Transformation the Burke-Litwin Causal Model

Transformation

The Burke-Litwin Causal Model examines the organizations transitional and transactional variables for fit, synergy and conflict. Each of these variables contributes to the performance of the company, and that performance is also impacted by the interrelation between the different variables. This paper will examine the transactional variables and how well they work together to meet the organization's desired performance outcomes. The transactional variables are the organizational structure; tasks & skills; management practices; systems & policies; work unit climate; motivation and individual needs & goals.

Harley-Davidson (NYSE: HOG) operates a bureaucratic organizational structure. There are two main units - motorcycles and finance. Within the motorcycle group are units for the different brands, Harley-Davidson and Buell, with the H-D being further segmented into five units for different segments of the motorcycle market. There is also a unit for licensed products and one for Parts & Accessories (Harley-Davidson Company 2007 Form 10-K).

While the most important strength of Harley-Davidson is their iconic brand, they have developed a number of minor skills and competencies that allow them to better compete. One of these is their technology. While many firms in the motorcycle industry are driven by a rapid pace of technological innovation, Harley-Davidson has been able to thrive by developing technologies that have long-last appeal and fit with their brand image. This has allowed Harley to operate with significantly lower research & development expenses than many competitors. They have developed a strong competency in licensing, and another one in financing, two aspects of the business that are strong revenue drivers for the company.

With respect to management practices, decision-making at Harley-Davidson is relatively centralized. The pace of decision-making is slow and deliberate. Change is driven by management in response to external events; Harley-Davidson rarely takes a proactive approach to the changes in the marketplace.

Harley-Davidson's systems include its dealer management system, which aims to bring a consistent customer experience to the dealers and improve sales to the Finance division and of ancillary products. The human resources system is relatively sophisticated for such an old-established bureaucratic manufacturing concern. The company has strong relations with its union and allows employees greater freedoms and opportunities for fulfillment than in other, similar, firms. There are few distinctivenesses in Harley's other systems. The company has an unexceptional information system and budgeting process.

The work climate at Harley-Davidson is generally positive. The company's employees are often enthusiasts themselves, so the work environment is generally positive. The relationship between Harley-Davidson and its unions is generally positive. The unions helped the company through its tough times in the early 1980s and the company has maintained a strong, positive relationship with the union since then. There even semi-autonomous workgroups, a departure from the work climate typical of bureaucratic, unionized companies (Bruce, 2004).

Strong union-management relations have led to a prevalence of non-financial motivation at Harley-Davidson. The aforementioned autonomous workgroups exemplify an atmosphere within the company where workers are motivated by higher needs of achievement and actualization. Harley promotes continued education among its workforce. Both management and the union work together for common goals, providing a strong sense of motivation throughout the company (Ibid.).

From this motivation flows a commitment to individual needs and goals. Employees at Harley-Davidson are encouraged to develop capabilities that allow them to be adaptable and understand the environment in which they operate. Employees are encouraged to fulfill their needs; the company sees this is a way to help the organization respond more rapidly to change.

Many of these variables work together. For example, the commitment that Harley has to the needs and goals of its employees has helped to foster a work climate where employees are motivated by higher order needs. This also ties into the organizational culture, which is based around being the embodiment of the Harley-Davidson experience that the company then markets to its customers.

Centralized decision-making, however, does not easily support individual achievement and non-financial motivation. Harley-Davidson recognized this conflict during their crisis period in the early 1980s and moved to adapt their system. Operationally, they were able to move slightly away from strict bureaucratic control by developing systems that allowed for greater employee empowerment. This was the company's way of building some needed flexibility and motivation systems into a structure from which potential deviation is ultimately minimal. The centralized bureaucracy supports the core manufacturing operations, but the human resources and motivation systems, along with the work climate are more adaptable because that is what best suits the company's needs.

Though a characterization of "conflict" may be too severe, these motivation systems and human resources policies do not lend any particular support to the core competencies beyond the promotion of the corporate culture and brand image. The creation of a more fulfilling work environment does not support a company for which innovation is a slow incremental process. The underlying theory is correct that such activities will allow Harley to respond more quickly and creatively to challenges but given their historically slow pace of innovation there appears to be a lack of commitment at the top to utilize this resource. The company's management systems and policies as a whole may have created this resource, but they have not leveraged it.