Ford's Management Problems

There are different internal and external challenges that businesses face today and the paper below starts by giving a general overview of some of these challenges. The paper, using the book “A Savage Factory: An Eyewitness Account of the Auto Industry’s Self-Destruction” by Robert J. Dewar to identifies and explains more on the challenges that Ford Motor Company faced in the 90’s due to its poor management. A poorly managed and corrupt organization culture is among the main causes of problems experienced organizations such as Ford Motor Company. The first problem addressed in the paper is managerial incompetence which resulted in the managers of Ford Motor Company using a dictatorial form of leadership to avoid criticism and opposition. The second problem is the lack of employee involvement in the decision-making process which resulted in reduced motivation in the company. The management called all the shots, and no employee was expected to question any instruction or command given. The book also explains how the company managers misused the company’s funds resulting in financial constraints. Another source of the company’s problems was poor communication as the managers were more concerned about the number of hours employees put into the job and forgot to check on the quality of the firm’s products. Another problem resulted from managers failing to respect the employees and viewing them as tools to achieve the firm’s goal. The managers were not interested in establishing a healthy working relationship with their workers which is essential in motivating and enhancing customer loyalty. Other problems mentioned in the paper include a bad relationship between the stakeholders i.e. the trade unions and also discrimination. The writing goes ahead to suggest two management theories to address the firm’s problems i.e. the systems theory and human relation theories. The paper concludes by suggesting the integration of a universal culture that encourages employment instead of discouraging it.

Introduction

Various organizations face different challenges in their day to day operations. Some of these challenges may either make or break the organization depending on the firm’s culture and leadership. With the increased market competition, organizations have been forced to not only consider their customers need but their employees. Different employees have various needs. The most common requirements include better pay, better working condition, job security, and continued motivation. Those firms that satisfy their employees' needs enjoy a variety of benefits such as employees’ loyalty which results in reduced staff turnover, employee motivation, reduced costs, quality products, and excellent reputation. With the increased market competition overqualified employees, firms are having to offer more than the basic minimum requirements to their employees to enhance their loyalty. From this paper, one will understand some of the problems that Ford Company was facing due to its poor management.

Ford’s management problems

The book is a narration by Robert J. Dewar a former employee, as a production line foreman, at one of Ford’s auto plant. With an MBA from the University of Southern California, he secured a job as a manager of Duncan Hines Cake Mix at Procter at Gamble in Cincinnati. However, due to the high living standards, he opted to take the job offer at Ford because of the high wages. During his interview, he mentioned that his goal was to get enough money to start his own business and saw Ford as an opportunity for him to save the necessary capital. However, he came to realize that the firm was facing a substantial managerial problem as there were massive conflicts between the management and labor forces which in this case represent the hourly employees and the full-time employees represented by United Auto Workers union. He believed that this problem would lead to the downfall of the large company and cited this problem as the source of the increased market competition. Using his daily journal, defective parts, and internal memos, he intended to show the magnitude of the company’s situation and advocated for government intervention before the company drained into debts.

One of Ford’s main problem according to the book was poor management due to their incompetence. Just like in many automotive companies at the time, most managers were not competent enough to run such large corporations. In most cases, the managers were appointed out of favoritism and not out of competence. Owing to this reason, most managers lacked knowledge and expertise necessary to run the business forming the root of all the problems. The management used the dictatorial or autocratic form of leadership where power was centralized, and they were responsible for all business operations. They did not like it when employees questioned their judgment or decision. In a situation where an employee tried to doubt or second guess their actions and opinions, they felt threatened and used any possible means to get rid of them. This problem discouraged employees from becoming creative and innovative which led to increased market competition.

Additionally, the staff members were not involved in the decision-making process and were expected to follow whatever they instructions in place. This form of leadership style as described by Hersey and Blanchard's situational leadership theory is the telling leadership style. This style is known to demotivate employees because they feel like the employer does not value their effort. In one instance, Ed, the general foreman tells his boss Mr. Larry that he does whatever the boss wants. In another example, Roger mentions that he does not care what type of people Robert managed at P&G indicating the kind of arrogance possessed by Ford’s managers.

