Organizational Leadership as a subject has been covered greatly by scholars, academicians and yet the creation of effective management is still elusive to many organizations.
Although finance and technology are significant for the growth of an organization, leadership remains the key requirement for a company to gain a competitive advantage in the market place.
Leadership comes up with business strategies as well as builds resources, finances and operation for the company. The leadership team can be the worst liability of an organization or the most important asset.
Over the past years, the Ford Motor Company has faced management dysfunctions which have in turn affected its way of operation.
This article will identify the dysfunctional aspects that are associated with planning, attraction and retention practices at the Ford Motor Company about Henry Ford’s management.
The analysis of the finding will be done in light of the changing environment of Ford through the years. Using the current theory, HR theory and (Australian) legal prescriptions, it will provide solutions and alternative practices to the problem areas detected.
Dysfunctional Management Aspects at Ford Motor Company
Since the early years of the 20th century, Ford Motor Company has been an American icon.
From the previous Model T to the most recent models like the Land Rover, Aston Martin, and Lincoln among other products, Ford has been able to come as a world-class leader in the motor vehicle industry.
From the manufacture of these luxurious vehicles, Ford Motor Company has been making huge profits.
With innovations from Henry Ford, Ford Motor Company has been ranked the top-ten most profitable companies in the world as well as grown into the world’s third-largest automaker.
Being the world’s profitable and powerful companies in the world does not mean that the Ford Motor Company has not faced challenges in the past.
In the last few years, Ford Motor Company has been plagued with human resource problems. These human resources problems have been commonly related to Henry Ford’s planning, attraction, and retention of employees.
As a result, it has experienced a loss of sales, marketing problems and most importantly the loss of employee motivation and morale. From Kiley’s article ‘Trickle-Down Despair at Ford.”
Business Week Online’, an employee at ford headquarters was quoted saying “I like the atmosphere in here better than I like work these days”.
These were words that came from an employee who has worked for Ford for over 20 years (Kiley 2006).
This is a representation of what other workers feel at the Ford Motor company at both the headquarters among other plants around North America.
Dysfunctional Aspects of Planning at Ford Motor Company Case study Analysis
The relation between Henry Ford’s family and the company was poor and it is, therefore, affected the companies planning. This strong involvement and influence of Ford’s family members led to power struggles and infighting.
Since the family had a bid control over the shareholders’ votes, it always retained the power to choose and retain the company’s CEOs and presidents. This has led to poor coordination among members of the staff.
As a result, poor management surfaced. Ford’s management has had a constant fight with Henry Ford’s family. One of the most famous power struggles was the one that President Lee Iacocca was fired in the year 1978.
Henry Ford fired him since he suspected that he had gone behind his back (Taylor 2006). This was the main proof that the ford’s family did not easily let go of its power over the management of Ford Motor company.
Dysfunctional Aspects Attraction at Ford Motor Company
Since the moving assembly innovation was hard on employees, and workers’ turnover was very high there was increased productivity and reduced labor demand. These turnovers translated to extra costs of training and delays in production.
As a result, there was less employee attraction since the work was too much for these employees to handle. No one wished to work for the company because of the hard labor and low returns.
In January 1914, Henry Ford was forced to cut employee shifts from 9 hours to 8 hours a day and 5 days a week. He also had to review the turnover problem by doubling employees’ pay up to 5 US dollars a day.
This was made in line with employee attraction and retention. It also served as a motivation strategy for those employees who had not quit remaining at work.
Dysfunctional Aspects Retention at Ford Motor Company Case Study PPT
The management of Henry Ford at the Ford Motor Company had a problem. The company was becoming very successful. With the growing popularity of the Model T made Henry Ford rethink his idea of mass production.
By introducing the moving assembly at a plant at Highland Park in the year 1913, Henry Ford experience success that he never imagined.
A year before the installation of the assembly line he dabbled the workforce to double production of model T. The year that followed, he nearly doubled the production but with the same number of workers.
