the heat on ford;case analysis

The Heat On Ford: Case Analysis

THE HEAT ON FORD: CASE ANALYSIS

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(29, July, 2010)


The Heat on Ford: Case Analysis

Situation Analysis

Ford financial crisis which has escalated over the last few years has been mainly

triggered by the executive bureaucracy and royal hierarchy which is fashioned to the Ford family

ties, the new appointed chief executive Alan R. Mulally articulates that the working atmosphere

in this organization is very reclusive, information and communication among production stage

shop floor taskforce is prohibited, this fact rationalize the employees making errors and been

unable to correct them which has led to the corporation loss of $1.2 billion dollars. This fact has

led to Ford degeneration to symbol of inefficiency, projected y the fact that the executive are

reluctant making the culture of this organization to be dysfunctional and defeatist conflicting

resulting to losing to the new Cerberus Chrysler management in sales as voiced by Kiley (2007).

The case study evaluates three question that are aligned with the organization atmosphere,

centrally emphasizing on fords main flaws which have degenerated to dysfunctional conflict, the

role that the new chief executive Mulally has patterned to combat this conflict and will analyzed

Mulally intervention of the incident involving Consumer Reports staff and two senior Ford

engineers.

Case Study Summary

According to the chairman of Automotive Research Center David E. Cole who has been

an observer of this organization, articulate that Mulally strategic plan might be frail although the

change that this organization needed was from the outside not from inside, this is due to the fact

that the conflicts in the corporation are relationship based due to the royal hierarchy governance

and dysfunctional executive bureaucracy (Scherer, 1996). According to McIntyre (2000) Mullary

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has developed a strategic plan which encompasses constructive conflict that ensures an

influential power which is legitimate, rewarding and coercive with expertise that ensures that all

the taskforce determination is rewarded and the information flow is ample at all channel of

production. This is aimed at mitigating the dysfunctional and the management practices which

are based on hierarchy grading of employment and working not to the objective of the

organization but the approval of the ford family members in the board.

Key issues

In the power point study guide 10 and 11 centralized on the course text books outlines

influence and power, conflict and negotiation in the work place. These follows the key issues

that are facing Ford Motors which include: 1.Identify the main conditions at Ford described in

this case study that seems to have generated dysfunctional conflict Key Issues? 2. What has

Mulally done to reduce or remove these sources of conflict? In what ways has he encouraged or

created more conflict? 3. The opening paragraphs of this case study describe a conflict incident

involving Consumer Reports staff and two senior Ford engineers?

One of the major contentious conditions that have been pin pointed in Ford is Royal

Hierarchy which engages employment grades and thus bores the result non flow of information

and communication making it to be reclusive. This is the fact that has influenced dysfunctional

conflict among the taskforce as they are not aware of the occurrence of the whole production

chain process, this was developed when the inventors developed the V-8 engine, this was

patterned so that the engineers could not crack the design and sell Ford creation out as voiced by

Selden (1997).

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Mullary has developed a strategic plan that includes all participating parties in this

organization to break the executive bureaucracy and royal hierarchy. The plan encompasses

sharing of information from all level of the production workforce, attendance of meeting by all

executives and management with the production subordinates available. The plan also details the

answering the right answer and combating issues that are affecting this corporation than

rationalizing as it was the culture of Ford (Kiley, 2007). Grade employment has been also

removed to encourage creativity and competition among the managers and whiz kids and this

will enable them to be recognized and rewarded for their efforts.

The conflict that Mulally witnessed between Consumer Reports staff and two senior Ford

engineers about the defect of Ford Edge crossover SUV, made him acknowledge and devise the

“if no answer do not try to answer ideology” this was from the fact that the engineers were only

being defensive and did not apprehend how they can change the flaws but instead engaged on a

blame game. This trend is which Mulally want to distinct with his strategic plan that

encompasses creation of automobile from the hard data than from the management point of view

(Wheeler, 1999).

