Caterpillar and Komatsu: A Mission Statement Evaluation
Caterpillar and Komatsu: A Mission Statement Evaluation
Caterpillar and Komatsu are two of the largest heavy equipment manufacturers in the world with total revenue of over $29.1 billion dollars for fiscal year 2001 between the two companies. Caterpillar was established in 1925 after Benjamin Holt and Daniel Best merged their two companies, both of which had been in business for over 35 years each. Komatsu was founded in 1921 when Komatsu Iron Works was spun off as an independent corporation from Takeuchi Mining Industry, Ltd. Both companies, Caterpillar and Komatsu, have since established themselves in the market as leaders of heavy equipment manufacturing.
A review of the websites and mission statements for each company speaks volumes about the company and their philosophy towards doing business. Each mission statement was evaluated for the following components as per the UniModule for the course: Customers, Products or services, Markets, Technology, Concern for survival, growth and profitability, Philosophy, Self-concept, Concern for public image and Concern for employees. Additionally, each mission statement, as well as the company web site and company reports, was reviewed to determine how the priorities of the stockholders were addressed.
Caterpillar has both a vision and a mission to drive their company. The vision is basically stated, “Be the global leader in customer value” (Caterpillar). This basic statement drives the four different aspects of the mission and the company as a whole. The vision also shows a strong concern for survival and growth with a forward-looking vision to the future. In addition, a basic vision such as this also drives the philosophy of the company as they strive to be the best in their market.
The first section of the mission statement is as follows:
Caterpillar will be the leader in providing the best value in machines, engines and support services for customers dedicated to building the world’s infrastructure and developing and transporting its resources. We provide the best value to customers. (italics as included in statement) (Caterpillar)
As this section states, Caterpillar believes in supporting the customer through all aspects of its operations. This section also addresses Caterpillar’s philosophy in their products and services by providing the best value to their customers.
The second section of the mission statement states:
Caterpillar people will increase shareholder value by aggressively pursuing growth and profit opportunities that leverage our engineering, manufacturing, distribution, information management and financial services expertise. We grow profitably. (italics as included in statement) (Caterpillar)
This section addresses Caterpillar’s concern for shareholder value by directly addressing their goals to increase value as part of the statement, and not as an afterthought. The simple line, “We grow profitably” shows a strong faith in their future as a company.
The third section read:
Caterpillar will provide its worldwide workforce with an environment that stimulates diversity, innovation, teamwork, continuous learning and improvement and rewards individual performance. We develop and reward people. (italics as included in statement) (Caterpillar)
A strong concern for the employees is shown in this section of the mission statement. According to the Caterpillar website, the company offers extensive training and employee development, as well as a multitude of benefits for their employees.
The final section of the mission statement is as follows:
Caterpillar is dedicated to improving the quality of life while sustaining the quality of our earth. We encourage social responsibility. (italics as included in statement) (Caterpillar)
Finally, Caterpillar addresses their concern for the public image of the company by addressing environmental and social issues in their mission statement. Caterpillar is involved in several environmental and social projects in the communities that they are a part of, whether in the United States or around the world.
Overall, the vision and mission statement for Caterpillar is strong and clear, providing a valuable direction for the company in all aspects of their operation.
Komatsu has established a basic mission statement as well as a Code of Worldwide Business Conduct (Code) booklet that helps to guide the company in its global business dealings. This Code is updated annually to reflect any new or changed information that may affect how the company performs on a global level. The mission statement, which is actually an opening statement by the president of the company, Masahiro Sakane, reads as follows:
Komatsu is committed to Quality and Reliability as the very cornerstones of its management to maximize its corporate value. Through business activities, we at Komatsu work to enhance the corporate value of Komatsu for shareholders and all other stakeholders by promoting activities to become a Strong Company, while simultaneously observing the “Rules of the Business Community (the Rules)” and fulfilling the responsibility of corporate citizenship to become a Good Company. In this manner, I believe that we can improve the Quality and Reliability of management and employees. (Komatsu)
By breaking down the opening statement, as well as the pertinent sections of the Code, we can evaluate the company’s means for addressing the different requirements from the UniModule.
A driving force behind the Code is the strong commitment to quality and reliability for their products. This is addressed in the management direction section of the code, which provides five guidelines for enhancing quality and reliability. The first guideline directly addresses the customers’ needs and concerns, as well as the product and/or services themselves, by “constantly providing safe and innovative products/service and systems from the viewpoint of our customers.” (Komatsu)
Additionally, product safety is mentioned as one of the main aspects for quality and reliability. According to Komatsu, “all employees place the highest priority for assurance of safety when engaging in development, production, procurement, sales, service and all other stages.” (Komatsu)
Caterpillar Company Information. Mission. Caterpillar. Retrieved on June 20, 2002 from the World Wide Web:
Komatsu Code of Business Conduct. Komatsu, Inc. Retrieved June 20, 2002 from the World Wide Web: