Part One: Impetus for Change
At the advent of the 21 st century, business for global corporations was booming and the American economy was expanding exponentially, more so in the corporate sector. Ford Motors was doing exceptionally well and to its management, the proverbial sky seemed to be the limit. This led to some form of relaxation at the top management level, a fact that created a plateau. Without swift and innovative changes in management approach, a plateau for a corporation will almost always be followed by a decline, and this is what happened to Ford. By 2006, the company was in trouble and many a commentator anticipated its filing for bankruptcy. Things got worse after that both for the company, the American economy and even the global economy by 2008. At the time, the company’s stock was selling at just over a dollar. Most corporates readily accepted to be bailed out by the government so as to remain afloat but Ford, under the leadership of then-CEO Alan Mulally declined. Instead, Mulally employed innovative leadership to salvage Ford from the precipice of bankruptcy, then propel it towards success.
The type of change can be considered to have been twofold; the first was a change in leadership and the second was change in leadership style. Both types of changes incorporated innovative leadership on the part of Mulally. Innovation has been lauded as the best approach to entrepreneurship currently. However, the main focus on innovation has been product yet great innovation has also been employed in management techniques. This is the nature of innovation that Mulally applied. In the first aspect of the change, Mulally made some leadership changes within the company, including bringing fresh talent from without the company. Among the most notable changes was the headhunting and appointment of Mark LaNeve as head of US marketing, sales, and service. LaNeve was one of the most effective and most sought after marketers in the USA at the time. Each appointment was meant to bring in innovative leadership changes into each of the departments.
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The second aspect of the change was an innovative and novel approach to leadership. Mulally defined the new leadership regime as engendering a compelling vision, comprehensive plan, a talented team and a sense of meaning. This is a clever, creative, and comprehensive combination of established leadership theory and a touch of novel innovativeness. Among the innovative aspects of the change was the addition of meaning into the leadership matrix. This entails the kind of leadership that no only goes beyond touching the minds of the followers but also the hearts of the followers. Instead of seeking to push the workforce at Ford Motors to work hard towards success, Mulally endeavored to motivate the members of staff to push themselves and desire to excel. This was achieved through giving meaning to whatever project, goal, and endeavor that the company ventured into. Among the sources of the said vision was the compelling vision. This entails not just having the team understand what they are supposed to do but why they are doing it. It answers the age-old question of “to what end?” thus resulting in great motivation for the workforce.
Allan Mulally as aforesaid was the main source of this innovative change in leadership through innovation. From a practical perspective, therefore, it can be said that the communication for the change took place in a pyramid style. Mulally imparted the change message to his top leadership who then communicated the same downwards and outwards to the rest of the staff. Mulally is an MIT-trained aeronautical engineer who also took a master’s level management course at the same institution. It must, however, be noted that the changes made were not generally geared towards the entire institution, but targeted specific division. It is within this division that changes in leadership style was accompanied by changes in the leaders themselves. Among the major divisions facing such changes was the marketing division. As aforesaid, LaNeve was appointed a country manager. In the same department, Stephen Odell was appointed executive vice president to manage it globally. This department, therefore, had an absolute leadership overhaul in style and personality. The innovative IT department was also changed exponentially with the appointment of an in charge who was also an executive vice president in the name of Marcy Klevorn. This, therefore, created targeted changes and modes of communication to achieve a unified general transformation.
A careful evaluation of the change model involved within Ford Motors during the time of focus in the instant essay leads to the conclusion that it adhered to the Lewin’s Change Management Model. This leadership model begins with a status quo which is followed by a short dispensation of transition, then a new form of status quo under a new system. Mulally took over in 2006 when Ford was already clearly in trouble. He made several major changes between 2006 and 2008, within which period the company continued on a downward spiral. By 2009, everything had been put in place and the company settled down under the new system. So firmly settled was the company by this time that even the availability of the government bail-out would not allow Mulally to interfere with the system by incorporating it.
All projects are assessed based more on the outcome than on the project. Ford Motors was the only motor vehicle manufacturer in the US that did not take the bailout that came after the 2008 economic disaster. Yet, based purely on the innovative leadership changes aforesaid, the company was able to pull itself out of what had initially seemed an inevitable crash . Within three years, Ford was not only saved but also back to profitable ways. From a loss of over twelve billion US dollars in 2006, Ford registered a profit of over six billion dollars in 2013. The company that was considered at the verge of collapse was through innovative leadership salvaged and also taken back to its erstwhile thriving ways. By the time Mulally retired in 2014, his innovative leadership changes had become the subject of research journals and even books. They are given credit to the innovative approach to leadership that had saved the global car manufacturing giant. Another tribute to Mulally’s innovative leadership lies in the fact that companies that took the government bailout came to be haunted later, formally and informally by the said move making Mulally twice vindicated for his leadership strategies.
