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.
Introduction
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.
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Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
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IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
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Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
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Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
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Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
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.
