Discussion exercise 2 Mulally, Ford’s Most Important New Model



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discussion exercise 4.2

Mulally, Ford’s Most Important New Model
New Ford Motor Company CEO Alan Mulally has just begun his tenure at Ford. He faces a steep learning curve with regards to product names and identities that he must overcome.
1. What messages is Alan Mulally trying to communicate to both Ford employees and Ford customers?

Mulally does not come from the automotive culture. He has business experience, especially during his tenure at Boeing, in production processes and cost structures, lessons he can draw on to make Ford more profitable. Mulally has already seen enough waste in the duplication of design and manufacturing. This has led to poor decisions and loss of profitability, preventing the company from building its best products.


2. What challenges does he face in building his credibility as the new CEO of Ford Motor Company?

Mulally must quickly come up to speed on the specifics of production methods, fuel economy standards, and the inter workings of labor groups. All of these factors affect how successful a car model can be in today’s global economy. However, his real challenge is undoing the poor production methods and territorial ownership that exists among the other executives involved in the decision-making process.


3. Give three examples of decisions that Mulally has made in his early days as the new CEO of Ford.

Mulally has changed production processes, considered joint production opportunities with other auto makers, and instituted weekly meetings with top executives instead of monthly gatherings.


4. Ford Motor Company is currently in dire financial straits, having lost $12.7 billion in 2006, forcing them to borrow $23.4 billion to cover further losses expected through 2009. How do you think this desperate situation will affect Mulally’s decision-making process?

Mulally is a realist. He understands why he was hired and the role he has in this currently unprofitable company. By not being a lifelong auto executive, he brings a new approach to what others are failing to see. This perspective is valuable. By not promoting an insider, Ford gains a new perspective that can foster the change needed to turn the company around.


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