Research Paper on "Ford Motor Company"

Research Paper 5 pages (1721 words) Sources: 5

[EXCERPT] . . . .

Ford Motor Company

Discuss the role of leadership and how it can impact organizational performance.

Leadership will set the overall direction of the organization. Where, it will determine how a company can be able to adapt to changes that are taking place in the economy and industry. This is because globalization has been having a profound impact upon the auto industry, as many of the different manufacturers are facing increased challenges from foreign competitors. These firms have the ability to produce better quality automobiles, while keeping up with changes in the market place and consumer tastes. This has an impact upon organizational performance, by affecting the market share and financial viability of those companies that are unable to adapt to the changes that are occurring. Leadership plays a role in helping the organization to quickly adapt to changes that are taking place, by providing the vision for the company to change. Once an organization has this kind of clarity about the future, it can be able to adapt more quickly to what is occurring. In the case of Ford, the arrival of Allan Mulally as CEO would mark a dramatic shift for the company. What was happening is: Ford was mainly focused on selling light trucks. This was problematic, because oil prices were rising and consumer tastes had changed. Over the course of time, this would cause the company to post negative earnings results and to lose market share to foreign competitors. Once Mulally became CEO, he began to focus on building small fuel efficient cars that consumers were demanding. This would allow the company to sell unprofitable luxury brands before the recession began, which would increase the liquidity. As a result, the company would not need government bailouts and avoided bankruptcy, by producing those cars that were in demand from consumers. ("Integrating Cases," n.d.) Once this occurred, it would cause the company to begin posting better than expected profits during 2010. Recent evidence of this can be found by looking no further than the second quarter earnings report, which saw the company post revenues of $31.3 billion up from $26.8 billion in the second quarter of 2009. The results were: fourth quarter in a row that the automaker would report a profit, after following years of losses. (Sushinsky, 2010) This is significant, because it shows how the leadership of Mulalley was able to transform the company, from being on the verge of bankruptcy to becoming a more focused organization.

Discuss Mulally's leadership style at Ford Motor Company and provide examples of how his actions fit this style.

Mulally believed, that everyone had a voice in matters affecting the company. Where, he would focus on everyone working together and the impact that these efforts could have on Ford. At the heart of his philosophy were the elements of: the belief that skilled / motivated people can make a difference, respect / listen to everyone, building strong relationships and communicating effectively. These different elements are important, because they would form the basic foundation of the organizational culture at Ford. As Mulally's leadership style would help, to transform the company into a more focused organization. An example of how his actions fit this style can be seen with the new corporate communications system that has been implemented. This is an advanced platform that will allow all of the different departments, to communicate more effectively, by offering an integrated digital solution. This is sharp difference from the Ford of the past, with each regional division having its own independence over their markets. (Hill, 2009) The increased communication system is evidence, of how the actions of Mulally fit this style. A second example of this can be seen with comments from Bill Ford who said, "Alan is not a very complicated person. He is driven." This is significant, because it shows how Mulally's leadership style is: helping to unite / refocus the company on what issues are most important and how the company can remain competitive in the future. ("Integrating Cases," n.d.)

Discuss how goal setting helped Ford improve its performance.

Goal setting has allowed the company to focus on how it can be able: to become profitable and rebuild market share in areas lost to foreign competitors. Mulally would take this one step further, by using these different goals to redefine the organization itself. Where, he would have each employee have a series of different cards; that would state the expected behavior on one side and the stated goals of the organization other side. A few of the different behaviors of the organization would include: functional / technical excellence, working together, redefining the values of the company and delivering the results. While some of the organizational goals would include: one team, one plan and one goal. This would allow the company to be able to redefine itself, by stating what the goals of the organization were and what mindset / behavior everyone needed to have, to achieve this objective. Once this took place, it would help the company, to begin developing those automobiles that consumers are demanding. A good example of this can be seen with the 2010 Ford Focus. Where, the car was designed to achieve 35-mile per gallon on the highway and it has voice operated controls. This is significant, because it shows how the goal setting techniques and the way they were implemented by Mulally, would redefine the company in less than four years. As they were able to create a car; that can offer consumers: the fuel economy, lots of extra features and an affordable price ($16,290.00). In many ways one could argue, that the goals and the way they were presented were instrumental in helping the company be able to turn around.

Assess Mulally on each element in communication openness including message transmission, trust, agendas and goals.

Mulally, used a strategy of communication openness; as a way of being able, to effectively reach out to the different executives and employees. When you apply the different elements of communication openness to his strategy, it is clear that there are many different ways that Mullaly embraced these ideas. As far as message transmission is concerned, Mulally would bring everyone in as part of the communication process, where their ideas were listened to and evaluated for merit. This would help to create change within the company, as everyone would see that the circumstances were different from the past. Trust was established by having the company deliver on the promises it makes to: consumers, employees, executives and shareholders. When you can do this, it establishes a commitment to the organization. With this helping everyone to believe that the changes, which are occurring will make a difference. The agenda would establish the long-term objectives of the company. In this case, Muallaly would use the agenda to establish the overall plan, as to how the company would become profitable in the future. The different goals were utilized: as short- and long-term building blocks, to achieve the larger agenda of the company. In each area Mulally would use innovative ideas, to be able to help address each issue of communication openness. This would allow him to improve the overall levels of communication even more, as these tools would help him to be able to redefine the role of the company. ("Integrating Cases,' n.d.)

Evaluate the effectiveness of Mulally's leadership style and recommend whether he should continue with this style, or use a different style.

Clearly, Mulally's leadership style is effective at bring about a change in the culture of Ford. This is because he is using a number of different leadership theories to achieve this objective the most notable would include: the contingency theory, the situation theory, the participative theory, and the relationship theory. The contingency theory is when you are looking at how different variables could affect leadership styles. The situation theory is when leaders are looking at internal and external variables, to determine the most appropriate course of action. The participative theory is when you are taking the views of others into account, when determining the most appropriate course of action. The relationship theory is focused on the connection between managers and employees. Where, you are seeking to motivate people to achieve the higher objectives for the organization. (Cherry, 2010) These different management theories that Muallay would use are important, because they highlight how he uses elements of each one, when addressing the various issues facing the company. This allows management to be as effective as possible when reaching out to the different staff members, in helping the company turnaround. Evidence of this can be seen by looking no further than the actions that Mullaly would take when he became CEO, by taking a cash infusion (which would cause debt levels to rise), so that the company can retool, to build fuel efficient cars. At the same time, he was telling everyone that the actions taken over the next several years will determine if the company can remain successful. If they follow the… READ MORE

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