Harley-Davidson utilizes a functional organizational structure that separates aspects of its sales and manufacturing business into distinct groups. These groups include Financial Services, Motorcycle Management, Marketing, Digital, and Electric Vehicles.
Harley-Davidson is also structured around four key geographic divisions: Europe, Middle East, and Africa (EMEA), North America, Asia Pacific, and Latin America.
The company is also characterized by a centralized, global hierarchy. Control and decision-making power are concentrated at company headquarters in Milwaukee, with each functional and divisional head reporting directly to current CEO Jochen Zeitz.
Department
Type of Structure
Details
Advantages
Drawbacks
Corporate Level
Functional
– Harley-Davidson’s corporate structure consists of various departments such as marketing, finance, supply chain, and manufacturing.
– Specialization in key functional areas. – Efficient management of corporate-level operations.
– Potential silos between functional departments, which can hinder cross-functional collaboration.
Business Units
Divisional
– The company has distinct business units, including Harley-Davidson Motorcycles, Parts and Accessories, and General Merchandise.
– Adaptation to specific product lines and markets. – Allows for focused strategies in each business unit.
– Coordination challenges between different business units, particularly when introducing new products or innovations.
Production
Functional
– Within manufacturing, Harley-Davidson uses a functional structure with specialized units for assembly, quality control, and research and development.
– Expertise and efficiency in motorcycle production.
– Potential difficulties in integrating new technologies or processes across production units.
Dealer Network
Network
– Harley-Davidson relies on a network of independent dealerships worldwide to distribute and sell its motorcycles and related products.
– Wide market reach through independent dealers. – Localized sales and customer support.
– Challenges in maintaining consistent branding and customer experience across diverse dealerships.
Harley-Davidson is a motorcycle manufacturer that was founded in 1903 by William S. Harley, Arthur Davidson, Walter Davidson, and William A. Davidson.
The company, which is headquartered in Milwaukee, Wisconsin, was one of only two motorcycle manufacturers to survive the Great Depression in the United States. Today, the Harley-Davidson brand boasts a loyal and devoted following with a broad range of merchandise supporting its core motorcycle range.
Harley-Davidson utilizes a functional organizational structure that separates aspects of its sales and manufacturing business into distinct groups. This structure and some additional components are explained in the following sections.
Functional groups
Functional groups are the predominant structure in the Harley-Davidson company. Employees are organized according to their particular skills and knowledge with each group having its own vertical management structure.
Harley-Davidson’s functional departments include:
Financial Services.
Legal.
Commercial.
Human Resources.
Digital.
Electric Vehicles.
Product Development and Operations.
Apparel and Licensing.
Motorcycle Management.
Stakeholder Management.
Marketing.
Chief Executive Officer, and
Communications and Corporate Relations.
As a company that sells just a few different types of products, the functional organizational structure is seen as an advantage. Employees who are categorized according to their expertise can contribute to the depth of knowledge within Harley-Davidson that allows it to be an industry leader in motorcycles.
Geographic divisions
Harley-Davidson also focuses its efforts across four geographic divisions:
Europe, Middle East, and Africa (EMEA).
North America.
Asia Pacific, and
Latin America.
Each division is headed by a Vice President or Director.
Centralization and global hierarchy
Harley-Davidson’s structure is also centralized since control over global operations is maintained by company headquarters in the United States. Centralization also means that each functional group and divisional head reports directly to the current Chairman, President, and CEO Jochen Zeitz. There is also a 10-member Board of Directors with experience at previous companies such as Boeing, Ford, MTV, and the Bill & Melinda Gates Foundation.
The predominant functional structure also contributes to centralization by providing a clear and consistent chain of command. Since employees are not confused about who they should report to, operational efficiency is improved.
Many companies may find centralization cumbersome when trying to manage global operations. But for Harley-Davidson, it appears to be less of an issue since most sales occur in the United States. In 2021, for example, the company sold 134,400 motorcycles in the North American Market – representing almost 70% of the global total.
Organizational Structure Overview
Functional Structure: Harley-Davidson is organized into several key functional areas:
Product Development: Focuses on the design, engineering, and innovation of motorcycles and related products.
