MANAGING CHANGE LEADERSHIP

ASSIGNMENT

Change Leadership of Ford Motors Ltd by Alan Mulally

DONE BY

MOHAMMED BASIL

TP043604

UCMF1610MBA

Submitted to: Ms. Subaashini

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 Asia Pacific University of Technology & Innovation (APU)

Technology Park Malaysia

Bukit Jalil, Kuala Lumpur 57000
Malaysia

Contents

Abstract
.3

Aknowledgment
..

Introduction............................................................................................................. 3

Change and Leadership........................................................................................ 5

The Organization..................................................................................................... 6

Overview of Ford Motors...................................................................................... 6

Achievements of Ford Motors under Alan Mulally.................................................7

The Leaders Background........................................................................................ 8

Brief History of Alan Mulallys Employment..........................................................8

Changes.................................................................................................................. 9

Changes made by Alan Mulally to Ford Motors.....................................................9

Challenges faced by Alan Mulally.......................................................................11

Change Sustainability........................................................................................ 11

The Leadership Style............................................................................................. 13

Leadership Style used by Alan Mulally...............................................................13

Conclusion............................................................................................................. 16

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 Recommendations................................................................................................. 16

References................................................................................................................ 17

Abstract

The Ford Motor Company has been an US symbol for a century. It has reasoned that with a
specific end goal to be fruitful in a worldwide economy, its procedure must be changed. This
system change includes change in firms goals and vision, fundamental portion of its corporate
culture.

This study shows the challenges faced by Alan Mulally who was appointed as CEO of Ford
when the company was on verge of crisis. Bill ford came to a conclusion that only an outsider
can help the company and turn it around. There were additionally a few issues on the operational
front to streamline the item portfolio and enhance the efficiency levels of the company
comparable to the opposition. This study analyses the leadership style of Mulally under Ford
Motors Company and also explore the changes used by him to ensure the companys success.

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Acknowledgment

This work includes a huge amount of research and dedications. It would not be possible without
the support of many individuals. Therefore, I sincerely appreciate all of them included in my
work.

First I would like to thank almighty for giving me strength and patience to complete this work in
a successful way. I would also express my sincere gratitude to Ms. Subaashnii, for her constant
inspiration, encouragement and guidance throughout the course.

I also extend my sincere heartfelt thanks to my classmates, friends for their whole hearted
cooperation.

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Introduction

Change and Leadership

Changes are faced all the time in business. Its caused by the internal and external forces in the
firm. Creating changes gives new ideas and opportunities in the firm. Employees and other staffs
are not comfortable with the change because it disturbs their daily routine and gives different
works with which they are not familiar. Its better to identify changes early which help the firm
to overcome problems. In current business level, the firms have to adopt changes as well as bring
new technologies to level up with the competition. Organizational change is a planned approach
for changes in a firm. While change is made, the main objective is to maximize the use of people
involved and minimize the risk (Bauer, 2012).

In order to achieve goals, leadership is an important factor. It is the capability of firms

management to make decisions, level up competitions, encourage others and achieve goals. The
individuals having great leadership skills reach the position of CEO, Chairman, etc. This
provides direction for the firm. Leadership shows how effective and efficient the employees
should be to complete their tasks. Its about creating an example for staffs to take after, by being
amped up for the work, being persuaded to study new things, and assisting others (Fuller, 2005).

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The Organization

Overview of Ford Motors

Ford Motors is a US multinational automaker headquarters is situated in Dearborn, Michigan,
a suburb of Detroit. It was established by Henry Ford and consolidated on June 16, 1903. The
organization offers cars and business vehicles under the Ford mark and most extravagance
autos under the Lincoln mark. The company claims a 2.1% stake in Mazda of Japan, 8% stake
in Aston Martin of the United Kingdom, and a 49% stake in Jiangling of China. It likewise has
various joint-wanders, one in China known as Changan Ford, one in Taiwan known as Ford
Lio Ho, one in Thailand known as Auto Alliance Thailand, one in Turkey known as Ford
Otosan and one in Russia known as Ford Sollers (Ford Motor, 2015).

Ford is the second-biggest U.S automaker and the fifth-biggest in the world of 2010 vehicle
sales. At the last of 2010, Ford Motors became the fifth automakers in Europe. In 2010, Ford
became the eighth-positioned general American-based organization. In 2008, Ford delivered
5.532 million automobiles and utilized around 213,000 workers at around 90 factories and
offices around the world. The organization opened up to the world in 1956 however the Ford
family, through unique Class B offers, still holds 40 percent voting rights (Revenue and Ford
Motor Company Essay, 2015).

