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Organizational development analysis paper
Henry ford topics
Henry ford topics
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Fordist Principles
Introduction
In organizational development, there are different theories that are considered to be influential. One of which is the theory of Fordism. Fordism is a form of industrial production developed from Taylorism methods; the main aim is product maximization through tight control over movements and separating planning from executing tasks. This production management practice was widely criticized for its inhumane production system with regards to employee conditions and was then replaced by Fordism (Edwards 1990)
Fordism is a production ideology pioneered by Henry Ford during the post-war decades in the Western industrial countries which supported domestic mass production and allocation of relatively higher wages among labourers. Ford was credited for improving the production methods during that time through developments in the assembly line methods and manufacturing as implemented by Ford Motor Company. Under the concept of Fordism, mass consumption considerations were integrated with production accountabilities in order to sustain economic growth (Hounshell, 1984). Ford believed in deskilling of car production was required to achieve continuous improvement' and mass production. Moreover, the Fordism philosophy has greatly influenced business operation management strategies that have transformed through time so as to address the current demands in the highly complex and competitive market environment. These include the principles of lean management, flexible system production, also called the Japanese management system, total quality management, just-in-time inventory control, leaderless work groups; globalization of consumer goods markets, faster production life cycles, as well as intensive product/market segmentation and differentiation (Hounshell, 1984).
Analysis
As modern organizations grew larger, skills become increasingly fragmented and specialized and positions become more functionally differentiated. (Hardy & Clegg, 1996). The best organizations/suppliers continuously update and upgrade their service deliveries in order to answer the demands of their customers. Customers have the ever-increasing demand on getting their hands into the new products which can lead to change in supplier if expectations are not met. This meant that organizations have to completely reformulate their conventional business aims and purposes from being process-focused to customer-centred. Organizations/suppliers are to highly differentiate their product range to meet and satisfy customers need. Rethinking and reformulating the organization on the other hand, entail the consideration of several factors such as various processes, technology, the environment as well as the success factors of people (Cohen & Moore, 2000). Hence, in order to bring out exceptional customer services within the organization operations, the management should employ fine-tuned organizational restructuring.
The automobile went from being a toy for society’s elite to being an essential item within the economic reach of nearly every American, all thanks to the hard work and ingenuity of Henry Ford. His dedication to quality and attention to detail earned him not only dozens of racing titles, but also the reputation of a respectable businessman. Ford understood his market so well that he knew what the people wanted before they could even ask for it, always ahead of the curve. Ford was a pioneer of American commercialism, and so his production methods were centred around efficiency and mass production, thus allowing him to increase productivity and decrees cost to meet the demand of the masses. Lastly, consideration of the working class and philosophy of raising the wages instead of raising the price point and focusing only on profit. There are a great many lessons to be learned from distinguished businessmen in history, and Henry Ford is no
Henry Ford is responsible for “perhaps the most revolutionary development in industrial history.” (Watts 2005,
Meryl Davids is a professional writer/editor with an education from the University of Pennsylvania. With an outstanding twenty plus years of experience under her belt, Davids has work featured in magzines and journals such as: U.S. News & World Report, Wall Street Journal, and The Journal of Business Strategy. In this article Davids brings to our attention the successfulness of Henry Ford as well as the some of the struggles he faced trough out his life. Davids lets us know right from the start that Ford was a smart man and he knew that time was money. Ford states, “Time loves to be wasted.” The solution to this was a large-scale assembly line. With the successfulness of the assembly line and the money Ford was saving he double the wages of his employees from $2.50 to $5 overnight as
Until recently, the Ford Motor Company has been one of the most dynastic of American enterprises, a factor which has both benefited the company and has brought it to the brink of disaster. Today Ford is the second largest manufacturer of automobiles and trucks in the world, and it’s operations are well diversified, both operationally and geographically. The company operates the worlds second largest finance company in the world, and is a major producer of tractors, glass and steel. It is most prominent in the US, but also has plants in Canada, Britain and Germany, and facilities in over 100 countries.
The industry has loyal customers with broad customer base that lowers the collective bargaining power of buyers to medium. The switching cost is very low and thus the customers can turn to a service provider who provide faster and innovative service but this is overcome by customized services and integrating into their customer supply chain.
