When Alan Mulally took over as Chief Executive Officer at Ford Motor Company in 2006 the organization was losing billions of dollars. According to Tony Schwartz (2010), “It had just come off reporting a $14. 6 billion loss for 2008, its fourth losing year in a row” (para. 1). The article Alan Mulally-Making Ford a Model for the Future illustrates the progress of Alan Mulally and the four simple principles that are making the company become profitable. Principles are important in any organization and an employee needs to feel important and motivated to come to work.
These are a few of the principles that Alan Mulally have implemented since 2006: Stand for something beyond profit. Rally your employees around a shared mission. Practice a realistic optimism. Tell the truth without fear (Schwartz, 2010). The turnaround at Ford Motor Company was not overnight. He invested in the vision “One Ford” which has the idea of creating vehicles that will appeal to both American and European consumers by utilizing a common design theme that would move beyond the three-bar infatuation of the United States (Lavrinc, 2007).
The transformation of the American icon was due to the One Ford vision and one year after 2008, Ford Motor Company reported a profit of $2. 7 billion. This transformation would not have happened if Alan Mulally did not take over in 2006. The ethical behavior by Ford Motor Company’s Chief Executive Officer has shown to be a true testament to future CEO’s in the global market. When the company raised $23. 5 billion to finance the restructuring and accelerate the investment in new products it shows great leadership during the Great Recession (Bartiromo, 2011).
This American icon is 110 years old and recently had the strongest third quarter profit in history in 2012. This would not have happened without Alan Mulally reducing the brands of Aston Martin, Jaguar, Mazda, Land Rover, and Volvo into the two main components that a person would vision on the road today Ford and Lincoln. The leadership is beyond extraordinary and models like the Ford Focus is now one of the country’s best selling cars (Schwartz, 2010). The business environment is multifaceted with enormous challenges that face the global market.
By focusing attention on a vision, the leader operates on the emotional and spiritual resources of the organization, on its values, commitment, and aspirations. The manager, by contrast, operates on the physical resources of the organization, on its capital, human skills, raw materials, and technology. The results that an individual observes currently are in direct correlation of the actions over the last five years. Ford has now paid back the $23. 5 billion that was taken out in 2006 to finance the restructuring and investment of new products.
The company has started to hire and bring jobs back to the United States. According to Schwartz (2010), “Mulally is taking an old-school industrial company and turning it into a model of how modern company ought to be run” (para. 3). Using the PESTEL Analysis to capture macro-environmental forces and including part of the Ansoff Product/Market Opportunity Matrix Ford Motor Company can thrive on market penetration strategies. The following PESTEL Analysis shows the six factors that are the biggest weaknesses and strengths perceived to be the primary data in the next five years for the automotive giant.