Question for this video http://www.viddler.com/embed/3df473f2/?f=1&autoplay=0&pl

Question

Question for this video http://www.viddler.com/embed/3df473f2/?f=1&autoplay=0&player=full&disablebranding=0

Organizational Change and Effectiveness at Ford

Henry Ford started Ford Motor Company in 1903 with $28,000 and a dream. Since that time, Ford has been an important part of the automotive industry and American history. Of course, much has changed in the auto industry since Ford got his start, and it is no secret that the American auto industry has struggled to compete with foreign car companies in more recent years. However, unlike Chrysler and GM, Ford famously avoided a government bailout.

This video discusses how Ford was able to avoid a government bailout despite losing $12.6 billion in 2006. Ford responded by engaging in a series of dramatic steps to restructure and change; to accomplish these changes Ford borrowed $23.5 billion and even mortgaged their iconic oval blue logo. Then CEO Bill Ford (great-grandson of Henry Ford) stepped down, and Ford hired Alan Mulally to take over as CEO. This move was considered a risk because Mulally had no experience in the auto industry; however, he had successfully restructured Boeing, and Ford was looking for this type of ability and vision in their new leader. In addition to hiring Mulally, Ford made dramatic changes throughout the company, cutting jobs and numerous assembly plants in the United States. Ford also reduced labor costs to better match that of competitors like Toyota.

Ford also responded to the market’s increasing demand for smaller more fuel-efficient cars. They also got rid of money-losing brands like Mercury. As an update to the video, Ford recently reported that its March 2012 sales have been the strongest since 2007. The increases are primarily due to sales of smaller fuel-efficient cars. Visit the Ford website for additional information.

Then answer the following questions:

What is meant by organizational change?

What are some of the main challenges when it comes to organizational change?

What are some ways that organizations can improve the likelihood of success in their change efforts?

Do you think Ford made a good decision in focusing more attention on smaller fuel-efficient cars? Why or why not?

Explanation / Answer

Organizational change is at work if the businesses change their strategies. The organization redesign the tasks to be performed and the way they need to be performed. These changes may be due to competitive pressure, employee pressure or it may be due to market pressure. Organizational change helps when the process are not being performed in the most optimal manner. The change strategically alters the way they are being performed to the way the process needs to be performed.

The main challenge in change is to manage the resistance to change in the organization. There may be many forces in the organization or out of the organization which may resist the change process in the organization. The reasons for such resistance may be uncertain future of the organization, change may decrease the productivity and therefore the earning of the employees. The change in the organization may lead to firing of the people or displacement of workers which may prove to be inefficient process for them. The so called change may also lead to many employee being technically unsuitable to a particular job, obviously leading to unemployment or loss of productivity.

The organizations can train and introduce employees with the new process and systems, so that their fear of insecurity of job may be eliminated. The organization can also encourage participation in change process, so that they become more adaptive and the process is clearly understood by the employees. The communication should be effective and clear between management and the stakeholders of the organizations. There can be negotiations and agreements between management and employees so that there is a common platform for both the parties.

The Ford Company did right by giving more attention to the smaller fuel efficient cars which have demand in the market and by getting rid of money losing brands the Ford will not only increase its profitability but also gives the market a message that the firm is adaptive to the needs of the market whenever required.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.