Essay On Organizational Behavior Of Ford Motor Company
It is a fact that every organization has its eye on increasing its profitability with time. In line with this thought, researchers and scholars have come up with models and theories that have helped business enterprises to become stable in their quest to remain relevant in the market. Many companies have adopted different theories and models that have seen them through time and have helped them to remain profitable. However, it is also clear that the market is a relatively volatile arena that has, in recent years become quite unpredictable. Major organizations that compete for the same resourcesand markets have cropped up thus leading to high stakes in winning customers to purchase products. Volatility is not just brought about by customers’ decision but also the company’s financial status, disruptions from workers’ strikes, disputes with suppliers and internal threats in the organization especially those in top management.
In this business study on organization behavior, the learner selected Ford Motor Company. The company is based in North America and has grown to become a force to reckon with in the motor market. Ford Motor Company has over the years adopted various strategies that have helped maintain the brand in the market. Their selections on the strategies to use have brought both benefits as well as weaknesses in the organization depending on their choices. In this case study, the learner will start by looking at the leadership strategy that has been adopted. In this, there will be relation of the strategy with relevant theories and/ or models that best explain their approach and the effects that their approach has on the organization. This will be followed by analysis of their product line where there will be mention of competitors that have made an impact on their production. From the production line, there will be consideration of customer satisfaction and market share and the implication of their decisions and actions. Under this section, there will be consideration of corporate social responsibility. Lastly, there will be analysis of employee satisfaction and engagement in the organization.
According to Salama, Holland and Vinten (2003), Ford Motor Company is known for its hierarchical leadership structure (p. 318) and (Marsh, 2008). Salama, Holland and Vinten continue to note that their approach is one that is mostly used in the U. S. (p. 318). It has been noted that there are strict hierarchical order that have been set up such that they are not to be breached. According to Weymes (2004) on management theory, it is noted that earlier research that led to the formation of the management theory like that of Kaplan and Norton (1992; 1996) best explain some approaches that are used in the market. Based on this theory (The Balanced Score Card) as proposed by Kaplan and Norton (1992; 1996; Weymes, 2004), it is clear that there is strict this approach. There is more leadership power and authority that is given to the top management that to some
The balanced scorecard offers four dimensions that include the customer service dimension, the knowledge generation dimension, process management dimension and the financial performance dimension (Kaplan & Norton, 1992; 1996; Weymes, 2004). There is little regard to the impact that leadership and its approach has on the overall organizational performance. For example, in the company’s internal S.W.O.T analysis as seen in Ford (2010), there is nowhere there is mention of the leadership of the organization which in essence appears like leadership is more of a passive and overly integrated aspect that is not good to mention.
The main focus in their analysis is the products and the market meaning that little emphasis is made leadership integration in day-to-day company operations – an aspect that the company should be proud of.
Product Line and Competitors
Ford Motor Company is a company that is reckoned for its superb SUV, a passenger vehicle, Lincoln, Mercury, Volvo, Mazda, Land Rovers among other vehicle fleets that has been on the market. The main reason for its success can be attributed to the fact that the company has known its customers’ taste and continuously edified their thirst for posh cars. In return the customers have stocked their garages with more than one type of these cars. This would best be described using Sivakumar’s (2009) market-centric model. Under this model, an organization manufactures its product based on the market taste. To be able to know the market taste, the companies, just like Ford Motor Company (Ford, 2010), invite their key customers to a brainstorming session on what they need and what they think the market needs and then tailor their next product line with this thought (Byrne, 1996; Rodrigues, 1999).
There is however a downside to their approach because there was overreliance on the rich rather than striking a balance between the medium class people and the high-class people. This has made the company remain stagnant in the domestic market. In their analysis, it is noted that in the domestic market, there has been a decrease in the market share of Ford Motor Company Vehicle from 18 % that was recorded in 2004 to 15.3 % as of 2008, a damage caused by wrong judgment (Ford, 2010, p. 20).
China and Japan are some key market segments that have ample opportunities for their products. In addition, there is a production plant in that region yet the Ford Motor Company has not been able to adequately utilize the available opportunity. Sadly, the company’s market share is barely 1 % (Rodrigues, 1999) and (Ford, 2010, p. 20).
Looking at the company from the viewpoint given in Salama, Holland and Vinten (2003), it is quite evident that the company has majored mainly on merger and acquisition model (p. 313 – 318). For example, Ford has over the years acquired, merged and/ or disposed of companies that manufactured Land Rover, Volvo, Mazda, Jaguar, Aston Martin, Fiat and Chrysler (Ford, 2010, p. 18, 20). It is noted that there is an ever increasing desire by companies to continuously keep acquiring and merging with smaller companies in order to gain market share and have a competitive edge against their rivals (Wullaerts, 2002; Salama, Holland & Vinten, 2003, p. 313).
According to this model, it has been noted that upon good assessment and understanding before acquisition and application of proper transition mechanisms in the mergers and acquisitions, companies stand a better chance that aid in its corporate renewal (Angwin, 2001; Salama, Holland & Vinten, 2003, p. 313). Harrison (2002; Salama, Holland & Vinten, 2003, p. 313) note that mergers and acquisition models have a certain type of synergy that has the capability of renewing an organizations market position at a speed that is almost unachievable following the conventional internal development.
