FORD CASE STUDY
1. Using competing values, assess why Ford is widely considered more effective than GM. How could GM have used the competing-values approach in the early 1980s to recognize that it had problems?
• In case of Ford motors they were earlier implementing the Rational Goal Model that lays immense emphasis of higher level of productivity, efficiency and profit. The decision-making is centralized to the higher-level authority with very less or no participation from the lower level staff in decision-making authority. • But after the major drawback that hit Ford Motors by producing more and more of particular product without customizing the product they change their strategy and become more employee centered. They choose to adopt human relation model to handle their employees in the best possible way so that an organization can get flexible in dealing with change and every give respect to the employees by making them communicate and coordinate their point pf view. • In case of GM, they are following decentralized authority with centralized control. Like Ford, GM had high cost and a bloated organization. They had an internal system that stifled innovation and was slow in reacting to change. Apart from that they are prisoner of their successes and that’s why Ford proved out to be more effective than GM as they change their strategy for the betterment of the organization. • In early 1980s they should used a human relation model to determine whether they are flexible or not and whether are focusing on employees in terms of decision making autonomy or not. If they had recognized the problem that exists with producing small cars just through mare assumption they wouldn’t have committed that mistake. In that case the human relation model would have been a perfect fit as it would have provided the employees with motivation and the flexibility would have enable the organization to adapt to the change.
2. Contrast Ford and GM’s strategies. How has each affected their organization’s structure?
• Ford Motors initially were following the Defender technique, as they are not taking any sort of risk and in seeking out for new opportunities. It’s been said that Henry Ford is a man who feared change and loved control. He even opted for a centralized control and doesn’t want any involvement from the lower level staff in decision-making. • But coming 1980 Ford used more of Prospector technique by changing the corporate strategy to become the styling leader among the US “Big Three”. They introduced a broad based cost cutting effort, initiate a massive program to change Ford’s culture and put emphasis on employees and give respect to them by giving them autonomy and decision making authority. • GM can be categorized as Analyzers as they are low in innovation and were slow to change although they suffer tremendous drawback after their technology structure misfit but even then it takes time for them to bring in change and follow the prescribed path. They were relying too much on their past successes and believed that they can get away with anything they do, like they had in the past.
3. How did GM’s technology affect its structure?
• GM basically had made a big mishap by assuming the changes that will occur in the environment and because of that they suffer big time. They decided to product smaller cars and installed robots, lasers, computed designed and other high tech technologies in order to boost up the pace of the work and improve quality. They just keep on focusing on increasing the market share but failed to respond to the needs of the customers • But the technologies didn’t match the structure of the organization and they found out the hard way that new technology pays off only when combined with changes in the way work is organized on the factory floor.
4. Assess both companies’ effectiveness in terms of their “environment-structure” fit.
• The structure of Ford...
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