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 Figure 1: SWOT analysis of Ford Motors (Ford, 2012)

Achievements of Ford Motors under Alan Mulally

Alan Mulally became the President and CEO of Ford Motors on 5 th of September, 2006. Before
Mulally took place as CEO the company was on the verge of losing $12.7 billion which is to be
the biggest annual loss happened in history. After 7 years, Mulally was named as the man behind
the rebuilt of Ford Motors and best corporate turnaround in history. One of Mulally's first change
at Ford was to bring back the Taurus nameplate. He couldnt understand why the company
stopped the Taurus, which was the bestselling ford model till 1990s (Harry Craemer, 2015).

In 2006, Mulally drove the exertion for Ford to obtain US$23.6 billion by selling the majority of
Ford's assets. Mulally said that he planned to utilize the cash to back a noteworthy redesign and
gave a pad to secure for a subsidence or other sudden occasion. At the time, the loan was
hindered as a sign of urgency, however is right now extensively credited with offsetting Ford's
budgetary position, appeared differently in relation to crosstown enemies General Motors and
Chrysler, both of whom had gone bankrupt in the midst of the auto business crisis of 20082009.
Ford Motors was the just a single of the Detroit Three that did not request an government loan
(Kimberly Amadeo, 2016).

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In 2007, he managed the offer of Jaguar cars and Land Rover to Tata Motors which is an Indian
auto and truck producer. Mulally said he had no second thoughts about the deal and to focus on
the Ford mark. CEO Jacques Nasser was censured in 2001 for giving careful consideration to
new abroad acquisitions while letting the fundamental Ford operations in the U.S. decrease. Ford
got US$2.3 billion on the deal, impressively beneath what they paid for it under Nasser and
Donald Petersen. In any case, examiners said that Ford would have become significantly less or
would not have found a purchaser in the event that they had attempted to offer it later in 2008, as
Jaguar Land Rover deals in this way dove because of high oil costs in the mid-year, making Tata
ask for a bailout from the British government (Vikas Bajaj, 2012).

The Leaders Background

Brief History of Alan Mulallys Employment

After the college, Mulally got job at Boeing as an engineer in 1969. He has contributed for many
Boeing Projects by using his knowledge in engineering and program management. He became
the director of engineering Boeing 777 and from Sept, 1992 he became the General Manager and
the Vice President of the company. Later, he was given the position of Vice President of
engineering for commercial airplane group. Mulally is better known for raising Phil Condits
Working Together philosophy during and after the Boeing -777 Project. In Future, he was
advanced to Senior Vice President and was taking charge of all the development programs and
flight test operations of airplane development (Ford Motors, 2006).

Till 1998, Mulally was the president of Space and Defense Systems, Tomlin and also the senior
vice president. He was in that position until he became the President of Boeing Commercial
Airplanes. When Phil Condit and Harry Stonecipher were resigned in 2003 and 2005
respectively Mulally was the leading candidate for the CEO position of the company (J. Lynn
Lunsford, 2005) .

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Mulally was awarded as person of the year by Aviation Week and Space Technology for his
contribution and performance at Boeing.

On September, 2006 Mulally was appointed as CEO in Ford Motors. Company had been battling
amid the 2000s retreat, which came to profits under Mulally, and was the only American
significant auto maker avoid from a bailout loan by government. Ford Motors has been named
the third largest automotive manufacturing company on June 2007 (Chris Isidore, 2012).

The achievements of Mulally at Ford Motors was turned into a book called An American Icon:
Alan Mulally and another book called The Fight to Save Ford Motor Company which was
written by Bryce G. Hoffman which was published in 2012. He was appointed as one of the
Board Of Directors in Google on July 15, 2014 (American Icon: Alan Mulally, 2015).

Figure 2: Principals used by Mulally in his career (Joseph Phillips, 2015)

Changes
Changes made by Alan Mulally to Ford Motors

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In the late 2000s, Ford Motors was struggling and was not in the competition with other auto
manufacturing companies. After Alan Mulally was appointed as the CEO of the company, He
began to make changes which returned to profitability under him. He made certain changes in the
company to stay ahead of the competitors. After the appointment of Alan Mulally, the following
are the changes made by him.

