The case describes the organization structure challenges that Alan Mulally faced when he became President and CEO of Ford Motor Company. He was hired by William Clay Ford, Jr., the Board Chairman of Ford Motor Company and great-grandson of Henry Ford, the company’s founder, to oversee the restructuring of the company. Numerous challenges faced Mulally, including but not limited to the following: entrenched institutional work habits where managers were more concerned about their own careers than about meeting customers’ needs and desires; a management team that would not admit mistakes, share information, cooperate across divisions, or work together; a depleted pool of managerial talent; and different platforms and different product and supply chains being used for Ford cars produced in America and in Europe. Mulally took several steps to address these challenges, culminating in the formulation and implementation of the One Ford plan that focused on “[p]eople working together as a lean, global enterprise for automotive leadership, as measured by: customer, employee, dealer, investor, supplier, union/council, and community satisfaction.” In restructuring Ford Motor Company, Alan Mulally had to deal with the fundamental organization design processes of differentiation and integration. In making choices regarding how to best restructure the company to transform it and return it to profitability, Mulally considered appropriate contextual factors especially the external environment and strategy and goals. In moving the structure from a more mechanistic form to a more organic form, Mulally and his executive team had to consider the basic organization design dimensions of formalization, centralization, specialization, standardization, complexity, and hierarchy of authority.
1. What are the key structural issues that Alan Mulally encountered as the incoming President and CEO of Ford Motor Company?
2. How has Alan Mulally addressed the structural issues identified in the previous question?
3. Explain the context that Ford’s strategic goals provide for the design of its organization structure.
4. Explain the context that Ford’s external environment provides for both its strategic goals and the design of its organization structure.
5. Would a network (or lattice) organization be a viable structural alternative for Ford Motor Company? Explain your answer.