Category: Ford

Introduction

“It is increasingly well-established in the literature that most business reporting on sustainability and much business representative activity around sustainability actually have little, if anything to do with sustainability” (Gray, 2010, p. 48).

This essay critically reviews Gray’s (2010) statement by focusing on sustainability reporting of Ford. It draws upon relevant academic literature and discusses a theoretical framework that could be used to support the argument. Specifically, the essay considers the following areas:

• The extent to which the sustainability report complies with the GRI’s Sustainability Reporting Guidelines G3 (GRI, 2006)
• Comparison between the sustainability report and what is available in the academic literature
• Whether sustainability report is or should be assured and to what extent of assurance

A sustainability report provides details about a firm’s economic, social, environmental, and governance issues. The report should not just present collected data. Instead, it should show how an organisation internalises and intends to improve on its commitment to sustainability development in a manner that can get both internal and external stakeholders’ approvals.

Any firm should ensure that sustainability accounting and reporting is transparent, traceable, and compliance. The main aim of sustainable development is to ensure that firms can meet their “present needs without adverse effects to future generations” (Global Reporting Initiative, 2006).

To what extent does the sustainability report comply with the GRI’s Sustainability Reporting Guidelines G3 (GRI, 2006)?

The GRI (Global Reporting Initiative G3) provides comprehensive guidelines, which companies that provide sustainability and accountability report should follow and ensure that their reports are more or less similar to G3 guidelines. However, from Gray’s (2010) statement, there might be significant variations. The GRI G3 has guidelines, which determine the content of the report and guarantee the quality of the report provided.

Moreover, the GRI G3 also has Standard Disclosures. These have Performance Indicators, related elements, as well as provisions on accounting for technical areas of the report. In short, the GRI guidelines identify elements that organisations should report and ways of reporting them. It has Reporting Principles of “materiality, stakeholder inclusiveness, sustainability context, and completeness” (Global Reporting Initiative, 2006).

Materiality

Contents under materiality have information and indicators that show a firm’s economic, social, environmental impacts and other factors that could influence stakeholders’ decision and assessments.

Ford has several areas or topics on which it could report (Ford, 2013). However, it only concentrates on relevant areas, which show its economic, social, and environmental outcomes or factors that could influence choices of different stakeholders. This warrants their inclusion in the report. Under materiality, any reported issues must be sufficiently significant because not all material areas would have the same importance, and a report should reflect priority areas and their indicators.

Under fiscal reporting, firms consider materiality as an important element that affects financial choices of shareholders and other stakeholders interested in fiscal statements of a company.

Stakeholder Inclusiveness

Organisations have several stakeholders. In the case of Ford, the company strives for stakeholder inclusiveness in its report and its reasonable responses to their interests and needs. Ford has identified its stakeholders as groups engaged with it, which include “communities; civil society; customers; shareholders and providers of capital; suppliers; and employees, other workers and their trade unions” (Ford, 2013).

The company recognises that its activities, products, and services could have significant effects on these groups. At the same time, Ford also acknowledges that actions of these stakeholders could reasonably affect its strategic objectives, implementation, and outcomes. These stakeholders have rights under the law or international trade treaties and conventions. Hence, they can make legitimate claims against the company.

Sustainability Context

The GRI G3 notes that the report should have a general framework of sustainability based on the firm’s activities. Any data about the company’s activities should be within its sustainability framework. The fundamental issue about sustainability that Ford aims to address through its report is how it enhances or strives to enhance the future through its present sustainable practices. Hence, the report must account for achievements or deterioration conditions of economic, social, and environment in all areas in which it operates globally.

Any organisation that reports only on a single outcome, performance, or competence, may not meet the principle of a sustainability framework. On this note, a good report must focus on a broader picture of sustainability concept.

Hence, a sustainability report under the GRI G3 guidelines should account for a firm’s activities within the context of limits and demands, which could affect social or environmental resources at all levels of operations (Global Reporting Initiative, 2006). For instance, Ford provides a report on eco-efficiency strategies, its focus on fuel economy and CO₂ emissions, vehicle safety, and water among others.

Completeness

This principle requires organisations to define their scope, time, and boundary, which must provide sufficient information in accounting for environmental, economic, and social aspects. This allows stakeholders to assess the report within the right context. In addition, it must also account for practices that organisations use to gather data and ensure that the report has data gathered within the boundary. Completeness also account for reasonable and appropriate reporting alongside accuracy and balance of the report.

Ford’s sustainability data focus on financial health, climate change and the environment, water, vehicle safety, supply chain, and people across the global.

Standard Disclosures

The GRI G3 emphasises Standard Disclosures that should form a part of the sustainability report. Information in this section is significant and of concern to stakeholders of an organisation.

Strategy and Profile

This allows stakeholders to comprehend a firm’s performance under governance, profile, and strategies (Global Reporting Initiative, 2006).

Ford has clearly identified its strategy and profile with factors about the organisation, the CEO statement, the relevance of sustainability, key impacts, risks, opportunities, products, ownership, and scope and boundary among others.

Management Approach

This disclosure focuses on several topics, which provide information about specific topics of interests to stakeholders. For instance, Ford has classified its management approach into several categories, which include economic, environmental, and social aspects, such as labour practices and decent work, human rights, society, and product responsibility.

Performance Indicators

According to GRI G3, these are indicators, which show data on environmental, social, and economic performance of a company for comparison (Global Reporting Initiative, 2006). Ford treats performance indicators under social, economic, and environmental aspects. In addition, it provides detailed account of several areas related to these aspects of performance.

Overall, one can conclude that Ford has aligned its Sustainability Reporting to the Global Reporting Initiative (GRI) G3 of 2006.

How the sustainability report compares to what is known from the academic literature on this subject?

The escalating cases of corporate malpractices have forced a number of firms to review their practices. As a result, academics have also shown significant interests in firms and their sustainability practices. Most academics have focused on the Triple Bottom Line (TBL) to explain sustainability concept and its theoretical backgrounds (Roberts and Mahoney, 2004; Freeman, 2004).

The aim of TBL is to measure profits, as well as impacts of the firm’s activities on the world and people within a local and global context. The concept of TBL emanates from the need of firms to have responsibility towards the use of the environment, economy, and society. These are the elements, which make up people, profit, and planet. In some cases, people use corporate social responsibility (CSR) reporting interchangeably with the TBL concept.

Stakeholder theory is applicable in the TBL concept. Stakeholder theory relates to “organisational practices and business ethics that addresses morals and values in managing an organisation” (Freeman, 2004). Ford has identified several stakeholders in its Sustainability Report 2012/13.

Samantha Miles notes that the “nature of what is a stakeholder is highly contested because of many definitions existing in the academic literature about a stakeholder” (Miles, 2012). As a result, Ford’s Sustainability Report classifies several groups and individuals as important stakeholders because the company’s objectives could affect them or they may influence the realisation of organisational goals.

The stakeholder theory consists of other theories such as resource based and market based theories. In addition, it also focuses on socio-political elements of a firm.

Others studies have pointed out that what is necessary is how firms enhance their positive images in the community by reducing negative effects and promoting positive impacts on individuals or the community.

The focus has been on social impacts because of its closeness with the well-being of people and other organisms within a given environment. In effect, a socially responsible organisation is the one that has the greatest net social impact on the lives of people and society in general. This is what advocates of CSR believe, and Ford strives to meet these social impacts through accountability and reporting.

The triple bottom line has gained recognition in the last few decades as a framework of understanding performances of organisations. Scholars have developed frameworks in order to measure other impacts of organisations other than the profit. In this sense, they aim to highlight different values that firms have to adopt in their operations.

These included social, environmental, and economic aspects, i.e., profit, people, and planet (3Ps). In other words, the TBL accounting practice aims at going beyond the old system of reporting profits and disregarding effects of an organisation on people and the planet. Thus, it provides a framework for accounting for social and environmental performance of a firm.

According to Owen, the field of social and environmental accounting (SEA) has evolved with time as new concepts emerge (Owen, 2008). At the same time, the author tries to show that the field may continue to develop in the future.

From legitimacy theory, one can conclude that Ford has utilised its Sustainability Report to show that its activities are desirable, appropriate, and proper within all areas of its operations globally based on socially developed systems of norms, beliefs, values, and definitions (Owen, 2008).

In order to prove this concept, Ford focuses on several aspects of sustainability reporting that go beyond the previous focus on profit reporting. Today, it has included CO₂ emissions, climate change, energy, water, human rights, and fair labour practices among others in its sustainability report.