Constraining all to Join the Group - The meetings were held in Dearborn, arenas of
mortal combat before the arrival of Mulally. Executives looked for weak areas in others
armor and wanted to drive back home fast. After Mulally took the spot, he arraigned the
meetings ina a safe environment where he can share every datas safely. Mulally also
praised and tied all the success of the company to each executive to make sure that they
have got all the messages delivered by him.
Demanding a rigorous dependence on the facts - Before the Mulally Ford, there were
many excuses given for the fail of plans. There were lot of reasons given for the excuses
and they dint work to clear causes caused by the company. In Mulallys weekly business
plan meetings, every executives has to submit the updates and progress of their work in
their departments was against the backdrop of his plan. All the senior executives had to
attend the weekly meetings so that the discrepancies in any data were exposed. No
explanations were allowed in the meetings and everyone took that opportunity to be
concentrated in the companys performance. Mulally always told that theres nowhere to
hide.

Creation of One Ford Till the Late 2000s Ford was divided into many divisions like
Ford of Asia, Ford of Europe and many other subsidiaries and these divisions were not in
corporation or had coordination with each other. Mulally wanted to merge all these
divisions into one Ford as a global enterprise. This would create unbelievable economies
of scale and also create a multinational auto powerhouse. During the early meetings with
the reporters, Mulally accepted that he want to merge the different ford divisions as One
Ford Company (Caldicott, 2014).

Creation of vehicles people Liked Like other Motor companies like Chrysler and
General Motors, Ford was having union contracts in good times that avoided it from
laying of labors or Closing of Plants so that the factories were fill with cheap vehicle and

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 was sold for loss. Before accepting the CEO position of Ford, Mulally told Bill Ford Jr.
that he wanted to change the complete product lineup from top to bottom. From the
Mulally period of Ford all the vehicles would be the best in its class. Even though the
company was running out of cash Mulally insisted that the company was going out of
business for all these 30 years and this is how to get back.

Stick with One Plan Before Mulally, Ford had different plans yearly. When plans dont
work they came up with another plan. But Mulally just had one plan and he focused on it.
He always stated the four points which are stated above that are coming up as a group,
leveraging the global assets of Ford, building the vehicles that people love and the fourth
is to put together and use finance for necessary (Hoffman, 2013).

Challenges faced by Alan Mulally

Being CEO of Ford Motors Alan Mulally faced a lot of challenges as the company was on
the verge of bankruptcy. He wanted to merge the different divisions of the company to One
Ford Company as a global enterprise.
He had to change to employees slow and supervising style of functionary.
Opinions of Henry Ford and other investors were different when Mulally insisted to focus
on making affordable cars for mass production.
The biggest challenge faced by Mulally is to changing the whole companys deep-rooted
culture which was said to be dysfunctional (Joel Kurtzman & Michael Distefano, 2014).

Change Sustainability

A developing stream of research demonstrates that the appropriation of ecological and

socially supportable technologies are, at any rate, cost nonpartisan and regularly spare
privately owned businesses and open organizations considerable wholes of cash while
expanding piece of the overall industry, expanding worker profitability and partner
responsibility. It is nothing unexpected that an expanding number of associations have

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 grasped the possibility of maintainability in the most recent decade. Anyways, in spite of
protracted discussions about what to do and which new advancements and strategy
instruments to actualize, a hefty portion of their drives have fizzled, prompting to squandered
assets, dissatisfaction, and criticism (Doppelt, 2003).

McKinsey 7-S Model to Sustain Changes in Ford Motors

Figure 3: McKinsey 7-S Model (Whit, 2011)

McKinseys 7s model is used here to show how Alan Mulally sustained the changes made in
his organization.7s includes strategy, systems, structure, skills, shared values, staffs and style.
All these elements are important to determine that the changes bought by Alan Mulally at
Ford helped to achieve the goals and objectives of the organization.

Strategy: In McKinseys 7s Model, strategy is the plan and the scope of the company to
maintain competition among the competitors. Under Mulally, Ford set a strategic path
and a Plan that everyone focused for the goals of the organization. This helped the
companys growth as Ford became the third largest auto manufacturers in two years.

