Introduction
The business world is characterized by dynamism. If an organization is not keen to change with the changes, it risks losing its competitive edge. Ford Motors is a globally renowned automotive corporation that once dominated the car making industry. However, in the past two decades, the company has seen its sales decline, and its market share gradually shrinks. Relatedly, this paper seeks to undertake an analysis of Ford to identify underlying issues. The analysis will utilize Bolman and Deal’s Reframing Model, Morgan’s Metaphors, and Sensemaking. Identification of the underlying issues will help inform recommendations to help Ford regain its competitive advantage.
Background of Ford Motor
Ford Motor is an American automotive corporation ranked among the world’s largest automakers based on worldwide sales. The corporation was founded in 1903 by Henry Ford and is headquartered in Dearborn, Michigan. Ford manufactures trucks, passenger cars, tractors, and automotive parts and accessories. In its early days, Ford only assembled a few cars per day, and they were hand-built by a small group of workers from parts made to order by other companies. Henry Ford’s main objective was to produce an affordable, reliable, and efficient automobile for everyone. The introduction of the Model T in 1908 saw his vision came to life. Within a decade, nearly half of the cars in the US were Model Ts. This led Ford to develop mass-production methods such as the use of standardized interchangeable parts, large production plants, and the world’s first moving assembly line for vehicles. After the massive success in the US, Ford went global and is now established in more than sixty countries (Banham, 2002). Over a century later, after the inception of Ford Motors, the company is still an industry leader as it ranks among the top ten leading automakers worldwide.
Rationale for Selecting Ford Motor
Ford Motors has significantly shaped the automotive industry. The company introduced the world’s first moving assembly line for cars, lean manufacturing, and better wages as a strategy to motivate employees (Banham, 2002). However, in the 21st century, the corporation is experiencing a series of problems, which are adversely affecting its competitive edge. Some of these issues include declining sales, market share, and management issues. Despite numerous efforts to address the issues and hone its competitive edge, the corporation is still struggling (Komarova & Ustyuzhanin, 2017). Notably, today’s market is flooded with both domestic and foreign competitors. Although Ford has struggled to remain competitive, promoting itself as America’s best-selling automaker, the truth is that it is losing its competitive grip. Ford’s stock has recently been downgraded, and in 2017 it announced its intentions to only sell sports utility cars, Mustangs, Focus, and trucks (Wong, 2019). This means that it will stop selling most of its passenger vehicles. Despite the many challenges facing Ford Motors, it is still considered one of the pillars of the global automotive industry and, as such, a suitable option for this analysis.
Diagnostic Reading of Ford and Storyline
In the past five decades, the global automotive industry has seen a significant increase in new entrants. Consequently, this has translated to increased competition for Ford Motor. Currently, Ford’s main competitors include General Motors, Chrysler, and Toyota. Competitors have embraced the use of new technology and innovation and, as a result, posed a considerable threat to Ford (Horton, Lillie, & Decker, 2016). For instance, Tesla, the electric vehicle manufacturer, has entered the passenger car market with new innovative products that have captured the consumer market attention. With the increase in competition, Ford has seen its market share decline due to a drastic shift in customer preference. The advent of electric cars is here to stay, and Ford has not established itself as a major player in the segment. Notably, companies such as Toyota and General Motors have solidified their position in the electric vehicles segment (Nazir & Shavarebi, 2019). Due to the loss of market share, Ford has encountered a pattern characterized by profit erosion, especially in the past decade. Moreover, in recent years, Ford’s stock has received unappealing ratings from most investment analysts (Wong, 2019). Hence, Ford is currently in a problematic situation since if it fails to come up with a practical, long-lasting solution, then it risks being stamped out of the industry by the increasingly growing stiff competition.