However, any organisation that diverges from societal expectations and norms may retain legitimacy when stakeholders fail to notice such divergence. This could lead to issues of ethical debates in its decision-making processes and legitimacy of organisational activities.

Ford considers legitimacy as a resource, which it must rely on for its operations across different countries globally. This implies that Ford must enhance Sustainability Reporting, gain credibility, and establish its legitimacy globally.

Businesses are social institutions. Hence, they function under a social contract, either implied or expressed, which affects their growth and survival. On this note, Ford aims to provide socially desirable benefits to regions in which it operates. In addition, the company strives to distribute economic, social, or political advantages to groups or individuals that provide its power.

One must understand that organisations operate in dynamic societies. Moreover, their sources of power and needs may change with time. On this regard, Ford must strive to meet the concept of legitimacy and stay relevant by showing that stakeholders need its services and all beneficiaries have approval from society.

From Ratner’s perspective, the social, economic, and environmental aspects of sustainability are complementary elements that focus on one meaningful goal, which an organisation could pursue through an overarching strategy or a unifying ethic (Ratner, 2004). While there are unifying factors in organisations, sustainable development has several components that work in a complex environment.

Under such social conditions, conflict may occur and a firm must develop strategies for collective action. Ratner (2004) considers a dialogue of values as a strategic approach that could aid in adopting social institutions to arbitrate conflicts that occur at different levels in a firm’s operational activities. Such conflicts in an organisation provoke the need for external assurance to guarantee the credibility of a sustainability report.

Whether the sustainability report is (or should be) assured? And, if so, what level of assurance is provided?

Firms use various strategies to enhance their credibility and contents of the sustainability report. Different firms have internal control mechanisms in place, which include internal audits. Internal audits help in controlling and reporting information. These elements of internal controls enhance the overall trustworthiness and reliability of a sustainability report (Global Reporting Initiative, 2006).

However, according to GRI G3, firms should use external assurance in their sustainability reports, as well as internal systems (Global Reporting Initiative, 2006). Various methods used to inculcate external assurance entail the use of specialised assurance providers, stakeholder groups, or other external qualified bodies or individuals.

Irrespective of the chosen method, the assurance service providers should be competent bodies or individuals who have no relations with the company. The company must ensure that its assurance service provider is an entity that follows professional standards for assurance and the industry best practices. In some instances, organisation base their assurance approaches on “systematic, documented, and evidence-based processes but are not governed by a specific standard” (Global Reporting Initiative, 2006).

From the GRI G3, the term ‘external assurance’ reflects “activities designed to result in published conclusions on the quality of the report and the information contained within it together with consideration of underlying processes for preparing information among others” (Global Reporting Initiative, 2006). These assurance activities assess or corroborate the level or standards of organizational performances e.g., compliance evaluations. The GRI GE posits that an external assurance should meet some conditions in the reporting framework.

• The external body or bodies should be external to a firm, demonstrate competence on assurance practices and subject matter.
• External assurance should follow a systematic, documented, evidence-based processes with defined procedures
• External assurance should review whether the sustainability report presents balanced and reasonable elements of performance with reference to data authenticity and entire selection of the report contents.
• The external assurance body or individuals should not be unduly restricted to perform their roles based on their relationships with the organization. Moreover, stakeholders should not have significant influences on these bodies or individuals to allow them to publish independent sustainability report.
• Based on external assurance, the report should demonstrate the use of GRI principles and guidelines in order to draw reliable conclusions.
• External assurance should provide a report that is available to the public in different formats. In addition, there should be a statement from the external assurance provider, which clarifies its relationship with organisation based on the prepared report.

Ford uses external assurance for its current sustainability report. The company includes the assurance report within the sustainability report, which accounts for the “range, boundary, and basis of relations with external assurance providers and the basis of reporting” (Ford, 2013).

For 2012/13 Sustainability Report and other previous reports, Ford has utilised services of Ceres and Stakeholder Committees in order to get reliable advice. Ceres works with different teams of investors, environmentalists, and other organisations that represent public interests to focus on sustainability issues.

Ceres selected “a sustainability team for Ford, and the company had to work with these teams” (Ford, 2013). It is imperative to note that Ceres Stakeholder Committee consists of autonomous parties and people from various arms of Ceres, and they represent different areas and have knowledge in social, environmental, and governance aspects (Ford, 2013).

Ford’s Committee on external assurance assessed the previous reports and contents of 2012/13 Sustainability Report and then provided a restructured materiality analysis. The Committee gathered inputs from all members through difference ways, which included meetings and teleconference.

Ford’s Committee on external assurance has suggested several ways on how the company can improve its reporting and materiality assessment.

Some critical results from external assurance evaluation show that it is the best method for an organisation to adopt. It would be difficult for internal control systems to identify all limitations within the Sustainability Report. The most critical recommendations focused on data assurance. The company subjected data to both internal and external verifications.

The organisation must thoroughly “audit its financial data for disclosure in the Form 10-K” (Ford, 2013). Ford also insists on a third party verification of its global greenhouse gas facilities. Ford also conducts voluntary CO₂ emission reporting in “Argentina, Australia, Brazil, Canada, China, the Philippines, Taiwan, and the US” (Ford, 2013).

The company also reports several data related to environmental aspects to different regulatory bodies. Ford has environmental data in its management database for comparison, evaluations, decision-making, and improvement. This offers a consistent way of monitoring and measuring emissions.

From these data and others, one can observe that external assurance has helped Ford to enhance its Sustainability Reporting. External assurance provides better insights than internal control systems. Moreover, the company’s assurance and data are clearly marked and explained in data charts.

Conclusion

Sustainability focuses on how firms should meet their present needs without comprising future generations. Ford has aligned its Sustainability Report 2012/13 and other previous reports with the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines released in October 2006 (Ford, 2013; Global Reporting Initiative, 2006). As a result, Ford has been able to capture and present several aspects related to economic, social, and environmental issues of sustainability.

Several theories exist to explain the concept of sustainability in organisations. These theories strive to explain why organisations and stakeholders behave in specific ways. The major framework for explaining sustainability is the triple bottom line. The TBL focuses on three critical areas (profit, people, and planet) that affect organisation and stakeholders.

Stakeholder theory emphasises the importance of critical stakeholder inclusiveness in the organisation because of their influences on strategic objectives and impacts of such strategic objectives on them. Ford continues to establish its legitimacy by satisfying the needs of stakeholders in areas in which it operates. It also recognises resource-based factors and market influences, which show that society is dynamic and the needs of stakeholders are not permanent, but change with time.

It is advisable for firms to use both internal and external assurance. While internal control systems are suitable for assessment of internal practices, external assurance focuses on broad areas beyond the organisational internal structures.

The GRI G3 recommends that organisations should use external assurance in their sustainability reports in order to establish credibility and present accurate information. On this note, Ford has used external assurance in its sustainability report. It is necessary for an organisation to have assurance at the external level because external assurance offers recommendations for improvement (Global Reporting Initiative, 2006).

Reference List

Ford 2013, Ford’s 2012/13 Sustainability Report. Web.

Freeman, E 2004, A Stakeholder Theory of Modern Corporations: Ethical Theory and Business, 7th edn, Pitman, Boston.

Global Reporting Initiative 2006, Sustainability Reporting Guidelines. Web.

Gray, R 2010, ‘Is accounting for sustainability actually accounting for sustainability…and how would we know? An exploration of narratives of organisations and the planet’, Accounting, Organizations and Society, vol. 35, no. 1, pp. 47-62.

Miles, S 2012, ‘Stakeholders: essentially contested or just confused?’, Journal of Business Ethics, vol. 108, no. 3, pp. 285–298.

Owen, D 2008, ‘Chronicles of wasted time?: A personal reflection on the current state of, and future prospects for, social and environmental accounting research’, Accounting, Auditing & Accountability Journal, vol. 21, no. 2, pp. 240 – 267. DOI 10.1108/09513570810854428.

Ratner, B 2004, ‘Sustainability as a Dialogue of Values: Challenges to the Sociology of Development’, Sociological Inquiry, vol. 74, no. 1, pp. 50–69.

Roberts, R and Mahoney, L 2004, ‘Stakeholder Concept of the Corporation: Their Meaning and Influence in Accounting Research’, Business Ethics Quarterly, vol. 14, no. 3, pp. 399-431.

