Ford\'s Impact of Downsizing Globalization

Ford's Impact Of Downsizing

Globalization is a word we hear everyday now and this is because of its major influences upon all features of life. Globalization has freed markets and liberalized the trade of goods, services, capital and even the labour force. A more and more common phenomenon within corporations is that of replacing the local workforce with cheaper and even better skilled foreign workforce, process referred to as outsourcing, or offshoring. But this then means that the local labour force is left out of jobs as they are fired by the employer. This process is called downsizing.

Downsizing of the local workforce is becoming more and more common and turns into a national problem moreover with the changing trends in outsourcing. To better explain, in the beginnings of globalization and market liberalization, the American corporations used to outsource the jobs in manufacturing, such as the case of Nike and their numerous facilities opened in various locations of the globe. The outsourced jobs required minimum qualifications and professional skills and the primary aim was that of reducing the operational costs. However, as time went by, the U.S. corporations began to outsource more and more blue and even white collar jobs to foreign countries.

This had three major effects upon the workers within the United States. For once, it shook the employees' trust in the employer. Most managers and other workers in the higher level service sector felt their jobs were secure and that the employer needed them and would only outsource manufacturing and routine jobs, to reduce costs. However, when the outsourcing process, expanded, these workers were caught by surprise and lost their trust in the system and the employer. A second effect was that the workers in the higher level service sector had to reorient themselves. This either meant looking for jobs in other sectors and even other regions of the country, or the globe, either increasing their professional skills in order to become more specialized and as such more valuable to the employer. And finally, the third major effect was that the number of downsized jobs within the sector increased, consequently generating an increase in the unemployment rate.

In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff, with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired" (What Is, 2008). In Ford Chief Sees Small as Virtue and Necessity, a New York Times article by editorialist Micheline Maynard, the process of downsizing is referred to as the "shedding of workers," basically implying getting "rid of something that you no longer need" (Longman Dictionary of Contemporary English, 2008). The article on Ford Motors Company reveals downsizing from another perspective in the meaning that it does not directly relate it to outsourcing, but mentions it as a consequence of corporate difficulties.

But regardless of the reasons for downsizing, fact remains that it is a process which severely affects both the organization as well as its employees. The major effect upon the organization is related to the corporate culture. In this order of ideas, Ford, like most American companies, promoted the idea of a secure workplace, one in which the employee is valued, cherished and accordingly rewarded. But his firing directly contradicts this initially stated mission, forcing as such the stakeholders to question the true intentions and capabilities of the organization which led it to stepping over their promoted culture. Looking at it from a different angle, the situation presents itself with an opposite conclusion. To better explain, the corporate culture at Ford, again like in most American companies, clearly states the company's intent to register profits. And if achieving this desiderate requires the downsizing of the personnel, they will engage in according activities.

Depending on how one looks at it, the process of organizational downsizing can have both negative as well as positive effects upon the corporate culture. In this order of ideas, the negative effect is that it presents an organization with an unstable culture and with increased attention to financial rather than moral values. Then, the positive effect is that the culture is emphasized, in the meaning that the organization will go to extreme lengths to achieve their goal of registering profits. Whichever the case, fact remains that downsizing will force the organization to rethink and reorient major business components, including their culture.