Background of Company
The Ford Motor Company is one of the largest vehicle manufacturers in the world primarily based in the US. The automotive company was founded in 1903 by Mr. Henry Ford in the city of Detroit but relocated its headquarters to Dearborn, Michigan. The company has had an exemplary history with significant positive relations noted between the organization and its employees. The firm identifies the latter as the driving force behind its success in the industry. This is evident in the company’s financial recovery shown by the dedication and strong performance of its workforce. The recent practices of the enterprise have shown a significant problem as it closed down two UK facilities and put an end to production in Belgium in 2013 and 2014 respectively. The incident resulted in mass retrenchment of employees an action that could have a negative impact on the corporation. The firm has converted that into hourly jobs in North America as it seeks to increase more local employees. By the end of 2012, the company had a total of 171,000 employees a significant drop from 246,000 in 2007.
HR Practice to Change
The organization should take on the challenge of ensuring high levels of retention of the best talents in the industry and prevent turnover practices. It is for this reason that the company enforced the ONE Ford plan. Reports of the company before the coming of Alan Mulally had shown that Ford was losing ground as a global corporation. The organization was a mess as evident by the unprofitability on cars, global disorganization, long sales cycles, and excessive reliance on SUV sales. The company experienced a steady and sure decline that would result in complete failure of the company. In 2006, Ford had lost nearly 25% of its market share since the early 1990s a clear indicator that the employees did not have the motivation and drive to propel financial success (Yang, 2014). Despite the company’s poor performance, the wages of the unionized workers were sky high at $76 an hour. By 2007, the company lost $12.7 billion and noted the need to develop a plan that would result in significant change (Yang, 2014).
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Michael Fields, the Ford American Division President, would develop a plan that would result in profitability and financial success of the company. The One Ford strategy was a business restructuring program to restore the company’s previous success (Yang, 2014). The primary goals being to bring all employees together as a team, leverage its unique automotive knowledge and assets, build vehicles that people want and arrange the necessary financing required. While the plan is useful, it is evident that the integral company focus was to ensure profitability of the company as it was able to achieve profits of $6.6 billion by the year 2012, a clear indicator of the effect of the HR practice (Yang, 2014). However, one issue remains, the focus on employees and ensuring talent management. The organization has focused almost entirely on achieving financial success that it forgets to develop the skills of its employees. This incidence results in low levels of morale and job satisfaction. There is a critical need to make changes in the HR practices to develop high levels of skills, competence, and experience among the young personnel.
Reasons for Change Management
The organization should make changes to create a new culture in the workplace. In this case, the firm should establish a new organizational culture where the more experienced personnel act as mentors to the young and future leaders. The Lewin’s model of change is the most appropriate approach to tackling this problem where the change process is divided into three stages; unfreeze, make changes, and refreeze (Yang, 2014). The initial step involves eliminating any form of bias and existing acceptance of mistakes while making everyone aware of the problem. Secondly, the guidance of employees will take place through the deployed changes where communication, support, and education are imperative to adaptation of roles. The final step is refreezing that reinforces the new status quo by using regular reviews to ensure members are following the new methods.
Ford Motor Company should enforce changes in the HR practice as a valid measure it has the required skills and competence to create competitive advantage over its close competitors. The McKinsey 7-S model is a practical approach to identifying the coherence in the firm (Yang, 2014). The 7-S includes strategy, structure, systems, shared values, style, staff, and skills. The initial step is analyzing whether the company has a plan that will result in a decisive advantage over competitors. This will also involve the structure, systems, and shared values which play significant roles in the operations (Yang, 2014). The style, staff, and skills will focus on the development of a leadership practice that will ensure the achievement of set goals. A critical assessment of the competence required in the company will also help guide practices towards increasing number of workers who are capable of taking up the positions shortly.
