Organizational Dynamics - Ford Motors - Case Study Example

Organizational Dynamics Introduction Organizational dynamics is mainly concerned with organizational behavior, learning and development of the required strategies to improve the performance of employees. Organizational behavior is the study of individual attitude, behavior and performances within the organizational setup affecting the principles or dynamics. The key elements of organizational behavior are its structure, people within the organization, technology and external environment in which the organization performs. It is a process of systematic study of various behavioral aspects such as sociology, psychology, and many more. A study of organizational behavior is essential for every organization as it assists in finding proper solution to the various challenges faced by the organization due to the increase in competition and other external factors. Organizational behavior is helpful in managing the diverse workforce within the organization with different cultures. Study of organizational behavior helps in managing authority to understand the individual needs, feelings and career dynamics for the progress of the organization. One of the major challenges faced by organization is to improve the productivity and quality of products and services. In such case, organizational behavior is helpful as it provides guidance to motivate employees, as they are the major source for implementing the organizational change (Lodedo, 2013). The behavior and attitude of employees is a crucial factor that affects customer satisfaction. A study of organizational behavior is also linked with improving organizational performance by enhancing customer service. It helps to develop a positive work environment that motivates employees of the organization to perform effectively. Organizational behavior is essential for the management of the business and success of organization in the long run (Cole, 2000). The main purpose of the paper is to investigate organizational setting involving organizational behavior of Ford Motors. The organizational culture, behavior is important aspects that lead to provide better organizational dynamics. Background of Ford Motors Ford Company operates its business in two different fields that is automobile sector and financial services. Ford Motors in one of the well-known and successfully developed car manufacturer in the global market. Ford produces various ranges of cars for different segments as well as other vehicles like vans, buses and many more. With the increase in competition and growing demand of more economic and smaller cars has resulted expansion of the automobile business segment in other countries as well. The automotive division of Ford Company is involved not only in developing and in selling vehicles but also offers a variety of after sale services through various authorized dealers. This helps the company to retain and attract new customers. The financial department of Ford was established in early 1923, with the aim of providing finance for the motor department of the company. Moreover, credit facility was established with the aim of offering financial services not only to individuals but also for business purposes. Some of the financial services of the company involve for example wholesale as well as retail financing and other management services (Ford Motor Company, 2008). Organizational structure and culture is of significance for the enhancement of Ford Motors in the long run. Organizational structure is a process of structuring various physical resources with respect to the main objective of the organization. It is a framework according to which, various jobs and tasks are classified, divided and coordinated to employees of organization. Being a global organization the organizational structure of Ford Motor is complex in nature. Ford Motors have implemented functional organizational structure for effective handling of the tasks. According to this structure, Mark Fields is the Chairman and President of the Ford Motor Company. As per the structural framework, President has various directors and various departments headed by functional heads. In this context, John Savona, is the Director of Manufacturing for Assembly. The various other functional departments of Ford Motors for example legal, manufacturing, HR activities and other departments is coordinated by the managers as per their job responsibilities, Organizational behavior is linked with culture as every organization has its effective work culture. The employees working in organization frames perception about the organization with respect to various factors for example role played by team members, risk tolerance and many more. The perception of employees about the organization affects its culture and dynamics. Individual perception affects the performance of employees within the organization and job satisfaction. Ford motors have a strong diverse culture, which is one of the sources for long-term success of the organization. The company follows a dominant culture that implies the core values shared by majority of members of the organization. On the other hand, subculture defines the problems or situation faced by members of the organization. Ford Motors maintains a diverse work force that has resulted in the establishment of the company as a “Premier American employer”. Ford offers employment opportunity to skilled employees with different culture, race, and religion. The company ensures that the work environment involves individuals from diverse population. Ford maintains policies according to which equal opportunities are provided to all individuals that further enhance the organizational culture of the respective organization. The two main business strategies followed by Ford are diversity and inclusion that has resulted growth of the business in long run and has improved profitability of the company in long run. The company follows “One Ford strategic plan” which offers an inclusive work environment that motivates employees to perform together globally to achieve the mission and vision. The diverse culture of the organization results in the development of strong performing teams and enhances the overall performance for a sustainable future (Ford Motor Company, 2015). Problem Statement The main purpose of the paper is to analyze the organizational setting of Ford Motor and various operational functions within the organization. The major problem faced by the company is both internal as well as external that affects the future growth of the organization. The paper analyses the organizational behavior with respect to culture, learning, motivation