Introduction

In the recent past, there has been a shifting paradigm from Taylor’s model of organizational management to more productive methods of production. The new methods aim at increasing production through efficient management of human and capital resources. A number of scholars have conducted extensive research to establish the effects of various managerial techniques on the performance of employees.

Some researchers note that task formulation is the most notable aspect of management, whereas others observe that the availability of human resources is the crucial factor that influences the performance of the management team. However, scholars concur that three factors are essential as far as the best managerial practices are concerned.

One of the factors is production management while the other is the organization of work. In addition, the relationship between various groups in the organization influences the performance of employees. Scholars agree that a new model of management should be applied in case the organization is to achieve high results. The new model must incorporate the tenets of neo-liberalism into its productivity structures.

Currently, scholars focus on exploring the new management dynamics that relate to post-Ford model of production. Scholars in the UK and the US perceive that the model should be adopted in order to enhance productivity in organizations.

However, changing the work structure has micro and macro implications. Scholars of political economy and ethnographic sociology have posted their findings on the topic given its importance in the performance of organizations. This paper reviews a number of articles in order to shed some light on the topic.

Views of Various Scholars on Post-Ford Production Model

As earlier noted, scholars have posted various views regarding the management models in the current managerial systems. Their views can be categorized into a number of models. Under high performance work systems model, scholars such as Danford and Thompson have contributed enormously in enriching the topic.

Handel and Gittleman are some of the scholars who have contributed to the development of high-performance work practices model. Ashton and Sung have conducted extensive research to establish the influence of high-performance work on organizations.

A number of scholars have also discussed the issue of high involvement in detail. Some have talked about high involvement work systems while others stick to high involvement work practices. Harmon is one such scholar who talks about high involvement work systems while Fuertes and Sanchez capitalize their study on high involvement practices.

The issue of high involvement management is also of importance to scholars. Forth and Millward are some of the scholars who analyze the relationship between high involvement practices and the management strategies. Scholars such as Brown and Reich have postulated their findings regarding the relationship between high performance and employment systems.

High commitment management is another model employed in analyzing the performance of employees. Baird, Whitefield, and Poole are some of the scholars who have posted their findings on commitment management model.

Danford (2004) notes that the idea of high performance work systems is a mechanistic model that does not take into account the demands of human beings. He conducted a study on JetCo manufacturing company and came up with a number of suggestions. The company had a number of efficient practices at the start, but ended up with practices that were unpleasant to the workforce.

The company had prolific initiatives aimed at improving the quality of production. The introduction of team leaders created tension among employees, which lowered the firm’s productivity. Employees perceived that their views were not given serious attention. On his part, Thompson (2003) notes that a significant factor regarding high performance work systems is reciprocity.

In this regard, employers have a responsibility of ensuring that they develop trust and commitment towards employees. Therefore, the employer is charged with the responsibility of ensuring that the employee is provided with adequate training and efficient reward system. However, Thomson admits that employers in the neo-liberal economy are unable to fulfill the wishes of employees due to the challenges posed by the economy.

On high performance work practices, Handel and Gittleman (2004) criticize the model by observing that it does not create a working relationship between workers and employers. The model is only known to increase wages. Therefore, the new model of high performance management is simply aimed at benefitting an individual, but does not increase productivity in the organization.

Ashton and Sung (2002) assert that it is proven scientifically that a strong relationship between human resource practices and improved performance exist. In particular, the relationship is strong in matters related to profitability and productivity. Therefore, the two scholars suggest that performance practices are closely related to the skills acquired by the employee.

The relationship serves to strengthen the effectiveness and efficiency of the organization. However, the scholars caution that the model is only applicable to certain industries. This means that the model does not solve managerial problems in all scenarios.

Harmon (2003) conducted a research to explore the efficiency of the American health care sector. In the study, a conclusion was drawn suggesting that a relationship between high performance management and employee efficiency existed. The study can be interpreted to mean that high involvement work systems are related to financial aspects.

Fuertes and Sanchez (2003) extend the works of Harmon by observing that some factors motivate employers to adopt certain models. Employers calculate the benefits of the model before adopting it. Employers might prefer using less costly strategies, as opposed to using strategies that would drain their resources.

Employers do not prefer some of the practices, such as rewarding employees with financial benefits because they eat up their profits. Employers prefer using non-financial rewards to appreciate their employees, such as awarding a promotion.

Forth and Millward (2004) assert that high performance management is a concept that cannot be neglected given its effectiveness and influence on the performance of the organization. They further observe that all management practices are related to the high performance management model in one way or the other.

Forth and Millward note that the high performance management model might be interrupted by deregulation of financial markets. Organizations in the modern financial markets go through a number of challenges that make it hard for employers to implement high performance management models.

Competition in the market is stiff implying that employers are concerned with sustaining market competition, not enhancing structural organization of firms. Brown and Reich (1999) conducted a study on one of the Australian manufacturing companies. The company formulated a number of strategies aimed at improving the performance of the organization.

The firm emphasized on team building, development of staff, and training. The firm adjusted its policies that focused on Taylor’s model to reflect modern managerial practices. Efficient planning and role allocation were some of the new strategies employed by the firm. The new tactics improved the performance of the organization in a number of ways.

Whitefield and Poole (1997) observe that high commitment management is a highly sensitive issue. Therefore, it must be handled carefully. The main concern of employers is to increase production and organize work. The scholars note that before talking about performance management, the causes of perennial problems in the organization must be handled.

The above scholars suggest that organizations utilize their competitive advantages in the market to formulate innovative practices. The researchers conclude that implementation of high performance managerial practices generate new techniques that improve the performance of the organization. High performance management strategies are extremely costly, but their outcomes are productive.

In this regard, they observe that high performance management models must produce high results for them to be maintained. In a study conducted in Europe, it was established that organizations with comprehensive new work practices tended to have high training needs. Regarding high commitment management, Baird (2002) notes that all stakeholders in the organization must be consulted before formulating any policy.

Through consultative forum, the organization utilizes its resources in the most cost effective way. Moreover, embracing dialogue helps the firm in achieving its competitive advantage in the market. The role of professionals in the organization is to ensure social bonding and commitment to the new techniques of production.

Conclusions

Model managerial theories suggest that the work place is the main learning institution that enhances the capacity of employees. Older models suggest that employees are expected to join organizations when they are already equipped with adequate knowledge from colleges and universities. Things have since changed in the modern society.

For instance, the works of modern scholars suggest that teamwork is one of the most crucial aspects of management. Employees are expected to be given chances to explore their potentials in the organization. This implies that employers are expected to allow some flexibility that permits sovereignty.

References

Ashton, D., & Sung, J. (2002). Supporting Workplace Learning for High Performance Working. Geneva: International Labor Office.

Baird, M. (2002). Changes, Dangers, Choice and Voice: Understanding What High Commitment Management Means for Employees and Unions. The Journal of Industrial Relations, 44(3), 359-375.

Brown, C., & Reich, M. (1997). Micro-Macro Linkages in High Performance Employment Systems. Organizational Studies, 18(5), 765-781.

Danford, A. (2004). High Performance Work Systems and Workplace Partnership: A Case Study of Aerospace Workers. New Technology, Work and Employment, 19(1), 14-29.

Forth, J., & Millward, N. (2004). High-Involvement Management and Pay in Britain’, Industrial Relations, 43(1), 98-119.

Fuertes, M., & Sanchez, F. (2003). High-Involvement Practices in Human Resource Management: Concept and Factors that Motivate their Adoption. International Journal of Human Resource Management, 14(4), 511-529.

Handel, J., & Gittleman, M. (2004). Is There a Wage Pay-off to Innovative Work Practices? Industrial Relations, 43(1), 67-97.

Harmon, J., (2003). Effects of High-Involvement Work Systems on Employee Satisfaction and Service Costs in Veteran Healthcare. Journal of Health Management, 48(16), 393-418.

Thompson, P. (2003). Disconnected Capitalism: Or Why Employers Cannot Keep Their Side of the Bargain. Work Employment and Society, 17(2), 359-378.

Whitefield, K., & Poole, M. (1997). Organizing Employment for High Performance: Theories, Evidence, and Policy. Organization Studies, 18(5), 745-764.

Country and US MNC Selection

Many people consider Ford Motor Company (Ford) as an important American automobile company. The American Multinational Corporation (MNC) is headquartered in Michigan. Since 1903, the company has grown steadily to become a leading automobile brand in the world.