Problem

Dysfunction in all stages of production has been due to the result of information being

not shared among all taskforce and the non appearance of the ground men in the crisis meeting as

they are the one with the knowledge of the damage and the recommendation, which would help

save Ford from failure of revenue accumulation and reaching it desired goals. Tedlow (1998)

notes that Grading of employment has also dictated information sharing by the management as

they articulate that because they are cycled from department to department, they would hold the

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information so that the person who will be offered the chair has to source for their own. This has

led to information being withheld and the chain process suffers as the final product is

encompassed with different expertise and recommending change becomes a chore incase the

managers that authorized the work force to execute certain task leaves the organization.

Alternative solutions

Mulally is also being faced with the defensive and intimidating of the management as

they have been the custom in the organization of conflicting in relationship; however his

constructive relationship is generated to help influence and assert powerful behavioral changes

from the task force. The chief executive main task would be to change the working habit of this

organization this will enable information sharing and effective communication between the

managers and the taskforce (Selden, 1997).

Mulally will also have to develop and project a rebuilding plan that would ensure that

Ford motor stay clear ahead of their new managed Cerberus Chrysler who is their main rivals.

This organization has to centralize on producing vehicles which have low consumption and their

prices are competitive with other manufactures in this industry (McIntyre, 2000). Through this

initiative they have to ditch production of non moving vehicles like mercury or jaguar. They

would mostly rely on hard data in creation of consumer friendly vehicles.

The strategic plan also emphasizes on employees not rationalizing the errors they have

committed, but rather on combating and fixing them. Through chain of information and breaking

of the complexity of manufacturing Ford vehicles Mulally exerts that most of the part of the cars

would be identical to minimize the process of designing and manufacturing this parts (Selden,

1997).

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Selected solution

To end the royal hierarchy and dysfunctional executive bureaucracy Mulally has

developed a organized information sharing through the meeting which are held weekly including

all stakeholders to assess the climate of the crisis and offer expertise in all field. The comfort of

the executive which have generated inefficiency and dysfunction would be addressed to make

the management be projected toward the objectives of the organizations. Grading of employment

would also be assessed to eliminate laxity among the top executive that are related with the Ford

family, this will ensure that the development of the vehicles are customers influenced than from

the hierarchy order of rule, which aims at pleasing the board members as echoed by Kiley

(2007).

Implementation

Effective strategic management which Mulally plans to instill in Ford is far way more

criticized, however from the track record he is capable of turning around this organization as he

did with Boeing. His strategy includes training of managers and employees to share information,

as being very important facets to elevate communication awareness of the causes and

consequences of Ford failure in the market, and this will help articulate the goals and objectives

of Mulally comprehensive strategic plan (Tedlow, 1998). The plan should highlight mostly the

contentious issues that affect the organizations and analyze the facets that should be attended to

change the culture of this organization so that it may focus on its objectives. Most important,

this strategic plan should shelter the support of the executives and the taskforce, which is integral

to the overall success of the strategy.

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According to Tedlow (1998) the strategic plan should adapt an evaluation process which

details quantifiable metrics for accountability. All stakeholders associated with this organization

should foster this evaluative mechanism so that they may all be on the same page, and on the

road for improvement and recovery.

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References

Kiley, D. (2007). The Heat on Ford. Bllomberg BusinessWeek,

http://www.businessweek.com/magazine/content/07_23/b4037036.htm Retrieved June 4,

2007.

McIntyre, S. (2000). The Failure of Fordism: Reform of the Automobile Repair Industry.

Technology and Culture Journals. 41, 2. 269-299.

Scherer, F. (1996). Industry Structure, Strategy, and Public Policy. New York: HarperCollins.

Selden, P. (1997). Sales Process Engineering: A Personal Workshop. Milwaukee: ASQ Quality

Press.

Tedlow, R. (1998). The Struggle for Dominance in the Automobile Market: the Early Years of

Ford and General Motors. Business and Economic History. 17. 49-62.

Wheeler, D. (1999). Understanding Variation: The Key to Managing Chaos. New York:

McGraw.

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the heat on ford;case analysis

Leadership & Management