International Entrepreneurs Henry Ford and Term Paper
- Length: 15 pages
- Sources: 5
- Subject: Drama - World
- Type: Term Paper
- Paper: #49557104
Excerpt from Term Paper :
Heinrich F. Albert and publicly praised by the propaganda office of the Reich Ministry of Economics, approved an enlargement of the Cologne plant as well as the construction of an assembly factory in Berlin-Johannisthal for trucks and passenger cars (Baldwin, 2001). Thereafter, in June 1938, as a direct signal of approval that Ford cars sold in Germany were finally being made entirely in Germany, the Nazi government placed an order for 3,150 custom-designed, three-ton V-8 trucks based on an assurance from Ford's headquarters that the vehicles were not being intended for military use (Baldwin, 2001). According to this author, "There was no danger of war on the horizon; besides, if the German consumer market did not warm overwhelmingly to the four-cylinder Ford 'Eifel' sedan, then the company needed to go with the demand for other vehicles" (Baldwin, 2001 p. 283). This rationalization of the economic benefits to be gained from doing business with the up-and-coming Nazi regime was regarded as a major breakthrough for Ford; moreover, the Ford board of directors also encouraged the Dearborn and Dagenham factories to purchase tractor parts, transmissions, and axles manufactured in Germany, as a further indication of good will and tacit approval of what Germany was doing to stimulate future German export activities (Baldwin, 2001). In this regard, Baldwin emphasizes that, "Stockholders were pleased to see Ford AG foreign sales triple. In 1938, for the first time in its history, Ford AG paid a dividend. A year later, the company changed its official name to Ford-Werke, AG, 'as a symbol of its wholly German identity'" (2001 p. 283).
In light of these developments, Henry Ford was delighted when, upon the occasion of his seventy-fifth birthday, July 30, 1938, he became the first American recipient of the Verdienstkreuz Deutscher Adler -- the Grand Service Cross of the Supreme Order of the German Eagle (see Figure 1 below). Despite what some of the popular media had reported at the time, the presentation of the award, created by Hitler in 1937 "as the highest honor given by Germany to distinguished foreigners," to Ford, was not a surprise, having been announced previously at Ford's birthday dinner before an invited audience of more than 1,500 prominent Detroit citizens (Baldwin, 2001).
Figure 1. Henry Ford receives the Grand Cross of the German Eagle on his seventy-fifth birthday, July 30, 1938.
Source: Baldwin, 2001 p. 284.
Notwithstanding his achievements, his later years - like Hitler's - were characterized by the type of mismanagement and the sort of poor judgment that seems to affect those with such seemingly unlimited power. Ford's reliance on others was not misplaced early on, but it would seem that his judgment became flawed and he simply lost touch with what people wanted. More importantly, he also lost the ability to even keep track of how much money he was making. According to one biographer, because Ford's international reputation attracted much attention from journalists, and Ford's libel suit against the Chicago Tribune in 1919 led to an investigation by the lawyer for the newspaper that highlighted Ford's lack of education; moreover, anti-Semitic articles in Ford's publication, the Dearborn Independent, resulted in still more legal controversy and he was compelled to apologize for the articles (Ford, 2007).
More importantly, at least from an entrepreneurial perspective, Ford appears to have lost his edge over the years as complacency and Ford's own sense of infallibility seem to have caught up with him. In this regard, "Ford was also a poor manager who failed to capitalize on his company's early success. In the 1920s he failed to respond to consumer tastes by introducing new models and the company fell far behind General Motors. By the time of his retirement, the company's accounting procedures were so primitive that Ford's managers were unable to accurately tell how much it cost to manufacture a car and the company was losing $9.5 million a month" (Ford, 2007 p. 3).