Taylorism is a system that was designed in the late 19th century, not only to maximise managerial control, but to also expand the levels of efficiency throughout workplaces. With this being said, productivity levels increased and fair wage distribution was the main result. However, with other, more recent theories and systems, such as Maslow and Herzburg’s theories, these helped to focus on the satisfaction and motivation of the workers rather than the concern of managerial control and empowerment. Fredrick W. Taylor ended up developing 4 main principles to help increase the work efficiency and productivity in workplaces; these will be discussed later on. Other theories relating to this include, Fayol, Follett, Management Science Theory as well as Organisational-Environmental Theory. All theories listed have an influence on the way businesses work effectively and put their skills to action. This essay will highlight how Taylorism was designed to maximise managerial control and increase productivity, furthermore, showing how more recent theories were developed to focus on empowering employees and to extend the use of organisational resources.
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer.
Ford used Taylor’s scientific management principles and come up with the mass production and assembly line. This benefitted the motor vehicle industry highly. The effects of Taylorism and Fordism in the industrial workplace were strong and between the period of 1919-1929 the output of industries in the U.S doubled as the number of workers decreased. There was an increase in unskilled labour as the skill was removed and placed into machines. It lead to the discouragement of workers ability to bargain on the basis of control over the workplace.
“Management is a process of planning, organisation, command, coordination, and control” (Morgan 2006, p.18). Rational organisation design is a bureaucratic method of management which emphasizes efficiency to achieve the end goal and the management of multiple companies have taken upon this system. Figures such as Frederick Taylor and Henry Ford have both shown and laid a path way for Rational Organisation which has become known as Taylorism and Fordism. The design has received criticism and both Taylor and Ford have been portrayed as villains with Taylor being called “enemy of the working man” (Morgan 2006, p.23) as the system dehumanised workers by taking all of the thought and skill from them and giving it to the managers this is because the tasks given were simple and repetitive. As staff needed little training they became an easily replaceable asset and thus more machine than human.
Fordism and Scientific Management are terms used to describe management that had application to practical situations with extremely dramatic effects. Fordism takes its name from the mass production units of Henry Ford, and is identified by an involved technical division of labour within companies and their production units. Other characteristics of Fordism include strong hierarchical control, with workers in a production line often restricted to the one single task, usually specialised and unskilled. Scientific management, on the other hand, "originated" through Fredrick Winslow Taylor in 1911, and in very basic terms described the one best way work could be done and that the best way to improve output was to improve the techniques or methods used by the workers. (Robbins p.38)
Ford’s production plants rely on very high-tech computers and automated assembly. It takes a significant financial investment and time to reconfigure a production plant after a vehicle model is setup for assembly. Ford has made this mistake in the past and surprisingly hasn’t learned the valuable lesson as evidence from the hybrid revolution their missing out on today. Between 1927 and 1928, Ford set in motion their “1928 Plan” of establishing worldwide operations. Unfortunately, the strategic plan didn’t account for economic factors in Europe driving the demand for smaller vehicles. Henry Ford established plants in Europe for the larger North American model A. Their market share in 1929 was 5.7% in England and 7.2% in France (Dassbach, 1988). Economic changes can wreak havoc on a corporation’s bottom line and profitability as well as their brand.
As the popularity of systematic management rose, there were many organizations that were implementing its main features such as employment of more unskilled workers and work standardization methods (Thompson and Mchugh, 2009, p.28 a). It had several features, a few of which included focusing on the manner in which production took place, being precise about how the activities were going about and to ensure that productivity and overall efficiency improved. Thus, the primary focus was on methods of production as compared to the end result of the production activity. This is when the role of Taylorism came about. Frederick Winslow Taylor, a name that transformed the management scheme forever. Also known as the Father of scientific management, Taylor was the brain behind recognizing the need for efficiency in the workplace. He first started off with his research at Midvale Steel Works, where he meticulously observed the workers and in order to develop his principles and theories with the prime focus of constructing a way to have full control over the activities taking place (Thompson and Mchugh, 2009, p.28 a).
We are in the midst of a revolution in business. Some call it a customer revolution, others a quality revolution, others a service revolution. Organizations are attempting to obtain increased customer satisfaction by focusing on the quality of their products and the service provided. This movement toward quality has produced significant benefits but just like other business fads, joining and adopting the religion does not insure that the real objective of producing customer satisfaction will be obtained.
With the rise of the economy, consumers have become more and more knowledgeable on selecting their favourable product as a result the organization cannot focus on what it sells but on the side focus on what the customer wants to buy.
As pointed by Parsons A.L (2002), there was increasing dependent on the relationship and customers is demanding to receive high standard of products and services for them to sustain the business in the intense manufacturing environment. Besides, Xu et al. (2008) has highlighted that supplier is developing a long-term relationship with their crucial suppliers to increase the competitiveness and to establish an effective and efficient supply chain. Trend (2005) also mentioned that work closely in partnership with suppliers is the only way to survive in today’s competitive business environment.