Alan Mulally, CEO, Ford Motor Company - Case Study Example

?Alan Mulally, CEO, Ford Motor Company Table of Contents Table of Contents 2 Overview 3 Personality of Alan Mulally 4 Leadership Style 5 Change Methods of Mulally 7 Evidence Based Management 8 Elements of Communication Openness 9 Message Transmission 9 Trust 10 Agenda 10 Goal 10 Conclusion 11 References 12 Overview This study is about the success of Ford with the help of approaches adopted by Alan Mulally. The study helps to understand the role of Alan Mulally in the success and change of fortune of the company. The personality of Alan Mulally is evaluated with the help of Big Five Personality Dimensions. The study also contains the leadership style of Alan Mulally. Alan Mulally has also applied his own strategies and made certain changes in the company due to which the company has been able to recover and has shown the potential of growth in future. The evidence based management has been applied in this study to identify whether the style of management of Alan Mulally comes under this aspect. It has observed that under Alan Mulally, there is transparency in the company, as every aspect is communicated to everyone in the company. Personality of Alan Mulally The personality can be judge on the basis of five fundamental elements which is known as the Big Five Dimensions of personality. The researcher of personality has projected the fundamental feature for evaluation of a personality (Coon, 2009). This theory is growing since the last 50 years. The big five is a broad class of personality traits which reflects a personality or behavior of an individual. The five categories are discussed as follows: Extraversion: It includes character of an individual as, sociability, assertiveness, talkativeness, and excitability and high level of ‘emotional expressiveness’. Agreeableness: It includes aspect such as, altruism, trust, affection, kindness and prosaically behaviors. Conscientiousness: It includes thoughtfulness, impulse as well as goal-focused behaviors. Neuroticism: It includes individual having emotional insecurity, irritability, nervousness, and unhappiness. Openness: It includes features of individuals such as imagination as well as insight and dept of life (Coon, 2009). According to the Big Five Dimension of Personality, Alan Mulally is a leader who especially focuses on the goals or objectives. He has high desires to achieve the objectives, thus it can be said that he is an individual having conscientiousness personality. He is involved in making the company more focused in its core business as the company was unsuccessful and had incurred loss of about $12.6 billion in 2006. It can be observed that, Alan Mulally visits the operation unit every week to assess the performance level of each unit (Coon, 2009). It can also be said that he has characteristics of openness as his thoughts and expectations for the company is really quite high. He had thought of manufacturing electrical car in 2010 and to be ahead from his competitors such as GM as well as Chrysler/Fiat. This characteristic has made him more challenging and thus enhancing his leadership quality. His behavior such as respect, discipline and listening to others as well as appreciation of others views shows that he has characteristics of extroversion and agreeableness. He is open to everyone, as he shares all the strategies with his executives. He had been an initiator as he developed a new strategy for operational unit of the company (Coon, 2009). Leadership Style Leadership is an act of making others to do the work with different techniques so as to achieve a common goal. Alan Mulally’s style of leadership is to approach employees to attain the company’s objectives is participative style. This style engages Alan Mulally along with other executives while taking the decision related to the company. The process of decision making helps to determine executives to do their work in an appropriate way to achieve the common goals. However, Alan Mulally has given an authority to their executives to contribute in the process of decision making for the company. The participative style is the strength for Alan Mulally due to which the executives have respect for each other and are able to sustain in the company (Nwlink, 2010). Alan Mulally has used different techniques to maintain sustainability in the market, as the company was in a bad situation when he joined in the year 2006. Alan Mulally’s leadership approach has proved to match with the company because at present Ford is in a good position, ahead of GM as well as Chrysler/Fiat who were the major competitors. The behaviors of motivating executives and making them work in an integrated way to attain objectives of the company have shown that he has adopted result-oriented leadership style. He does not want his company to be dependent on the government. All the employees are treated equally and are free to provide their views and ideas regarding the improvement of the company (Yale School of Management, 2010). . Alan Mulally, with honesty and sincerity, was able to gain support from the executives. He is trustworthy and inspires his executives to attain the company’s goals and objectives. The financial independence of Ford was due to a new approach for operational regulation. Alan Mulally had set up a new approach, due to which Ford was able to be financially independent as the company’s other competitors were depended on government. The company was in loss when Alan Mulally first joined the organization but after applying all his leadership techniques Ford has recovered (Yale School of Management, 2010). Change Methods of Mulally The specific formation of goals and objectives helps a company to become successful, thus when Alan Mulally first joined the company, he had set up goals for the company and created different method to accomplish those goals. Alan Mulally had made different changes within the company as the company was going through loss and hence it was necessary to bring changes within the company for becoming successful in future. The management was not up to the level, so he decided to change the management system. Ford has modified certain strategic approach under the leadership of Alan Mulally. In the year 2006, the company was financially not strong, as the previous leaders had neglected to focus on the main business of the company. Therefore, the company was incompetent as compared to its competitors such as GM as well as Chrysler/Fiat. With the changes in the company, Ford’s loss had gone down to $2.7billion in the year 2007 from a figure of $12.6 