Henry Ford, Psychology of a Great Entrepreneur - Essay Example

? Henry Ford a Great Entrepreneur The research paper deals with a great personality of Henry Ford. To my mind this is a perfect example of the way leader's intentions have been founded from the very childhood and resulted in a sound leader's personality. Henry ford managed to deal with the challenges in the Ford Company. It is relevant to consider a great leader's personality of Henry Ford in the aspects of management and leadership. Key words: automobile industry, management, leadership, human resource management, sales volume. HENRY FORD A GREAT ENTREPRENEUR Henry Ford was born in 1863 in Dearborn, Michigan. In his childhood he liked machines very much. He was interested in different mechanisms and parts of the machines. He was working on farm and he had many opportunities. He worked part-time on the Westinghouse Engine Company. By 1896 Ford had embodied his intentions into reality, because he constructed his first horseless carriage. He wanted to finance his work in the future. This man had big intentions and he was working in the name of an improved model of cars (Coughlin 2004, p. 40). Ford established the Ford Motor Company in 1903, and he claimed: "I will build a car for the great multitude" (Henry Ford biography). In October 1908 he offered a very successful Model T, which cost $950. It has been sold for nineteen years and its price became lower and lower in the course of time. Finally, it cost $280. There was a great number of cars sold in the USA (nearly 15,500,000 were sold in the United States alone). The Model T was not a luxurious car. It was a simple means of transportation for an ordinary man. Ford made a great outbreak in its progress and by 1914 Henry Ford introduced innovative techniques of production. One of the most efficient techniques was chassis turning every 93 minutes, because in the process of earlier production chassis was turning every 728 minutes. In 1914 Ford motivated his employees by paying them two times more in comparison with other manufacturers. He made them work 8 hours instead of 9 hours and the factory operated a three-shift workday. As a result of his innovations, Model T was manufactured every 24 seconds. His great personality became a national celebrity. Ford's Model T became an affordable one, and it altered American society. The standards of living were changed in the American society. People got a chance to live in the suburbs and they created a national highway system. They had a chance to go anywhere they want anytime. All of them had their own cars. Therefore, Henry Ford is further considered not only as a successful entrepreneur, but also as a successful leader. He made his dream come true: “I want to make a car that anybody can buy” (Henry Ford biography). There was an essential increase of sales experienced by the Ford Company. An essential raise of production was marked by high price sales increase. How did Henry Ford reach all these improvements in his company? Actually, this man has never minded a process of innovations and changes introduction. He wanted to pay sound salaries to the employees because he knew that it is not wise to hire new people and to teach them to work from the very beginning. He wanted to take the most efficient measures to deal with his rivals. Henry Ford was sure that it is very wise of him to conduct a shrewd policy and introduce different innovative measures in the context of his work. Henry Ford is often positioned as a very talented manager, a wise engineer, a gifted leader, an outstanding politician and economist for his company. We can see that a success of this entrepreneur depended on his well-developed personality. He tried to develop his policy in accordance with the needs and wants of the customers in America. He took into account emotional, physical abilities and financial conditions of his cars' potential buyers. Therefore, Henry Ford developed his cars in the name of the customers’ needs and he positioned his developed products as rather competitive in the international market. First challenge, which was experienced by Ford was the initial capital, which reached 10 thousand dollars, but "an investment of ten thousand dollars when the company was first established produced a return of twenty-five million dollars” (Coughlin 2004, p. 42). In the process of the Company's development, Henry Ford experienced many challenges: "Ford's "Model T" was still a dependable car. But it had not changed in years. The Chevrolet, however, had a different look every year. And you could pay for one over a long period of time. Ford's share of the car market began to fall” (Coughlin 2004, p. 42). Henry Ford managed to keep up the price and even to make it lower, but he could not keep up with the modern tendencies of cars' design changes. His innovations in the process of manufacturing increased the volumes of sales, but they did not contribute much to sales of some changed and improved cars. Another challenge for the Ford Company occurred in 1930, when the economic recession was developing in America. There was a great need to improve working conditions in the country and Henry ford was very much focused about the necessities of working conditions improvement for his employees. Henry Ford was going to develop a labor union. It was very important for him to focus more on a labor union. It shows that Henry Ford was very much concerned about favorable conditions of work for his employees. Ford was thinking about the way of his business quality improvement, he wanted to decrease price and he wanted to sell millions of cars to average Americans in the country. Henry Ford made consequential attempts to promote his business and foster some innovative processes in the field of his activity. Taylor was an undeniable authority for Ford and he tried to follow the main steps of a great manager. Thus, Taylor's ideas about standardizations were of crucial importance for Henry Ford. He made an emphasis on standardization in the field of products manufacturing. He did not make a great emphasis on workers' standardization. Henry Ford managed to introduce “single purpose machine tools” and “assembly lines” (Shiomi, Wada 1995, p. 56). Ford was focused on relevant and on-time management strategies as well as specific features of production process. He made and emphasis on improvement in technological process, but he did not want to be too cruel or too strict with his workers. As a matter of fact, the main essence of Taylor's ideas can be found in the following claims: an introduction of new technologies is a right way to modernization of an industrial process was reached by introduction of new technologies. Henry Ford was interested in his employees as effective mediators in the process of production. In other words, he wanted to concentrate on dehumanized principles of his activities. Human management strategies can be promoted in case Ford policy is chosen as one of the most important and leading principles in his business. Even in the modern context, modern entrepreneurs can learn much from Henry Ford. For example, very often they accuse their employees of inefficient labour, but it would be much better for them to concentrate on improvements in technologies at plants. Ford as a great manager Leadership features