Culture Change At Ford Motor Company Case Study

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An Analysis of Culture Change at Ford Motor Company
When reflecting on the history of Ford Motor Company, the name Henry Ford is synonymous with the success of the company. Henry Ford created a culture of innovation and creativity (Brady & Haley, 2013), and also one in which he doubled workers’ wagers to further highlight them as valuable assets to the company (Harnish, 2012). However, by 2006, the culture that Henry Ford created had drastically changed and the company was facing potential bankruptcy. To recreate the once powerful culture of Ford, Alan Mulally was brought in as CEO to overcome the dysfunctional culture and was able to prevent the company’s downfall (Brady & Haley). The following will outline the changing culture that Mulally
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The biggest impact that Mulally’s three step process had on changing the company’s culture was most notably reflected in the company’s finances. Ingrassia (2010) noted that although Ford suffered a $12.6 billion loss during 2006, Mulally’s efforts that began that year resulted in Ford being the only U.S. car company to avoid bankruptcy in 2009. Furthermore, Ingrassia accounted for a $2.7 billion profit the following year. The table below highlights Ford in recent years, providing further proof that revenue has remained steady and bankruptcy has been avoided. Aside from the financial aspect, Kiley described how Mulally’s changes had a positive impact on employees. He highlighted one example of an executive who held four different positions at various car companies within five years, but was then able to stay at Ford for four consecutive years due to the changed …show more content…
By taking a critical look at Ford’s financial recovery, it is apparent that Mulally’s culture change at Ford was successful in avoiding bankruptcy. However, it is also important to account for the major changes he made to employee relations and the overall company attitude. Denning (2011) stated that changing an organization’s culture is one of the most difficult aspects of leadership. He also outlined that a successful culture change strategy involves starting with leadership tools, such as creating a vision for the organization. As previously described, Mulally did this by instilling the company’s mission within employees and created his plan of simplicity. Denning stated the second course of action to implement culture change was to cement the vision by using management tools, such as creating role definitions. Again, Mulally executed this by changing the hostile environment in which employees worked against each other (Kiley) and reformed the company to where employee roles worked in harmony with one another, pinpointing problems and allowing for suggestions. The final aspect that Denning described was to use power tools when all else fails, such as coercion. Although there is little information on if there was resistance to Mulally’s changes, Buckman highlighted that coercion was used as leaders were expected to cooperate with each other and work as a team for the company’s success. Based on Denning’s outline, Mulally’s steps

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