and various other factors. The research offers a detail analysis of various threats faced by Ford Motor and the recommendation section provides some of the likely solution to the problem. Research methodology The paper analyses the concept of dynamics of organizational behavior with respect to Ford Motor Company. The main purpose of the research is to investigate the organizational setting of the Ford Motor and to analyze various challenges faced by the company. Research methodology has three approaches quantitative, qualitative and mixed approach. For this purpose of research, qualitative approach is appropriate as it satisfies the objective of the paper. Secondary sources of information such as journals, annual reports and company websites have been used for the purpose of research (Practical Management, 2010). Research design defines the process of data and information’ collected for the purpose of research to meet the desired objective. The descriptive design of research is based on actual environment and is defined as observational. The data and information are mainly collected based on observations. Dynamics within the Organization Organization involves a continuous process of coordinating various factors of productions for example human resource, materials, to effectively manage the process in order to achieve the organizational objectives. The behavior and attitude of employees affects the organizational behavior. Every individual exhibits a complex behavior and the major challenge faced by the organization is to match the organizational structure with the task to be performed by employees and the managing authority. Moreover, it is the responsibility of the higher authority to analyze various works performed by individuals and to identify competency skills required for respective tasks. In such a case, the ability to differentiate the behavior of individual employees helps to improve the performance of each task and enhances the overall performance of the organization. The “One Ford strategic plan” encourages and motivates employees within the organizations that aims at personal growth as well as improve the professional skills. The diverse workforce of the Ford Company also maximizes the overall benefits earned. Abilities of an individual are either in-built or has developed through learning process that influences overall organizational behavior. Attitude of a person comprises of values and beliefs that affects the perception about organization. Perception of individuals affects behavior and influences information at large. The integrated human behavior model as shown in the figure-1 below explains the process of transformation of the external stimuli into individual behavior (Practical Management, 2010). Figure-1 Source (Practical Management, 2010) Response to the external environmental stimuli defines the observed behavior of individuals. Other factor that also affects the individual behavior within the organization involves gender, race, as well as various psychological aspects. On the other hand, Ford Motors being a leader in diversity provides equal opportunities to all the skilled and qualified individuals irrespective of their race, gender, disability or any other status. The main aim of diversity at work place is to innovate new ideas and workforce to compete with other automobile industry in the marketplace. Some of the functional operation of the company involves working with ‘employee resource group’, ‘Fund and community services’, ‘supplier diversity’, ‘benefit programmes’ and many more. The “Employee Resource Group” of the Ford Motor Company was established in the early 90s that mainly involves those employees of the organization possessing similar traits or desires that helps to develop ‘cross-functional workplace’. Employees with similar life experiences influence the development of professional skills that enhances the organizational performance. The resource group of the organization supported organizational objective by attracting new talents and retain the existing employees of the organization. Apart from this, various cultural programmes, for example campus recruitment conducted by the company encourages participation of the employees. The individual behavior of employees are further influenced by various work flexibility programmes for example job sharing, flexible timing and other benefit programmes increases employee engagement as well as improved job satisfaction (Ford Motor Company, 2015). Motivation is another factor that influences human behavior within the organization. Motivated employees are more likely to perform better as compared to other employees of the organization. There are number of ways implemented by the organization that involves monetary as well as non-monetary benefits in order to encourage and motivate employees to perform effectively. Ford motors are a profitable organization so the main goal of the organization is to maintain its competitive position on the market as well as to enhance the overall profitability. For this purpose, it is essential for the organization to motivate and to improve work performance. For the success of an organization it is necessary that the customers are satisfied for which it is essential that the employees performs well. The modern theory of motivation identifies individual needs and factors that motivate employees to improve performance. Employees if well motivated leads to greater performance and enhancement in organizational dynamics. The “Herbergs Two-Factor Theory” of motivation involvers two factors that is motivation and hygiene factor affects the level of satisfaction. The theory identifies factors that motivate employees of the organization. It involves identification of the each individual needs and desires that affects their behavior. According to the theory, motivation factors influences the job satisfaction of employees. On the other hand, hygiene factor prevents dissatisfaction among employees by providing various extrinsic benefits for the enhancement of the performance. The motivation factor is directly linked with the employee satisfaction from the job and organizational dynamics. Therefore, to motivate an employee it is vital for the organization to provide a better culture and work environment. Some other factors identified as motivators are the level of responsibility, opportunity provided as well as status gained with respect to position in organization. A sense of self-achievement motivates employees further the performance. On the other hand, lack of motivating factors increases dependency on the hygiene factors. The hygiene factors mainly involve the organizational