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Caterpillar Case Study


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Caterpillar, Inc is a company known for its heavy machinery and mining equipment (Murphy, P., & Laczniak, E. (2012).). If you’ve spent any time around a construction site or just drove by one more likely than not you’re going to see a CAT piece of machinery. CAT is a global company who takes pride in managing their stakeholders, customers and employees. CAT has made a name for themselves not only for their high quality products but also for their high ethical standards and corporate responsibility (Murphy, P., & Laczniak, E. (2012).). Even though CAT has been known for their high ethical standards they have also dealt with some ethical issues over the years. CAT sells over 300 machines while also selling parts, turbines, engines and electronics. Caterpillar Inc. also owns CAT Financial, CAT logistics, Progress Rail, Solar Turbine and Asia Trak (Murphy, P., & Laczniak, E. (2012).). The awards CAT has won for their ethical relations include being listed in Ethisphere’s Worlds Most Ethical Companies under industrial manufacturing, ranked 27th in Fortune magazine’s “Worlds Most Admired Companies”, Scored 12 in Women Engineer Magazine’s “Top 50 Employers” (Murphy, P., & Laczniak, E. (2012).). Caterpillar ranks so high because of their strong goals and strategies. Caterpillar has identified its vision, mission and strategy to express commitment towards the environment, economy and workforce (Murphy, P., & Laczniak, E. (2012).). It’s a great move by CAT to show these standards and ethics with their company and products. Although they want to make as much money as they can like any company they also value the ethical issues that surround their company. Their vision is to see a world where people’s basic requirements are fulfilled to sustain our environment. Their mission statement is to enable economic growth through infrastructure and energy development. Their strategy is to provide work environments, products services and solutions that make efficient use of the worlds natural resources and reduce unnecessary impacts on people (Murphy, P., & Laczniak, E. (2012).). Cat made a code of conduct in 1974 which insured ethical standards for the company. In 2010 the company established a Vision 2020 strategy as a set of goals for the upcoming years (Murphy, P., & Laczniak, E. (2012).). By doing this CAT has set them self up to succeed, they have made it clear what these goals are and what they expect out of the company. I really like this move because it lets the company see exactly where it intends to go and morally where it stands on the future. CAT has four main core values for its goals: Integrity, Excellence Teamwork and commitment (Murphy, P., & Laczniak, E. (2012).).
Although stockholders are not mentioned directly in the core values they will benefit from the company following these values. CAT recognizes that it will not only affect its stockholders but also its customers and employees (Murphy, P., & Laczniak, E. (2012).). CAT see’s that their products need to be high quality based on environment and safety considerations. They strive to make new innovative products while also working on improving existing ones. They also do more than sell machinery; they do financing and safety material. This is a great move by CAT not only do they show that they care about the well being of the customer they also cut down on risk by offering safety tips and procedures for the machines. The production system works to fix defective products before they go further down the process (Murphy, P., & Laczniak, E. (2012).). The employees have had some problems with CAT over the years. The unions had some disagreement with the company and therefore it led to some strikes and other problems. These issues have been resolved and the company has not seen any of those issues since the 1990’s (Murphy, P., & Laczniak, E. (2012).). CAT’s major emphases with its employees are diversity and have actually won awards for their progress in the matter. They also emphasize safety of their employees and have cut injury down by more than half since 2003. CAT is socially seen as a great company. They have a social responsibility to the public to have a positive impact on their stakeholders and minimize negative impact on society. They’ve created the Caterpillar foundation which uses money aid and resources to help the public. They have the matching gifts program where every dollar they donate to certain organizations of the community they will match. They are also involved in the charity United Way. In 2010 the employees donated around 250,000, tops for employee donations (Murphy, P., & Laczniak, E. (2012).).
The ethical issues that most relate to CAT are the issues of their own employees and their unions. Although they have not been n strike in years they are constantly in intense negations. They have also dealt with environmental issues that have caused momentary issues. In 2000 a product was producing too much smog and they were forced to pay 128 million in penalties (Murphy, P., & Laczniak, E. (2012).). They have addressed these issues with some of their own programs to clean the air up and have been successful with their products. They have also had issues with their own products. Big machines are not the not the safest products to use and sometimes injuries do occur. They have had to deal with that but nothing major (Murphy, P., & Laczniak, E. (2012).). My recommendations for Caterpillar Inc. are to work on their relations with their employees union. This still seems to be a major issue even though there haven’t been any major incidents since the 1990’s. A company with unhappy employees will not run as efficient as it is capable of. If this relationship doesn’t get better I can see it becoming a major issue. Caterpillar Inc. seems to be a great company that I would love to work for myself. They seem to be on the rise and growing past their rival John Deere.

Works Cited
Murphy, P., & Laczniak, E. (2012). Ethics in marketing: International cases and perspectives (pp. 147-155). Abingdon, Oxon: Routledge.

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