The following year he nearly doubled production again, but this time he did it with the same number of workers. Employee turnover was accelerating at a very high rate. With the excess work involved made workers quit in mass. Ford was facing a serious problem of retaining its employees.
Application of the Current theory on Henry Ford Motor Management
The motivation of employees is considered one of the most effective forces behind the successful performance of organizations. Motivation is a tool used by many organizations to both attract new employees as well as retain the existing.
When an individual is motivated, he is dedicated to accomplishing given tasks. To achieve goals and objectives, managers must be equipped with effective ways of retaining existing and attracting new employees.
Many theories have been suggested to explain why employees are motivated to go to work daily, why they strive to give their best while others simply do not care as long as they can put food on their tables.
The motivation of employees clearly explains why most people see their work as mere job A current management theory that Ford could adopt is the Maslow’s theory ‘hierarchy of needs’ is frequently depicted in a pyramid shape with needs for self-actualization at the top and the most fundamental level of needs at the bottom.
The basic four layers of the pyramid comprise of “deficiency needs”. These needs are love and friendship, physical needs, security, and esteem. When physical needs are not met, individuals will have tension and anxiety.
Therefore, this theory suggests that, when employee’s needs are taken care of, they are highly motivated. In this case, Ford’s management motivations since most of their needs are not taken care of.
After employees’ wages were doubled up to 5 USD, employees were motivated to work hence the retention problem was solved.
Application of HR Theory on Ford Motor Company
Ford manufactures hundreds of thousands of vehicles each year. This means that employees who are in charge of the final assembly have a chance to come face to face with the product of many other employees.
Therefore, the manager in charge of productivity has many ways to increase productivity among employees with the application of the HR theory.
The application of Alderfer’s ERG Theory of employee motivation would attract more employees for Ford’s management. This theory’s concern about the existence of groups is to provide basic material existence human requirements.
These requirements include safety and physiological needs. The second set of needs is those of relatedness –the desire of individuals to maintain interpersonal relationships.
These status and social desires involve interaction with others. When these status and desires are not satisfied, individuals’ morale is affected. Employee’s needs may include better salaries and rest.
With the reduction of working hours, Ford was able to attract more employees. Form a wide range of specialized professionals, Ford Motor Company has been able to have a competitive advantage in the market place.
Legal Prescriptions (Australian)
For effective management, Ford Motor Company should design an appraisal system. Before hiring new employees, the Ford motor company should consider applying legal prescriptions to its employees.
Since the employee performance data is used to make important decisions such as employee selection, pay, and promotion, it is subject to legal disputes that involve employer charges of bias and unfairness.
There are several channels through which an individual can pursue to obtain discriminatory employee appraisal. The most common federal laws are the age discrimination in employment act and the title VII of the civil rights.
Several recommendations would assist the ford motor company to conduct fair performance as well as avoid legal suits from employees. The ford motor company should audit appraisal data to check on the impact if they are sued by its employees.
Through taking appraisal data, Ford Motor Company might avoid getting sued. These statistics can also be used in disparate treatment on an employee’s claim of gender or race discrimination. Ford can use can rebut this claim when there is no evidence of an adverse impact related to a certain class
Conclusion on Ford Motor Company Case Study Strategic Management
Before outlining the recommendations for Ford Motor Company, I must note that the company has a successful and proud history, starting with the way people traveled and the amazing innovations which changed the world’s system of mass-production as areas being one of the most profitable and successful companies in the world.
From powerful Mustang and the elite and to the everyday Taurus, Ford has provided cars to the American market as well as the world market. On the other hand, companies are not invincible. The Ford Company has in the past witnessed this fact firsthand.
The constant managerial turnover and the staggering drops and upheaval have hurt more than 300,000 plants as well as workers.
The dysfunctional aspects of planning, attraction, and retention at Ford’s management have had yielded negative results on the motivation and morale of employees.
As a result, these aspects have constantly continued to hurt the management of the Ford Motor company.
Through the application of the current theory, HR theory, and (Australian) legal prescriptions, Ford will be able to address employee motivation as well as facilitate a brighter future.