Ford Motor Company: Globalization and Organizational Structure

Modern multicultural corporations are complex, massive, dynamic organizational systems that are often influenced by organizational design hampering innovation and complicating the penetration of new resources for gaining profits. Therefore, an advanced organizational design should be introduced to fit the challenges of an external business environment. Holistic thinking, cultural diversity management, and strategic thinking can introduce a fresh insight into a global organization’s philosophy and mission. In this respect, Ford Motor Company, a leading automobile producer in the world, should also consider this issue to strengthen its position in the global market. In particular, the company’s managers should realize that the global environment has a potent impact on an organization’s competitiveness, as well as on its future organizational development.

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The complexity of the problem lies in understanding several dimensions that it covers. To begin with, the context of organizational development is closely associated with organizational culture, conflict management, and human resource management. The external environment, therefore, touches on these issues and undermines the necessity to introduce organizational changes. Hence, there is a significant gap between organizational change and internal organizational design which can be achieved through reconsideration of the points uniting structural and cultural components. Hence, Bate et al. (2000) stress the evident difference between organizational design and its structure. Specifically, the structure is more connected with the functional and social dimension of human interaction and, therefore, it “…describes both the prescribed frameworks and realized configurations of interaction, and the degrees to which they are mutually constituted and constituting” (Bate et al, 2000, p. 199). In this respect, Ford Motor Company should be more attentive to the economic process that takes place abroad because it can fail to face those effectively. As proof, Hiraide and Chakraborty (2012) reveal the obvious influence of the global economic recession on the automobile industries in the United States and outside it.

Apart from the changes to the production process, Ford Motor Company was largely affected by the fluctuations in consumer demand and product supply chain development. To stand the international market challenges, the company had to promote a holistic and integrated ideology to control overseas production and sales (Anastakis, 2004). Such an approach is supported in the studies by Bryan and Joyce (2007) who focus on organizational design as a foundation for corporate strategy. In particular, the researchers insist, “organizations can be designed to fit the economic conditions of the 21st century and use specific initiative to put such designs in place” (Bryan and Joyce, 2007, p. 4). In this context, Henry Ford’s company has actively employed a consistent corporate strategy that sought to reconsider the organization’s unique position in Canada and bring in into the organizational control of Ford Motors in the United States.

The main task of the multicultural organization consists in adapting to the change from beyond. In this respect, Larry and Jamie (2002) focus on the alliance strategy and market expansion as the key approaches to meet the demands of globalization. According to the research, developing new partnerships creates the opportunity for sharing production techniques of components of automobiles, as well as reduces costs on research and development initiatives (Larry and Jamie, 2002). To accept the challenges of globalization, the Ford Motor Company has resorted to technological expansion as one of the core solutions of strengthening its positions in the international market. As a result, there are a great number of benefits and potentials for the company to restructure its organizational design by the recent trends in global marketing. In addition to the alliance development and technological advancement, the company adopts a new model of risk management because of the inability to predict the economic and financial fluctuations in other countries. According to Larry and Jamie (2002), “the best way to help accelerate the globalization process is to recruit and empower an international executive team” (p. 49). In this respect, attention to the activities carried out by non-governmental organizations should also be encouraged because they may affect the company’s brand due to the increased recognition of the company’s products.

Certainly, the global expansion has brought in a number of opportunities for Ford Motor Company to increase its production and sale rates. At the same time, the impact of globalization has led to the rise of costs due to the lapses in diesel engine technology. The analysis of the activities of Ford Company in Europe at the end of 1990s has highlighted the shortcomings of globalization and made the Ford managers reconsider its strategic policy. Similar to the recommendations provided by Bryan and Joyce (2007), Donnelly and Morris (2003) argue, “…if globalization is accepted as a driver in the world economy, then firms need to manage their subsidiaries carefully in an integrated manner” (p. 79). In this respect, the debate should also focus on the ideas of centralization and decentralization that stand at the core of internationalization and company’s responsiveness to changes.

Apart from technological advancement and market expansion, globalization is closely associated with the emergence of the World Wide Web. At this point, the Ford Motor Company can be regarded as a pioneer in promoting virtual team collaboration. In 2003, the company started reconstructing organization by substituting traditional phone services and introducing online services (Nepal et al., 2007). Hence, each member of an organization was able to access company’s file online, which significantly fostered interaction and communication. In the interview with Alan Huberty, a consultant to Ford Motor Company, it has been emphasized, “that the concept of “Presence” as the fundamental technology…as well as the connection in your team space are…not understood by most of the people supplying technology because they look at it “technically” and not “Process-Based” (Link and Filias , 2006, p. 64). Customer-centered orientation, therefore, identifies the functional dimension of the World Wide Web and creates a new environment in which managers are able to operate. Such a dimension of organizational design can be beneficial for expanding the company’s opportunities to operate from a global perspective. As proof, Hughes-Cromwick (2011) introduces Ford’s electricity strategy and states, “Having a platform designed for global use…provides flexibility to expand [Ford’s] electrification coverage into additional vehicle nameplates as customer demand warrants” (p. 169). Developing a wide portfolio within an organization ensures the organizational dynamics and motivates the employees to improve their performance.

