Case Study: Ford and Nasser - Essay Example

Case Study: Ford & Nasser (College) Case Study: Ford & Nasser Ford Motor Company is a well established car manufacturer in the automobile industry, and is also one of the members of the group “Big Three” including Chrysler and General Motors as the other members. The long years’ operation in the automobile industry has aided the company to attain well market stature across the globe. According to Prasad (2009, p.91), for every organization good will is a priceless asset and hence firms never engage in activities that would hurt their good will.

The Ford also gives first priority to its market stature for it offered sweet severance packages to the former CEO Jacques A Nasser who had been terminated for his lackluster performance. At the same time, it seems that the firm provides only smaller severance packages to employees who are laid off. By practicing this strategy, the Ford wanted to make the terminated CEO satisfied. Although Nasser was terminated from his position, he had been at the helm of affairs of the company for several years.

Therefore he would be aware of the financial position and other internal policies of the company. If the firm gave fewer severances to Nasser, he would probably get unsatisfied; and such a condition would certainly worsen his attitude to the company. Moreover, he might pass crucial information regarding the Ford to its competitors and would cause dreadful impacts on the company. In addition, the former CEO may also deliver some awful statements about the company through media and it would adversely affect the business interests of the Ford.

As in the case of every company, the Ford’s board of directors also focuses on its long term financial interests rather than saving a small sum by compromising with the company’s sustainability. The response made by Ford’s board of directors seems the company’s best interests as this strategy would save the company’s good will. Obviously termination of the CEO would get wide media coverage which in turn would adversely affect the firm’s market stature. In contrast, by offering a sweet severance package even to its failed CEO, the company can convince the public that the company has a stronger financial position.

In addition, this practice would contribute to the overall dignity and ethical standards of the company. Another benefit of this strategy is that it would aid the company to acquire experienced and potential top executives. When the managerial professionals observe that they would get financial benefits regardless the company’s performance, more and more top executives may be attracted towards the firm (MissouriBusiness.net). The most notable benefit of this strategy is that this practice would assist the company to prove its financial stability in the automobile industry.

When a CEO is terminated due to the lackluster performance of the company, naturally people may believe that the company has confronted with some financial difficulties. Therefore, offering better severance packages would sometimes help a company to overcome such worse situations. References Prasad, Kesho.(2009). Strategic Management. New Delhi: PHI Learning. “Using Employee Benefits to Attract, Retain Employees”. MissouriBusiness.net. retrieved from http://www.missouribusiness.net/sbtdc/docs/using_employee_benefits_attract.asp