The Organization of PACCAR Inc

            PACCAR Inc. offers heavy-duty and medium-duty both types of trucks, winches, diesel engines, and spare parts of trucks. PACCAR Inc. is famous for technological innovations and uniqueness of their products.  PACCAR Inc. has a functional network of extensive dealers in 2100 locations over the globe (Becker, 2004). According to the information provided by the administration, PACCAR Inc. operates in more than 100 countries of the world. In this research paper globalization strategy, leadership styles, HRM, operations strategy and strategic planning of the PACCAR Company are discussed in detail.

Brief History of the Organization of PACCAR Inc

             PACCAR is a heavy truck manufacturing and selling company headquartered in Bellevue. In early 1900s William Pigott started a car manufacturing company named as Pacific Car and Foundry Company. In 1972, the company made changes in its operations and eliminated all structural steel business operations. Furthermore, at the beginning of 1972, the company also changed its name from Pacific Car and Foundry Company to PACCAR Company (Paccar.com, 2019). Mainly the company has several brands for trucks that includes DAF, Kenworth, Foden, and Peterbilt. Targeted market for trucks and premium commercial vehicles sales includes Belgium, Asia, South America, Mexico, Western Europe, Africa, Canada, Brasil, Australia, and the Netherlands. PACCAR Inc. earned ISO 14001 certificate in 2015 and ISO 9001 certificate in 2008.  

Ethics System of the Organization of PACCAR Inc

          Ethics represents the moral values and social norms that are defined as good in society. Organizations follow up ethics to promote a positive culture at their workplace and to get better positioning and reputation in society. Senior management at PACCAR Inc. is highly concerned with business ethics. The company has set out ethical standards for its employees and managerial staff. Particularly, the ethical system of finance and accounts department is kept strong to ensure accountability and accuracy of the financial details (Paccar.com, 2019). The core of ethics senior financial officers includes several policies and requirements a few of these are presented below. 

1)      Fairness, accuracy, timely, and understandable disclosure of financial periodical reports are the responsibility of senior financial officers.

2)      It is the responsibility of the senior management at the finance department to ensure development, maintenance, and evaluation of the internal audit of financial information and statements (Paccar.com, 2019).

           According to the rules and regulations of the PACCAR Company, the board of directors can take decisions regarding disciplinary actions in case senior financial management violates these code of ethics. Somehow, other than financial department other managerial staff and working staff are also strictly obliged to follow up the code of ethics (Paccar.com, 2019). For instance, by following ethical policies of the company HR department is responsible to make recruitment on a fair basis without any type of discriminations.  

            Furthermore, the company has also forbidden its workforce to accept any kind of bribery. According to the business ethics of PACCAR employees are not allowed to accept gifts, payments, entrainment, and services other than social amenities that are considered as fair and normal part of the professional relationship.   

Leadership of the Organization of PACCAR Inc

             Leaders or manager perform several functions that include monitoring employee's performance, controlling, planning, and implementation of plans. PACCAR Company is following the bureaucratic leadership style in which power and authorities are given to the managers at different levels of hierarchy. Here organizational chart is presented below (in the appendix) that represents that the company is following a wider span of control for overall organizational management. CEO, Directors, General Managers, Assistant managers, and bottom line managers are responsible to work as leaders for their subordinates. Managers develop a plan and communicate with their employees to help them work on these plans. Somehow, top leave management and corporate management are responsible to create the corporate strategy.    

Organizational Culture

             The organizational culture of the PACCAR Company can be evaluated and measured through different attribute including employee engagement, teamwork, trust, integrity, responsibility, learning opportunity, and employees behavior (Anwar, Warso, & Paramita, 2016). Policies and strategies developed at the corporate level management of the company create an overall organizational culture. PACCAR is working in a highly competitive environment in which innovation and product designing have significant value. PACCAR promote the collaborative culture through engaging employees in the team project. Group projects not only encourage collaborative culture development but also help out workers bring efficiency in their work performance (paccar.com, 2019). 