This exercise digs deeper to analyse the strategic approach and performance of Ford Motor Company in Thailand.

US MNC Industry type

The Ford Company is a leading US Multinational Corporation (MNC). The company has different manufacturing plants in many countries across the globe. Ford operates in the automobile industry. The automobile industry is one of the most important industries in America and across the world.

The automobile industry has been growing very fast since in the mid 20^th century. The industry plays a significant role towards the success of the global economy. It is one of the industries greatly influenced by technological changes today.

Country Strategic Analysis

Country Technology Assessment

Thailand is not technologically advanced. However, the current wave of globalization has resulted in new technological developments. The citizens using the internet are on the rise. There are different organizations and companies relying on modern technologies to boost production and performance.

A company like Ford can benefit greatly from these new technologies. This explains why different Multinational Corporations (MNCs) like Ford can succeed in the country’s automobile industry.

Cultural Profile

Culture dictates the way people behave, eat, communicate, and interact with each other. Thailand differs significantly from the United States in terms of culture. The people of Thailand work as teams and expect to be guided by their seniors. Families are united and mostly live together.

People tend to have respect for the elderly and consider them as wise. There are different religious beliefs and social functions or celebrations that mean a lot to the people of Thailand.

However, it is notable that many people are changing their lifestyles due to the wave of globalization. This indicates that Ford will continue performing positively in the foreign country.

Conditions Facing the Multinational Corporation

Leadership Success

Ford is successful because it uses an effective organizational structure and strategic leadership style. At Ford, the leaders know the importance of decision-making, teamwork, and mentorship. The leadership strategy always presents revolutionary ideas for the company.

This explains why Ford is presently producing new cars for the global customer. Its competitive leaders manage the performance of different subsidiaries thus making the company successful. The company’s leadership strategy has been successful thus improving its performance and profitability.

Financial and Competitive Challenge

For very many years, Ford has been a leading manufacturer and marketer of light trucks. Such business strategy established the company as a leading competitor in the global automobile industry.

The company enjoyed a stable financial base until 2008 when the world experienced a major financial breakdown.

Currently, the company is reducing its debts incurred during the financial crisis. During the economic meltdown, Ford was unable to promote a competitive business in the United States and overseas.

The other thing concerns Ford’s competitive challenge. Despite its financial worth and competitive edge, other companies have emerged with competitive technologies and vehicles that meet the needs of the global consumers.

Assessment of Thailand’s Political Environment

The political environment of a country is crucial to the success of multinational companies. Currently, Thailand enjoys a stable government and political climate that attracts foreign investors. However, bribes are also common in the country thus affecting different business activities.

Thailand is listed as a corrupt nation based on the Corruption Perception Index (CPI). Thai’s government is currently promoting democracy and human liberties.

This explains why the country is attracting different investors thus becoming a suitable destination for different multinational companies. From this assessment, it is clearly notable that Thailand will provide a better political environment for MNCs such as Ford.

Introduction

A business model refers to a company’s plan in respect of how it projects to profit from its operations currently and in the future. Therefore, a business model entails a unique procedure of determining the fundamental elements necessary for achieving the strategic business goals (Chesbrough, 2007).

In essence, a business model encompasses all the details of a firm’s operations both short-term and long-term perspectives. Ford as a one of the leading automobile manufacturers in the world operates on a strategic business model that enables its performance.

In the view of Ford’s business model, it endeavors to position itself in a competitive business environment that experiences changes (Chesbrough, 2007). A business model consists of various requisite elements, which must be present in order to accomplish a feasible, strategic, and profitable model.

To achieve this objective, Ford has founded a number of participants who would strengthen its presence in the market. Some of the strategic suppliers include Delphi Autoliv, Yazaki, Johnson Controls, Lear, Magna, and Visteon.

Strategic business alliances and partnership

Ford has developed a business strategy that aims at exploring numerous foreign and local markets. To maintain a strategic presence in the market, Ford believes in the power of strategic partnership with formidable supply chains with a wide network across the world. In establishing itself as top most business with a strong image, it has endeavored to maintain its reliability in respect of availability of products within the custom time.

Strategic entry into numerous and unexplored markets require that a firm develops a mechanism capable of beating the market participants who exist within the market. Although Ford exists in a wider market with extensive market coverage, it asserts that to maintain its leadership, it must pursue strategic partnership.

Informed of this imperative, it seeks to enter into new short-term and long-term agreements with specific suppliers of its marketing components on a global basis in order to establish a strong, and sustainable performance (Pateli & Giaglis, 2004).

Since Ford operates in an industry full of technological advancements, the need for a sustainable and hi-tech technology capable of addressing the dynamics of the market. The company ensures that its strategic partnership brings the leading-edge technology that affords to produce the best-of-breed automobile products that meet the changing market needs.

Additionally, the quest for sustainable environment, environmental stakeholders have leveled pressure for companies that contribute to production of green house gases to scale down their pollution.

In the wake of these demands for a habitable ecosystem, Ford has decided to belong among those companies that consider the issue of environmental sustainability (Chesbrough, 2007). Firstly, the company envisages producing automobile that considers the increasing oil costs due to the declining world oil products.

To ascertain this need, the company has invested huge sums of funds in research and development with a belief that it has the capacity to turn around the company’s product image. Therefore, Ford boasts of being a company with the most updated technology brought about because of both customer needs and environmental concerns (Pateli & Giaglis, 2004).

Competitive cost structures

The company has adopted a strategy that minimizes on the production costs and the operational costs that spun from product generation to maturity. Although the partnerships are strategically different modes of achieving the primary objectives, it remains a related element to the aspects of enabling a competitive cost structure with an ability to sustain the evolving product image of the company.

To ensure sustainable pricing of its products, Ford has demonstrated its ability to maintain a low-cost production plan that will enable customer-oriented prices. This strategy aims at establishing Ford as a company that leads in respect of price in relation to other competitors in the automobile industry. As a price leader, Ford will be able to induce other market features that remain advantageous to its operations on the global market.

Growth strategy

Ford believes in the strength of growing its product portfolio in order to achieve its objective of maintaining strong market autonomy. Initially, Ford produced heavy automobile as compared to its immediate competitors such as Toyota, Honda, and Hyundai. To ensure that it reaches its target segments, it has formulated a strategic expansion aiming at producing products that address the varied needs of its growing clientele.

Because of the growing needs for light vehicles, the company has tended to shift from the heavy automobile toward light-vehicles and other automobiles that consider the economies of consumption and costs (Shafer et al., 2005).

This strategy favors the ongoing challenges of the skyrocketing fuel prices and declining availability of oil in the market. To cope with these market realities, Ford Company has ventured into utilizing the automobile technology that embraces these market-driven dynamics (Shafer et al., 2005).

Differentiation strategy

Differentiation entails a strategic plan to eliminate the common aspects of a product that delineates a company’s products from the rest of the competitors. This strategy aims at developing a model product unique in quality and image, yet affordable by average consumers on the market.

In ensuring that it maintains a high-quality product portfolio. Ford has adopted a differentiation plan that gives a unique feel of a quality brand capable of sustaining the historical brand of the company (Chesbrough & Rosenbloom, 2002).

Revenue generation

The company aims at increasing its revenue streams through focus marketing and sales strategies. In a bid to achieve the objective of high profitability, the company has established a strategic marketing and distribution plan capable of maximizing the sales in order to achieve its projected plan (Chesbrough & Rosenbloom, 2002).

However, the company recognizes the innate challenges involved in the process of widening its market sales. The primary essence of strategic distribution is useful cushioning it against this vulnerability.

Conclusion

In this discussion, the paper notes the strategic importance of developing a business model. The analysis of the term business model entails all details aimed at designing plans to maximize on a firm’s overall future profitability.

Therefore, a strategic business model remains an essential element of a sustainable business capable of beating the challenges of the ever-growing business world. Ford as one of five leading automobile companies in the world has developed a state-of-art business model, which successfully sustains its position in the automobile industry.

As noted in the analysis, one of the elements adopted by Ford has been strategic partnerships with selected suppliers on the market to ensure its rapid entry into the unexplored markets. This strategy aims at exploring foreign markets that remain un-exploited by most players on the market.

The other components include the design of competitive cost structures, strategic growth, product differentiation, and revenue generation. These strategic alliances endeavors to bring on board the best of edge technology aimed at addressing the advancing technology in the automobile industry. Additionally, the company aims at utilizing the selected suppliers to distribute hi-impact automobile products in the global market.