of Henry Ford were revealed during the years of his management years. Ford’s automobile industry was evident within a well-structured organization and management of personnel. Every employee had to complete his own series of necessary tasks. As a result of these consequential actions, employees managed to cope with their job effectively and efficiently. Ford reached positive results under such conditions of his effective innovative management: “production surged and profits skyrocketed. Ford happily paid the higher wages and also cut the price of the Model T by over 10 percent in 1914, 1915, and again in 1916” (Easterbrook 1984, p. 25). His workers became his customers. It was reliable and convenient to sell cars to the group of customers, which was a target audience for his business. Thus, the auto industry became a centralized industry. Attempts of Ford were successful and industry of automobile production was on the edge of its development. Ford became a successful entrepreneur, but he also became a respected national hero. Ford's business developed with respect to his own economic philosophy. His policy depended much on his individualistic positions and concerns. His employees had a good salary and they worked 8-hour working day. Moreover, we can claim that Ford conducted a fair and just business policy, because he hired many handicapped people. This group of people could work at mini-assembly lines. Actually, he did a good deed and he helped people, who needed help and God helped him in his good intentions. Of course, Ford had main rivals and one of the cruelest competitors was George Selden. He was a monopolist in automobile industry. Ford did not join the rest of car manufacturers and he occupied his own niche in the automobile production industry in the country. The American car producers wanted to join his business, because Henry Ford produced combustion engines. He did not implement Selden’s developed engines. In such a way, we can claim that Ford tried to develop his own business strategy and keep up to his own business line of behavior. Model T was popular because it correlated with the basic needs of average customers. Other producers of cars in America were much focused on advanced cars. By 1924 Ford hit the market with the new Chevrolet, which was well-known for “a water-pump cooling system, an oil gauge on the dash, a reliable ignition system, a foot accelerator, and a gas tank in the rear for safety and convenience” (Easterbrook 1984, p. 26). This model was available in a wide color range and the customers were really pleased by this introduction and technological innovation. For Ford other convenient cars and some other comfortable car models were also important. He realized that it is necessary to satisfy the needs of the customers in different fields and suggest them as wider range of models as possible. His strategy was to grasp customers' attention and wallets. The Americans could afford more innovation, more comfort and they wanted to buy more stylish and convenient cars. Consequently, the developers in the field of automobile industry wanted to introduce more and more innovative models. Ford managed to survive in a diversified and a highly competitive market. His cars were of great importance for him. He did not deny some risky actions in his business too. For example, he did not sign the Blue Eagle codes, because Ford was very much concerned about the following issues: “…it would have to be written that the surrender of American business to government was unanimous, complete, and unconditional” (Easterbrook 1984, p. 29). For Henry Ford this Blue Eagle codes was a great challenge. Ford has always been striving for independence, but his code of laws would prevent him from independence for sure. From the political perspective, this law had good intentions. NRA chief Hugh Johnson and President Roosevelt wanted to pacify the automobile market. The government was interested in mutual understanding between car manufacturers. Ford experienced a great challenge, when his dealer’s bid on 500 trucks for the Civilian Conservation Corps was $169,000. The government underlined that it was necessary to pay even more and they did not like Ford's rejection to sing code of laws. Ford succeeded and in 1935 NRA was gone. Ford had a perfect chance to fight for the car business he wanted (Ramrattan 2001, p. 34). Therefore, we can see that Ford managed to cope with external pressures in his business. Ford managed to provide his business with many different options, such as "reduction of subsidies for driving, providing possibilities of transportation choices, providing a balanced relation between transportation, development of land use, environmental safety and community protection” (Yang, 1995). A business growth and expansion for Henry Ford has been one of the most important concerns, but he developed his policy with respect to external and internal pressures (Engdahl 2005, p. 54). As a result of his wise policy, the Ford Company managed to survive and operate successfully even nowadays. Henry Ford was a great leader, a wise manager and a just citizen: “Ford understood a good deal more about the direction of modern technology and society than did most of his seemingly more sophisticated contemporaries. He sought a limitation on the ever-greater size, scale, and impersonality of technological development and a concern for other aspects of the “good life” (Engdahl 2005, p. 53). Conclusion Ford made his dream come true. He made dreams of other Americans come true too, because he made cars affordable for them. Consequently, it is possible to claim that the Ford Company succeeded because of independent management and economic strategy. His Company was his dream, his work and his future. He inspired by his business not only people, but also the American society, which became less urbanized and more free. Ford did not make his employees suffer, because he paid good money to them; he boosted production volume basing on technological innovations and not on people's suffering; he improved human resource management in his company and the ideas of Taylor were the main principles for his business. Social and environmental concerns played as much important role for Ford's business as development and increase of automobile production volumes. References Coughlin, J. F., 2004. Not Your Father's Auto Industry? Aging, the Automobile and the Drive for Product Innovation. Generations, 28(4), 38+. Easterbrook, G., 1986, October. Have You Driven a Ford Lately? Thanks to Donald Peterson You May Want To. Washington Monthly, 18, 23+. Engdahl, R. A., 2005. Organization Evolution: the Natural Change Model for Organizational Structure in Changing Times. Organization Development Journal, 23(2), 50+. Henry Ford Biography. [online] Available from: http://inventors.about.com/od/fstartinventors/a/HenryFord.htm [Retrieved December 12, 2012] Ramrattan, L. B., 2001. Dealership Competition in the U.S. Automobile Industry.American Economist, 45(1), 33. Shiomi, H. & Wada, K. Eds., 1995. Fordism Transformed: The Development of Production Methods in the Automobile Industry. Oxford: Oxford University Press. Yang, X., 1995. Globalization of the Automobile Industry: The United States, Japan, and the People's Republic of China. Westport, CT: Praeger. Read More