Business Failure And Organizational

Fisker Automotive was founded in 2007 by Henrik Fisker and Bernhard Koehler (“Our Story,” n. d. ). The goal of the company was to produce the world’s first premium hybrid. In 2009 the company received a $529 million federal loan to go forward with its project. By 2011, the Fisker Karma was officially in the hands of the customers, but because it failed its production goals and target dates, the Energy Department suspended the loans (Huhn, Harris, & Snyder, 2013). Fisker’s Vision and Mission Its vision statement is “Our vision was to create and deliver design excellence from concept to realization” (Fisker, 2013, p.

2). Fisker’s mission is “To bring a car to market that true automotive enthusiasts can drive and enjoy, we have created a car company where the production process is built around the design – to allow emotion and performance to blend more harmoniously than ever before” (Fisker, 2013, p. 1). Indicators of Failure Fisker Automotive focused the majority of their attention on the visual design aspects of the Karma creating a visually stunning automobile, but they did not take the necessary time to perfect the technology system before placing the automobile on the market (Loveday, Eric, 2013).

This defect in the technology system, led to several negative reviews. The Karma also featured an A123 Systems battery (Korosec, Kirsten, 2011). This battery featured misaligned hose clamps that could cause a coolant leak (Korosec, Kirsten, 2011). Fisker also struggled with the manufacturing of their automobiles. Fisker did not own their manufacturing facility so they had to outsource almost every component featured within the Karma (Loveday, Eric, 2013). This outsourcing became a struggle for Fisker because of the increased costs associated with outsourcing and problems with the suppliers.

Path-Goal Theory The path-goal theory express that it is the head’s job to help employees in attaining their targets and to give direction and guidance to ensure their targets are conciliable with the general objectives of the organization (Robbins & Judge, 2013). Fisker’s main goal was to create a visually stunning automobile. This goal allowed the employees to only focus on the visual appearance of the vehicle and not to focus on the technology system. As a result the Karma was a visually stunning vehicle, but the technology system failed.

The failures from the technology system caused the failure of Fisker. Organization Structure The Fisker Automotive Company leadership was rooted in the ideologies of Henrik Fisker, but because of disagreements, Fisker announced his resignation as executive chairperson. The new team was mostly auto industry veterans, including current Chief Executive Tony Posawatz, who is credited with developing the Chevy Volt electric car for General Motors” (Hamanaka, 2013, p. 1). The roles of the new management team had a different vision than Henrik Fisker, and Henrik began to lose the power required to make his vision become reality.