References

Chesbrough, H. & Rosenbloom. R.S., 2002. The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change, 11(3), p. 529.

Chesbrough, H., 2007. Business model innovation: it’s not just about technology anymore. Strategy and Leadership, 35 (6), p. 12

Pateli, A.G. & Giaglis, G.M., 2004. A research framework for analysing eBusiness models. European Journal of Information Systems, 13(4), p. 302.

Shafer, S.M., & Smith, H.J. et al., 2005. The power of business models. Business Horizons 48(3), pp. 199-207.

The Decision Made by Ford About the Production

The decision made by Ford to carry on with the production of the ‘Ford-Explorer’ also known as a Sports Utility Vehicle (SUV) was grounded on the returns generated for the firm through the sale of SUVs. The firm’s market demand for SUVs had increased across the globe. Thus, considering the improved market demand for the new SUV, Ford wanted a faster and cheaper way to produce the commodity.

However, such decisions to continue with the production of the SUV despite being unstable were mainly based on the aspect of time-saving as well as meeting the targeted production capacities to satiate the market demand. Ford knew that delayed production of the SUV would give leeway for market competition (Brooks & Dun, 2009).

The trial of the Explorer in service delivery indicated that it did not have solidity, and the only better way of improving it included extending the wheelbase and reducing the Center of Gravity (COG). The changes would have practically consumed more time while hindering the anticipated duration within which the production of the vehicle would have been finished and released for sale.

The market demand target was met, but with negative impacts including rollovers and tire letdown protests. Such incidents showed that the new SUV was unstable though the firm had its own interests and goals to be achieved within a given period (Boatright, 2013).

Cost reduction was also a major factor considered when Ford opted to continue with the production of SUVs. As a basis of its foundation, Ford Motor Company officials asserted that the low-price manufacturing strategy should be maintained during the production of all vehicles including the new SUV.

The firm wanted to incur fewer expenses in the whole production process despite any imminent danger. The budget for extending the wheelbase and reducing the COG of the vehicle was high when making the ‘Explorer’ (Brooks & Dun, 2009).

Lesson Learned in Firestone From the Ford/Goodyear Schism

Ford and Goodyear corporations were long-time production partners. The breakup between these two renowned corporations that took place four years prior to Firestone signing a binding contract with Ford should have sent warning signals to any other corporation. However, obtaining crucial business information is deemed difficult given that most businesses fear market competition.

Despite this fact, Firestone should have requested for the details and trading information with the previous tire supplier. Investigating the annual reports and any business dealings could have revealed the cause of the schism between Ford and Goodyear before entering into a contract. In fact, any form of detest from the Goodyear Corporation meant to address safety and quality issues should have been a warning to Firestone (Boatright, 2013).

Conversely, having dominated global markets, there were numerous tragic accident reports from drivers of Ford vehicles all over. Firestone should have taken the initiative to find out the causes of the road menace that occurred when Ford and Goodyear were still business partners. Any investigation that landed Ford at fault should have been treated with the utmost concern.

For instance, any issues proposed by Ford on cost reduction while compromising the quality and safety should have been checked carefully. In case the schism was due to a price war, then Firestone should have sidestepped the contract. The drawback by Ford could have been a good sign to give Firestone a hunch why Goodyear (the former supplier) and Ford disagreed after a short period of partnership (Brooks & Dun, 2009).

Firestone ought to have enquired about Ford’s former supplier to find out if there had been recorded damages caused by the tires. As it is, Ford went for cheap products and never gave the suppliers the opportunity to identify better tires to use in their vehicles. In fact, this explains why they demanded what they thought would serve the “purpose” from Firestone.

Thus, Firestone ought to have insisted on recommending which tires Ford was to use on every vehicle. The fact shows why Goodyear broke up the partnership, as they were not ready to supply quality products at an unworthy price for low-quality products demanded by Ford.

Understanding the Statment of Ford About the Problem in a Tire Issue

Previous data released by Ford’s Chief Executive Officer (CEO) indicated that various tires supplied by Goodyear Corporation and used on the Explorers proved to be very efficient and were included in the quality and safety lead reports. The Ford Company representatives defended the firm saying that the rollovers had nothing to do with their automobiles. However, Firestone wheels were the problem.

For instance, when the Explorers had been produced, Ford ordered the wheels P235 ATX. These tires were found to be imperfect. Hence, Ford chose to use a set of Firestone tires P245 ATX, which they already had in store (Boatright, 2013).

From reports, tires supplied by Firestone were inclined to split up. The fact puts the blame on Firestone given that Ford conveyed the issue hoping for an alternative, but got assurance from the firm that the split-up was hardly a problem to Ford’s automobiles.

In addition, the widespread accident information acknowledged by NHTSA, which called for a probe, showed that most of the road carnage was due to Firestone Corporation’s tire letdowns while vehicles were fast-moving on freeways.

References

Boatright, J. (2013). Ethics and the conduct of business. Upper Saddle River, New Jersey: Pearson Prentice Hall.

Brooks, L. & Dun, P. (2009). Business and professional ethics for directors, executives & accountants. Boston, Massachusetts: Cengage Learning.

Executive Summary

This paper delves into the problems Ford Motors is currently experiencing within its primary markets due to competition from foreign brands as well as cathartic sales. Within the U.S., which is the primary market of the company, Ford Motors has been experiencing an influx of competition from foreign brands such as Toyota, Honda, Hyundai, and Subaru which appeal to U.S. consumers due to their affordability and their gas mileage.

It can also be clearly seen that the current markets of Ford within the U.S. and Europe are far from ideal due to a lagging economy in both these regions which has impacted the capacity of consumers to make car purchases. As such, this necessitates expansion into new markets in order for the company to survive and uphold its commitment to shareholders.

It is based on this that what will be examined is how Ford overcomes such challenges through international expansion, the use of new Enterprise Solutions as well as the implementation of social network advertising and promotion.

Thesis

In order to survive, Ford needs to expand into new markets and develop a new line-up of cars that appeals to present-day consumers. Within the past five decades, the Ford Motor Company has gone from being the most prominent car brand in the world to be the third or even fourth most popular brand. The reason behind this shift is related to the subsequent proliferation of brands such as Toyota, Honda, and Subaru, all of which have car models that are cheaper and more efficient than the current iteration of Ford cards.

It should also be noted that within its primary markets (i.e., the U.S. and Europe), Ford has experienced a drop in sales due to cathartic market expansion which, when combined with lower levels of employment, has significantly affected the company’s profits.

To address the issue of competition from cheaper brands and low product sales, the company has attempted a solution, namely: expansion into new markets as well as the development of new types of vehicles to address new market segments.

In relation to this strategy, the company should attempt to market and promote its products through social media since an examination of its current strategies reveals a lack of sufficient social media promotion which may contribute to its dropping relevancy among young consumers.

To facilitate this expansion into new international markets as well as address the development of its new line-up of cars, the company has launched its P.I.M. initiative wherein it utilizes WebSphere and MQSeries so as to integrate its various enterprise applications into a cohesive whole which, theoretically, should result in improved operations across international and regional borders.

It is based on what has been presented so far that this paper will delve into the competitive environment of Ford Motors and examine the strategies that would aid it in being able to survive in its current market environment.

Introduction

Founded in 1903 by Henry Ford, the company has expanded its operations into different brands resulting in multiple types of cars being owned by a single company. To better illustrate this point, it is necessary to examine how Ford differs in comparison to other organizations that control multiple brands. For example, Kellogg’s has multiple brands such as Captain Crunch, Frosted Flakes, and Fruit Loops. While each item that is being sold is different in its own way, the management of the product remains under a single tier structure.

What makes Ford different is that each individual car brand it has acquired or created, such as the Land Rover, Jaguar, Volvo, Mercury, etc. has its own independent management tier structure. This particular management structure is further compounded by the various relationships the company has with individual dealerships which also creates another management tier involved in the sale and distribution of cars through sellers on a regional basis based on the expansion of brands into target markets

Competitive Forces and External Market Conditions

Within the U.S., which is the primary market of the company, Ford Motors has been experiencing an influx of competition from foreign brands such as Toyota, Honda, Hyundai, and Subaru which appeal to U.S. consumers due to their affordability and their gas mileage. In fact, based on data from Bonini & Kaas (2010), 1 in every four cars on America’s roads at present is a Toyota which various consumer groups state is one of the most affordable and gas-friendly cars out there.

