Ford Motors and Its Leadership - Term Paper Example

? Henry Ford’s vision was to manufacture cars for the masses and hence he created Ford’s Motors in 1903, which did not just cater to the niche markets. His company became a success but his autocratic leadership style turned out to be very detrimental for his company. What differentiates good leadership from a bad one is the employee empowerment and freedom to bring in their ideas. Henry Ford introduced a structure whereby employees and workers were only responsible for the tasks in their job description and the decision making was highly centralized: only the top management had the decision making authority. Though Ford’s production line was perfect, it only made sales in the USA and Canada in1999. It was realized that Ford’s structure was too rigid (Hammonds, 2000). Jacques Nasser, Ford’s CEO in 1999 believed that there was an urgent need to relax the rigid and slow structure and he recommended ‘nimble leaders at all levels’, in order to speed up decision making. Only when lower level employees were allowed to make decisions, they could feel confident and trusted. This improves efficiency and performance of the overall workforce. Ford’s present ideology is that to start a revolution, one has to train revolutionaries. This was not the case back in 1999. To develop leaders, Ford sent around 2500 of its managers to Leadership Development Center, which had four programs: Capstone, Experienced Leader Challenge, Ford Business Associates, and New Business Leader. These programs were not only aimed at defining good leaders but they also taught the skills and strategies to become good leaders. At Ford’s New Business Leader Program, Janine Bay, director of vehicle customization for Ford Motor Co.’s Automotive Consumer Services Group, retorted: "How many of you feel comfortable being here? About half. Okay. Well, I hope to change that this week. I want all of you to be uncomfortable. Because if you're comfortable, you can't really be a revolutionary, can you?" (Hammonds, 2000). Only when managers work outside their comfort zones, they can learn different new tasks and bring about innovations and revolutions. Leadership at grass root level made Ford a more nimble entity. It instills risk taking ability at lower levels of the hierarchy. If employees at grass root wait for instructions from the top management, there can be hold ups in the whole production process. Ford encourages leaders to be teachers because it makes them stronger and insightful leaders. Teaching transforms managers into leaders who can strike a balance between work and family (Hammonds, 2000). In 2009, General Motors and Chrysler filed for bankruptcy and agreed to government bailout. The year 2008 was the worst period for Ford as it incurred a loss of $14.6 billion in sales. It had made $24 billion which was less than the $25.8 billion debt. In spite of this blow, Ford turned down government help because it wanted to save it for times when the economy worsened to the greatest extent. Ford also experienced declining sales the following year: and its sales in February 2009 were 48% lower than its sales in February of 2008. But Fords did not follow the footsteps of General Motors or Chrysler. The crisis that it faced did not shake its integrity as an organization. It stood strong in times of economic trouble and refused government loans in order to bounce back. The reason why Ford survived even after refusing a government bailout was that in 2007, Ford had raised $23.6 billion by getting loans against its North American assets (that served as collateral). The idea as per the then chief executive Alan R. Mulally was that this loaned money will protect Ford’s in times of recession. Unlike Chrysler and General Motors, Ford’s was protected in recession by this loaned money. Planning for contingencies by its top management gave Ford the security and stability it needed in recessionary period. In 2009, Ford turned out to be the only automaker survivor, when most automakers filed for bankruptcy (Mulally, 2011). In Harris Interactive’s Corporation Reputation survey, Ford’s reputation became much better because it refused the government bailout and customers developed more respect for Ford, the brand. In the same survey, General Motors and Chrysler got the lowest score because they succumbed to government’s offers of bailout. Ford’s refusal to the bailout proved to be more lucrative than General Motor’s or Chrysler’s acceptance of the bailout (Woodall, 2011). Regarding government’s bailout offer to the country’s thee most prominent automobile giants, Ford’s CEO Alan R. Mulally commented while being interviewed by AFP in Paris:"This is not about a bailout." Regarding credit tightening he remarked:"It was very insightful what they did with the recent credit tightening, otherwise it would have really slowed down all efforts to being new technology into fuel-efficient vehicles." (AFP, 2008). So it is evident from the CEO’s statements that Ford’s considered credit tightening as an opportunity to develop new technology and stay efficient and competent. The CEO’s vision accounts for the vision of the whole organization. Ford chose to be self-sufficient and indeed it came out of the financial chaos faster than its competitors. Besides this, Fords leadership also encourages the fulfillment of Corporate Social Responsibility (CSR). It has given a helping hand to businesses in the auto industry that belonged to either women or other minorities (Ford Motors, 2009). The leadership at Ford now is one which is based on learning by doing. Every employee is accountable for all projects of Fords and is deeply involved at each step of the project. Leadership at grass root is Ford’s modern approach and due to this it has outdone itself in the past few decades. Successful and adept managers do mentoring for the upcoming leaders at Fords so that the leadership stays successful even if people come and go. In order to give leaders a well rounded personality, their roles are integrated at Fords. Integration is a tool that develops employees and focuses their attention on the path to successful leadership. Employees are given training in Leadership classrooms where they are made to do activities through which they can determine what kind of leaders they aspire to become. When they finally discover what they want, employees are then taught the route they need to take to become the leaders they aspire to be (Hammonds, 2000). The Fords Motors today is completely different from Henry Ford’s company because it underwent a transformation. The leadership style was revamped from being autocratic to one that is democratic and welcomes employees’ suggestions and ideas. When people from different departments or divisions brainstorm, the synergy achieved surpasses all other types of doing work. Ford’s organizational culture is rich and it not only attracts employees from other organizations but also grooms its existing employees so that they become future leaders! Works Cited AFP. (2008, October 2). "This is not about a bailout," the Ford chief executive told AFP in an interview at the Paris auto show. Retrieved from Breitbart: http://www.breitbart.com/article.php?id=081002135906.fjk5sk99&show_article=1 Ford Motors. (2009). FORD MOTOR COMPANY MAINTAINS AUTO INDUSTRY LEADERSHIP IN SUPPLIER DIVERSITY. Retrieved from media.ford.com: http://media.ford.com/article_display.cfm?article_id=30630 Hammonds, K. H. (2000, March 31). Grassroots Leadership - Ford Motor Co. Fast Company Magazine , pp. 1-6. Mulally, A. R. (2011, October 26). 2011 Earnings: Third Quarter. The New York times . Woodall, B. (2011, September 30). Ford CEO pressed to explain anti-bailout ad. Reuters . Read More