policies, compensation, work conditions and various other external factors. Ford Motors offers high compensation benefits and other services to employees to improve the physical as well as financial well-being. Moreover, the company also offers proper safety and security to the employees as well as maintains various functional responsibilities linked with occupational health (Ball, 2003). In order to motivate employees of the organization it is essential for the managing authority to follow proper leadership style that directly influences behavior of individuals. The main factors of leadership are leader, follower, communication and situation. It is the responsibility of the leaders to motivate the followers to improve their work performance. The leadership skills define the ability and behavior of the leader in order to motivate employees for performance enhancement. It is the responsibility of leader to develop strategies to motivate employees of the organization and improve the quality of work. Ford Motor builds and follows a world class technical as well as functional and leadership capability. The company aligns various ‘learning solutions’ and organizational needs with the help of different processes and competencies (Ball, 2003). Issues facing the organization An automobile company faces various challenges due to unstable economic conditions. However, ford motor is one of the financially stable car manufacturers and so has the ability to continue its operations despite of the weak economic conditions. A competitive analysis of Ford Motors Company using the SWOT analysis reveals various internal as well as external challenges faced by the company. Ford Motors is the leading automobile company in the United States. Despite the fact, the company faces internal rivalry within the home country. Some of the major competitors of Ford Motors are Toyota, Honda, Nissan and many more. Figure Source (Dornbach-Bender, Slade & Thorpe, 2009) From the above figure, it can be analyzed that Ford Motor is facing increased competition from the other automobile companies. The market shares of the other companies have grown because of their ability to produce lower price fuel-efficient cars. Ford Motor has differentiated itself by focusing less on smaller vehicles and so is losing its market shares. Apart from the internal risk, supplier’s power is also a threat to automobile industries. In order to maintain stability of the supply chain as well as to retain loyalty among supplier of the raw materials, Ford Motor has reduced number of suppliers for the process to be effective. The automobile companies also face entry barriers within the developed economies of the world because of various measures for example tariff and trade policies (Dornbach-Bender, Slade & Thorpe, 2009). Ford Motors has a strong organizational culture as it allows people with different set of values and beliefs to work together for a single mission and vision of the company. Organizational culture defines the combination of different shared values as well as belief that in turn influences behavior of the employees. The culture of the organization has a significant effect on the attitude of members. The set of values and norms possessed by the company also affects the growth and profitability in long run. The mission statement of the company states that the employees of Ford Motor works together in order to gain a leadership position in the automobile industry. It is the responsibility of members of the organization to maintain the quality of product to improve stakeholder’s satisfaction. The mission and vision statement of the company mainly focuses on becoming one of the top consumer organizations. However, despite the fact, the growth of company is the result of having a strong corporate culture. On the other hand, because of communication barriers the executives of the company were more focused to compete against each other rather than working together and to improve the overall performance of the organization. The leaders of the organization are responsible for creating and maintaining organizational characteristics effectively. The organizational culture of Ford is one of the factors that are crucial for competitive advantage and sustaining the performance. The main reason behind the failure of many companies is that the leaders pay minimum attention to culture as one of the powerful tool to maintain the standard of performance. Other issue faced by the company is the rise in the price of the raw materials that affects the profitability as well as the cost structure of the organization. Ford has a high cost structure because of the excess costs involved in the employee compensations as well as other benefits for example the pension plans (Ball, 2003). Recommendations From the above analysis of the market shares, it can be analyzed that Ford Motors is facing increased competitions from other competitors of the world. For the success of any automobile industry, it is very essential that the customers are fully satisfied. For this, it is necessary that employees are motivated to perform effectively. Toyota, Nissan and other automobile companies delivers their products at a much lower costs that enabled the companies to hold the existing customers as well as to attract new buyers. On the other hand, lower labor cost is another factor that is responsible for the profitability of competitors. For this reason, it is essentials for the company to recruit new talents with a greater ability to design new products and to improve overall satisfaction level of customers. Moreover, in order to retain the existing talents of the organization it is necessary to motivate them so as to enhance the performance level. According to the Two-factor theory, job satisfaction is one of the main factors that motivate employees to perform well. Therefore, the company should allocate the task with respect to the technical skills and knowledge possessed by the individuals. The work tasks should be designed in such a manner that enables employee to increase knowledge as well as offers a greater scope to raise position within the company. Apart from this, hygiene factors that is monetary and non-monetary benefits provided to the employees also motivates them to improve the performance and help in enhancing the organizational dynamics. With the advancement in technology, automobile industry is also facing challenges due to various foreign automobile companies for example Japan based companies are manufacturing cheap vehicles that poses threat for American automobile industries. As a result of which, it is necessary for the automobile companies to change the