In comparison, car models from Ford always rank the highest in terms of aesthetics, horsepower, and amenities; however, they rank the lowest in terms of affordability and gas mileage. While this was not an issue during the 1990s when gas was cheap, and the economy was doing well, the subsequent transition of the U.S. economy into the 21st century brought with it a considerable reduction in the economic capacity of individual U.S. households as well as resulted in an increase in the price of gas and basic commodities.

Upon closer examination, it can be seen that the market for motor vehicles within the U.S. at present has issues related to the current state of the economy which is not conducive towards high levels of purchases from consumers. The reason behind this can be correlated to the 7% unemployment rate within the country, which has affected the ability of consumers to purchase new car models. As a result, low sales within the company’s primary markets have impacted its bottom-line resulting in the various factory closures that have been reported in the news as of late.

When examining the global demand for the products of Ford Motors, what should be taken into consideration is that Europe at present has been impacted by a debt crisis, housing crisis, as well as a considerable slowdown in its economic output due to high taxes and its aging population. As a result, many people within the region are hesitant to take out bank loans for cars due to the general atmosphere of uncertainty, which pervades the European economy.

This has impacted Ford’s international operations to such an extent that nearly 50% of its foreign earnings for the 2008 – 2010 quarter were effectively wiped out in Europe. Taking all the competitive forces and the current economic conditions within its local markets into consideration, it is immediately evident that in order for the company to continue to survive, it is necessary to transition into a new set of strategies so as to continue to remain relevant.

Competitive Strategies

Upon further examination, it can clearly be seen that the current markets of Ford within the U.S. and Europe are far from being ideal and, as such, necessitates expansion into new markets in order for the company to survive and uphold its commitment to shareholders. To address such an issue, the company has begun to focus its attention on expanding into new markets in Asia such as those in the A.S.E.A.N. (Association of Southeast Asian Nations), Japan, and China.

With their growing economies and the subsequent increase in the purchasing power of their citizens, these new markets show considerable potential for growth. It is due to this that the company has begun aggressively expanding into these new regions in order to capitalize on the potential they have for increasing the profits of the company.

Another factor that should also be taken into consideration is the fact that countries such as China and the Philippines act as excellent locations for outsourcing various production facilities for Ford and, as such, act as a means for the company to save considerable amounts of money due to the lower operating costs associated with manufacturing goods through outsourcing.

By implementing such a strategy, it is likely that Ford Motors will capitalize on the growth of Asia as a means of expanding its customer base, which would create more sales for the company in the future.

When taking into consideration the lacklustre growth rate of the U.S. which is estimated to grow 2% by the end of 2013, as well as the current levels of economic uncertainty in Europe, this shows that the strategy of Ford Motors of expanding into different Asian markets is a sound one since focusing on proper market penetration in these growing regions could mean the difference between survival or being relegated into historical obscurity.

Despite this grim economic forecast, the economies of Asia (particularly the Philippines, China, Japan, India, Malaysia, and Singapore, etc.) have actually experienced steady and spectacular economic growth which has translated into increased consumer spending within the region within the past four years. This has actually been good news for the car industry due to the correlation between high economic growth and subsequent increases in the number of cars bought.

Enterprise Business System

The implementation of information systems within an organization can be considered a means by which a company establishes an electronic system to create an interface between people, technology and the organization that they are meant to support in order to carry out a specific action. For example, information systems are often utilized when it comes to supply chain management, organizational emails, technical support, and various internal methods of confirmation and communication.

Basically, it acts as a method of integration for a company which results in a better and more controlled process of operations that is streamlined to ensure maximum efficiency and effectiveness in its desired output. It is within this context that Ford Motors launched its P.I.M. initiative wherein it utilizes WebSphere and MQSeries to integrate its various enterprise applications in order to make sure that its operations are problem-free.

What you have to understand is that as a company expands into multiple markets, new systems are needed in order to enact specific procedures to keep operations going properly. This is especially true in instances when a company’s operations are located in different countries.

Thus, the enterprise systems of Ford Motors advocates strict adherence to a vertical style of dual authority matrix/ global matrix management, which is utilized to ensure proper controls are in place in all levels of operation. Each process flow and the decision is evaluated vertically within the company’s hierarchy, which enables it to monitor and control every facet of its operations down to individual managers and dealers.

Social Media

Based on the needs of Ford, one way in which it could establish itself is by creating “fan pages” on the various social networking sites that are popular in the countries that it is trying to expand into. By doing so, this helps to connect the company to its possible consumers better and gives it a “human face” so to speak, which would result in better product awareness and possible product patronage.

Through the fan page, the company would be able to tell its consumers about new products and upcoming promos that they might be interested in. It is also interesting to note that through the fan page, the company can also better facilitate particular promotions such as discounts, special contests and other such methods of promotional marketing that are meant to entice greater public interest over a particular product.

Conclusion

Overall, through its expansion into China, use of WebSphere and MQSeries as well as the implementation of fan pages, it can be stated that Ford should be able to address the various issues it has with its competitors within its local markets.

When taking into consideration the lacklustre growth rate of the U.S. as well as the current levels of economic uncertainty in Europe, this shows that the strategy of Ford Motors of expanding into different Asian markets is a sound one since focusing on proper market penetration in these growing regions could mean the difference between survival or death for the company.

The Ford Case Analysis

Opinion one: when every stakeholder matters

Defining the specifics of the corporate governance strategy, which Ford has chosen as its key guideline in defining the company’s goals, its strategies, and the relationships between the staff and the managers, one must admit that it has a range of positive aspects. To be more exact, the Ford Company CEO has stressed several times that the cooperation between the firm’s members and the satisfaction of all its stakeholders are currently at the top of the priorities list (Andress, Bolin, Horton, Cleven, McCullar & Stevens, 2012, p. 146).

Opinion two: when a little more perspective is desirable

Although the model of corporate governance, which is currently used at Ford, proves quite efficient as a tool for the company’s global success, it is worth keeping in mind that the company is represented by a range of affiliates in a variety of states (Affiliates, n. d.). In order to coordinate the work of all these affiliates, retaining the role of the leader and maintaining the corporate governance model,

Ford will have to make a very serious effort. Seeing that the company is currently quite busy defining its position in the market and competing with such successful brands as Toyota and Honda (Andress, Bolin, Horton, Cleven, McCullar & Stevens, 2012, p. 132), it will not be able to coordinate the work of all its departments successfully, which will lead to an ultimate failure. Therefore, a more flexible model of leadership should be executed.

Cooperative Strategies and the Companies’ Objectives

Thunderbird and Laureate Education

Though the agreement concluded between Thunderbird and Laureate Education has only been touched upon briefly in the article by Hommel (2013), the author still has shed some light on the nature of the relationships between the companies, pointing at the fact that the two are going to base their relationships on equity (Hommel, 2013). The goals of the companies are, therefore, to reduce the risks and to enter the global market.

WSE and its has-been rival

The same can be said about the strategic alliance, which the Warsaw Stock Exchange is about to undertake (Stratford, 2014). Even though the alliance is only a project at present, it is obviously going to become a major step towards the company reconstruction and its further economic growth. In fact, Adam Maciejewski, the company’s CEO, specifies that expansion is the current objective of the organization, which the strategic alliance is supposed to facilitate: “We want to build a strong company so we can discuss potential moves.

We don’t want to be a ‘younger brother’ in such discussions” (Stratford, 2014). It should be noted, though, that the strategic alliance formed by the WSE and the company’s former rival, a Viennese company, is somewhat different from the one described above. In contrast to the previous alliance, this one is not only attempting at entering the global market, but also tries to analyze its assets and weaknesses, working on the latter and developing the former. Therefore, the given cooperation can be defined as a non-equity strategic alliance.

Hakassah Group Meets MGM

The last, but definitely not the least, the joint venture formed by the Hakassah Group and the MGM Studio (Kerr & Blitz, 2014) should be mentioned. This project is obviously different from the two types of cooperation mentioned above. In contrast to equity and non-equity strategic alliances, a joint venture is formed to create an entirely new enterprise. What MGM and The Hakassah Group have designed is clearly a new venture, and it is evidently being built by two independent, worldly renowned companies.

Reference List

Affiliates. Web.

Andress, J., Bolin, M., Horton, D., Cleven, C., McCullar, M. & Stevens, H. (2012).Ford Motor Company: Staying “Ford tough!” Strategic management cases: Competitiveness and globalization (pp. 127–151). Stanford, CT: Cengage Learning.