Analysis of Ford and Storyline
Bolman and Deal’s Reframing Model
Bolman and Deal outline four frames for evaluating organizational issues. The four frames include structural, human resource, political, and symbolic. The structural frame focuses on strategy, clarifying tasks and responsibilities, setting measurable goals, agreeing on metrics, technology, and creating metrics and procedures (Bolman & Deal, 2017). In Ford’s context, this analysis will focus on technology. The essential technologies driving the automotive industry are autonomous driving and vehicle electrification. Comparably, Ford is lagging in both areas, with Tesla, Toyota, and General Motors being the market leaders based on the two aspects.
The human resource frame emphasizes people’s needs. The frame chiefly focuses on companies empowering employees and allowing them to perform their jobs in a conducive environment (Bolman & Deal, 2017). In this regard, it is worth noting that Ford maintains a hierarchical organizational structure, which is not the best in empowering employees as it promotes bureaucracy. Bureaucracy also negatively affects communication between employees and the management as well as decision-making (Rhee, Seog, Bozorov, & Dedahanov, 2017). Hence, Ford’s employee empowerment, facilitation of personal growth, and job satisfaction is wanting.
The political frame focuses on the issue of persons and interest groups having conflicting agendas. Therefore, the frame seeks to establish a basis for coalition building, power base building, and conflict resolution (Bolman & Deal, 2017). From the extensive research, in the past two decades, Ford has not experienced conflicting agendas within the organization as its leadership has maintained a clear vision of Ford’s future. According to Bolman and Deal, problems arise when power is concentrated in the wrong places or is too dispersed.
The symbolic frame emphasizes people’s need for a sense of purpose and meaning in their job. The frame focuses on inspiring people by making the organization’s direction feel important and distinctive (Bolman & Deal, 2017). Ford’s purpose statement arguably is plausible for the task of giving the workforce a sense of purpose and meaning in work. The purpose statement reads, “We are once again working to revolutionize mobility, fueled by new challenges and creating solutions to build a better world for everyone. Our mission is to drive human progress through the freedom of movement.” (“Ford – Our Purpose”, 2020). The statement is sufficient to make employees feel important and distinctive.
Morgan’s Metaphors
Metaphor’s expose employees to new ways of seeing their organization, themselves, and coworkers. The eight organizational metaphors outlined by Gareth Morgan include machine, organism, brain, cultural system, political system, psychic prison, instrument of domination, and flux and transformation. As a machine, an organization entails a series of connected parts arranged in a logical order to produce repeatable output. As an organism, an organization serves as a collective response to its environment, whereby to survive, it must effectively adapt to the environment changes (Torp, 2018). Torp explains that as a brain, an organization is a set of functions designed to process information and learn over time.
Regarding cultural system, an organization is a min-society, whereby it has its own culture and subcultures defined by its norms, beliefs, values, and rituals. As a political system, an organization plays in a game of gaining, coordinating, and influencing power. As a psychic prison, an organization serves as a collection of stories and myths that restrict people’s ideas, thoughts, and actions. Concerning instrument of domination, an organization is a means to exact one’s will on others as well as exploit resources for personal gains. Lastly, as a flux and transformation metaphor, an organization is an ever-changing system invisible from its environment (Torp, 2018). Having defined each metaphor, this section proceeds to analyze them from the perspective of Ford.
From Ford’s perspective as a machine, psychic prison, instrument of domination, and flux and transformation, the metaphors are working for the corporation. However, as an organism, brain, political system, and cultural system, the metaphors have failed for Ford. To start with, as a brain, Ford is supposed to continually process information and learn over time. Over the past two decades, the automotive industry has experienced numerous changes, including paradigm shifts in manufacturing, technology, and new entrants. However, it seems that Ford has not processed this information to help it improve its strategies. Arguably, if Ford has been efficiently implementing evidence-based strategies, it would not be in the situation that it is in currently.