existing policy of producing only luxury cars in order to face the increasing challenges. On the other hand, mass production of cheaper vehicles is likely to be of better option rather than producing only costly automobiles. Moreover, a car is a luxury product that is purchased only once by most of people, so the buyers are more likely to analyze the price before buying. Therefore, production of low price vehicle not only attracts the new group of buyers but also improve the market share of the concerned automobile industry. The power of suppliers is another problem faced by the automobile company that can be reduced by limiting the number of contracted suppliers. A proper communication network has to be handled so the managing authority of the company can negotiate with the contracted suppliers with respect to the price and quality of products. Minimizing numbers of contracted suppliers also enables the company to get an opportunity to reduce the price of the raw materials and get other benefits. Despite the success of Ford Motor, some of the weakness exists because of the organizational culture. The increased competitions among employees of the organization also tend to reduce the overall performance as the individuals are mainly concerned about self-benefit. In such a case, the distribution of power and authority is necessary for efficient decision-making. For this purpose, implementation of different organizational culture in line with the existing one can improve the performance of Ford Motor. The adoption of developmental culture can be effective for the automobile company as it is externally focused as well as offers more flexibility as compared to the existing culture. A developmental culture mainly focuses in improving programmes those are responsible for the personal as well as professional growth of all members of the company. Learning process takes place naturally in an organization, and so developmental culture enables employees to think with respect to short term as well as long-term goals. The leader of the organization performs the major role in developing the attitude as well as shaping the behaviors of the individuals. The members of the organizations should be encouraged to contribute ideas that further enhances the decision-making and contributes to the organizational learning process. Apart from this, an informal communication system further enables the employees to easily exchange their experiences and ideas that also improve the organizational behavior. The organizational culture model of Ford Motor should be designed in such a manner that focuses on both internal as well as external aspects. Developmental culture focuses on the external aspects that further assists in improving the internal performance along with external (Tucker, Cullen, Sinclair & Wakeland, 2005). A cultural change benefits the organization by marketing the brand image of Ford Motors as well as improving the production of motor vehicles. Organizational development requires implementation of various changes as discussed above. Development of an organization depends on the learning process of employees. Organizational change is necessary for any organization in order to face the increasing competition as well as to enhance the performance and increase profitability. The work force of an organization comprises of various team members and the adoption of change by the internal members is necessary for improving performance. The most important challenge faced by the company while implementing is to reduce the competition among the employees within the organization. Therefore, for this the organization should allow open communication among the members that develops trust and confidence between different levels of hierarchy. The implementation of change depends on the active participation of employee of the organization. Therefore, it is crucial for the employers of the organization to motivate the employees so that the change can be implemented successfully. Conclusion From the above discussion, it has been analyzed that the human behavior within an organization defines the organizational behavior. The overall impact of individual as well as the group- behavior affects the organizational process. The learning process within an organization defines the attitude of the people towards organization. Organizational culture plays a crucial role in shaping behavior. Ford Motor is one of the leading car manufacturers and follows a diverse work force. The company offers equal opportunity to all the individuals despite differences in cultural background. The perception of an individual is the main factor that guides the behavior. The paper further analyses that leaders play a crucial role in motivating the employees to perform well. Herzberg’s two-factor model has been used in the paper to understand the various aspects that motivates employee to improve performance and that in turn leads to job satisfaction. Despite the success of Ford Motor, the company faces various internal as well as external challenges as discussed in the paper. The internal issues faced by the organization are mainly linked with the organizational culture and competition within the organization. The external issues faced by the company involve entry barriers in developing economies, increased competition and supplier’s power. Some of the recommendations have been provided with respect to the challenges faced by the company. The change in organizational culture and increased participation of members improve the performance and results success in the organization. References Ball, J. (2003). Understanding Herzbergs motivation theory. Retrieved from http://www.chinaacc.com/upload/html/2013/06/26/lixingcun841e7885772f4e7f907bf6272b185c41.pdf Cole, G.A. (2000). Organizational behavior: theory and practice. UK: Cengage Learning EMEA. Dornbach-Bender, R., Slade, B., & Thorpe, J. (2009). Strategic report for ford motor company. Retrieved from http://economics-files.pomona.edu/jlikens/seniorseminars/oasis/reports/f.pdf Ford Motor Company. (2008). Learning from the automotive industry. Retrieved from http://epub.wu.ac.at/3795/1/Ford__WU-CaseSeries.pdf Ford Motor Company. (2015). Diversity in the workplace. Retrieved from https://corporate.ford.com/careers/diversity.html Lodedo, C. (2013). Communication processes and organizational change in post-industrial society. International Journal of Business and Social Research (IJBSR), 3(11), 63-73. Tucker, J.S., Cullen, J.C., Sinclair, R.R., & Wakeland, W.W. (2005). Dynamic systems and organizational decision-making processes in nonprofits. The Journal of Applied Behavioral Science, 41(4), 482–502. Read More