            Somehow, PACCAR conducts the survey and collect feedback from their employees to get information about the culture and desired culture for the company (Schaltegger & Burritt, 2010). Company relays on modern IT system for communication between employees and the external environment. Organizational culture support vertical and horizontal communication within the company (Bourne, Mills, Wilcox, Neely, & Platts, 2000).

             Because of the wider span of control each manager or leader has the appropriate number of workers and subordinates that reduce the communication barriers (Anwar, Warso, & Paramita, 2016). Because employees working in an organization that has a large or tall hierarchy because of the narrow span of control usually face difficulty in communication with top management. Considering this factor analysis claim that communication system is supportive for PACCAR Company to provide a positive organizational culture.     

           Teamwork is the core value of the PACCAR Company. According to the principle of the company synergy of teamwork causes to promote success and enhance capabilities. In organizational culture, teamwork emphasizes the engagement and involvement of the workers in respective worker’s teams (paccar.com, 2019). The company provides training sessions to its employees to ensure teambuilding in the organization. Major training programs offered by the PACCAR Company includes technical training programs, employee’s well-being program, confidential employee assistance program, and leadership development training program.  

          The organizational culture of PACCAR is supportive of the organization in the development process. The company facilitates the learning environment. According to this organizational staff and management always utilizes the information and knowledge gained from the activities and programs of their workers (Anwar, Warso, & Paramita, 2016).

                According to the company, learning is a way to ensure continuous improvement and development of solutions for the problems. Thus in short organizational culture is supportive for continues learning and improvement in each area of operation (paccar.com, 2019). Managers conduct research and compare performance through benchmarking to collect information about the gaps and weaknesses with the purpose to work on these gaps and make each process improved and highly success oriented. ISO certificates are evidence of continued improvement in the organizational systems.  

Human Resources Management of the Organization of PACCAR Inc

            Human resources management section includes processes and strategies of PACCAR HR department towards hiring, compensation, reinforcement, motivation, monitoring employee’s performance, wages, employee’s relations, health, and safety, rewarding, firing, and pension. According to the analysis, the company is successfully managing the workforce of more than 25000 employees. HR managers recruit employees on a fair selection basis.

            A panel of experts (in the relevant field) and HR managers conduct the interview to evaluate and judge all available candidates. They select candidates on the basis of qualification level and work experiences while ignoring all kind of discrimination related to race, gender, and physical disabilities.  Because of this you never found PACCAR in news and cases related to discrimination. Basically, it is the policy of the company to keep the workplace clear from any kind of discrimination, harassment, and stereotyping.

            HR management of PACCAR Company is familiar with the importance of rewards and incentives in the employee’s job satisfaction, motivation and performance improvement. Company appraises the employee performance to facilitate the fair distribution of rewards and incentives in the employees. Managers conduct surveys to collect quantitative information about the employee’s engagement and satisfaction level (paccar.com, 2019).

            HR department also ensures employees health and safety. For employees, the well-being HR department has introduced free healthcare-related programs (paccar.com, 2019). Company offer discounted memberships in sports complexes and local gyms to help their employees remain healthy and physically fit. Employees are also given opportunity through Confidential Employees Assistance Program to get online classes for parenting, conflict management, financial planning, and stress to remain mentally fit and healthy (paccar.com, 2019).  

Marketing Strategy of the Organization of PACCAR Inc

            The marketing strategy of PACCAR Company represents the strong positioning of the company in the market. As the selected targeted market is economically strong therefore company offers high-quality products at competitive prices. For the purpose of marketing company mostly use digital media and social media platforms. The company promotes its products and services through social media marketing. Company’s official page at Facebook is the main source for direct interaction with the customers and their feedback. Somehow, other than social media there is a very limited platform where we can find PACCAR Company promoting products and services.

            Other than social media marketing strategy company is also following direct and physical marketing strategies (Bourne, Mills, Wilcox, Neely, & Platts, 2000). The company organizes events and functions such as events on the inauguration of the new manufacturing plant, or introduction of new vehicles. Basically, PACCAR provides customer-oriented services but of course, heavy trucks are not the require vehicles of households (Anwar, Warso, & Paramita, 2016). Their targeted segment is truck drivers, traveling and fright services providing companies that mainly rely on personal relationships rather than heavy digital marketing and advertising, therefore, all marketing activities and strategies of PACCAR Company are related to their targeted market segment (Becker, 2004).  