billion in the year 2006. Alan Mulally decided to concentrate on his core business competency. Ford was liable to sell its operation related to Jaguar and Land Rover to Tata, an Indian company in the year 2007, as the company was in loss which might have affected the core business of the company. He focused mainly on manufacturing small cars such as Fiesta and Focus. The competitors of Ford also got separated as it shifted its business and focus on small car (Integrating Cases, n.d.). There was change in managing executives as he became closer with the executives and simultaneously reduced the gap of communication. The executives were free to contribute their idea for an improvement of the company. In the year 2008, the company registered a loss of around $14.7 billion. However, in the year 2009, in the first quarter the loss of the company was estimated to be around $1.4 billion. It shows that the changes that had been made in the company were effective as the company was able to recover its loss and could maintain its level as a competitive name in the market. The company had become more objective as it was recovering from loss. Under his leadership, Taurus car which had lost its identity has recovered and at present it’s in the market. The company was slowly showing a positive sign to sustain in the market. In recent times, under the leadership of Alan Mulally, the company has become more competitive in every section of business and hence become efficient in terms of quality, safety, and value and fuel efficiency (Integrating Cases, n.d.). Evidence Based Management Evidence based management is identified as taking decision on the basis of data available at the time of decision making. Alan Mulally also followed on the evidence based management as the decisions taken by him are on the basis of facts available from the executives. Alan Mulally has provided an authority to the executives to be involved in decision making. He considers everyone while taking a decision or making a plan or adopting certain approaches for the development of the company. The ideas and judgments of executives are taken into consideration and collectively the decision is made (Pfeffer & Sutton, 2006). The evidence based management is used by a sick company to cure it by applying knowledge from all the skilled work force within the company. It integrates all the individuals of a company and contributes for recovery of a company. It has been observed that Alan Mulally’s decision related to the company is taken on the basis of facts and data which are collected from the company. Alan Mulally collects data and facts from the executives to understand the company more widely. It helps Alan Mulally to find out mistakes of the company and to correct them to make the company successful (Pfeffer & Sutton, 2006). Elements of Communication Openness There are two level of communication openness such as ‘meta communication’ and ‘closed communication’. Meta communication is the communication where everything is transparent and there is no question of hiding anything from others. The message is delivered openly to everyone. Alan Mulally comes under ‘meta communication’ level as there are no hidden thoughts within the organization. Every employee in the company has to be involved in the decision making process of the company. There is openness in the company as every idea or plan or strategy is communicated within everyone involved with the company. According to Alan Mulally everyone has to be attentive to the area that the company has to focus (Hellriegel & Slocum, 2007). There are four element of communication openness such as Message Transmission, Trust, Agenda and Goals. Message Transmission Alan Mulally is result oriented and concentrates more on providing new idea or message to the executives. Alan Mulally implements convincing and inclusive plans with consideration to the objectives of the company. The modification in management of the company is known to everyone and there is no hidden thoughts and ideas (Hellriegel & Slocum, 2007). Trust Alan Mulally motivates and inspires employees to work together for obtaining the objectives of the company. He believes in knowledgeable as well as skilled people and wants his employees to work for an improvement of the company. He has respect for everyone in the company hence wants the same from others. All the workforce of the company were integrated and designed to work cooperatively. He has always listened and appreciated ideas or decisions of other executives for establishing a strong relationship (Hellriegel & Slocum, 2007). Agenda The plan for the company was delivered to everyone related to the company. His plan was to reduce manufacturing of light trucks as gas was becoming expensive. He believes in making profits by manufacturing small cars. Ford’s core business was to manufacture small cars hence the company has sold other segments such as Jaguar along with Land Rover. The company focuses on the development of new product to satisfy the customers (Hellriegel & Slocum, 2007). Goal Alan Mulally’s ultimate goal is to turn the company into a profit making company. The company is improving slowly and has shown a sign of growth in the market (Hellriegel & Slocum, 2007). Conclusion The above study has proved that Alan Mulally has contributed a lot for Ford which was a sick company and with under his able leadership, the company is growing. The reason behind the success is his sincerity, honesty and trustworthiness that have inspired the executives to work together for attaining the goals of the company. Alan Mulally has removed half of the existing segments of Ford and has concentrated mainly on the core business of Ford. He has adopted a different leadership approach to become a good corporate citizen. References Coon, D., (2009). Psychology: A Journey. Cengage Learning. Hellriegel, D. & Slocum, J. W., (2007). Organizational Behavior. Cengage Learning. Integrating Cases, No Date. Alan Mulally, CEO, Ford Motor Company. Integrating Cases, p. 543. Nwlink, (2010). Leadership Styles. Home. Retrieved Online on May 21, 2011 from http://www.nwlink.com/~donclark/leader/leadstl.html Pfeffer, J. & Sutton, R. I., (2006). Evidence-Based Management. Harvard Business Review. Retrieved Online on May 21, 2011 from http://hbr.org/product/evidence-based-management/an/R0601E-PDF-ENG Yale School of Management, (2010). Yale Chief Executive Leadership Institute to Honor Ford Motor Company CEO Alan Mulally with Leadership Award. Centers. Retrieved Online on May 21, 2011 from http://mba.yale.edu/news_events/CMS/Articles/7169.shtml Read More