Leadership on Henry Ford Motor Company

¶ … Leadership of Henry Ford-Ford Motor Company. It gives a corporate and organizational history. It discusses the company's culture as a result of Ford's influence and includes comments of leadership theories.

LEADERSHIP OF HENRY FORD: THE FORD MOTOR COMPANY

As the twentieth century drew to an end, Time magazine named the Model T. The "automobile that defined the twentieth century from start to finish" (Alvarado 9). Henry Ford's Model T. mass production methods, and wage price theories revolutionized American industry. He was extraordinarily influential and respected because he made a product that met a public need (Lewis 1). Ford had an immeasurable impact on American life. "When he got his Model T. rolling in 1908, the horse disappeared so fast that the conversion of acreage from hay to other crops is said to have caused an agricultural revolution" (Stewart 108). By the 1920's, it was rarely possible to find a farm where a horse did most of the hauling and plowing (Alvarado 12). Ford was the most influential force in putting North America on wheels (Pegg A1).

Henry Ford didn't invent the automobile. He invented the automobile business (Stewart 108). At the time when he founded the Ford Motor Company in 1903, cars were fussy, unreliable, and costly novelties affordable only by the wealthy (Stewart 108). In 1907, Henry Ford said, "I will build a car for the great multitude, so low in price that no man will be unable to own one" (Iacocca 76). His Model T. was designed for 'everyday wear and tear' with virtues of lightness, simplicity, and utility. It became the most successful vehicle ever produced in America (Stewart 108). During its 19-year run, more than 15 million Model T. cars were sold (Stewart 108). Furthermore, the price dropped from $850 in its introduction year of 1908 to $290 in 1927, the final year of production (Alvarado 12).

Henry Ford made a reliable and inexpensive automobile because of his introduction of the innovative moving assembly line, a system for carrying an item that is being manufactured past a series of stationary workers who each assemble a particular portion of the finished product. Instead of having workers put together the entire car, tool and diemakers organized teams that added parts to each Model T (Iacocca 76). Thus, by 1914, his Highland Park plant was churning out a car every 93 minutes on the world's first automatic conveyor belt (Iacocca 76).

Ford controlled most aspects of his company operations. He shocked the world in 1914 by raising the hourly wage from $2.34 per hour for a nine hour shift to $5.00 per hour for an eight hour shift (Iacocca 76). He encouraged regular attendance at work, and required all immigrant laborers to learn English and become United States' citizens. He was one of the first business men to introduce time clocks into his business operations to monitor employee activity. An active philanthropist, Henry Ford built a hospital for his employees in Detroit and in 1936 established the Ford Foundation for the purposes of "advancing human welfare"(biography.com/HenryFord). The Ford Foundation has issued more than $8 billion in grants worldwide since its founding (biography.com/HenryFord).

Ford also invented the dealer-franchise system to sell and service cars (Iacocca 76). His 'road men' became a familiar part of the American landscape, and by 1912 there were 7,000 Ford dealers across the country. Furthermore, he pushed for gas stations everywhere and campaigned for better roads, which eventually led to an interstate highway system that is still the envy of the world (Iacocca 76).

The company became so integrated by the late 1920's that it was completely self-sufficient. Ford controlled rubber plantations in Brazil, a fleet of ships, a railroad, sixteen coal mines, and thousands of acres of timberland and iron-ore mines (Iacocca 76). But, his control eventually led to tunnel vision that kept his workers producing only one model. He didn't bring out a new design until 1927. General Motors was making a variety of models and prices to suit all tastes and moreover, had made peace with the labor unions, which Ford violently opposed (Iacocca 76). If World War II had not turned the company's manufacturing prowess to making B-24 bombers and jeeps, it's possible that the 1932 V-8 engine might have been Ford's last innovation (Iacocca 76). By the end of the war though, the company was a monolithic dictatorship. Balance sheets were kept on back of envelopes and purchasing invoices had to be weighed to count them (Iacocca 76). Ford spent most of his time roaming the factory floor and little time in his office (Stewart 108). He distrusted bankers, disdained organization charts, and virtually ignored balance sheets and operating statements (Stewart 108). But in 1945, Henry Ford II took over the presidency of Ford Motor Company, and rescued the legacy (Iacocca 76). He modernized management, thus putting the company back on track. After the war, Ford was the first company to turn out a car, and it was the only company that had a real base overseas (Iacocca 76).

One of the reasons that Ford Motor Company is so competitive today is that Henry Ford believed in going anywhere there was a road. At his peak, the company was in thirty-three countries (Iacocca 76). He not only transformed the land we live on, but was the first to create a mass market as well as the means to satisfy it (Stewart 108). Moreover, if it had not been for this drive to create a mass market for cars, there would be no middle class in America today (Iacocca 76). Furthermore, his 'just-in-time' system of production and inventory handling, planning and coordinating the receipt of raw materials until finished goods, is still inspiring manufacturers today (Kelly 104). The creator of Toyota's assembly 'just-in-time' system acknowledged that the idea came from reading about Henry Ford's experiences (Kelly 104).

Leadership in any business is subject to criticism. In Henry Ford's day business was done by virtual dictators, men laden with riches and so much power they could take over a country if they wanted to (Iacocca 76). Today, business is collegial, dictatorships are not acceptable anymore (Iacocca 76). Businesses are so high-tech today that the thought of weighing invoices is unthinkable. Management is generally streamlined and efficient. Time saving programs are at the forefront on any management plan. However, the bottom line of any business is profit, and few companies can compare with Ford's (Stewart 108).