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Human Resource Management at the Ford Motor Company
The Ford Motor Company is one of the largest economic entities at the global level, with sales and operations across the entire globe. The organization is reputable as the first company to make automobiles accessible to the people through the usage of the production and assembly line. In more recent times, Ford is recognized as one of the largest employers in the United States and a global leader of the automotive industry.
During 2008, the company was hit by the internationalized economic crisis, which raised new financial concerns, but also exacerbated the problems already existent within the firm. For decades, Ford had invested in large size and luxurious vehicles as an emblem of American consumerism. Throughout the past recent years however, the preferences of consumers have changed to reflect the shifting international price of oil and environmental concerns. More and more smaller size and fuel efficient engines came to be popularized within the country. Ford nevertheless did not recognize this trend, but continued to manufacture high consuming vehicles.
As the crisis hit in the later part of the 2000s decade, the company faced decreasing sales and an inability to respond to the changing needs of customers. The company nevertheless decided not to participate in the TARP initiated by the government, but focused its energy on restructuring its debt and its internal structures. Throughout the past four years then, the company has been focusing on its internal strengthening. At this level then, a question is being posed relative to the means in which they address their staff members. The current project then sets out to assess the human resource management model implemented by the automaker and also to propose some recommendations for future improvement.
2. Company information
The Ford Motor Company was established in 1903 in Dearborn, Michigan, by founder Henry Ford, alongside with eleven investors. By 1908, the company would be introducing Model T, the first automobile to become an international success and be sold in over 15 million across the globe, until 1927, when its production was stopped. In the 1910s decade, Ford expanded its production capabilities by opening new plants and its interesting strategy was that of alluring staffs to work for the company, by guaranteeing their salaries ($5 per day).
With the beginning of the Second World War, Ford's production shifted completely to military trucks, but civilian automobiles were again produced starting with 1945. Eleven years later, the Ford stock is sold onto the market with great success. During the 1980s decade, the company has focused on the acquisition of firms such as Aston Martin Lagonda or Jaguar Cars, which allowed it to increase its capacity and knowledge.
During the 1990s and thereafter, the company has focused its strategy on global development, through the opening of manufacturing plants and sales locations in various countries, such as Mexico or even China. Additionally, throughout the period, more investments were made towards innovation and technologic integration. As the economic recession hit the automotive industry, the company registered financial losses, closed plants and downsized an estimated 30,000 jobs (NPR, 2012).
Currently, Ford's strategy is created to help the company attain global success through the sale of its vehicles. Some of the more notable components of the Ford strategy include the following:
Commitment to product quality and the continuous development of innovative, hi-tech and competitive vehicles that serve the needs of diverse customer markets
The centralization of organizational management at the level of a single global management team
The pursuit of newer and better methods of creating environmentally friendly vehicles, such as fuel efficiency or non-fuel running engines
The investment in technology and innovation and the continued integration of innovation to support performance
The support of the communities in which Ford operates and the internal strengthening of the corporation.
Overall, the strategy of Ford is represented by the ONE commitment of the firm, revealed below:
"The goal of ONE Ford is to create an exciting and viable company with profitable growth for all. The output of ONE Ford is:
Great Products, defined as those that are high quality, green, safe and smart.
Strong Business, based on a balanced portfolio of products and global presence; and Better World, accomplished through our sustainability strategy" (Corporate Website of Ford, 2012).
Overall, Ford's strategy is aimed at aligning its internal and external forces in an effort to strengthen the company and attain its profitability objectives. To this end, they seek to ensure internal alignment of all resources, strategies and operations.
Within the market place, Ford is positioned as a leader and an innovator, with a stable market share. The table below reveals the company's market share from 2006 through 2011 in both Europe as well as the United States.
Data source: Corporate Website of the Ford Motor Company
As it can be observed, Ford's position within the market has suffered slight decreases throughout the past recent years, and these are due to both the crisis, as well as the changing customer preferences towards more environmentally friendly vehicles.
3. HRM analysis of Ford Motor
The human resource department at Ford Motors is fairly large and this is explained by the fact that the operations completed by the firm are generally integrated and similar. In other words, due to the homogeneity of the organizational operations, the company can more easily centralize its HRM efforts (Price, 2011).Today's Ford employs an estimated 164,000 individuals across the globe, meaning that it has to place an increased emphasis on the adequate integration and management of its personnel.
The importance of the personnel management at Ford is represented by the company's understanding of its staff members as the most valuable organizational assets and the sources of competitive strategy. In other words, the company recognizes its dependence on the staff members and seeks to increase their levels of satisfaction and knowledge in an effort to also increase their performances.
The company as such provides complex compensation packages to its employees, including base salaries, as well as additional benefits, such as premiums and bonuses, training programs, flexible working schedules or the Ford Privilege Club, which presents its employees with the possibility of purchasing the Ford vehicles at discount prices. The company also places an increased emphasis on the creation of an open and pleasant working environment, which cherishes and embraces diversity. Ford's chief executive officer:
"The he more we embrace our differences within Ford -- diversity of thought, experience, perspective, race, gender, faith and more -- the better we can deliver what the customers want and the more successful Ford will be. My priority is to ensure that inclusion at Ford is at the highest level of performance so that we include all employees deeply, thoughtfully and broadly in the business. It's about respecting each other and listening to each other. It's about one global team working together" (Mulally, on Ford's Corporate Website, 2012).
The company's current HRM needs fall on the employment and retention of staffs specialized in financial services. The process to employing manufacturing staffs is limited within the firm, but the company is diversifying its operations to also include financial services. It therefore seeks to employ more financial staffs, who need to possess skills and knowledge in the following fields: accounting, risk management, capital investment, cash management, forecasting, cost analysis, financial reporting, internal auditing, profit forecasting, product pricing and revenue and market analysis (Corporate Website of Ford, 2012). The employment of such staffs is necessary not only to help expand the financial services segment of the business, but also to continually improve the quality of financial management at Ford, and support the company's long-term sustainability.
At the level of both financial services, as well as production operations, the individuals employed by Ford must also possess vast technical knowledge. This is necessary to ensure that the company is able to devise new technologies and continually integrate them within their products. In other words, the levels of organizational innovation -- and competitive advantage adjacent -- are dependent on the levels of technical skills and performances among the employees.
4. The greater HRM context
The labor force in the United States is composed of 153.6 million individuals (63 per cent of the entire population), being the fourth largest labor force in the country, after those in China, India and the European Union. The majority of the individuals are employed in the services sector (79.1 per cent), with the industry and manufacturing sector employing 20.3 per cent of the population and agriculture only employing 0.7 per cent of the American labor force. The unemployment rate in the country is of 9 per cent and the country struggles to reduce it (Central Intelligence Agency, 2012).
The labor force in the U.S. continues to reveal higher male participants, yet the gap between the genders has decreased, since now 53 per cent workers and male and 47 per cent are…[continue]
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