Strategic Leadership in Ford Motor Company, US and Europe, 1980s and 1990s
Success in Ford US
Pascale (1990, pp 119-121) studied a range of American companies during the 1980s and concluded that Ford US stood alone in appearing to have truly transformed itself. In 1980 it lost $3.3 billion. In 1986 it surpassed GM in profits for the first time since 1924. In 1987 it broke all previous industry records for profitability.
The process started when, seeking ways of turning the company around, a Ford task force examined outstanding American companies and their characteristics. Top management decided that Ford’s core values were people, products and profits and developed a new statement of Ford’s mission and guiding principles of behaviour. The major organisational challenges to support the strategic agenda were employee involvement (EI) and participative management (PM). The latter at Ford US was used:
• To complement EI by development managerial skills needed to provide employees and fellow managers with opportunities to participate in the managerial processes of planning, goal setting, problem-solving and decision-making • To integrate managerial effort across rigid functional barriers
In Ford US, functional groups formed `organisational chimneys’ – an organisation structured for vertical relationships within functions, and that in so doing put up barriers that prevented effective horizontal linkages. PM sought to change managerial attitudes and to dismantle dysfunctional structures by simplifying managerial control, devolving authority and breaking down barriers between managerial groups. This was of crucial strategic significance, since the success of Ford’s shift towards innovation hinged on the integration of design, manufacture and sales and marketing – as in Japanese companies operating in the same kind of increasingly turbulent market conditions. PM and product development came together for Ford in a new strategic vision of...
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