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 Structure: The way how the company is structured and organized, i.e. how the
departments are interrelated which shows influence in coordinating the employees.
Mulally used a simple way of structure which was easy to communicate between all the
employees of the organization which allows things to change easily.
Systems: Systems refers to the daily tasks done by the employees in the organization.
Mulally wanted every single worker to focus on their job. He arraigned meetings weekly
for executives and praised them for their work done. This method helps the firm by
bringing a lot of changes than before and sustains the interest in the work by employees.
Shared Values: The values of the company which guides the employees towards a
valued-behavior. Mulally always uttered One Ford, One Team (John Dudovskiy, 2013).
Style: The style of leadership used in the firm. Mulally not only tried new ideas but also
tried the old Taurus nameplate which was bestselling in 1990s. Mulally exhibited a
unique way to leadership and management style that helped to turn around fords culture.
He used to flatten the organization, help employees to work together and talk and listen to
them frequently.
Staff: The Companys human resources and their capabilities play a big role in ensuring
the change sustained because the employees have to make the change. Under Mulally, the
employees and the executives were applauded for the works done by them. Mulally used
to communicate with all level of employees.
Skills: In McKinseys 7s Model, the skills are capabilities of the company. Mulally made
sure that companys new manufacturing must be according to customers concept and
made employees to stick to that.

The Leadership Style

Leadership Style used by Alan Mulally

Leadership refers as attaining the goals of the organization by creating an idea or vision in which
the employees follow up. Here highlights the leadership style used by Alan Mulally in Ford
Motors. He used outward-mindset pattern to change the company. Mulally soon discovered that
no one shows responsible for the loss of the company as they think their jobs are done well.

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Mulally used the management approach while was successful for him at Boeing. He kept two
meeting weekly which is Business plan review (BPR) and Special attention review (SAR)
(Koehler, 2016).

Figure 4: The Outward Mindset Pattern (Koehler, Berrett, 2016)

Following are the Leadership style used by Alan Mulally at Ford:

Values: Mulally used to say memorable phrases which make the employees work
towards the firm goals. He uses phrases to show how valued are his employees to the
firm.
Vision: He used to communicate Henry Fords Phrase i.e., Opening the highways to all
mankind which explains how the company serves the human resources (Gallo, 2012).
Win-Win situation: Rather than considering different companies and people as
contenders, Mulally utilizes a "win-win" approach and mentality with regards to
connections, which helped him make a concurrence with the United Auto Workers union
to roll out specific improvements that are essential for Ford to make benefit as a
byproduct of taking production back to the US and helped him merge the organization's
buys to providers that were ready to band together with them to decrease costs as an end-

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 result of accepting a more noteworthy share of the organization's business (Stallard,
2014).
Living it: Mulally was a facilitator rather than being the dictator during the meetings,
precluding humor made by others and anticipating that leaders should straightforwardly
share obstructions they are confronting. Additionally, he praises leaders who help others.
Taking Positive attitude: Mulally uses positive comments instead of criticism with
having a plan and good persons to actualize the plan. He always gives a hopeful attitude
that the firm will attain the vision.
Getting everyone together: Mulally used to keep weekly meetings between the global
leadership team with all the business and functional leaders who would give the reports
of the progress. If any problems are identified, they arrange separate meetings to find
solutions (Alan Mulally, 2013).
Result Oriented: Mulally follows and assess the results of the firm, which are checked
frequently in meetings which help to understand the companys position (Chris, 2015).

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Conclusion

Under Mulally, Ford Motor Company made a record of $2.7 billion net profit, despite being on
the verge of bankruptcy in three years earlier when he started as CEO. All these
accomplishments are the aftereffect of presenting extensive changes in the organization in an
effective way. In the meantime, stretch that progressions executed by Mulally were fairly seen as
dangerous during 2006-2009. In any case, the advancement of occasions for the organization in
taking after years and, most importantly, its amazing budgetary execution legitimize propriety of
those progressions, and, demonstrating to successful business of Alan Mulally.

Mulally was able to accomplish viable turnaround in his company in part since he could offer
fresh knowledge into the organization's issues. In particular, having worked for aircraft
organization, Boeing for a long time Mulally had no past involvement in vehicle fabricating
when he accepted the job in 2006. He was able to survey the problems faced by Ford from new
point of view and find solutions and guarantee their implementation.

Recommendations

In spite of the fact that Ford Motor Company has huge customers, they must change over
shoppers that buy chiefly foreign autos over to their items. One of the attractions that draw
clients from US products to outside products is the trustworthiness and service that foreign items
offer. Also the company should appeal to the government to less tax gas which would bring
down the cost of gas and give purchasers more discretionary cash flow. This would likewise
revive the SUV demands and increase benefits. Ultimately, Ford ought to examine their abilities
and attempt to conjecture the items customers need.

References
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Bauer, T., 2012. An Introduction to Organizational Behavior.

Caldicott, S.M., 2014. Why Ford's Alan Mulally Is An Innovation CEO For The Record
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