Based on the case study (what would you do?) it listed four options for the Ford company, here are the three criterion the company should use to decide which of the four listed is best and the reasons why each criterion should work and be used. The first rule for testing these 4 options is the reason for being in business to make a profit, which is what the stock holders expect. The next judgment would be to examine the options and weigh the profitability of each or a combination of them. The next standard would be longevity or measuring what options would sustain the Ford Motor company for years to come. Let’s look at option 1 that suggests closing older plants to realign production and sales. The criterion is you don’t want to produce more product than you can sell in this case it is cars. Ford Motor Company has been losing money for years particularly in its North American operations. According to Mandy Bennett’s Ford Motor company 2004 annual report “The Ford Motor Company has had many (Bennett, 2004) disappointments in the past several years”.
These criteria should be examined and applied just as Mr. A Mulally (CEO of Ford Motor company) negotiated with labor unions to successfully slash more than 30,000 jobs, and close factories. Ford spent $700 million on severance packages and paid layoff expenditures for union workers. This in turn gave Ford a cash cushion to float on for the time being while working out long term profitable plans. (S Holmes, 2006)
2. Discuss at least three examples of how the company should build in flexibility to back-up its decision-making process. One way the company should build in flexibility is to use the options listed in the case study and invest in all of the ideas. By Making small investments in all four options at the same time it will provide the flexibility to back up the each option. Like a fail safety net, the better an option works the more money and resources can be added to it.
The options with the least progress can be minimized or relinquished. For example put four managers in charge of the four plans with an equal amount of budget to get the job done and roll out the plan. (Williams, 2010)
3. Discuss how an effective action plan can be created and how progress can be monitored. Developing and effective action plan would be to list the detailed steps or the how to get the job done type manual. Hire the right people who could get the job done proficiently, provide them with the appropriate means and time frame to get the work done. The next step would be to track or monitor the plan to make sure the results are profitable. According to the Management text the best thing to do is set up proximal and distal goals. Proximal goals are short term and distal goals are long term main goal (Williams, 2010). This would be perfect for the flexibility plan discussed in discussion two, hiring four teams and setting up a tracking progress to decide which plans to further fund.
4. List at least three steps that make-up a workable plan explain why each is important. There is a television show that use to come on years ago called the A-team and one of the main characters (Hanabal) use to say after a successful mission” I love it when a plan comes together”. That phrase describes a workable plan; it is when everything comes together in one direction manifesting the complete goal. This all starts with the top managers creating structural purpose declaration and deliberate objectives. Middle managers coming next with premeditated plans that they bring about with specific objectives to inspire there staff. The last step ends with the first level managers who develop and carry out the operation of the plan by using policies and procedures. The policies are standing plans that specifies the overall course of action that should be taken in reaction to a particular event or condition. Procedures are also standing plans that indicate the specific steps that should be taken in response to a particular event (Williams, 2010).
5. Discuss the option combination of options you selected as the best course of action for Ford Motor Company and detail your reasons for selecting that option or combination of options.
I would definitely choose a combination of options for the best course of action for the Ford Motor company. Based on my research and text reading it is better to have flexibility and back-ups, so I prefer to combine options to create a flexible plan platform. The combination I selected is to close down older plants in an effort to realign production and sales, to move the company to produce only smaller cars, eliminating or sharply reducing the SUV and truck lines, and The fourth option is to sell the entire PAG group, letting someone else figure out how to make money selling so few vehicles a year. The first option of closing old plants to realign production and sales is a smart move. It allows the company to produce fewer cars and shift the supply and demand curve to their favor in their business. What I mean by that is by producing fewer cars the price can decrease and more people can buy more cars. The law of supply states that the supply increases as prices increase and decreases as prices decrease, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price.
This will allow the next option to fall in line as well by moving the company to produce smaller cars saves the company money in the cost to make the smaller cars. Gas prices are at an all-time rise so people would appreciate this. SUV and truck lines are becoming more and more costly to consumers and producers alike. Producing smaller cars can also have a positive effect on the supply and demand law. Supply and demand states that at lower prices, people tend to buy some goods as a substitute for others more expensive. Lastly Selling the PAG group, this approach has worked for Ford in the past. It works and takes a huge expense off of the company.
ReferencesBennett, Mandy Ford Motor Company (2004)
S Holmes, D Kelley, D welch, J M.C. Gregor Business week (2006)
Williams, Chuck Management, (2010)