Hommel, U. (2013). Moocs herald the disruption to come. Financial Times. Web.

Kerr, S. & Blitz, D. (2014). Jumeirah to manage luxury hotel complex in Mauritius. Financial Times. Web.

Stratford, P. (2014). Warsaw Stock Exchange eyes investments with other bourses. Financial Times. Web.

Christina Rogers and Mike Colias are the authors of the article about the latest changes in the work of Ford Company and its development in terms of the global market. The main idea of the article is that Ford Motors is going to cooperate with some Chinese manufacturing organizations in order to save its costs that are about $500 million. The peculiar feature of this situation is the necessity to reconsider the already developed business relations with Mexico and relocate factories.

All these steps lead to the reduction of working places among American and Mexican people. However, this decision has certain political reasons such as the pressure from the Trump administration and change of the conditions of the North American Free Trade Agreement. White House representatives underline the importance of the development of the American tax system and the return of manufacturing back to the United States. The authors of the article admit that Mexico is not the best option for America to import cars. However, China should not be considered as an alternative as well because of vehicles that come from Asia are not always dependent on the vehicles or some parts that come from Mexico or are found in America.

Therefore, it is necessary to think about some new ways for Ford Motors to promote the development of its production in the United States in order to support American employees, observe positive shifts in economics, and improve global demand regarding the opportunities of American manufacturing. The car industry may be developed in different ways, and this article shows how Ford Motors representatives recognize problems and search for effective solutions with respect to the current political, economic, and international conditions.

Ringwood Mines landfill site is a 500-acre territory (once an iron mining site) in the Borough of Ringwood, New Jersey, that was subjected to severe contamination owing to the disposal of waste by the Ford Motor Plant in 1960s-70s. The Ramapough Mountaing Indian Tribe and other inhabitants of the area sued Ford Motor Company for causing extensive soil pollution, and the plant was closed in 1980 (Dyrud 11). In 1984, the area was placed on the Superfund priority list by the Environmental Protection Agency (EPA) in order to clean up the contamination; however, several attempts of land recovery made by Ford failed as pockets of paint sludge were later found in 1995, 1998, and 2004, which resulted in placing the site back on the list. In 2011, 47,000 tons of earth contaminated with hazardous wastes had to be removed (Verbos and Humphries 27).

The paper at hand is aimed to investigate why the company decided to dump wastes on this very site as the choice of the place does not seem to be random. The case is going to be investigated from the racism perspective given by the history of the place.

Historical Account

The Ramapough Mountain Indians or Ramapough Lunaape Munsee Delaware Nation consists of app. 5000 people who live in the Ramapo Mountains in New Jersey and whose villages were recorded as far back as in the seventeenth century. Although the tribe was recognized by the state, all the attempts to win federal recognition failed (Alexander and Alexander 17).

The Ramapough people descend from Lenape, whose bands included the Tappan, Munsee, Hackensack, Rumanchenanck, and Ramapo having Tuscarora, African, and Dutch ancestry (which accounted for the fact that early colonist Europeans thought that these were different peoples) (Van Valen 28).

The racist slurs that the tribe currently has to tolerate are deeply rooted in history: until 1970s, its members were often called “Jackson Whites”. The phrase is a shortened version of “Jacks and Whites” – a derogatory term that was invented to emphasize the multiracial ancestry of people composing the tribe. Because of different backgrounds these people had, the outer community concluded that they were mostly “Jacks” (which in slang meant “runaway slaves”) and poor whites (including the Dutch, Hessian soldiers, and German mercenaries – all quite unwelcome by the dominant population) (Adams et al. 84). There was no document supporting the idea that tribe members belonged to these categories; nevertheless, the pejorative legend remained widely accepted, and the term “Jackson Whites” was even used in one of the publications of The Bergen Democrat in 1880. Earlier, in 1972, Appleton’s Journal called the Ramapough “fugitive slaves” and claimed that they hid in the mountains to bring up children that were going to grow even more savage that their fathers. In 1938, New Yorker continued the tradition of mockery and called the tribe “an enclave of albinos” with Nellie Mann (a circus performer) as a “queen” (Alexander and Alexander 31).

Nowadays, the historians confirm that these legends have nothing to do with actual history; however the prejudice against the tribe continues to impact the attitude of the outside community (Alexander and Alexander 33).

The Present-Day Situation

Unfortunately, 5,000 people living in Ringwood are still subjected to injury and insults: the tribe remains the subject of various unflattering myths that make hostility against it escalate among the members of the neighboring communities. All the attempts of the Ramapough to set the record straight are still made in vain (Verbos and Humphries 42).

One may think that the age of racial equality promoting tolerance and integration would bring about justice together with enlightenment. Yet, the situation remains the same as it was almost a century ago: in 2012, Weird New Jersey article referred to the Ramapough as to “degenerate race” and “motley group of social outcasts inbred to the point of mutation”. The article stated (without any supporting evidence) that the tribe was comprised of renegade Indians, runaway blacks, deserters, and prostitutes that together became known as Jackson Whites. This defamation was further developed by the movie Out of Furnace, which showed tribe members as a gang of drug dealers staging fights. The defamation case was dismissed by the court (Alexander and Alexander 46).

Ford’s Case

As we can see from the historical account and the present-day attitude of the public to the tribe, there is hardly any moral obligation that the community feels in relation to its members. In this light, the actions of Ford are quite comprehensible. First and foremost, the company still believes that dumping was legal since there was no law banning contamination of the land. Ford found itself in a favorable position: the whole nation has humiliated the tribe for centuries, and a lot of other companies happened to dump their wastes in Ringwood. This allowed Ford claim that the responsibility for contamination is shared (Dyrud 15).

Knowing that the tribe would hardly be protected either by law or by the locals, the company paid people for silence to be able to get rid of the stuff they no longer needed. The decision to dump loads of sludge on the poor was the most cost-saving and logical one. As a result, the tribe was hit by numerous cases of cancer and other terminal diseases. Nevertheless, every action of Ford was performed in accordance with the law. And here, it is not only the company but the community with its relentless racism that is to blame for the immoral and the inhuman consequences of the matter.

Works Cited

Adams, Beatrice J., et al. Scarlet and Black: Slavery and Dispossession in Rutgers History. Rutgers University Press, 2016.

Alexander, Leonard M., and Peter C. Alexander. It Takes A Village. Page Publishing Inc, 2015.

Dyrud, Marilyn A. “The Case of Ford Motor Company.” Journal of Engineering Technology, vol. 33, no. 1, 2016, pp. 10-21.

Van Valen, Gary. “The Seven Trees and Ramapough Ethnicity.” Voices, vol. 40, no. ½, 2014, pp. 26-30.

Verbos, Amy Klemm, and Maria Humphries. “Amplifying a Relational Ethic: A Contribution to PRME Praxis.” Business and Society Review, vol. 120, no. 1, 2015, pp. 23-56.

Strategic Analysis

Industry Profile

The American automotive industry has received a significant boost recently, with the increase in the options for the sustainable production process and the impact of the Internet of Things on the design of cars and other vehicles. Therefore, the maturing U.S. car industry has experienced quite a rise recently, with customers’ needs changing and the levels of car sales increasing by 0.3% in 2018 (American Automotive Policy Council 2018).

Companies such as Ford, General Motors, and Fiat can be seen as key competitors in the U.S. market, which is a case worthy of analyzing. Specifically, Ford has been performing quite well in the automotive industry setting, its recent revenue being $41.793B, which exceeds the previous one by 1.13% (American Automotive Policy Council 2018). With 199,000 employees, Ford has retained their position as a leader in the target domain despite the challenges linked to the necessity to process larger data and the need to produce environmentally friendly cars (American Automotive Policy Council 2018). By introducing an innovation-driven strategy into its environment and enhancing communication, Ford will maintain its position as a leader in the U.S. automotive industry.

Organizational Purpose

Ford’s current mission embraces the idea of cooperation as the platform for future improvement and particularly the advancement of the automotive industry. Ford has been following its mission and vision closely, with its ethical code of conduct being rooted in honesty and integrity. Creating a strategic initiative that will allow the firm to remain relevant is critical for a company that has been in the public eye for decades and whose product has slightly lost its novelty (Agarwal & Brem 2015). Both the company and its competitors have been experiencing a significant rise in the target market, with the revenue streak rising for Ford, GM, and Fiat ($41.793B, $38.399B, and $32.084B correspondingly) (American Automotive Policy Council 2018).

