Part 1: Background
In business management, exploration insinuates that the company in question conducts a comprehensive search of the entire sample space to establish new approaches that could inform better management compared to the existing approaches (Posen & Levinthal, 2012). On the other hand, a management structure that bases its operations on exploiting and making the best use of the potential areas established during the exploration stage is said to be exploitative. Companies move more from the exploration of knowledge and ideas during their prior stages of existence, to Exploitation of the identified valuable experience during later in its existence.
Ford motor is an example of an organization that heavily employs Exploitation of existing knowledge in its structure. Ford is the giant motor vehicle company in the United States, and which kept on mimicking the desirable actions that the company had established at its exploratory stages (Kassim, 2014). During the 20th century, Ford Motors developed motor vehicles relevant to that era and which were primarily consumed by most United States citizens. The citizens viewed the Ford products as superior to any other motor vehicle products produced locally or imported. In that particular era, the Asian manufacturers of motor vehicle products were unable to penetrate the United States market properly to the market superiority of Ford Motors products alongside other locally manufactured products.
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However, the soring of petroleum products and the continued awareness of the rising environmental responsibility by the broader public meant that Ford Motors was compelled to integrate these fuel consumption and environmental concerns into its production. The Asian and European motor companies were quick to react to the key concerns and mediated more suitable intervention to the public call. Ford Motors was unable to initiate the green technology that would excellently match the 21st-century requirements into its production, and as a result, has been overtaken entirely by the Asian manufacturers.
Part 2: How Exploitation is reflected in Ford Motors’ organizational structure
Decisions regarding the implementation of improving corporate products from time to time constitute an integral aspect of management. Companies must progressively incorporate new strategies into the ones that have been successful before. Ford Motors has held various elements of control that the company had earlier explored and begun to implement in the previous years (Pandey & Sharma, 2009).
As traditional, Ford Motors manifests the exploitation management approach in most of its essential functions. The company operates as a collection of various entities in its attempts to increase its competitiveness in the foreign market. This approach, which has been implemented since the last years of the 20th century, suggests that Ford Motors considers all its value chain activities as economic rent sources. As a result, the company has failed to establish itself in the global motor vehicle manufacturing arena.
The composition of the Ford Motors management team highly reflects exploitation approaches of management in the manner that it is structured. Ford's management structure is mainly subject to the company's need to control its operations in response to specific regional marketing demands. In terms of the corporate hierarchy, Ford Motors has continued to implement the traditional hierarchy established during the company’s exploration stage. The Executive Vice Presidents of the company are answerable to the CEO while the Middle Managers are answerable to the executive vice presidents. This top-down structure has been existent since the company’s establishment.
Ford Motor Company and its respective subsidiaries have also revealed considerable exploitations in the way that resources are acquired, manipulated, and distributed across multiple regional markets (Ford Motors, 2015). Despite significant improvements in the company's resource management approaches, Ford Motor Company has sustained its traditional allocation strategies in which production resources are centrally acquired and distributed to the company’s sublets. Even though this approach has been profitable over the years as it reduces mismanagement by subsidiaries, Ford needs to incorporate it with decentralized management approaches.
References
Ireland, R. D., Hitt, M. A., & Hoskisson, R. E. (2007). Strategic Management: Competitiveness and Globalization (Seventh ed.). Natorp Boulevard: Thomson Higher Education.
Kassim, Z. (2014). Cognitive Theory of the Firm: A Historical Analysis of Ford and GM. Ottawa, Ontario: semanticscholar.org.
Motors, F. (2015). Ford Motor Company: Annual Report On Form 10-K. Dearborn, Michigan, U.S: Ford Motor Company.
Pandey, S., & Sharma, R. (2009). Organizational Factors for Exploration and Exploitation. Journal of Technology Management & Innovation, 4 (1), 123-167.
Posen, H. E., & Levinthal, D. A. (2012). Chasing a Moving Target: Exploitation and Exploration in Dynamic Environments. Management Science, 53 (3), 587–601. doi:10.1287/mnsc.1110.1420
