Nature Project Sources Information Plan Important Concepts Essay

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Proposal for new strategic endeavors of production, pricing and resource utilization at Ford Motor Company

In the context of the global economic recession, the American automobile industry faces demise. Out of the three main players in the United States, Ford Motor Company has rejected the bailout from the government and has focused its strategy on internal restructuring. As part of this effort, the future project would set out to provide some recommendations of how the company can reshape its production, pricing and resource utilisation strategies in an effort to create more value for the organisation.


With the commencement of the 2007 economic crisis, the American automobile industry has been facing endless challenges. The number of customers has decreased, as has their purchase power and the subsequent demand for the companies' products. Once a primary employer in the country, the automobile industry was forced to downsize tens of thousands of individuals in only a few years.

But the problems of the American automobile industry have not commenced with the crisis. They had been existent for years, in a more salient manner, which was eventually exacerbated by the crisis. The U.S. car manufacturers had failed to address the changing needs of the customer base and they had also failed to respond to the changes in the macro economy. Some examples of features neglected by the industry include the increases and instability in the international price of oil, the increasing emphasis on environmental sustainability and the customers' desire for small size and fuel efficient cars.

Today, the automobile industry in the United States strives to cope with the new challenges of the micro and macro environments and its primary focus remains that of restoring its stability. In such a setting, the future project would assess the case of Ford Motor Company and would strive to provide strategies and tactics on how the company should approach its pricing, production and resource utilisation decisions in a manner in which it creates more value for the firm.

3. Research scope, questions and significance

The scope of the future project is that of generating practical recommendations on how Ford Motor Company could approach production, pricing and resource utilisation in a means in which it would generate more value for the firm. In order to attain this objective, it would have to answer four specific research questions, as follows:

(a) What are the macro-environmental forces impacting strategic management at Ford Motor Company?

(b) What are the micro-environmental forces impacting strategic decision making at Ford Motor Company?

(c) What are the internal organisational traits impacting strategies at Ford Motor Company?

(d) How can the organisation combine the strengths and opportunities to overcome the weaknesses and the threats in the creation of better pricing, production and resource utilisation strategies, which create more value for the firm?

In terms of the significance of the future project, this is observable at two different levels, namely a theoretical level and a practical dimension. In terms of the theoretical significance of the future study, this is revealed in terms of the ability of the study to centralize relevant findings in the literature, but also to generate new findings that are relevant in the context of organisational and managerial research, as well as research of the automobile industry.

The practical significance of the study is represented by the fact that the study would generate specific recommendations that are pertinent in the current macro and micro economic contexts, and which can constitute valid starting points in the future decisions of Ford, as well as other players in the automobile industry.

4. Background

The background to the current study is represented by previous individual research on the topic of Ford, as well as on the wider topic of the automobile industry, with emphasis on the American automobile industry. This previous research constitutes the starting point, yet it would also be completed by new and more thorough investigations and analyses.

5. Theoretical framework

5.1. Nature of sources

The theoretical framework of the future study would be represented by the information already available in the specialized literature. This information would be thoroughly researched and centralised in a manner that is relevant for the approached topic, namely the problems of Ford and potential solutions to increase its organizational value.

The sources to be consulted could be classified into three different categories, each with its own traits. For instance, a first category is represented by books, which have the advantage of addressing a topic in an in-depth manner, but which can also be outdated -- a crucial trait when assessing current issues. Then, the second category is represented by journal articles, which have the advantage of being peer reviewed and based on thorough research. Nevertheless, they can be more difficult to access and they can also address specific and niche subjects, with a decreased relevance to the current topic.

Finally, the third category of literary sources to be consulted is represented by the media, with emphasis on articles found on the internet. These sources have the main shortage of not being peer reviewed, and as such not being entirely unbiased and reliable. Nevertheless, their advantage is that they address current issues in a timely manner, making information quickly and easily accessible to the researcher.

5.2 Literature review

In a 2009 article on the Monthly Review, Herman Rosenfeld approaches the stringent problem of the crisis faced by the American automobile industry. The author argues that the problems with which the industry is currently confronted have existed long before the crisis and that they are rooted in the faulty strategic management of the firms.

Rosenfeld as such promotes several causes for the current crisis of the automobile industry, one of the more important of these being the pursuit of business strategies focused primarily -- and sometimes solely -- on the generation of higher profitability rates. In this context, automobile makers neglected the dynamics of the community and the workers -- which now raise more challenges --, as well as the rise in international competition. Ford's primary focus was profits, and this strategy was supported through the promotion of the needs of the company's stock owners, who enjoyed wealthy dividend repayments (Vasudev and Watson, 2012).

The result of these decisions was devastating, as the "Big Three" of the automobile industry were downsized to "The Detroit Three," and have been on the verge of financial collapse; the risk of bankruptcy by the American automobile makers has yet to be fully overcome. And one more point which is made by Rosenfeld is that the decay of the automobile industry has been so dramatic that it set back the progress made by the labour unions and have negatively impacted the status of the workers:

"The auto unions, themselves once emblematic of what workers could achieve within capitalism, have been reduced to lobbying to save their companies, and a decades-long trend in private-sector labour negotiations has now confirmed collective bargaining as having shifted from demands by workers to demands on workers" (Rosenfeld, 2009).

Ford's approach to the created situation was rather prompt and successful, as the company refused to declare bankrupt and focused on internal restructuring and strengthening. This strategy was possible as Ford was already the more efficient company out of the Big Three. It was also the most profitable automobile manufacturer, and this also supported the implementation of its strategic decisions (Vasudev and Watson, 2012). Furthermore, the company employed a team of specialized executives, who had the ability to recognize the upcoming crisis and developed strategies to counteract it.

"Months before the recession hit, Ford's financial executives recognized the early warning signs of business-cycle change. They also knew that Ford was unprofitable and losing market share to international competitors. In response, the executives drew up a financial plan to prepare for leaner times while implementing a turnaround. The purpose was to be sure that money was available for near-term expenses such as restructuring through layoffs and plant closing as well as for long-term projects such as researching environmentally friendly engines and creating the concept cars of tomorrow -- activities that would pay off far in the future" (Pride, Hughes and Kapoor, 2011).

In terms of the future, Ford seems focused on innovation and progression through technology. Cars would be developed to be more easy to use and function at higher performances, but emphasis would also be placed on them integrating technology and allowing integration and connectivity through Wi-Fi (Ford Life, 2012).

6. Research methodology

As it has already been mentioned, the future project aims to deliver pertinent recommendations on how Ford Motor Company could reshape its pricing, production and resource utilisation strategies in an effort to create more organisational value. In this endeavour, emphasis would be placed on the gradual and sustained analysis of the forces impacting the macro-environment, the micro-environment as well as the internal environment of the automobile maker.

The methodology…

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