The balance sheets of each company have also been very strong in 2018 (American Automotive Policy Council 2018). Nonetheless, introducing the innovation that will define the further development of the industry would make it possible for Ford to keep its popularity rates high. Ford has an unbroken record of success, and it has pursued mostly the goals of providing innovative solutions and high-quality products based on the company’s records.

Internal and External Environment

Ford has been quite successful in all possible environments of its functioning recently. The company owes this success to not only the favorable environment in which it operates but also the strategy that allows it to use these opportunities fully. For example, the international trade agreements and the active support of the U.S. government help Ford to pursue its goals (Agarwal & Brem 2015).

Besides, the recent positive change of the U.S. automotive industry is an important opportunity for Ford. Regarding social changes, the demand for smart, eco-friendly vehicles, and the increase in the wealth gap present several important opportunities for Ford and its recent project (Agarwal & Brem 2015). The organization meets the expectations of stakeholders, with Ford’s key success factors including the integration of innovations and stakeholders’ satisfaction.

Table 1. Ford: PESTLE.

Table 2. Ford: SWOT.

The internal resources of the company are quite vast. The key strengths of Ford include the recent success of its pick-up truck line, its profitability, and its brand reputation (Ford 2018). At the same time, there are certain weaknesses in Ford’s design, such as quality control (given the recent recalls) and poor representation of the brand in developing markets (Ford 2018). Ford can exploit the resources linked to digital technology and innovations, whereas the financial constraints such as changes in the currency fluctuations represent a certain threat. So far, the company’s innovation-driven philosophy is what defines its competitive advantage.

Competition and Success Factors

The competitive environment in which Ford has been operating is quite rigid. The automotive industry in the U.S currently represents an oligopoly, with several organizations controlling it and defining trends within it. Therefore, the threat of new entrants and substitutes is quite low, as well as the bargaining power of suppliers (see Fig. 1). The bargaining power of buyers, however, is moderate since most revenues received by Ford come from individual consumers who buy vehicles for personal use (Nicholas 2018). The combination of the described factors makes the competition rates within the industry very strong. Therefore, the extent to which Ford is ready to provide comfort to its buyers and reciprocate their feedback will determine the organization’s success in the future.

Strategic Development

Existing Strategy

The company’s current strategy can be viewed as both people- and technology-oriented since Ford seeks to meet the increasing demand with the help of technological tools. IT devices are used to enhance the communication between Ford and its partners, receive feedback from buyers, and ensure that it introduces innovative solutions to the car industry. Thus, the current strategic objectives of the company seem to revolve around the promotion of innovations at all levels of its functioning, from the production-related to the organizational one. The specified approach seems considerably reasonable given the current trend in environmentalism.

The business streams within the organization are quite compatible since they are linked to the development and application of innovative technology in the automotive industry. Car sales are the most obvious ones, yet they are far from delivering the highest returns to Ford at present. The revenue stream of the highest value is presently the loans that the company gives to car dealers and individual customers (Nicholas 2018). Therefore, the organization has been experimenting with the revenue sources that are seemingly outside its comfort zone. The focus on the introduction of smart technologies into the range of services that Ford has to offer can be interpreted as the attempt to introduce another revenue stream of the framework of the already existing ones.

Strategic Options

Presently, there are several ways for Ford to add new strategic options to its revenue stream. Because of the need to focus on the creation of smart infrastructure, the firm will need to design the corporate philosophy that will enable employees to build the required infrastructure and increase the quality control processes. The proposed strategy will allow Ford to establish a well-designed smart infrastructure that will make it possible to meet new demands. Specifically, the responsiveness of the services provided by Ford will rise systematically, which is particularly important given the source of the current highest revenue stream for the organization.

At the corporate level, Ford seems to be aware of the strengths and weaknesses of its strategy. For instance, the organization has been promoting an innovation-based culture in its setting for a while with the focus on the development of smart technologies. Similarly, Ford has been placing a strong emphasis on the enhancement of the company-customer dialogue as the method of improving the quality of the firm’s services (Nicholas 2018). The resulting outcomes show that while needing major improvements in its communication strategy, Ford has been following the principles defined by its corporate philosophy quite closely.

Evaluation of Options

The company currently has several options regarding its further development. For instance, given the current position of the organization, the next strategy that it could use may include enhancing the current approach toward quality management by implementing the Total Quality Management (TQM) principles. The proposed tool will encourage the organization to reduce the costs by cutting waste levels and developing rigid supervision standards (Ahmad et al. 2016).

The use of the TQM approach will lead to focusing on the specific needs of customers, thus defining the further development of the organization. Also, the identified technique will help Ford to resolve the quality issue by connecting the idea of an impeccable workplace performance of the existing corporate philosophy and values. Furthermore, the adoption of the TQM principles will help Ford to champion the idea of continuous professional growth among its staff members. As a result, Ford will invest in the development of its organization and improve its relationships with customers.

Choice of Strategies

The selection of the strategies with the help of which the key objective will be attained is based on corporate values and philosophy. Specifically, due to the focus on customer satisfaction and the necessity to meet new demands, the organization will need to adopt the strategies that will allow for the fast processing of data and the immediate integration of innovative tools. For this purpose, developing an exploring strategy model seems to be the most legitimate solution since it will give Ford a chance to study the possible implications of applying innovations to the corporate environment (Ahmad et al. 2016).

Besides, the proposed tool will enable Ford to make the most efficient use of its strengths and resources, improving its weakest areas. Furthermore, the organization will have a chance to focus on the opportunities that it will encounter in the target setting (Nicholas 2018). The identified framework may need to be coupled with a resource-based view given the need to reduce the levels of waste and increase the utility of the company’s choices.

Furthermore, the company will have to institutionalize the newly adopted standards which will be faster and more effective with the enhancement of its value chain. Particularly, Ford will need to focus on the R&D aspect thereof due to the significance of innovative thinking and the recent project involving the development of smart infrastructure. The application of an R&D-focused approach and the use of the company’s financial resources to improve the communication process and build a coherent infrastructure system for its smart services should be deemed as the key strategies. Thus, Ford will need to adopt the approach that will enable it to develop an easily distinguishable competitive advantage in the realm of the U. S. car industry.

Implementation

The process of putting the selected strategy into action will have to start with the integration of new communication and data management techniques into the organizational framework. As a result, the platform for improvements will be created. Shaping the corporate values toward a customer-focused and innovation-driven performance will be the next step followed by setting rigid and distinctive quality guidelines and standards for employees to follow. The specified change will be supervised with the help of the TQM approach and the integration of the value system based on taking care of the needs of all stakeholders involved. Besides, the principles of continuous positive change will have to be incorporated into the organizational value system.

It is expected that the selected strategy and the proposed change will meet rather vocal reluctance among staff members. Indeed, due to the need to build a new skill system and acquire the knowledge required for effective information management, staff members may experience excessive pressure. To counteract the identified hindrance, Ford will have to provide employees with additional benefits such as free training opportunities and career development options. Thus, the employees will receive the impetus for increasing their performance levels.

Promoting a positive change within the context of the Ford company will mean enhancing its competitive advantage through an innovation-driven philosophy. The identified framework will help Ford to multiply its advantages and address some of the controversial issues such as the environmental footprint that it currently leaves. Moreover, chances for improving company-customer communication and receiving more detailed feedback that will inform Ford’s further choices will be possible. Thus, the organization will have to integrate the suggested strategy into its corporate environment.

Reference List

Agarwal, N & Brem, A 2015, ‘Strategic business transformation through technology convergence: implications from General Electric’s industrial internet initiative’, International Journal of Technology Management, vol. 67, no. 2-4, pp. 196-214.

Ahmad, MA, Asaad, MN, Saad, R, Iteng, R, Irwan, MK & Rahim, A 2016, ‘Quality management practices and organizational performance: impact of sustainable product development’, International Journal of Supply Chain Management, vol. 5, no. 4, pp. 104-107.

American Automotive Policy Council 2018, State of the U.S. automotive industry. Web.

Ford, H 2018, Today and tomorrow: commemorative edition of Ford’s 1926 Classic, Routledge, New York, NY.

Nicholas, J 2018, Lean production for competitive advantage: a comprehensive guide to lean methodologies and management practices, 2nd edn, Taylor & Francis, New York, NY.