwork with explicitly creating teams. Instead of having a linear organization where ideas flow up the chain of command, people can collaborate on ideas without relying on the hierarchy for implementation. This includes all internal stakeholders -- managers, workers, unions and dealers. The circle concept fostered a "spirit of cooperation" that resulted in a Joint Partnership Committee (JPIC), formed between management and the unions to improve operations (Teerlink & Ozley, 2000).

The current organizational structure is functional in nature. The key functions are corporate strategy, communications, human resources, financial services, legal and operations (Harley-Davidson 2010 Annual Report). By organizing along functional lines, the company has global control of all key functions, but this structure also emphasizes that the North American market is by far the largest for the company, the United States accounting for 55-60% of total shipments.

Harley-Davidson has focused in recent years on building addition flexibility to its management structure, with the circle organization and stronger cooperation with the unions. This has allowed the company to be more innovative, and respond more quickly to market challenges that it had in the past. Harley Davidson is likely to continue with these concepts in the future. Its business is relatively mature, so there is little need to make drastic changes to its management structure at this point, and its employee management is much more successful than in days past since it embraced the unions as key strategic partners.