Operations Strategy of the Organization of PACCAR Inc

             PACCAR company operations include production and selling of vehicles and parts. In the production sector strategy of the company is to manufacture high-quality vehicles with minimum chances of defects. The company promises with their customers that they deliver high quality therefore in manufacturing operations they mainly focus on quality rather than cost-effective strategies. The company follows modern system engineering and digital monitoring systems to eliminate the chances of defeats. Somehow, the company is also following lean management and six sigma approaches to ensure high quality and minimum wastes. As a result of these efforts and successful implementation of this strategy, the company earned Manufacturing leadership award in 2014. While for selling operations company has a relationship with dealers and suppliers.  

Globalization Strategy of the Organization of PACCAR Inc

            The company is also working on globalization strategy. HR department develops policies and strategies for diversity. The company operates in more than 24 countries for the manufacturing process, therefore, they have a highly diverse workforce (Hao & Yazdanifard, 2015). The company provides the opportunity to the natives and local residents of each country to work with the team of PACCAR that not only increases diversity in the organization but also help out the managerial staff to learn the new culture. Managers use this knowledge to understand cultural differences, perceptions, and interest of people belonging from different cultures and regions of the world. Thus in the light of this knowledge, they can make better policies and strategies for marketing.     

Strategic planning of PACCAR Engine Company

PACCAR Engine Company is achieving strong market growth due to increasing the investment of parts distribution, manufacturing facilities, new products and the implementation of new technologies. The revenues of the company are reaching as fifth highest with the values of $ 17.03 billion and the net income according to statistical analysis reached $ 521.7 million, tax return revenues as 3.1 %.  The financial results of the company reflect the premium quality services and product. The superior financial strength of PACCAR Engine Company reflects the capabilities of companies to achieve the goals (Paccar. com, 2016).

The financial performance of PACCAR Engine Company is benefited due to strong strategic planning. The consistency, profitability, intense focus, strong balance sheet, productivity, technology and quality of services are considered in the analysis of strategic planning. Based on productivity and efficiency the annual improvement of the company was 5 -7 % and capacity expansion increase the capability of the company for manufacturing and facilities. The company was able to achieve a strong position in the market by considering the strategies about the customer dealer financing capabilities and market segmentation. On contrary to the services of competitors, PACCAR Engine Company possess a strong power of bargaining by the appropriate operation of management (Analysisreport. morningstar. com, 2019).

The strategy of the company is to deal with 98 countries and more than 2100 dealers that are the captive arm of the company. The vigorous devotion of the company is towards the independent truth of company and loyalty of customers. The success of the company is based on the market position and maintenance of current policies in the company. The premium market position of PACCAR Engine Company is around 35 % in Mexico, 30 % in North America, and 15 % in Europe (Analysisreport. morningstar. com, 2019).

The company evolved the consideration of the strategies and regulations for the emission standards and cost considerations. The operational strategy of PACCAR Engine Company is associated with the margin compression (Brettel, Friederichsen, Keller, & Rosenberg, 2014). The shift in the role and components is related to the manufactured engines. The operating efficiencies of the company are increased due to the manufacturing of engines and by reducing the concerns of supplier power. The operating efficiencies of PACCAR are improving for the facilities of distribution as well as manufacturing. The company believes in the product differentiation and strategy that enables to remain competitive in the international market (Businesswire. com, 2012).

PACCAR Engine Company believes in the intangible assets and sells the products for different brands such as DAF, Peterbilt, and Kenworth. As compared to the peer group including (Volkswagen, Daimler, and Volvo) PACCAR succeeded in generating impressive returns on invested capital and the return is 24 %. The cost of capital according to the estimated analysis reached 9.0 % weightage. The attributes of the company are related to the positive trends and effective management for the leverages and to improve the growth of services by increasing the opportunities (Analysisreport. morningstar. com, 2019).

