Fordism Is Dead
Definitions:
Fordism encompasses systems of mass production and consumption characteristics of highly developed economies in the 1940’s – 1960’s. At the time the emphasis turned towards specialisation, standardisation and control. Mass production rested on presumption that activities should be simplified and controlled from above.
Post Fordism was seen as a direct confrontation with principles of fordism. It involved the introduction of an increasingly skilled, highly motivated and extremely flexible workforce. The main aim was to engender flexibility and innovation through the decentralization of power.
Neo Fordism was originally subsumed under the more general concept of post fordism. It involves modification of fordist practices rather than direct confrontation. Changes with Neo fordism includes centralizing research and management functions in advanced industrialized nations, transference of production to lower cost countries, and use of flexible patterns of production and labour organizations in order to reduce costs.
Effects of a Changing Economy:
1. Globalisation
Need to be flexible with ability to reconfigure resources in order to take full advantage of potential benefits of globalization. There may be advantages to coordinating activities on a worldwide scale but shouldn’t ignore opportunities at a local level – aspects of standardization and flexibility need to be integrated. Increased globalization means increased complexity for a firm and thus the bureaucratic firms associated with Fordism need to be adapted to deal with complexity.
2. New Technologies
New technologies have facilitated greater interdependence between organizations. Options created by the internet and ICT have led to a whole new area of choice as to organization structures. Technology has enabled greater flexibility in production and also aided the development of mass production. Therefore technology has facilitated the expansion of Fordism practices in relation to production but also allowed firms move away from Fordism and the original organization structures.
3. Knowledge Based Environment
Value is increasingly being created through how information and knowledge flows & hence organizing to maximize efficiency of production is less relevant. Given that Fordism was based on premise of mass production combined with lower costs we can clearly see how the importance of Fordism is waning. Growth of low cost production economies has resulted in twin needs for organizations: to motivate individuals to contribute to organizational knowledge generation and to devise organizational arrangements to support organizational learning processes. The bureaucratic & rigid structure used in fordism period doesn’t actively encourage such needs & must be adapted.
4. Hyper-competition
Markets are being redefined as consumers develop new needs and wants.
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 great carmaker himself witnessed none of this. He never set foot in the town that bore his name, yet his powerful, contradictory personality influenced every aspect of the project. As disaster after disaster struck, Ford continued to pour money into the project. Not one drop of latex from Fordlandia ever made it into a Ford car. But the more it failed, the more Ford justified the project in idealistic terms. "It increasingly was justified as a work of civilization, or as a sociological experiment," Grandin says. Despite the obstacles faced, Fordlandia did establish some brief success. The area had red fire hydrants on neat streets, running water, a sawmill, a water tower and weekly square dancing. However, the complexity of a jungle, changes in world economy and ongoing war entrenched Fordlandia’s failure as inevitable.
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
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
General Motors is knocking on the door to world class business performance. Ohmae’s five stages of global operation support General Motors aspirations. From stage one to stage five there are significant differences to becoming a global organization. For instance, stage one, states that a company supports arm’s length customer export activity by a domestic company that links up with local and distributors to function. This stage represents the entry level global corporation. General Motors is at stage 4 of Ohmae’s five stages of becoming a global corporation, because it has exemplified the following traits: Systems and tools used globally not just at headquarters, R&D, Engineering and other business operations have a global focus, and all support functions are applied globally. (MFGO 601, WK. #2 Lecture Notes) An example of Ohmae’s, stage ...
Information technology has advanced in multiple ways in society, where organizations has implement the structure into their work environment. Industries have outsource their manufacturing to other places in the world and rely on telecommunication to keep the marketing. The geographic distribution has changed significantly by reducing the distance it takes to complete an operation, due to information technology. These are just a couple of examples of how this advanced technology has reshape our society and continuing.
Henry Ford revolutionized the American automotive industry and forever changed transportation. Born on the morning of July 30, 1863 in a patch of Michigan woods, Henry Ford matured into the founder of the Ford Motor Co. that made the Ford name famous. The Ford Motor Co. would develop American automotive icons that continue to make a lasting impression.
Comparisons that can be made include Fordism's mechanisation of mass production and Taylor's attempts at using employees as machines. Taylor designed this using his principles of management that included developing a science for each element of work and finding the quickest way the job could be done.
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.
This paper examines the expansion of General Motors overseas in its various phases, as well as triggers for internationalization and the problems faced during the process. The paper also considers what benefits have been achieved through international growth, and how the company can be classified with regards to Bartlett and Ghosal’s 4 typologies. Finally, the paper discusses the concept of a “world car,” meeting the demands of customers across the globe.
The corporate culture of Ford management is establishing strategic business units that complement the company's global scale and structure.
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.
Spatz, J., & Nennenkamp, P. (2002, January). Globalization of the automotive industry-traditional locations under pressure. Retrieved January 14, 2012, from http://www.uni-kiel.de/ifw/pub/kap/2002/kap1093.pdf
Woywode, M. (2002). y global management concepts and local adaptations: Working groups in the frenchand german car manufacturing industry.Organization Studies, 23(4), Retrieved from http://oss.sagepub.com.ezproxy.csusm.edu/content/23/4/497.full.pdf html
The Ford Motor Company has been in business since the nineteenth century, and it has enjoyed a rather successful run as one of the top automobile-making industries in the United States. Ford Motor Company is a prosperous business because of strategic planning and changes that it was willing to take a risk on developing and implementing. Successful corporations have to adapt to the constantly changing environment or the company will be doomed to failure. In other words, customer shopping habits change as new products are introduced to the market or when other factors beyond Ford Motor Company’s control affect which vehicles are sold. For example, there is an increased demand for fuel efficient cars when the average price per gallon