Traditionally, the management of Caterpillar was founded on a firm, hierarchical organization dominated by the executive office. Former CEO's set the vision and strategy for Caterpillar and typically went unchallenged. In addition, Caterpillar adamantly believed in the "promote from within" policy. This created an environment of educated and devoted employees; however, it also created an environment lacking diversity, creativity, and imagination.

Caterpillar needs to recognize that global competition is increasing and that in order for it to maintain its role as the industry leader; it must diversify and expand its product line of parts and components as well at its’ services, into other areas without straying from its high quality of standards.

Corporate Culture acts as a tool for achieving organizational goals and helping Caterpillar adapt to challenging external forces. Caterpillar needs to employ Human Resources and create a separate group to focus on corporate culture and inform the employees of the benefits of the changes. Corporate culture and instilling vision in employees is no easy task, small steps will be necessary. First, Caterpillar should begin by creating cross-functional work teams and offer incentives based on company-wide performance versus individual performance. Cross-functional work teams will also help to eliminate some of the individual product teams.

1). Barton could not count on Caterpillar’s continual success due to the downturn of the North American construction industry.

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