Moreover, managers were not accountable for their actions and would misuse the firm’s money through ways such as retreats and large pay and allowances. They would drain a lot of money from the corporation’s account to their accounts resulting in an increased loss. Moreover, they lacked communication skills: an essential requirement for a successful manager. Robert states that panel members used vulgar language which proved their incompetence for it failed to portray a good firm’s image. They said that “they needed a foreman with an invisible sign reading fuck with me and you will pay the price…” (Dewar, 2009). In another instance, the author describes a scenario where he and Ed, the general foreman, were being ignored by Larry, a Zone 3 senior General Foreman. The author states that Ed did not seem bothered by the situation meaning that it was a common trend in the firm. Even when the “skeleton” as Robert describes Larry moves to his desk, he tells him that at Ford they are less concerned about the number of degrees one possesses or where they previously worked. He adds that what matters to them is the numbers.

The mentality of getting the maximum output of every employee was another problem that affected the organization. The managers were not concerned with the quality of their products for they measured success by the number of outputs. In one scenario, Robert finds that “the firm needs a foreman that can take the lowest scum from Cincinnati and make the torque converters I need to keep this plant humming…” (Dewar, 2009). In chapter two of the book, Roger tells Robert that the job of the management is to call the shots and dictate what should ensue in the company and the workers were to obey without question. With such a culture, any firm is expected to fail if serious changes are not in place. The management used a leadership influence style under Charles Handy's six methods of influence termed to as power. This style gives the managers the notion that they own the employees because they give them a particular benefit, in this case, high wages and can therefore threaten and control them as they wish. This problem led to increased conflict between the management and the labor union.

The fact that the management did not respect the employees is another cause of the problem for the company. In one scenario Roger describes the employees as drug addicts and lazy bastards who love to benefit from the firm. With such an attitude, it is very hard for managers to listen to suggestions of their employees. Ford’s employees acknowledged the fact that they could not directly get back to the management and therefore opted to use other means such as producing low-quality products. In one revelation, a worker stated that “I have been fucking their brains out since they hired me twenty-eight years ago. I run bad parts. I fuck up machines. I never run my full quota...” (Dewar, 2009). By then, the firm was serving four different states which resulted in increased market demand. Some of these actions taken by the employees led to low quality and inefficient products which saw the firm experience numerous lawsuits and increased product recall which significantly affected its operation and reputation. The book also indicates that the management took unethical measures such as using rejected parts to meet increased market demands and beat the competition.        

Another management problem can be described using Blake and Mouton Managerial Grid where Ford’s managers fall under Produce-or-Perish Management category. Leaders in this category, have a high concern for the firm’s results but lack concern for their employees’ welfare. They believe that employees are just a means to an end and mostly adhere to the theory X motivation approach. In this approach, leaders believe that workers dislike working and are naturally unmotivated a situation that Roger puts across when he refers to the employees as lazy bastards. The book goes ahead to state that the working conditions were terrible as described in chapter one, “inside there were four dirty, dented gray metal desks.” (Dewar, 2009). The poor working conditions and increased labor hours resulted in drug addiction, alcoholism, and family breakdown. Ford’s management had failed to understand and respect the needs of their employees: a crucial requirement for a leader.

Ford’s management lacked skills necessary to encourage a positive relationship with other stakeholders such as labor unions. The primary role of labor unions is to protect the rights of their members which in return results to maximum productivity. With this said, one can attribute the firm's failure to reduced cooperation with the trade unions because of the increased employee demotivation. The book quotes Roger stating that the union poses a significant problem to the firm because of its increased lawsuits against the company (Dewar, 2009). He does not seem to understand that the union would not be bothering the firm if it respected all employees rights.    

