Ethiopian Review

Economic changes continue to transform the very essence of how business is conducted. A company must be able to recognize the paths they face and be able to poise themselves to confront any obstacles to achieve the goals they set. One would ask how a company can poise themselves to meet
these demands and the answer to that would be simple, thorough capable management and strong leadership. The answer may be simple but achieving this can be a daunting task. What does it take to have capable management and what qualities make up a good leader? Ford Motor Company is one company that has taken these items to task and have produced results that illustrate the power of effective management and precise leadership. The company’s ability to appoint qualified managers and leaders has allowed the company to rise from previous lows and mistakes to be poised for a bright economic future.

To be successful Ford Motor Company is required to have both good management and good leadership. Looking at these two terms one would think that they are one and the same. Isn’t a manager a leader? Isn’t a leader a manager? Thought these terms seem to be one and the same, they can be truly different when taken in the context in which they are used. Ford Motor Company, as an American manufacturer of automobiles and automotive parts and accessories, has faced many challenges since its incorporation that required decisive management and capable leadership. To best understand the challenges the company faces an understanding of the definitions of management and leadership are required.

Management is important for any successful company but what is management? According to the definitions provided by dictionary.com, management has a variety of implications. It can mean the act or manner of managing; handling, direction, or control (management, n.d.) or skill in managing;
executive ability: great management and tact (management, n.d.). It can also mean the person or persons controlling and directing the affairs of a business or institution. (management, n.d.). Management can be descriptive of the act of managing, the skill of managing, or the ability to manage. Leadership comes to mind when hearing these definitions and it would seem that the definition of leadership would be the same; however, the differences between the two, though rather transparent, have far reaching implications in creating and maintaining a well-planned corporation. To illustrate this, the definition of leadership should be examined.

Leadership is a term that is heard any time a company is congratulated or criticized. When describing the leadership in these contexts what message is being conveyed? According to the Dictionary.com definition, leadership can mean the position or function of a leader, ability to lead, an act or instance of leading; guidance; direction, and the leaders of a group (leadership, n.d.). In each of these definitions, leadership seems to coincide well with management and be one and the same but the subtle differences are evident. Effective managers will possess the abilities that make up the definition of management and an effective leader will possess the attributes that make up the definition of management. To understand the parts these terms play when used in describing Ford Motor Company a brief history of the company is necessary.

Ford Motor Company is currently the fourth largest automaker in the world (wikipedia.com, 2008). The company has been in operation in the United States since it’s incorporation on June 16, 1903 (Wikipedia.com, 2008). After 100 years in business, the industry that Ford Motor Company helped to revolutionize is changing in dramatic ways. The current plan of the company has been set forth for it to meet the changing demands of the consumer worldwide and to meet these objectives; the company has set forth a bold initiative requiring firm management ability and exceptional leadership to usher in a new era of prosperity for Ford Motor Company. To understand the tasks faced by Ford Motor Company in creating an organizational culture for the 21st Century, the objectives that the company aims to meet as it progresses forward into the future should be analyzed.

Ford Motor Company Executive Chairman William Clay Ford Jr. states this purpose with one sentence, “environmental sustainability is the most important issue facing businesses in the 21st century” (Ford.com, 2008). The mission of the company is to drive the direction of Ford Motor Company
to meet the demands of the consumer and the world in creating technologies that meet mobility needs will providing increasingly less environmental impact. According to Ford, the company has begun a consortium on the issue of sustainability and the future of Ford Motor Company (Ford.com, 2008). The issue that this consortium aims to address will be issues for short, medium, and long-term sustainability. As Ford Motor Company continues to innovate to meet the demands of the changing business market it becomes necessary to understand the challenge they face and the ways that the management and leadership of Ford Motor Company plans to meet these challenges.

