Case Analysis - Ford Motors

A Case Analysis on Ford Motor Company Introduction Henry Ford’s Motor Company is one of America’s biggest prides in automotive industry. It is a multinational corporation and the world's fourth largest automaker based on worldwide vehicle sales, following Toyota, General Motors, and Volkswagen. The founder, Henry Ford incorporated the company on June 16, 1903. At 1980’s, under the leadership of his grandson Henry Ford II, several bad decisions had been made regarding the organizational structure for being an autocratic leader. Some internal problems were also contributing to the company’s loss in the business. Several times the company has experienced crisis to lose billions of dollars and faced a wide range of criticism for producing cars designed for yesterday’s consumer and poor quality.

A phenomenon downturn happened at the early 1980’s to auto industry including Henry Ford’s Motor. The company encountered severe economic losses as a result of a reduction in market share, as well as the high costs incurred by labor contracts and the development of automobiles that met the new federal standards. In 1980, the company lost $1.54 billion, despite strong profits from the truck division and European operations. Ford lost a further $1.06 billion in 1981 and $658 million in 1982 while trying to affect a recovery; its market share fell from 3.6 percent in 1978 to 16.6 percent in 1981. Statement of the Problem Henry Ford II being an autocratic ignorant leader was unable to accept his subordinate’s idea thereby failed to recognize the current market’s demand. He was unwilling to change their old car design “Pinto” to small car design which was popular at that time. Objectives To adapt a democratic organizational structure for a better management.

To recognize current market’s demand. Scope of Work The study will focus on the recession happened between 1979 to 1982. FORD SWOT ANALYSIS Strengths Well-known brand. Affordable price Have loyal customers (mostly Americans). Goal-oriented Design cars customers would like to drive (Taurus and Sable). Using computerized robot and upgraded inventory. Weaknesses Autocratic management. Expansion of division will leave it weak to some areas. Confusions, duplicate work appear after building some centers.

Opportunities Change to a democratic organizational structure for a better management Develop new design and models. Technology advancement lead to an organize and systematic growth. Shift from producing low-priced, stripped down models. Threats Strong price competition. Design competitiveness, Varying purchasing power of customers. Alternative Courses of Action To implement a new approach in decision making process Ford should start to pushed decision making to lower levels, by inaugurating a policy of employee involvement in plant (designing, engineering and manufacturing) in order to improve productivity under a supervision of a functional manager. Pros It makes the subordinate feels appreciated. Gather more ideas to contribute company’s success. Lessen the length of bureaucracy procedure. Cons Cannot accommodate all ideas coming from the subordinate. Superior might not receive adequate information of the decisions. To support the ACA above, selective subordinate must be chosen based on their ability and confidence in making a correct decision. This way, superiors may depend and have full trust on their subordinates.

Expand the market to selective countries by producing customer’s “would like to drive” designs and models. (China, India, Indonesia, Thailand, and Vietnam). Pros Strong market in populated countries like China and India. In some Asian countries, European brand means good quality. Might prevent the company from risk of market downfall. Cons Other countries may have their own national product and people might not patronize them. Current market demand intermittently changes. Although market down fall cannot just be realized by this approach, global expansion can be a way to make the company stable to increase the market share. Conclusion and Recommendations Ford Motor Company’s success will depend on their capability to effectively achieve the objectives. Several fundamental changes must be done, decisions must be reviewed, and actions must take charge in order for the company to rise to back to its feet.

Alternative course of action #1 is preferably to be recommended to generate new ideas supported by the ACA#2 to improve the market share of the company. References McGraw, Thomas. American Business, 1920–2000: How It Worked. Wheeling, Ill.: Harlan Davidson, 2000. Nevins, Allan. Ford. New York: Scribners, 1954. Scherer, F. M. Industry Structure, Strategy, and Public Policy. New York: HarperCollins, 1996.