Manufacturing and Supply Chain: Manages the production facilities and logistics to ensure efficient operations and quality control.
Marketing and Sales: Drives brand engagement, promotes product offerings, and manages customer relationships across various markets.
Finance: Oversees financial planning, risk management, and investment decisions to support corporate goals.
Human Resources: Manages employee relations, recruitment, and organizational development to align with strategic objectives.
Geographic Divisions: To address the specific needs of different markets, Harley-Davidson also incorporates geographic divisions:
North America: The largest market, managed directly from corporate headquarters in Milwaukee, Wisconsin.
Europe, Middle East, and Africa (EMEA): A significant market with diverse customer preferences, managed from a regional hub.
Asia-Pacific: Includes emerging markets where Harley-Davidson is expanding its presence, managed from regional subsidiaries.
Comparison with Other Automotive Companies
Comparing Harley-Davidson’s structure with automotive giants like Ford and Honda reveals some key differences:
Ford: Utilizes a global matrix structure that combines functional management with geographic and product-based divisions. This allows Ford to coordinate operations across different product lines and regions more dynamically than Harley-Davidson’s predominantly functional structure.
Honda: Operates with a more integrated global structure that blends functional activities with strong regional operations, focusing heavily on localization and cross-functional teams to drive innovation and adaptability.
Key Advantages and Challenges
Advantages:
Specialization: Functional departments allow Harley-Davidson to develop deep expertise in each area, from product design to marketing strategies.
Clear Accountability: Each department has clear responsibilities and goals, simplifying performance assessment and decision-making processes.
Market Adaptability: Geographic divisions enable tailored strategies that cater to local customer preferences and regulatory environments, crucial for global brands.
Challenges:
Cross-Functional Coordination: While functional structures support specialization, they can create silos that hinder communication and collaboration between departments, especially in product innovation and customer experience.
Responsiveness to Market Changes: Geographic divisions help, but the centralization of decision-making in functional areas might slow down Harley-Davidson’s ability to respond to rapid market changes compared to companies with a more integrated or matrix structure.
Resource Allocation: Balancing resources across functional departments and geographic regions can be complex, potentially leading to inefficiencies or conflicts in priority settings.
Strategic Implications
Harley-Davidson’s organizational structure supports its focus on quality, brand heritage, and customer loyalty, which are critical for its niche market position. However, as the competitive landscape evolves with increasing emphasis on electric vehicles and new consumer demographics, Harley-Davidson may need to further adapt its structure to enhance cross-functional collaboration and agility. This could involve integrating more aspects of a matrix structure or increasing the autonomy of geographic divisions to drive local innovation and responsiveness.
Key Highlights:
Functional Organizational Structure: Harley-Davidson employs a functional organizational structure that organizes its sales and manufacturing business into distinct functional groups based on expertise and skills.
Functional Departments: The company’s functional departments include Financial Services, Legal, Commercial, Human Resources, Digital, Electric Vehicles, Product Development and Operations, Apparel and Licensing, Motorcycle Management, Stakeholder Management, Marketing, CEO, and Communications and Corporate Relations.
Advantage of Focus: Due to its focused product range (motorcycles), the functional organizational structure allows Harley-Davidson to leverage the expertise of its employees and be an industry leader in its field.
Geographic Divisions: Harley-Davidson operates through four geographic divisions: Europe, Middle East, and Africa (EMEA), North America, Asia Pacific, and Latin America. Each division is led by a Vice President or Director.
Centralization: The company’s structure is centralized, with control over global operations maintained at the company’s headquarters in the United States. This centralization ensures a clear chain of command and efficient decision-making.
Global Hierarchy: The CEO, Jochen Zeitz, holds a central role in the global hierarchy, with each functional group and divisional head reporting directly to him. The company also has a 10-member Board of Directors with diverse experience.
Sales Distribution: Despite global operations, the company’s centralization seems less cumbersome due to a significant portion of sales occurring in North America, where it sold nearly 70% of its motorcycles in 2021.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
