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Alan Mulally's Restructuring Of Ford Motor Company

1423 words - 6 pages

Seeing a Ford Model T or A driving down the road is a snap shot of history of American motor vehicles. Henry Ford revolutionized the automobile industry and set the standard for manufacturing products on an assembly line. In 1903, Henry Ford opened Ford Motor Company with $28,000 and sold his first Model A to Dr. E. Pfenning, a physician from Chicago, Illinois (Ford Motor Company, 2013). Since that first vehicle, Ford Motor Company has gone on to sell over 300 million vehicles.
Growth in Ford Motor Company created problems within the company. Poor quality plagued every line of vehicles produced by Ford. Growth included Ford Motor Company purchasing multiple vehicle brands from other companies in different countries. Operating one company that contains smaller companies can create inter organizational rivalry. Rivalry sent each company in its own direction and drained money from Ford Motor Company. Further complicating the issues at Ford Motor Company was the Great Recession.
The Great Recession affected the stock and house markets hard. Automotive industry was not immune to the ramification of the Great Recession. Rising gasoline price crippled Ford Motor Company flagship vehicles such as the SUV and Pickup based on their poor gas mileage. Caught on their heels, Ford Motor Company had no affordable vehicle platform that obtained good gas mileage. Looking for a new path, Ford Motor Company went outside the company to hire Alan Mulally. Mr. Mulally worked for the Boeing Company for 30 years, starting as an engineer and finishing as the Executive Vice President (Bloomberg Businessweek). Sixty days on the job, Mr. Mulally started the restructuring of Ford Motor Company; moving it forward as a global company.

Customary practice in an organization is to promote leadership within its rank. Outside leadership entering a company to restructure the company can cause stress to lower level leadership. Alan Mulally faced past years of key structural issues that plaque the company from prospering. Bryce Hoffman (2012) outlines the major key structural issues Alan Mulally faced as teamwork, poor communication, separate operating divisions, consumer appeal, and in need of a plan (Bryce, 2012)
Corporate leadership is always looking for job security. Job or information knowledge is seen as job security. Ford executives were afflicted with this phenomenon. Disregarding the company they worked for, executives seen the enemy as other executives within the same company. Hoffman (2012) described board meetings as, “Executives entered them eying each other for advantage, looking for weak spots in each other’s armor, ready to drive home a shiv at the first sign of vulnerability” (Bryce, 2012). Executives have to work as a team, communicating the good and bad, and working together to conquer obstacles.
Alan Mulally recognized the infighting of executives within the company. The fix was to make the executive board...

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