In the case of an economic moat, two factors are of prime concern such as the quality of the dealer's network and perceived quality of the product. There is the number of factors that demonstrate the ability of PACCAR Engine Company to maintain the market shares, maintain the peer residual values, sell products at the premium price to the peers and to maintain the position of the company in the international market (Businesswire. com, 2012).

The truck business of the company comprises of approximately 75% of the sales and generates 60 % of the revenues. The other competitive brands are Peterbilt and Kenworth that considers 30 % of market shares. The freight growth in the company is increased due to the global trade, improvement in freight productivity, gross domestic growth of the product, and availability of the extensive transportation network.

The performance of the product increases customer satisfaction and ultimately results in revenue stemming. The freight growth of PACCAR Engine Company is expanding rapidly and results in the increase in demand for products (Afza & Nazir, 2007). The other factors having an influence on the network includes an extensive multimodal network of transportation. The American trucker association determined that 70 % of the freight is done by trucks and 60 % of the owners holds heavy truck fleet. The report can be used to determine the activity of PACCAR Engine Company in providing products (Alpert, Alpert, & Maltz, 2005). The designs of trucks generated by PACCAR Engine Company are for greater lifecycle that is around two years more than the engines provided by the competitors.

PACCAR Engine Company offers a 10% price premium for the sales of trucks. The management analyzed bolstered variation in the truck driver population. The operation strategy of PACCAR Engine Company withstands the whole margin compression. The owners of the company believe in the product differentiation and strategy of PACCAR to remain well defined in the niche market and to stay competitive in the international market (Analysisreport. morningstar. com, 2019). The major shareholders are mentioned below in table 1

SWOT analysis of the Organization of PACCAR Inc

Strengths of the Organization of PACCAR Inc

The extensive network of dealers for the services and products provides benefits to PACCAR and the network is expanded for more than 100 countries including the United States and Asia. The major part of revenues is generated by the network of services. The dealers of PACCAR are around 1800 around the world and employees in the company as provided by the analysis of 2017 are more than 25000. The extensive network of dealers and skills of the workforce enables the company to generate profit from 2100 locations.

PACCAR is a strong brand and fully equipped with heavy equipment. The business strategy of the company revolves around the quality and technology for the services and products. The financial services make the company strong as the total production in 2017 for all the products was 2.3 million units.

The better customer service and management have control over the inventory and increase the output rates. The company has paved the ways to improve the technology and to provide the vehicle autonomy for truck utilization, improvement in the safety considerations, and fuel efficiency that increases the demand.

Weakness of the Organization of PACCAR Inc

The higher level of debt is expanded and reduces capital expenditure. The higher recession is having an impact on the sales in the United States and the drop in the total revenues was determined as 40 %. PACCAR is composed of the number of small companies and failed to merge the firms together for different work culture. The company is not able to tackle the challenges and to develop a new mechanism that deals with the challenges. The structure of the organization is compatible with the developed business model but limits the expansion of products in the adjacent segments of the market (Brah, Wong, & Rao, 2000).

Opportunities of the Organization of PACCAR Inc

 There is a number of new opportunities that generate a higher level of production in the market. The greater opportunity is to drive the advantages of new technology and to gain market shares for the new products. The stable and free cash flow provides the company with a wide range of opportunities to change the technology and to introduce new segments of the product. The new trends in the services and products can open a new market for the company and it provides the opportunity to develop a new stream of revenues and to find diversity in the categories

Threats 

The implementation of new environmental regulations possesses threats to the existing production process. The skill of the workforce is important for the growth of the company and the shortage of skilled employees can reduce the production efficiency of the company. The use of new technology by competitors develops a serious threat to the company. The increase in the level and moment for the production process increases the prices and generates pressure on the profitability of the company (Analysisreport. morningstar. com, 2019).

Conclusion on the Organization of PACCAR Inc

            PACCAR Company is working in the international market with its fixed product line of heavy trucks and vehicles parts. Managerial staff develop policies and plans that other employees follow up. The company is mainly focused on improvement, innovativeness, and customer demands. Continuous learning process enables the company to cover up gaps and weakness and ensure successful operations in the market.     

Appendix of the Organization of PACCAR Inc