Case Study of Ford and the Global Car Under the label ‘Ford 2000’ the company seeks to transform itself into a global corporation deploying a new ‘philosophy’ of doing business. By 1993, despite being profitable, the world’s second-largest automotive producer engaged on a major programme of development. Ford also recognized itself as part of a complex and intensively competitive sector, not least with issues of oversupply in various markets. The existing business philosophy emphasized the production of cars in the regions where they were to be sold. Yet Ford was engaged in separate development processes in different regions of the world for what were essentially similar products. Moreover, while Ford was well positioned in the USA and Europe it was less well placed in those areas where growth in demand is likely. Moreover, customers are more sophisticated, more demanding and more aware of what is available around the world. The market is increasingly global. The company has merged its semi-autonomous regional operations into a single worldwide business. Product development will focus globally. Change of this type had been attempted earlier in Ford’s history. The Escort development had been shared by teams in Europe and North America but differentiation resulted. Amalgamations within Europe were achieved in the late 1960s. The Escort experience led Ford to realize that a world car development needed single leadership to achieve the needed integration – easy to say but not easy to achieve. The Mondeo development was a further stage in the process. Led from Europe, this work was facilitated by a communications infrastructure allowing the sharing and analysis of data and decision making across borders. The communications infrastructure supports a worldwide engineering release system, a worldwide purchasing system and a global conferencing facility. Are these infrastructure developments not as important as the concept of single leadership in enabling the company to overcome the problems of national pride and narrow perception that limited the past attempts? In turn the Mondeo development led Ford to learn vital lessons, in particular simultaneous engineering’. Achieved via ‘vertically integrated teams’, it contrasts with the former sequential process with its attendant possibilities for conflict between those who design and those who manufacture the product. In early 1994 a ‘study team’ of 27 managers from a variety of functions and countries began a 10-week programme looking at how to learn the lessons of the past and achieve genuine globalization. It was decided to merge the existing operations in Europe and North America. Ford established five vehicle centres to take lifetime responsibility for the development of all vehicles of a given class produced and sold anywhere in the world. In addition Ford has created a single global unit for technology development. All employees with Automotive Operations have been deployed within this worldwide ‘matrix’. The vehicle centre is responsible for developing and launching new vehicles and has lifetime responsibility for quality, serviceability, profitability and overall programme management. Formerly the development team’s work ended at launch. The focus therefore is on horizontal integration. Not least of the advantages is that decisions can be made closer to the action. With the introduction of an integrated global cycle plan for product launch, major product changes are planned to be achieved in half the time. The matrix combines vertical integration with horizontal integration and raises fundamental questions about the role of senior management in devising strategy, ensuring that the needed capabilities are in place and so on. 1) As a student what you have learn from this case study? 2) what was the reasons behind centralization of Ford Motor ?
Case Study of Ford and the Global Car
Under the label ‘Ford 2000’ the company seeks to transform itself into a global corporation deploying a new ‘philosophy’ of doing business.
By 1993, despite being profitable, the world’s second-largest automotive producer engaged on a major programme of development. Ford also recognized itself as part of a complex and intensively competitive sector, not least with issues of oversupply in various markets. The existing business philosophy emphasized the production of cars in the regions where they were to be sold. Yet Ford was engaged in separate development processes in different regions of the world for what were essentially similar products. Moreover, while Ford was well positioned in the USA and Europe it was less well placed in those areas where growth in demand is likely. Moreover, customers are more sophisticated, more demanding and more aware of what is available around the world. The market is increasingly global. The company has merged its semi-autonomous regional operations into a single worldwide business. Product development will focus globally. Change of this type had been attempted earlier in Ford’s history. The Escort development had been shared by teams in Europe and North America but differentiation resulted. Amalgamations within Europe were achieved in the late 1960s. The Escort experience led Ford to realize that a world car development needed single leadership to achieve the needed integration – easy to say but not easy to achieve. The Mondeo development was a further stage in the process. Led from Europe, this work was facilitated by a communications infrastructure allowing the sharing and analysis of data and decision making across borders. The communications infrastructure supports a worldwide engineering release system, a worldwide purchasing system and a global conferencing facility. Are these infrastructure developments not as important as the concept of single leadership in enabling the company to overcome the problems of national pride and narrow perception that limited the past attempts? In turn the Mondeo development led Ford to learn vital lessons, in particular simultaneous engineering’. Achieved via ‘vertically integrated teams’, it contrasts with the former sequential process with its attendant possibilities for conflict between those who design and those who manufacture the product. In early 1994 a ‘study team’ of 27 managers from a variety of functions and countries began a 10-week programme looking at how to learn the lessons of the past and achieve genuine globalization. It was decided to merge the existing operations in Europe and North America. Ford established five vehicle centres to take lifetime responsibility for the development of all vehicles of a given class produced and sold anywhere in the world. In addition Ford has created a single global unit for technology development. All employees with Automotive Operations have been deployed within this worldwide ‘matrix’. The vehicle centre is responsible for developing and launching new vehicles and has lifetime responsibility for quality, serviceability, profitability and overall programme management. Formerly the development team’s work ended at launch. The focus therefore is on horizontal integration. Not least of the advantages is that decisions can be made closer to the action. With the introduction of an integrated global cycle plan for product launch, major product changes are planned to be achieved in half the time. The matrix combines vertical integration with horizontal integration and raises fundamental questions about the role of senior management in devising strategy, ensuring that the needed capabilities are in place and so on.
1) As a student what you have learn from this case study?
2) what was the reasons behind centralization of Ford Motor ?
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