Ford Decisions Decision-Making and Management

Ford Decisions

Decision-Making and Management at Ford Motor Co.

Provide a description of the decisions managers make based upon the information that they have been provided with by the management accountants and the MIS.

Ford Motor Company has held itself in a position of relative insulation from the financial crisis which appears to have targeted the automobile industry with as much severity as any. However, this is mere presentation, with Ford struggling to find creative ways to present the balance sheet so as dissuade the view that its fortunes have declined with the economy. Today, as its contemporaries in Chrysler and General Motors have accepted massive bailout packages from the federal government, Ford's management has been forced to address decisions primarily based on accounting scenarios. Recording massive losses on sales, Ford's leadership is currently under pressure to decide how best to secure the financial resources to remain viable. According to an article published in Time Magazine (2009), "with its sales down nearly 50%, there is no way for it to make it to the end of the year with its current debt structure. What the company is not saying is that it may not be able to make it another six months without outside help. There are only so many costs that can be cut for Ford to remain a viable global car company." (McIntyre, 1) This points to the demand to make key borrowing decisions, whether from the federal government or from a private lending institution, based on information and insight provided by accounting managers.

2) Explain and critically evaluated the process which is used by your organization's managers to make better informed operating decisions.

Historically, Ford has been a top-down organization, with little power or decision-making entitlement invested in those outside of the offices of the top-ranking executives. In its early phases as a company, decisions were made by the CEO with assistance from 'helpers.' This was, naturally, a mode which was fated to be disregarded as ineffective and archaic. Accordingly, "Ford's business slipped as rapidly as it rose because the size of the business had outgrown the family-style management with which its founder persisted." (Datta, 1) Today, this process is more a reflection of the approach first taken by Ford's competitors, where more democratic decision-making apparatuses interact to arrive at a final resolution.

Taking again the encompassing conditions of the current global recession, I is clear that any decision made by the Ford Motor Company concerning borrowing to support its continued viability will be shaped and rendered after being channeled through the array of appropriate departments. First, financial reporting, accounting and financial forecasting will precipitate the establishment of a decision. Thereafter, this decisions is passed along to legal and operational personnel who will determine the feasibility, practicality and long-term implications of the decision. Finally, decisions evaluated in total through the proper channels of personnel will be based to a board of trustees or stakeholders for a final vote. This is a process which combines both sound organizational theory and the democratic corporate governance to help a company like Ford enact all its moving parts in the face of the current crisis.

3) Explain how any additional information you propose could be of benefit to the decision making process of the organization.

Decision-making is impacted by a wide variance of concerns and conditions, many of which will be relegated in consideration behind some more dominant areas of concern such as accounting conditions or market sales. However, it is not always possible for the immediate leadership team to consider all relevant aspects of a decision given the many responsibilities and roles implied by management or administrative authority. Therefore, it will often fall upon members of the organization at other levels to add important peripheral concerns to the conversation surrounding a decision. For instance, in making decisions regarding borrowing in the face of operation losses, additional information of value might include information on broader market patterns, projected trends in the cost of materials, commodity price fluctuations such as with oil, patterns related to consumer confidence and the stability or volatility of the banks and federal government. Consultants within Ford should regard the provision of such insights to the decision-making process as tantamount to the sensibility and balance of the final decision.

4) Include an evaluation of the performance evaluation methods currently used and their effectiveness in terms of motivation and productivity.