Ford Case Analysis 3p1n2y

INTRODUCTION

Ford Motor Company, one of the “Big Three” automakers, was established in Detroit, Michigan, on June 16, 1903. Founder Henry Ford converted an old wagon factory to house his new inventions. The Model T, in particular, was the one turning point that put Ford on the map. Despite stiff competition from rival General Motors, over the decades other Ford models such as the Mustang and Taurus continued to push Ford forward. Today Ford is one of the world’s top automobile companies—its Ford Focus was the world’s bestselling automobile in 2013. Ford Motor Company was founded on strong core values, which has helped it to overcome many obstacles and lead to its success. Despite ethical issues in the past, Ford Motor Company has proven to be an ethical leader in the automobile industry. In 2013 it was selected by the Ethisphere Institute as one of the world’s most ethical companies. Ford Motor Company’s corporate social responsibility (CSR) programs are designed to respond to the demands and interests of the firm’s stakeholders. Ford impacts these stakeholder groups through its business activities. At the same time, the stakeholders are significant because they affect the company through their purchases and sociopolitical pressure. As the second biggest U.S.based automobile manufacturer, Ford must address the needs of its stakeholders to maintain its industry position. Thus, improving corporate social responsibility efforts can help sustain Ford’s long-term development toward its aim of becoming the global market leader.

BACKGROUND OF THE JOURNAL ARTICLE

This journal examines the ethical challenges and corporate social responsibility initiatives Ford Motor Company has faced in its history. It begins with a history of Ford’s background. We follow with an examination of Ford’s corporate culture and its emphasis on product quality. We then describe the code Campuses: Hilltop | MH del Pilar | Pallocan East | Pallocan West | Lipa Telephone Numbers: +63 43 723 1446 | 980 0041 Website: w ww.ub.edu.ph

of ethics the firm has adopted to keep it on an ethical course. The next section demonstrates that despite its strong code of ethics, Ford has experienced serious misconduct in the past. Next, we investigate how Ford has restored its reputation and instituted corporate responsibility initiatives to benefit stakeholders. We conclude by examining Ford’s current status today.

Ford’s stakeholders are comprehensively addressed through various corporate social responsibility initiatives and programs. The following is Ford’s prioritization of its stakeholders, with customers having the highest priority: 1. 2. 3. 4.

Customers (Ford’s top-priority stakeholders) Employees Investors Communities (Ford’s least-priority stakeholders)

Customers. Ford’s top-priority stakeholders are its customers. The interests of this stakeholder group are high quality products and services, especially after-sales services. Customers are significant stakeholders because they directly determine the company’s revenues. Ford’s corporate social responsibility efforts for this stakeholder group are as follows: 1. Product innovation for quality, fuel economy, and safety 2. Ford Smart Mobility 3. Ford Driving Skills for Life program Ford Motor Company continues to innovate its products for quality, fuel economy, and safety to maximize satisfaction among customers as stakeholders. Majority of the firm’s 2015 vehicles received five-star ratings from the United States New Car Assessment Program (NCAP). Also, the Ford Smart Mobility program aims to increase mobility and provide autonomous/driverless vehicles. In addition, the Ford Driving Skills for Life free driver education program helps novice drivers develop skills for safe and efficient driving. Thus, Ford’s corporate social responsibility programs extend beyond just offering vehicles, and improve the driving skills of customers as the top stakeholders. Employees. Ford considers its employees as second-level priority stakeholders. This stakeholder group is interested in career development, high wages, and equal treatment and opportunities. Employees are significant stakeholders because they influence the production and service capacity of the business. For instance, even a small decline in this stakeholder group leads to a proportionate decline in the company’s productivity and performance. To address the interests of employees as stakeholders, Ford has the following corporate social responsibility initiatives: Campuses: Hilltop | MH del Pilar | Pallocan East | Pallocan West | Lipa Telephone Numbers: +63 43 723 1446 | 980 0041 Website: w ww.ub.edu.ph

1. 2. 3. 4.