Another problem described in the book is discrimination. There were all sorts of biases in the company which affected the firm’s profitability. The first form of discrimination in the book is racial discrimination. At the start of the book, Robert apologizes for the book’s content claiming that the racial remarks and foul language in the book aimed at giving an accurate picture of Ford Motor Company’s operation. The management discriminated both the employees and customers based on their race. There firm’s administration was made up of whites while blacks worked as casual laborers who underwent discrimination. This problem resulted in low motivation which result in the low-quality products. Additionally, customers were discriminated by the incompetent management team which led to poor reputation and reduced sales. The other form of discrimination was gender-based or sexism with most of Ford’s employee being male. The management was known to deny employment opportunities to female, and those who managed to secure a job at the firm were usually mistreated and assaulted. The book states that once a female employee joined the firm, there would be an employee who would post a life-size picture of a spread-eagle nude lady in his office and the management did not take any action.  

Solution to the management problem

A variety of solutions can be offered to solve some of the managerial issues stated above. The primary solution would be the adoption of a culture that fosters organization development and teamwork among all employees and the management. In this case, the systems and human relations theories of management can prove sufficient to address most of the issues raised in the book. Systems theory is designed to look for holistic patterns in metaphysical and scientific context and help achieve a balanced whole and integrated business. This theory helps identify the organization’s overall goals and ensure that all its different elements work towards achieving the goals and objectives. It goes ahead to describe the business cycles which helps control the inputs and outputs of the system. Human relations theories understand that people play a prominent role when it comes to determining system’s success. This management theory advocates for creativity and innovation while at the same time encouraging employees to work towards bringing out their full potential. It advocates for the development of organization’s goals that are in line with their staffs’ needs and wants and the creation of a mutual relationship.

Human relations theories, in this case, could have helped increase employees’ motivation. Managers should ensure that they occupy the ‘team management grid’ under The Blake-Mouton Managerial Grid. This grid advocate for managers to portray high concern for their employees and at the same time have high business success focus. Such a scenario will advocate for a participatory leadership style under Hersey and Blanchard's situational leadership theory. This style will foster innovation and creativity translating to high-quality products forming a competitive advantage. Additionally, the human relations theory will result in reduced conflicts between the management and the trade union because employees’ needs will have their needs met. This fact will even reduce the need for employees to join trade unions due to the positive industrial relationship. By adopting this theory, the management will have to involve its employees when making decisions a move that will result in employees’ satisfaction and loyalty.  

On the other hand, systems theory can be used by the management when integrating a holistic organization system. Such as system will help guide the activities undertaken in the organization. It will encourage the development of a culture that advocates for cooperation and teamwork. Such a system demands the presence of an effective communication system which will address some of the challenges described in the book. This theory will also encourage the development of a suitable inspection system that will enhance the detection of defects before reaching the market. This strategy will not only reduce the incurred loss but also improve the firm’s reputation. The system should also advocate for the integration of an effective supply chain management system. With such a system, the firm will be sure of high-quality raw materials which will translate to quality finished goods and increased marketing advantage.

Conclusion

Leaders are expected to have the firm’s best interests at heart meaning that they should implement strategies that will foster both business growth and shareholders wealth maximization. In most cases, leaders should learn to listen to suggestions from their employees and give them a chance to participate in the decision-making process. Although different leadership styles and theories vary depending on the type of organization, democratic and strategic leadership styles would have reduced most of the problem discussed in the book. Business owners should ensure that they thoroughly vet potential managers before giving them a job position and ensure that they continuously monitor their progress. In conclusion, Robert managed to set up his own business which brings out the question whether setting up a firm is the right solution to the addressed problems during employment. Most people start their ventures with the aim of freeing themselves from various problems associated with being employed. However, I think that people should focus on changing the work environment culture because if all organizations had a positive culture, employees would be satisfied and hence remove the notion that being employed is similar to a jail sentence.  

Reference

Dewar, R. J. (2009). A savage factory: An eyewitness account of the auto industry's self-destruction. Bloomington, IN AuthorHouse.