The company recently experienced a significant loss of $12.7 billion during the 2007/08 financial recession. The corporation should develop changes in its HR processes as a preventive measure of backward movement and ensure acceleration to the front of the line. The financial recession has set back the company significantly in the automotive industry, and it may be difficult to restore its previous stature. The corporation may seek to incorporate Kotter’s 8-step change model. This includes creating a sense of urgency, establishing core coalition, developing vision for change, communicate to get everyone on board, empower staff by eliminating barriers and reducing friction, create short-term goals, be persistent and maintain acceleration, and make the change a permanent practice (Yang, 2014). These measures will prevent the resurfacing of previous methods that were unproductive and deteriorative of the firm’s success.
Diagnostic Tools to Determine Ford’s Readiness for Change
The Organizational Effectiveness Inventory (OEI) is a diagnostic tool that provides reliable and valid data on the systems, structure, skills, qualities, and technologies that affect the culture of the company. The results of this diagnostic tool are to verify whether the company should change to ensure performance improvement at the individual, team, and organizational levels (Yang, 2014). The 128-item survey collects confidential data from employees to assess their perception and experience of things that should or can be changed to change the culture and performance. They also provide feedback on the current cultural practice as it affects them individually, as a group, and as part of the organization whole. This tool helps identify the employees’ attitude, motivation, and stress level while identifying targets for changing their engagement (Yang, 2014). It also enables the HR department to develop cases for change, improve strategies, and to evaluate the impact of interventions for change.
The Organizational culture inventory (OCI) is one of the most widely used tools for evaluating organizational culture. With over 20 years of research and now incorporated into the latest technologies of survey, the OCI is an appropriate approach to identifying the organization’s readiness for change. The instrument reveals the demands on the workers and its impact on their performance, job satisfaction, and motivation. This practice lays a foundation for achieving successful and sustainable cultural change. The diagnostic tool has two critical parts the OCI-Current and the OCI-Ideal. The former reveals a clear picture of the present practices regarding how employees believe is expected of them (Yang, 2014). The latter is a revelation of the behaviors that leaders and other employees think should be expected of them to achieve maximum effectiveness of the organization. The tool will help in building a vision of the ideal culture that can be enforced during the change process.
Results of the Diagnostic Analysis
The diagnostic results of Ford’s readiness to change are presented as per the OCI tool. The OCI-Current shows that majority of the employees identify the importance of ensuring profitability as the primary motive of the company. Following the tremendous $12.7 billion loss, the organization has worked extensively to prevent such an occurrence in the future. Another implicit requirement that workers perceive is working in groups to achieve a common goal. The corporation believes that unison is the necessary practice to achieve success. The workers also think that they have one future in developing quality products that suit the needs of consumers. However, the OCI-ideal shows that the leaders perceive they have an essential role to play in promoting high levels of job satisfaction among employees (Yang, 2014). This will be an integral factor in any success that the automotive company achieves. Another role includes ensuring employee engagement, leadership development, and developing future talent. As the firm makes progress in the industry, it must involve the workers and press on to achieve its vision.
Explanation
The OCI tool results are a clear indicator of the significant need for change in the company. In this case, the low-level employees and leaders share substantial similarities of the expectations of their roles. The company intends to create a business model that is favorable for its success in the future. In this case, maintaining high levels of profitability is a critical factor in this practice (Yang, 2014). However, the employees feel that this is the only consideration from the company and seem not to experience a connection with the company practices. The firm should develop measures that will merge both perspectives into one.
Conclusion
The Ford Motor Company is ready for change to take place in its HR practice. The organization mainly focused on the need to enforce measures that will ensure sustainability of the company in the long-term. The One Ford strategy emphasizes the importance of the employees in any level of success that the company will attain. In this regard, the workers are equated to the customers who purchase the various products. Using Kotter’s theory of change, it is evident that the company has created a sense of urgency that builds a coalition with the employees, and created a vision that they can follow. However, getting everyone on board, eliminating the barriers, and setting short-term goals are some of the practices that the organization should enforce. The workers should become aware of their importance to the company and the need to develop their skills and competence to achieve the goals that the company has for the future. Once these measures are performed, the company will set out to sustain the acceleration of success.
References
Yang, Y. (2014). Employees Management Analysis at Ford Motor Company. International Journal of Business and Social Science, 5 ,10(1); 80-85.
