Understanding Organisations - Essay Example

? Understanding Organisations Task The first part of the essay will throw light on the decision taken by Ford Motor Company to cease its productionof cars at the Geelong plant in Australia by 2016. The context of the essay will focus on the modernistic view of decision taken by the company. It will analyze its impact on the environmental, cultural, social and technological aspects in Australia (Flink, 1990). Introduction Ford Motor Company, also known as Ford is an automobile manufacturing firm in America. Operating almost in all the countries in the world, Ford is a multinational firm with its headquarters in Dearborn, Michigan which is a suburb of Detroit (Banham, 2002). The firm was founded in 1903 by Henry Ford and since then it has manufactured a large number of commercial cars. Ford also manufactures luxury cars but they are marketed under the brand Lincoln. The chief executive of the company has taken measures since 2008 to simplify the fleet of all Ford cars across the world (Vlasic, 2008). The company has also shaped several automotive components. Ford Australia is an Australian subsidiary company of the original corporation. This subsidiary was founded in Geelong, Victoria in the early 1925. In May 2013 Ford president Bob Graziano has announced to cease the manufacturing process of the company in Geelong (Reuters, 2013). The industry for automobiles is highly competitive in nature in the current economic era. The establish firm of Ford has undergone certain losses since the last six years. The president claimed that the company’s manufacturing cost in Australia is extremely high when compared to that of Asia and Europe (News Geelong, 2013). Thus, in order to reduce its costs and losses the company has decided to cease its operating plants in Geelong by 2016, as its fabrication in Geelong is not economically viable in the long run (Lambreth, 2007). Modernistic View of Ford’s Decision The decision of Ford to cease its manufacturing unit in Geelong Australia may be actually beneficial to the economy of the country according to modernistic view (Goodwin and Wright, 2007). It is believed by many economists that the domestic economy of Australia would evolve as a result of the decision taken by Ford. Newscastle was another city that experienced a similar situation in 1999, when the city lost the BHP Steelworks. After BHP steel ceased its business in Newscastle, the city shifted its competences towards medical research, education and innovation. Thus the decision of BHP Steelworks was a blessing for Newscastle in 1999. It is thus felt that the people for Geelong should be optimistic regarding their future despite of experiencing a closure of Fords manufacturing and loss of employment opportunities. It is believed by the modernistic thinkers that this incident would help Geelong to carve new ways for improvements of in segments of the economy like academics and medical research. Though it is true that the loss of Ford business would render many individuals jobless but still according to the modern optimistic view the growth of other industries would surely generate more employment opportunities in Australia (Raschella, 2013). Environmental Impact The decision of Ford to cease its manufacturing division in Geelong would surely create a stressful atmosphere in its working environment. The closure of the factory was reported to cease 510 job losses in Fords Geelong engine plant (News Geelong, 2013). The president of the Australian branch of the company along with its CEO Bob Graziano stated that it was necessary to end the production unit of the company in Australia because the company faced a loss of almost $141 million in the recent financial years. Such situation would surely create an uncanny environment in the existing workplaces of the company. The existing workers would fear to lose their jobs in this crisis, when the company is facing severe financial instability. The employees would surely resist to the decision of manufacturing cease, as they would not want their jobs to be lost. Internal unhealthy competition and bureaucracies are also expected to prevail in the workplaces of Ford Motors in such situations. Social Impact On the contrary to the impact on environment the social impact is directly proportional to the extent of industrialization in an economy. If the industrial sector in an economy is developed then it would surely improve the level of Gross Domestic Product (GDP) of the economy. This is because big and enormous industries appoint large sections of people for manpower resource requirements. The GDP denotes the value of the final goods and services produced within the domestic territory of a country. Thus, it can be analyzed that if the manufacturing process of the Ford plants ceases in Australia, then it would surely make thousands of workers jobless who were working for the firm. This would surely affect their standard of living, which would further lead to price rise and recession, so the workers would be unable to afford their basic amenities. The growth of suppliers and dealers substantially depend on the growth of the giant manufacturing firms with whom they deal. Ford Australian branch in Geelong demands large amount of raw inputs from the suppliers. These inputs involve iron, paint, glass etc. When the firm would cease its manufacturing process then it would surely affect the suppliers negatively. Their income level would fall as a result of which their quality of life would also deplete. A poor income level in an economy will result in bad standard of living. This would result a detrimental impact in social aspects like literacy, health, empowerments. Lack of economic resources would surely reduce the empowerment level of the unemployed workers. They would suffer social backwardness due to lack of purchasing power. When the income level would fall then it would surely allow these individuals to mobilize less economic resources for educating their children. Less education would again give rise to less skilled and less efficient working class in the economy. The resources available for health expenditures would also be low. In the modern world medication and treatment has become extraordinarily expensive, thus lower income level of the suppliers and especially the workers would make them incapable to finance treatments during health problems. Thus, the decision to cease manufacturing process would adversely affect existing workers of the firm and the suppliers in the market. However, the sudden retardation in the growth of automobile