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In order to undergo changes, the risk assessment should be introduced to gradual transformation of the company’s activities to sustain a competitive advantage in automobile industry. Moreover, the transformation process involving risk assessment should also imply sufficient time scheduling. According to Barlatt et al. (2012), time spent on innovation and creativity promotes culture of responsiveness to creativity and innovation (p. 478). Such a perspective is typical of the Ford’s ideology in the context of global expansion. Moreover, development of new products and diversification of services is another global strategy that should be implemented to reconstruct organizational design and face the changes in the international market. Introducing new automobiles cannot only expand the existing customer base, but also create new markets segments. For instance, the introduction of electrified automobiles can also meet the environmental needs, as well as respond to such global problems as environmental pollution and global warming. Under these circumstances, the Ford Motor Company can successfully develop a new corporate strategy.

With regard to the changes observed during the history of company’s development, the Ford Motor Company can be considered as a powerful enterprise producing automobiles and adapting to the emerging trends in globalization. The firm’s leaders are aware of the fact that innovation requires constant upgrades of technological devices and strategies. Thus, the invention of assembly lines and introduction of supply chain management emphasizes the readiness of Ford’s managers to face challenges. As a response to the external threats, the company has developed a range of software devices, including cloud computing, protocols, and online communication. According to Barlatt et al. (2012), penetrating a global environment should strengthen the company’s competitiveness and foster the production cycle. As the production pace increases, the company can contribute to the product complexity by introducing electronic software. Using an advanced level of technology integration allows introduction of efficient risk assessment measures. Such an approach provides new strategies for enhancing risk management initiatives.

Although the company constantly implements innovative approaches and efficient strategies on enriching organizational culture and limiting the organizational mission, there are a number of recommendations that can be introduced to fill in the gaps in other fields. Hence, the main weaknesses of Ford’s business activities lie in product recalls whereas threats are associated with the constantly increasing competition (Ford Motor Company SWOT Analysis, 2012). In order to avoid the challenges, the company can succeed by implementing integration planning, an individual-centered approach, and cultural diversity management (Goksoy et al. 2012). The latter is of special importance because the organization acts at a multicultural level. As a response to the problem, the studies by Goksoy et al. (2012) propose Business Process re-engineering as the key to organizational change and employees’ engagement. In particular, the process involves “…reinventing processes by abolishing the old ones and finding imaginative ways of accomplishing work while defining completely and a radically new process” (Goksoy et al., 2012, p. 90). As a result, this model has been developed as a solution for improving the company’s performance by assuring high quality of products and adding value to other processes.

The change model proposed by Goksoy et al. (2012) is closely associated with the classical change model that is split into three stages, including unfreezing, the change itself, and freezing. The former refers to the total withdrawal of previous information to convince the employees that old models are not efficient anymore. The change should be the next step to introduce alternative ways of organizational culture and mission. The latter implies establishing and strengthening the accepted changes, as well as enhancing organizational design. These recommendations can contribute great Ford’s extensive global strategies, as well as predict possible risks associated with those changes.

References

Anastakis, D. (2004). From independence to integration: The corporate evolution of the ford motor company of canada, 1904-2004. Business History Review, 78(2), 213-253.

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Barlatt, A. Y., Cohn, A., Gusikhin, O., Fradkin, Y., Davidson, R., & Batey, J. (2012). Ford Motor Company Implements Integrated Planning and Scheduling in a Complex Automotive Manufacturing Environment. Interfaces, 42(5), 478-491.

Bate, P., Kahn, R., and Pye, A. (2000). Towards a Cultural Sensitive Approach to Organizational Structure: Where Organization Design Meets Organizational Development. Organizational Science. 11(2), 197-211.

Bryan, L. L., & Joyce, C. I. (2007). Better Strategy through Organizational Design. McKingsey Quarterly. 2, 20-29.

Donnelly, T., & Morris, D. (2003). Restructuring ford Europe. European Business Review, 15(2), 77-86.

Ford Motor Company SWOT Analysis. (2012). Ford Motor Company SWOT Analysis, 1-9.

Goksoy, A., Ozsoy, B., & Vayvay, O. (2012). Business Process Reengineering: Strategic Tool for Managing Organizational Change an Application in a Multinational Company. International Journal Of Business & Management, 7(2), 89-112.

Hiraide, N., & Chakraborty, K. (2012). Surviving the Global Recession and the Demand for Auto Industry in the U.S. – A Case for Ford Motor Company. International Journal Of Economics & Finance, 4(5), 85-93.

Hughes-Cromwick, E. (2011). Ford Motor Company’s Global Electrification Strategy. Business Economics, 46(3), 167-170.

Larry, J. H., & Jamie, C. H. (2002). Globalization within the auto industry. Research Technology Management, 45(4), 43-49.

Link, A., & Filias, P. (2006). The expert opinion: An interview with alan huberty consultant to ford motor company’s virtual teams projects 1988 -2005. Journal of Global Information Technology Management, 9(1), 62-68.

Nepal, B., Chinnam, R., Petrycia, J., Brush, E., Chisholm, C., Hearn, M., & Meixner, M. (2007). A Quality-Based Business Model for Determining Non-product Investment: A Case Study from a Ford Automotive Engine Plant. Engineering Management Journal, 19(3), 41-56.

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