Sustainable Workforce Product Online Training Global Learning and Development Global leadership development programs

Ford Motor Company has reformed its workplace safety policies through time to protect this stakeholder group and ensure regulatory compliance. The firm’s Sustainable Workforce initiative aims to optimize employees’ health, efficiency and productivity. For instance, Ford’s new global safety standards have reduced workplace injuries by 90% since 2000. The company also offers online product training to keep this stakeholder group always up-to-date and capable of doing their jobs. In addition, the firm’s corporate social responsibility efforts include the Global Learning and Development program, which offers continuing education through classroombased and online courses, as well as mentoring and shadowing to maximize performance and satisfaction in the stakeholder group. Moreover, Ford has global leadership and development programs like (a) the Global Leadership Summit for executives and general managers, (b) the Global Executive Leadership Program for directors and senior managers, (c) the Experienced Leader Program for middle managers, and (d) the Salaried Supervisor Institute/Program (SSI) for new or experienced leaders. These programs reflect Ford’s corporate social responsibility and dedication to the interests of employees as one of the company’s most important stakeholder groups. Investors. Ford Motor Company’s investors are interested in maximum profits and business stability. These stakeholders are significant because they affect the firm’s capital. To address the interests of this stakeholder group, Ford implemented the One Ford plan in 2008 under former CEO Alan Mulally’s leadership to achieve consistency and synergy in its global organization. The One Ford plan reduces costs and maximizes the company’s profits worldwide. This effort is part of Ford’s corporate social responsibility strategy to improve its performance, especially in the aftermath of the recession of the late 2000s. Communities. Ford has a number of major corporate social responsibility programs for communities as stakeholders. The interests of this stakeholder group include for community development, as well as environmental conservation. Communities are significant stakeholders because they can influence the perceptions of Ford’s customers. These interests are addressed through the following corporate social responsibility programs at the company: 1. Supplier sustainability training Campuses: Hilltop | MH del Pilar | Pallocan East | Pallocan West | Lipa Telephone Numbers: +63 43 723 1446 | 980 0041 Website: w ww.ub.edu.ph

2. 3. 4.

Ford Motor Company Fund and Community Services Ford Volunteer Corps Ford Driving Skills for Life program

LEARNING AND INSIGHTS

Although Ford Motor Company faced significant ethical challenges in the past, it is taking a proactive approach toward eliminating future issues. It holds the distinction of being the only one of the “Big Three” carmakers to avoid having to be bailed out by the government during the 2008- 2009 recession. This showed that the company had made a significant turnaround and was financially viable enough to weather the economic storm. In contrast, the government only just recently sold off its shares in General Motors, which it bailed out in 2009 with $49.5 million. It is estimated that taxpayers lost $10.5 billion. By avoiding a government bailout, Ford was able to improve its reputation and gain a competitive edge over its major rivals. The company was also able to outsell its rival Toyota in the United States in 2012 and 2013. Ford has taken proactive measures toward improving its internal processes, such as improved testing procedures and internal quality control. The firm made a renewed commitment to consumer safety, environmental sustainability, and stakeholder appreciation. This has led to its four-time nomination as a world’s most ethical company. These results are based upon an intensive review of Ford’s social responsibility efforts, innovation, transparency, communication, citizenship, corporate governance, and business practices. 11 Ford has learned from its past mistakes and has taken proactive measures toward ensuring consumer safety and satisfaction. Ford is an elite company that has secured an ethical reputation. It must continue to investigate ways to improve corporate social responsibility and sustainability without compromising consumer safety or quality.

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Ford Motor Company provides sustainability training to its suppliers to improve their sustainability performance, which is linked to environmental impact. Also, the Ford Motor Company Fund and Community Services is the company’s nonprofit organization for a wide variety of philanthropic efforts for this stakeholder group. For example, the firm’s corporate social responsibility efforts provide investments for community irrigation, as well as education programs in rural areas. In relation, the Ford Volunteer Corps, mainly composed of the company’s employees, s community development. Moreover, the Ford Driving Skills for Life program also ensures that driving does not create issues with community safety. Thus, the company’s corporate social responsibility activities for these stakeholders are diverse.

SOURCE Journal Article: Ford Motor Company Manages Ethics and Social Responsibility Daniels Fund Ethics Initiative University of New Mexico http://danielsethics.mgt.unm.edu

Campuses: Hilltop | MH del Pilar | Pallocan East | Pallocan West | Lipa Telephone Numbers: +63 43 723 1446 | 980 0041 Website: w ww.ub.edu.ph