Alan Mullaly and Ford Motors - Term Paper Example

?Alan Mulally and Ford Motors Table of Contents Defining the Issue 3 Impartial Evaluation 4 Evaluation 6 Personal Opinion with Supporting Argument 8 Conclusion 9 References 10 Defining the Issue There are numerous examples in the corporate history where organizational leaders are recognized to have a significant impression on the performance of the company in a highly challenging situation. Especially, after the recent global economic downturn this statement has been argued by various industry experts. In comparison to other industries, this situation was explicitly experienced in the global automobile industry (Dean & Varshney, “Your Next Turnaround Leader: Industry Expert or Outsider?”). For instance, it was during the recent global economic downturn that most of the automobile companies faced various challenges in gaining a competitive position to survive in the international market which included General Motors, Harley Davidson and even Ford. It is in this context that leadership advantages were apparently observed in these companies. The most debated issues related to this context were the turnaround of Ford which is stated to be steered by Alan Mulally as the organizational leader (Dean & Varshney, “Your Next Turnaround Leader: Industry Expert or Outsider?”). Alan Mulally is considered to be an outsider to the automobile industry as well as to the company (i.e. Ford Motors) due to the fact that his early professional career related to the Boeing Company, a commercial airplane and integrated defense system producer and thus had limited knowledge about the operational structure of the automotive industry (BBC News, “Boeing Exec Made New Ford Chief”). He joined the company in the year 2006 when Ford was witnessing losses and severe downfalls in its overall competency. In order to face these challenges and sensing the upcoming recession then, Alan Mulally decided to borrow a significant amount from the debt market against the company’s assets. Subsequently, the company faced minimum affect of the global economic downturn in comparison to other major industry players (Hitt & Et. Al., “Strategic Management: Competitiveness and Globalization: Cases”). Two factors are strongly identifiable in the defined issue, related to the turnaround of Ford in the recent global downturn. One factor has been the leadership of Alan Mulally and the other factor was the crisis faced by the company during the period. Thereby, the paper intends to recognize the stronger factors to influence the change management of Ford and reward its remarkable competency in the international platform. Impartial Evaluation Both the factors of change, i.e. the financial crisis faced by the organization and the leadership change witnessed by the organization can be observed as quite significant in influencing the turnaround of the company. It was in the year 2006 when the company was facing losses for four consecutive years. Therefore, it is quite evident that the company had to witness significant challenges to maintain its financial competency and survive in the fiercely competitive market of global automobile industry (Armitage, “Ford CEO Alan Mulally: The Turnaround Specialist”). Alan Mulally joined the company during the financial crisis of the company. Financial turmoil was also apparent in the domestic economy of the company that certainly supported the impacts of internal limitations faced by the organization. Considering these facts, Alan Mulally concentrated on the implementation of various strategies that included retrenchment, restructuring of the organizational operations, marketing strategies, as well as financial strategies (Wall Street Journal, “Testimony of Alan R. Mulally”). Few of the most significant strategies that boosted the change in the organization concentrated on the borrowing of $23.6 billion from the market against the assets of Ford Motors (Armitage, “Ford CEO Alan Mulally: The Turnaround Specialist”). The strategic decisions of Alan Mulally further initiated to cut almost 30,000 jobs and retrench around 14 organizational operations worldwide with the purpose of cutting the extra burden of rising costs and ensuring the profitability of the company (BBC News, “Boeing Exec Made New Ford Chief”). Therefore, as a leader, Alan Mulally focused on the overall organizational change with due consideration to the division of financial group factors in terms of cost retrenchment and gathering financial borrowings. It is worth mentioning that experts have frequently noted Alan Mulally to be the catalyst of change in Ford. As stated by Kiley (2009), “The changes at Ford initiated by CEO Mulally, a former aerospace guy, have meant the difference between death for the automaker and merely being sick”. However, from an in-depth perspective it can be stated that although Alan Mulally as a leader instigated the change in the company, it was actually the financial crisis faced by the organization that led to the necessity of prudential changes. The fact can be apparently recognized from the statement of Bill Ford regarding the turnaround initiative of the company that “required the additional skills of an executive who has led a major manufacturing enterprise through such challenges before” (BBC News, “Boeing Exec Made New Ford Chief”). Evaluation Experts have often presented the view that success of an organizational leader depends upon his/ her personal leadership traits that in turn defines their ability to deal with a situation to achieve the determined objective (Breen, “Leadership: An Introduction to Fundamental Concepts and Styles”). The fact can further be related to the success of Alan Mulally as the organizational