Part 2: CSR Brief
Corporate social responsibility (CSR), also aptly referred to as corporate conscience or corporate citizenship relates to the self-regulation of the company, that generally informs a company’s corporate culture. CSR begins with a commitment to fulfill all laws and business ethics then extends to a company going out of its way to do good to the community (Schrempf-Stirling & Schrempf, 2012) . This is the genesis of the concept of corporate citizenship and it entails a company acting as a good citizen with or without regulatory superintendence. Company culture relates to what is said about a company externally. It mainly stems from organizational behavior, which relates to who a company operates internally, including CSR. When a company needs to change, organizational culture can be a major boost or impediment, depending on the nature of change as well as the company’s organizational culture. It is worthy of notice that a company can only control its behavior, not reputation (Schrempf-Stirling & Schrempf, 2012) . It is now over a century since Ford started operating in the suburb of Dearborn, in Detroit, Michigan. Within the said year, the company has spread its operations to all five continents. Yet the company has managed to retain a positive corporate culture, mainly because of its good CSR.
Among the fundamental aspects of good CSR relates to how a company as an entity treats people. This operates both with regard to the people within the company as well as the people surrounding the company (Adi, Grigore & Crowther, 2015) . Ford was established as a family business and has remained so to this very date. This is even after the Ford family lost majority share control of the corporation through its continued expansion over the last century. The organizational behavior of Ford has been akin to that of a family. The company’s initial patriarch treated his employees as if by joining the family business, they had joined his family too. Indeed, legend has it that part of the reason why Ford started an assembly line to make car manufacturing cheaper, was so that Ford employees could afford cars. This was at a time when car ownership was only within the purview of the very rich. This trend has continued to this date with Ford being considered as one of the best places to work almost every year in recent times. Working around this organizational behavior and its resultant culture is extremely difficult for Ford as it provides for a very limited wriggle-room. It is a great reputation to have but also hard to maneuver around in times of change.
Further, with regard to the people around the company, Ford has taken the responsibility of taking care of their needs on a global scope. The company has sponsored education, healthcare services, and other non-governmental organizations. In Dearborn, Michigan where the company is headquartered, the CSR aspect of the company has absolutely transformed the entire area, making it among the ideal places to live in the US. It is possible for an individual in this area to move from elementary to advanced level studies within institutions sponsored entirely by the company. This is over and above the Henry Ford Centennial Library which has several branches in the area and tens of thousands of books and study materials. The library has also hosted the City of Dearborn Health Department for almost forty years.
Another important aspect of CSR is caring for the environment (Schrempf-Stirling & Schrempf, 2012) . In this area, Ford has been seen and seemed to excel, unlike most of the other vehicle manufacturers. All the facilities operated by Ford globally have an ISO 14040 certification for environmental conservation measures. Further, Ford has managed to avoid the common condemnation by formal and informal regulators relating to environmental conservation. This is a very telling factor, considering that environmental issues have been of great focus globally due to global warming. Further, car manufacturing is one of the largest industries that have been generally expected to aggravate environmental degradation due to its nature of operations. Changes such as cost-cutting in manufacturing systems can be very tricky for Ford, as this environmental reputation is very sensitive.
Finally, business ethics is another important measure for CSR (Carol, 2015) . The concept of business ethics entails seeking to do the right thing, even when the same is neither mandatory nor expedient. The Ethisphere Institute, one of the globally acclaimed entrepreneurial think tanks has ranked Ford as among the 100 most ethical companies in the world. The presence of Ford in that list is made even more remarkable by the fact that Ford is the only motor company within the said list. This exponentially sets Ford apart from the perspective of ethical behavior, a fact that makes decision-making complex, more so in times of change. The company stands in competition with global companies that are willing to cut ethical corners in order to be more competitive but will not indulge in such conduct itself. Among the greatest tributes to Ford’s ethical approach to business is its declining the government bailout in the aftermath of the 2008 economic crisis. Instead of taking the tax-payers money and easing its burden, the company opted to find alternatives means of staying afloat. This showcases a company determined to do the right thing at all times.
References
Adi, A., Grigore, G., & Crowther, D. (2015). Corporate Social Responsibility in the Digital Age. Bingley, England: Emerald Group Publishing Limited.
Carroll, A. B. (2015). Corporate social responsibility. Organizational Dynamics , 44 (2), 87-96
Schrempf-Stirling, J., & Schrempf, J. (2012). The Delimitation of Corporate Social Responsibility: Upstream, Downstream, and Historic CSR
