The International Monetary Fund defines globalisation as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services…
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Globalisation is chosen as topic for this assignment since the significance of this concept is being widely questioned these days. Referring to the adverse impacts of 2009 global financial crisis, it is argued that the globalisation has not led to a rapid growth or economic convergence in the world. On the other hand, many economists hold that this process greatly slowed down economic growth, diverged income levels, and widened the gap between industrialised and developing countries. Therefore, it is reasonable to analyse the effects of globalisation in the context of a specific international company to identify the degree of its effectiveness and flaws. I have selected Ford Motor Company for this assignment as it is the US’ second largest and world’s fifth largest automaker in terms of annual vehicle sales. The company has subsidiaries across the globe and its UK subsidiary is operated under the name Ford of Britain. While analysing the history of the Ford Motor Company, it is evident that the mid to late 1990s was the golden age of the company. During this period, the company sold large number of vehicles by taking maximum advantages of a booming American economy with quickly developing stock market and relatively low fuel prices. The situation extremely changed with the dawn of the 21st century. As a result of mounting fuel prices, legacy healthcare costs, and an unstable economy, the company experienced a considerable fall in its sales volume, market shares, and ultimately in profit margins in the beginning of the new century. By 2005, the company’s bonds were downgraded by corporate bond rating agencies, citing to the threatening market condition of the firm. Ford reduced its profit margins even on luxury models since the company was forced to spend higher costs to offset declining demand. The company substantially increased its borrowing capacity to $25 million in order to meet its mounting financial requirements. The skyrocketing labour costs also hurt the profitability of the company to a great extent. The company’s 2006 annual financial statements reported the biggest loss ($12.7 billion) in the history of Ford and the company management team identified that the firm might take long time to return to its profitability track. The company remained unprofitable in the next two consecutive years. The 2008 global financial crisis worsened the growth rate of the organisation as its all policy responses went in vain due to the negative impacts of this crisis. Although the company returned to profitability in the fiscal year 2009, it is still striving to improve or even stabilise its profit margins. The Ford is also affected by environmental issues as its production processes alleged to have threatened the sustainability of the environment. To illustrate, as Miller (2008) reports, the company was fined for violating state air pollution polices in Brook Park. ` Theoretical framework Conceptually, Globalisation refers to a process through which national economies and cultures are integrated into an international economy so as to enhance international trade, direct foreign investment, migration, and technology sharing. According to the concept, globalisation greatly contributes to effective and rapid circulation of ideas, languages, and cultural ideologies. Obviously, globalisation divided the history into two; age of manual labour and age of technical labour. This concept influences nations to liberalise cross border trade regulations by pointing to the significance of foreign investment and cross-border trade for international business expansion. The theoretical framework of globalisation envisages that this process would contribute to the
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“Globalisation and Ford Motor Company. The Golden Age of the Company Essay”, n.d. https://studentshare.org/business/1393611-international-business.
Ford has been in crisis for some years now. The reasons that have lead to this crisis are many. There are external factors as well as internal factors that lead to the present crisis situation. But it is found that the center of all the issues of Ford is the serious mismanagement which has been undergoing in the company for years.
This essay demonstrates that the overall demand for automobiles or cars decreased in 2008 in the US. The external business environment in 2008 remained tremendously challenging as the availability of short-term credit was abridged. By the end of 2008, the company had sold a major portion of its managing interest that it enjoyed in Mazda.
According to the discussion the work culture is very conducive to the employees, and it definitely helps in generating the employee productivity, which has helped Ford Motors to become one of the leaders in the automotive industry. The Managers in the organization maintain a good corporate outlook and boost the employees to perform well.
Human resource personnel must ensure that the reward system is properly aligned with the strategic goals of an organisation. According to Armstrong & Murlis, “Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization”(Armstrong & Murlis, 2007).
It operates under two segments: Automotive and Financial Services. The Automotive segment includes the operations of Ford North America, Ford South America, Ford Europe and Ford Asia Pacific Africa. The Financial services include the operations of Ford Motor Credit Company and Other Financial Services” (Reuters, 2011).
In 2010, this auto manufacturer earned a net income of $ 6.5 billion. And by 2011, net profits soared to $ 20.2 billion. In 2008, as a result of a recession, and the entire Auto Industry sales went down to its lowest level, Ford had reported a Net Loss of over $14.7 billion.
A company will have many departments and audit should be done on every departments accounts and then valuate the viability of merger of acquisition. After audit if it is found that functioning of all the departments are healthy and profitable then a memorandum is made between the companies.
As the report, Ford Motor Company, declares company’s mission statement is reminiscent of a reflection of its core principle, identity, and values. Ford Motor Company operates its business throughout the world and endows with ‘personal mobility’ for the communities. The company is committed to serve the people with enthusiasm.
Ford’s domestic sales have been low and stagnant for quite some time, in comparison to its European operations that has increased by producing many quality acclaimed vehicles. The reason behind the difference between domestic and international operations is expensive manufacturing facilities caused by “high wages and expensive health care".
Ford Motors believes that change in the climate of natural environment poses major opportunities and threats to the company. The company concentrates on stabilizing the effects of greenhouse gas in the environmental atmosphere to a certain extent that would result in a minimal effect on the climate change through producing cars in which the level of carbon emissions is relatively lower.
10 Pages(2500 words)Essay
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