As an organism, an organization must respond to its environment and, to survive, it must adapt to its environment changes. As mentioned above, the automotive has experienced numerous changes in the past two decades. The most successful brands are the ones that have emphasized innovation and technology. Ironically, although Ford invests the most in R&D, the investment does not reciprocate as it is not the most innovative in the industry (Carmo, Sacomano Neto, & Donadone, 2018). Moreover, the company still lags in the technologies dominating the automotive industry, namely autonomous driving and vehicle electrification. Technology and innovation are essential to the success of companies operating in the automobile industry.
As a cultural system, an organization needs to establish an organizational culture that aligns with its mission and vision to succeed. Besides keeping employees motivated and satisfied with their work, an organization needs to instill a culture of creativity and innovation. Despite the company insisting that it is undergirded by innovation and encourages its employees to approach their work with a sense of interest and wonder, its strategy to enhance creativity and innovation is underwhelming. For instance, as a response to the declining sales, the company responded by announcing it will stop manufacturing passenger vehicles. In the same market, during the same period, Tesla had a backlog of approximately 500,000 preordered passenger cars (Komarova & Ustyuzhanin, 2017). This shows that the problem is not the passenger car but Ford’s product.
As a political system, Ford should be increasing its competitive advantage as well as its market share. However, this has not been the case over the past two decades as the company has been gradually losing its competitive edge, evident in the shrinking market share. Torp (2018) explains that when competition emerges, as a political system, an organization needs to formulate and implement a strategy that will help it remain ahead of the competition. Therefore, in this aspect, Ford has failed.
Discussion and Interpretation Using Sensemaking
Discussion and interpretation of the analysis results will follow sensemaking. The term sensemaking was coined by Karl Weick to refer to how people or organizations structure the unknown to be able to act in it by coming up with a plausible understanding of their dynamic world. Sensemaking enables an organization to understand better what is going on in their environments (Weick, 2020). Sensemaking the analysis results will help identify the root cause of Ford’s problems.
From the analysis results, it is evident that Ford’s challenges stem from its inability to compete with other automakers in technology and innovation. The company also maintains a hierarchical organizational structure that is usually not suitable for motivating employees and promoting creativity and innovativeness. In its early years, Ford was a hub for creativity and innovation. The company introduced the world’s first moving assembly line for vehicles and lean manufacturing, among other innovative processes and products. However, over in the 21st century, the company, creativity, and innovation do not characterize Ford. The company invests millions of dollars in research and development (R&D) but still lags in these areas.
To make sense of the reason Ford invests heavily in R&D but is still beaten in creativity and innovation by countries that invest less, it is crucial that we look at its human resource. As mentioned before, the company maintains a hierarchical organizational structure characterized by bureaucracy. Rhee, Seog, Bozorov, and Dedahanov (2017) explain that a bureaucracy smothers creativity and innovation since employees lack autonomy, are not involved in decision-making, and communication is mostly one way. This implies that a company can invest significant funds in R&D, but if its organizational structure does not support creativity and innovation, it will not get the best out of its talented employees.
Recommendations
From the sensemaking process, it is clear that Ford’s problems stem from its organizational structure. The organizational structure does not support creativity and innovation. Therefore, Ford needs to shift from the hierarchical to a horizontal organizational structure. A flat organizational structure is characterized by a two-way communication framework, enhanced employee-management relationships, flexibility, employee involvement in decision-making, and employee autonomy (Rhee, Seog, Bozorov, & Dedahanov, 2017). Consequently, this promotes a culture of creativity and innovation within an organization. Thus, a change of organizational culture and nurturing a culture of creativity and innovation can help Ford regain its competitive advantage.
Conclusion
To sum up, it is imperative that organizations emphasize timely responding to changes in their environment. They also need to continually process information and learn over time to adapt to the changes effectively. Surviving in their ever-changing industries requires that they formulate and implement evidence-based strategies. In this regard, in the past two decades, Ford has not been effectively responding to changes in its environment. This is mainly due to its organizational structure, which does not encourage creativity and innovation. To address this problem, Ford must shift from the hierarchical to horizontal organizational structure.
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