Corporate Social Responsibility and Customer Satisfaction
It is expected that any company should have their corporate social responsibility department that addresses issues that pertain to the society under which the organization operates through. In this case, the Ford Motor Company has from earl 1970s been involved in research on ways of designing environmentally friendly vehicles (Ford, 2010). For this course, many alliances have had to be made such that there is communal research on the best technology that will ultimately lead to the realization of this goal. The driving force towards this approach has mainly been to ensure that there is minimal CFC gas emission in the atmosphere that results in global warming (Cacioppe & Edwards, 2005, p. 87). Additionally, it has been noted that these types of cars have the ability to reduce fuel consumption and thus economically acceptable and affordable maintenance (Cacioppe & Edwards, 2005, p. 87).
There have been continued research studies on ways and means of ensuring that there is production of vehicles that do not use gasoline but instead use batteries and / or burn hydrogen and thus creating an environmentally friendly car (Ford, 2010). In a world where sound and speed are regarded as the identity of a good car, Ford Motor Company has invested in warning technologies that are able to interpret the level of fatigue in a driver and raise an alarm that is intended to gain the driver’s attention (Ford, 2010). In addition to this, the company has also realized that most of the accidents are caused by people being distracted while driving while talking on phone, putting on makeup, or sheer fun of speed, Ford Motor Company has embarked on a campaign that is aimed at enlightening the group they identify as the teens and tweens (young adults in their early twenties) (Ford, 2010).
Research has shown that this category of people account for about 80 % of all the accidents that occur due to reckless driving for show-off to their age mates (Ford, 2010). Ford Motor Company noted that if they addressed the root of the problem, which are the teens, then it would be possible to avert most of the accidents and this has become an initiative that the organization has adopted as one of the many corporate social responsibilities (Ford, 2010). Ford Motor Company is trying to change the notion of a western and male perspective as regards to the power of the types of cars that the company produces (Marsh, 2008).
Employee satisfaction is one facet that can never be neglected and those that do so do it at their own peril. For example, during their merger with Volvo, it was noted that employee at Volvo were more involved in decision making (Salama, Holland & Vinten, 2003, p. 318). There was more focus on teamwork and firm decision making decentralization (Salama, Holland & Vinten, 2003, p. 318). In so doing, there was higher level of participation from the employees and the management that was part of their corporate culture (Salama, Holland & Vinten, 2003, p. 318). It is also noted that at Volvo, decision making happened on the lower level following the Scandinavian leadership approach, rather than the conventional top management make the decision and the rest follow (Salama, Holland & Vinten, 2003, p. 318).
According to the Scandinavian style of decision making, there are no decision making hierarchies that are involved and hence everyone plays an equal role (Salama, Holland & Vinten, 2003, p. 318). After the merger between Ford Motor Company and Volvo, there was a lot of difference and challenges in acclimatizing especially employees from Volvo. There was an inferiority-superiority complex whereby those from Volvo were made to feel inferior being absorbed into the Ford Motor Company’s scheme of working (Salama, Holland & Vinten, 2003, p. 318). In addition to this, it was noted that there is a high degree of variation as far as compensation packages are concerned. This makes employees get dissatisfied.
There is however, due to past wrangles in the employee body, it was noted that there was a need to have a program that allowed employees to pursue academic excellence within and outside the organization (Employee Development at Ford, 1992). For this reason the Ford Motor Company created the Employee Development Assistance Program (EDAP). Under this program on sight training is offered free while off site training was paid up to L 200 per year per employee and this was not to interfere with normal working hours (Employee Development at Ford, 1992). However, there exist many restrictions with this program allowing only 500 different things that could be studied unlike in an organization like BMW that has continuous training programs throughout the year that help keep its employee on top of its competitors.
It has been noted according to Employee Development at Ford (1992) that there is no drive in their employees to progress at work except to just study. These are strong indications that although the employees appreciate that they are gaining from the company, their hearts are not in the company and they are not the type that would utter words like ‘in our company’ In essence, it would not be surprising to find that employees get the necessary qualifications and leave the company in search of other organizations where they would feel appreciated.
As far as environmental impact assessment is concerned, the company has done a good job and continues to implement superfluous ideas towards making the roads and the natural environment habitable by implementation of viable options.
It is good to note here that not all organization behaviors were completely incorporated as they should be and thus the results discussed above. The scanning systems, a systems oriented approach that addresses issues from the social, economic, political, technological and regulatory would best suit its future assessment (Rodrigues, 1999).
The way in which the company disposes off its non performing products is an indicator of poor management. Why should a good product have a bad image? Why should a company keep losing grounds on its local market? These are some of the indicators that something is really wrong with its management approach.
In conclusion, it is clear that Ford Motor Company has come a long way to be among the leading in the North American Market. There is too much power that is vested on the top management such that the lower level employees do not seem to have a say in the issues and decisions made. There is a combination of various organization behavior theories and models that have been used although most of these theories are not comprehensively utilized in the organization. Should Ford Motor Company aspire to make significant profits, there is need to have a comprehensive analysis of the market and the organization and if possible, an overhaul of its top management that continue to enjoy power at the expense of valuable ideas that can cause a paradigm shift upon their realization.
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