leader of Ford. It is worth mentioning that Alan Mulally possesses few significant leadership traits that can be observed to support his proficiency in dealing with challenging situations as had been faced by the company. For instance, Alan Mulally has been observed to be influentially autocratic but simultaneously he provides due consideration to his friendly behavior towards his subordinates making them feel free to disclose their perceptions. As stated by Taylor III (2009), “He won't let up until he has turned all my ‘nos’ and ‘maybes’ into ‘yeses’……………………. Call it the Mulally method: this good-natured but relentless insistence on following what he has determined to be the correct course of action”. In relation to the Big Five Traits of leadership, as had been forwarded by various psychologists, Alan Mulally can be observed to exhibit two of the five major traits of leadership, i.e. E and C. In this context, E symbolizes the traits of extraversion, optimistic emotionality and cordiality. Similarly, C represents the leadership traits of consolidation, meticulousness, will to achieve and goal-orientation. As stated in the study, extraversion refers to the attitude of an individual to stay in the midst of a problem and tend to solve it or keep away from the issues. While consolidation indicates the will of an individual to accomplish the determined objective (Brusman, “Leadership Personality: Do You Have the Big Five Traits?”). Both these traits can be apparently witnessed in the leadership qualities of Alan Mulally. First, he joined Ford Motors when it was facing severe turmoil in its financial stance which apparently questioned its future existence in the market. It was his personal leadership traits in terms of extraversion, optimistic emotionality, and cordiality that motivated Alan Mulally to join Ford in such turmoil and leave Boeing where he could enjoy a more peaceful ambience. Furthermore, immediately after he joined Ford, his initial attention turned to the determination of firm organizational objectives showcasing his leadership traits of consolidation, meticulousness, will to achieve and goal-orientation. It is in this context that these leadership traits motivated Alan Mulally to join Ford and Bill Ford to consider him as an effective leader for the company despite the fact that Mr. Mulally had no experience in automotive industry and thus was an outsider to the company. Personal Opinion with Supporting Argument Alan Mulally’s contribution to the company has evidently been quite significant. He steered the company towards favorable conditions that rewarded it with noteworthy opportunities and competitive advantages to a large extent. As had been stated earlier, Alan Mullaly had been recognized as a catalyst to the organizational change in Ford. He introduced various changes in the company from financial structure to operational outlook (Kiley, “Alan Mulally: The Outsider at Ford”). The most significant change can be witnessed in terms of the organizational culture. In order to gain efficiency in the strategic change process of the company, Alan Mulally concentrated on the inter-organizational communication process of Ford Motors. His prime objective in the change process was to bring transparency to the organizational culture with the purpose to foster the commitment of the employees. Therefore, Alan Mulally had to change the perceptions of every employee working in the organization (Taylor III, “Fixing up Ford”). Undoubtedly, it was the personal leadership traits that encouraged Mulally to bring the change and also assisted his decisions to continue the change process with efficiency (Brusman, “Leadership Personality: Do You Have the Big Five Traits?”). Conclusion The change brought by the leadership traits of Alan Mulally has certainly led towards a significant step forward by Ford in the global automotive industry. The freshly designed organizational structure, culture and financial outlook evidently fuelled up the competency of Ford in the current market scenario. As stated by majority of the experts, Ford was one of the companies which faced minimum challenges from the economic recession in comparison to other global players. One significant fact that the company learnt in this context was that change often enhances the competency of global firms and thus the organizational structure and culture should be refined periodically. Moreover, the company also leant about the importance of effective leadership in rewarding overall success to the company. On the similar context, the situation of Ford assisted Alan Mulally to learn about his leadership qualities along with the requirement of a global automotive company in order to face challenges to survive in the fiercely competitive market. References Armitage, Ian. “Ford CEO Alan Mulally: The Turnaround Specialist”. June 27, 2011. Industry Focus: World Class Operations, 2010. BBC News. “Boeing Exec Made New Ford Chief”. June 27, 2011. Business, 2006. Breen, Anne. “Leadership: An Introduction to Fundamental Concepts and Styles”. Case Western Reserve University (No Date). Brusman, Maynard. “Leadership Personality: Do You Have the Big Five Traits?” Newsletter, (No Date) IV (8). Dean, Craig. & Varshney, Shiwali. “Your Next Turnaround Leader: Industry Expert or Outsider?” June 27, 2011. AEG Partners LLC, 2010. Hitt, Michael A. & Et. Al. Strategic Management: Competitiveness and Globalization: Cases Cengage Learning, 2009. Kiley, David. “Alan Mulally: The Outsider at Ford”. June 27, 2011. Bloomberg L.P., 2009. Taylor III, Alex. “Fixing up Ford”. June 27, 2011. Cable News Network, 2009. Wall Street Journal. “Testimony of Alan R. Mulally”. June 27, 2011. Senate Banking Committee, 2008. Read More