One of the issues Ford Motor Company considers paramount to the continued viability and success of their products is initiatives to confront the issues of global warming. At Ford Motor Company they believe that “that climate change poses a range of risks and opportunities for our Company, the environment and the global community (Ford.com, 2008). To confront these issues the leaders of the company believe that the direction of the company needs the company “committed to doing our part to achieve climate stabilization” (Ford.com, 2008). To meet these demands they believe it “will require significant increases in vehicle fuel economy globally, as well as the development of lower-carbon fuels” (Ford.2008). As the world begins to face the increasing possibility of climate change the decision of Ford Motor Company to confront these issues is paramount to the success of the company and a shining example of what leadership is. To best understand how this is being implemented and the management that is needed to succeed in this direction, a look at further examples of Ford Motor Company’s Initiatives is in order.

Through successful management of the policies set forth for sustainability, Ford has begun “targeting a 30 percent reduction in U.S. and EU new vehicle CO2 emissions, relative to the 2006 model year baseline, by 2020″ (Ford.com, 2008). In addition to implementing plans for reducing
emissions Ford is an advocate for U.S. legislation that aims to reduce the emission of greenhouse gases throughout the entire economy (Ford.com, 2008). This commitment to reducing greenhouse gases can only be done on the factory level and will require excellent management to see the vision of the leaders of the company come to fruition. Reaching these goals will require the company to implement many new practices and to pioneer new technologies that can maintain the direction of the company as it continues to reach for suck noble goals. Without the effective leadership and management that the company possesses these tasks would prove to be insurmountable. To illustrate the effect these policies can create company wide, an analysis of current operating procedures is necessary.

To meet the new challenges facing the company and to help to guarantee increased sustainability, Ford Motor Company has implemented new deals with many of the union organizations that make up their workforce. In 2007 the company eliminated approximately 7,800 salaried employees through early retirements and voluntary separation packages (Ford.com, 2008). Unfortunately, in business, cutbacks to achieve progress are sometimes necessary. This is signs of good leadership, the ability to make the hard choice. By making these changes Ford Motor Company hope to once again become profitable through the continued restructuring of the company. Several reasons exist for Ford Motor Company needing to return to profitability and these reasons need to be discussed to understand Ford Motor Company’s decisions.

One impact that the gradually increasing economic conditions has had on Ford Motor Company is steadily eroding sales of their flagship F-Series line of trucks. According to the article in USA Today, Ford Motor Company lost $7.2 billion in the first nine months of 2006 (USATODAY.com, 2007). As a result of these losses the company needed to make decisive decisions to turn the company around. By mortgaging assets to pay to implement a broad restructuring of the company, Ford Motor Company plans to focus on areas of new product development to remain in line with changing consumer demand (USATODAY.com, 2007). Although economic conditions have added to the steady deterioration of Ford market share recently, global competition has also had an effect.

Ford Motor Company has had to deal with a loss of Market share of 9% percent in the decade leading up to 2006. Part of this has been as a result of the increasing prominence of foreign brands on the U.S. market. According to the article at USATODAY.com, “Toyota has seen its U.S. sales
rise, beating Ford out for the No. 2 sales spot in July and November” (USATODAY.com, 2007). As global competitors continue to win market share away from Ford Motor Company the company has been faced with making drastic decisions to maintain a viable entity in the automotive market. As a result of this, Ford Motor Company sold two trouble lines, Jaguar and Land Rover in 2008 to Tata Motors Ltd, a company out of India (Newsvine.com, 2008). The sales of these lines are a result of the company’s plans to focus on traditional model lines and cut unnecessary expenditures (Newsvine.com, 2008). To increase the ability of the company to remain competitive in a slowing economy and in the face of global competition, Ford Motor Company has shown the necessary leadership and management ability to be successful well into the 21st Century.

Ford Motor Company’s ability to implement effective management and leadership is aimed to allow the company to be poised for a bright economic future. Economic changes continue to transform the way business is conducted within Ford Motor Company. For the company to continue to be successful it requires recognizing the paths they face and implementation of policies that will allow the company to themselves to confront obstacles and to achieve the goals they’ve set. To meet these demands the company must take the steps necessary and capable management and strong leadership are necessary at the highest levels. Ford Motor Company has produced a plan for sustainability that illustrates the power of effective management and precise leadership.

- by Randall Bullard | AC

-- rahel