sector in Australia resulting from this decision of Ford may reduce certain harmful social factors like noise pollution and obesity. A lower level of traffic may reduce the number of accidental deaths in the country (Domansky, 2006). Cultural Impact Cars are a part and parcel of life for the people in the developed economies, owning personal cars is normal to the culture of modern world. In the epoch of policy coordination and global trade, the operating decisions of giant firms are often interrelated. The decision of Ford to cease its production in Australia might allow the other potential produces to follow the same trend. The value of Australian money is continuously increasing with time, thus the problem of cost faced by Ford is likely to be common for most of the car manufacturer (Jericho, 2013). In such a juncture the overall availability of cars would fall in Australia. They are the major modes of transport; lack of its availability of cars at reasonable prices would disturb their convenience (Volti, 2004). However it can also be analyzed according to the modernistic approach that Geelong would experience a culture of new innovation and develop new sectors of the economy after the closure of the Ford business. Academic advancements in the nation can help in improving the literacy level of the common mass. If not the automobile sector, Geelong would soon turn out to be a pool of creativity. Technological Impact The growth of an economy largely depends on the extent of technological improvement in it (The Associated Press, 2013). Large automobile giants spend huge sums of money for the purpose of research and development. Technological innovations are the fruits enjoyed from high spending on research and development. If Ford decides to cease its operations in Australia due to high manufacturing costs then the country would lose the opportunity to enjoy the modern and innovative designed cars produced by the company. Over the years there has been a shift of the tastes and preference pattern of the consumers (Simon, 2003). They now generally does not prefer cars as a status symbol, rather they favour fuel efficient cars that give out less emissions. Ford constantly invests in improving its technological state to manufacture more eco friendly cars. Moreover, the price of fuel is rising over time, so consumers prefer cars with high mileages. Ford cars are well known all over the world for its fuel efficiencies and high mileages. The decision of the company to cease its production level will ultimately increase the opportunity costs of the consumers who would be unable to purchase Ford cars. Thus, considering the impact on technology the decision to cease manufacture will adversely affect the technological progress of the nation (Conybeare, 2004). Task 2 Report The decision chosen for analysis: The essay is written on decision 2. It is regarding the Ford Motor Company of Australia, which has declared to cease its manufacture of cars at its Geelong plant by 2016. The automobile industry is a major industry in the economy of most of the countries in the world. A decision taken by one of the popular giant in this industry like Ford would affect most of the other sectors in the economy either implicitly or explicitly. How well I think I’m doing in the level of research I have done to date? I have selected a current topic, and hence it was possible for me to gather lot of news regarding it. The research and analysis done by me is primarily based on secondary data collected from the scholarly references. I have completed the research work in correct time. How well I think I’m going with the three tasks for the decision analysis? The essay interprets the advantages and disadvantages of the decision undertaken by the company by modernistic, post modernistic and symbolic interpretive methods of decision analysis. Problems I want some help with are: I faced certain problems to interpret the social and cultural affect due to the decision undertaken by the company. It would be of great help if I get some samples of empirical decision analysis made to judge the decision of a firm. My group number is: My group number, identity, unit code and decision is: Group id_unit code_Decision Who I’m working with: My group members are _ and my project guide is_. The effort being applied by my group members up until this time: 1 All my group members have put excellent effort to make the project successful. We have distributed our tasks and coordinated our work such that we had a great experience in putting together such an empirical research analysis. Reference List Banham, R., 2002. The ford century: ford motor company and the innovations that shaped the world. New York City: Artisan. Conybeare, J. A., 2004. Merging traffic: the consolidation of the international automobile industry. Maryland: Rowman & Littlefield. Domansky, L. R., 2006. Automobile industry: Current issues. New York: Nova Publishers. Flink, J. J., 1990. The automobile age. Massachusetts: MIT Press. Goodwin, P. and Wright, G., 2007. Decision analysis for management judgment. New Jersey: John Wiley & Sons. Jericho, G., 2013. How will the RBA react to inflation? The Guardian. [online] 23 July. Available at < http://www.theguardian.com/business/grogonomics/2013/jul/23/rba-inflation-interest-rates-dollar> [Accessed 14 September 2013]. Lambreth, C., 2007. Ford and the American dream: founded on right decisions. Basingstoke: Palgrave Macmillan. News Geelong, 2013. Ford to shut Geelong plant. News Geelong.[online] 23 May. Available at: [Accessed 14 September 2013]. Raschella, A., 2013. Newcastle says Ford's closure could be a blessing for Geelong. ABC News 24. [online] 11 July. Available at: < http://www.abc.net.au/news/2013-07-11/is-fords-failure-a-blessing-for-geelong/4812996> Accessed 14 September 2013]. Reuters, 2013. Ford Plans to Shut Its 2 Plants in Australia. The New York Times. [online] 23 May Available at: [Accessed 14 September 2013]. Simon, Z., 2003. The double-edged sword: the technological sublime in American novels between 1900 and 1940. Budapest: Akademiai Kiado. The Associated Press, 2013. Trade Gap Falls, Hinting At Pickup in U.S. Growth. The New York Times. [online] 6 August Available at: [Accessed 14 September 2013]. Vlasic, B., 2008. At Ford, Chief Intends to Get Its Units in Sync. The New York Times. [online] 25 January. Available at: < http://www.nytimes.com/2008/01/25/business/25ford.html?ref=alanrmulally> [Accessed 14 September 2013]. Volti, R., 2004. Cars and culture: the life story of a technology. Connecticut: Greenwood Publishing Group. Read More