Adolf Hitler. During the mid-1930s, Hitler followed principles that were similar to views espoused by John Maynard Keynes, the preeminent economist of the day, who proposed deficit financing and public works employment for military and civil projects, with a prime example of such capital generation techniques resulting in the Autobahn (Redlich, 1999). According to this author, "In 1934, 4% of the gross national product in Germany went to armament; in 1939, this rose to 50%. For Hitler, this was not fast enough" (Redlich, 1999 p. 101). It was not long, though, before Hitler recognized that there were other ways to generate capital as well. In this regard, on January 2, 1937, Newsweek reported that Hitler was at his retreat at Berchtesgaden contemplating the future of Europe and how he would manage it, and speculated whether he would take the actions that would result "in the long-feared second world war," thereby making the "world hold its breath" (quoted in Zalampas, 1989 at p. 102). Another influential media source, the New Republic, reported on January 6, 1937 that Hitler was "sitting alone at his mountain retreat at Berchtesgaden deciding the issue of war or peace for almost the entire world" and the Paris Stock Exchange declared that it would remain closed on future Saturdays because of "Hitler's unsettling habit of hurling political bombs on weekends" (quoted in Zalampas, 1989 at p. 102).
It was recognized by the European community as well as international observers at this point that any new military initiatives by Hitler would clearly involve the violation of the territory of a neighboring state and possibly result in war (Zalampas, 1989). In the United States, Representative Samuel Dickstein of New York responded to these trends abroad by objecting to the increased presence of Nazi leaders and sympathizers at home. Dickstein charged that the leader of the American Nazi party was no less a personage that one of Henry Ford's own employees: "Nazi rats, spies and agents' were recruiting and drilling armed units in New York, Pennsylvania, Ohio, Illinois, and Michigan. He asserted '2,500 Hitlerites' drilled each Sunday at Camp Upton on Long Island. Dickstein identified Fritz Kuhn, a chemist for the Ford Motor Company, as the leader of American Nazis" (Zalampas, 1989 p. 108).
Furthermore, a number of successful entrepreneurs appear to possess the same sort of charisma that is characteristic of many effective leaders today. According to House, Spangler and Woycke (1991), "In an age of complexity, change, large enterprises, and nation states, leaders are more important than ever. However, their effectiveness depends on their personality and charisma and not solely on their control over bureaucratic structures" (p. 364). This was clearly the case during Hitler's era as well. For example, one biographer emphasizes that:
From the first days of Hitler's 'Third Reich' political opponents were murdered or incarcerated, and some Nazis, were themselves purged. Jews, Socialists, Communists, and others were hounded, arrested, or assassinated. Government, law, and education became appendages of National Socialism. After Hindenburg's death in 1934 the chancellorship and presidency were united in the person of the Fuhrer [leader]. Heil Hitler! became the obligatory form of greeting, and a cult of Fuhrer worship was propagated. (Hitler, 2007 p. 3)
Section Three: Critical Analysis and Discussion of the Entrepreneurial Role and Achievements. a. Comparative and Contrasting Aspects of Ford and Hitler.
In reality, both Ford and Hitler were entrepreneurs if a strictly legal definition is taken into account. For example, according to Black's Law Dictionary (1990), an entrepreneur is "one who, on his own, initiates and assumes the risks of a new enterprise and who undertakes its management" (p. 532). Ford was clearly of this ilk, and while modern observers may not consider Hitler from an organizational perspective, he was clearly a good manager as well, at least during his early years. Furthermore, both Hitler and Ford were authors of well-known - and in some cases - popular books that remain the focus of a consideration amount of research today. Both of these individuals changed the world, but they did it for different reasons using different sources of income, an issue that is discussed further below.
B. Principal Areas of Capital Generation.
Henry Ford. All entrepreneurs need money, of course, but Ford made money "the old-fashioned way." Following a disagreement with his business partners, Ford launched the Ford Motor Company in 1903 in partnership with Alexander Malcomson, James Couzens (who was responsible for developing and administering the company's successful early business and accounting procedures), the Dodge brothers, and others (Ford, 2007). In 1907, Ford bought most of the outstanding stock and the Ford family retained control of the company for a significant period of time. Because of this vested interest in the business, Ford was keen to identify opportunities for improving production techniques and eliminating waste.
According to one biographer, "By cutting the costs of production, by adapting the conveyor belt and assembly line to automobile production, and by featuring an inexpensive, standardized car, Ford was soon able to outdistance all his competitors and become the largest…