Ford’s Organizational Changes
Kimberly Rape
Dana Mandell
Chamindu Kavindra
Organizational Behavior
November 14, 2014
Introduction
Background – Henry Ford
Founded in 1903, Henry Ford managed to get investor support to open the first manufacturing automobile company in Detroit, Michigan. Ford Motor Company has been known for its mass production of vehicles using a perfected assembly line method and its innovations in the automobile industry. Ford’s famous Model-T was developed as an innovative automobile that could be produced quickly, while keeping the cost to a minimum. This allowed people with a lower income the opportunity to afford an automobile. One of the biggest changes in the automobile industry occurred in 1913 with the introduction of a perfected assembly line method. This assembly line method was the one of the main reasons Ford Motor Company was able to keep the cost of vehicles and the production time to a minimum. Ford also took the first step to increase wages of their employees above the industry standard. Although it was still a very low value, Ford offered $5 per day which was a huge improvement from the $2.34 per day that most companies offered.
By the 1930 's Ford was a primary target of the United Automobile Workers (UAW) union to increase wages and working conditions. Despite attempts by Henry Ford to keep the Unions out of the company, the Supreme Court rulings forced Ford to work with the UAW. Another sentence….
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Other manufacturers were content to target the wealthy American could buy, not even considering the middle or lower class. Ford developed a design and a method of making the cars that steadily and continuously reduced the cost of the car, the car being the Model T. Instead of pocketing the money from the cars Ford used it to make better and more efficient ways to build a car. As a result, Ford Motor Company sold more cars and steadily increased its earnings. Henry Ford somehow managed to change people from the looking at an automobile as a luxury, and more like a convenience
Ford impacted todays life from what he did back in his prime by, his technological development and U.S. infrastructure. Ford became renowned for his revolutionary vision: the manufacture of an inexpensive automobile made by skilled workers who earn steady wages. In 1914, he sponsored the development of the moving assembly line technique of mass production. Simultaneously, he introduced the $5-per-day wage as a method of keeping the best workers loyal to his company. Simple to drive and cheap to repair, half of all cars in America in 1918 were Model T's.
As said in the article “Timeline: The Life of experience for Ford. After the Model A, Ford focused on cheaper and more efficient means of production. In 1908, Ford launched the Model T, also known as the “Tin Lizzie”, which became an instant hit (“Timeline: The Life of Henry Ford). Harris confirms that in 1910, Ford Motor Company moves to a larger factory named Highland Park to meet with the demand of their automobiles (42). To maximize efficiency Ford implements the moving assembly line in his Hyland Park Factory (“Henry Ford”, History.com). Ford Motor Company is then able to manufacture an extreme number of Model T’s. The article “Henry Ford” on Biography.com points out that in 1819, 50% of all automobiles in the U.S. are Ford Model T’s. This reference points out not only the popularity of the Model T, but also the popularity of Ford Motor Company itself. Henry Ford”, in 1901, Ford’s Grosse Point Track 999 racecar breaks a speed record. Ford was starting to make his automobiles faster and more reliable. Ford founds Ford motor company in the year 1903 (“Henry Ford”, Biography.com). This would mark an important year in American History. Harris writes that Ford launched the Model A automobile in 1903 (108). The Model A was a learning
In 1896, Ford constructed his first model for a horseless carriage, the Ford Quadricycle. After attending a meeting with executives and proposing automobile ideas, Thomas Edison encouraged to build another model. Seven years later, after continuing to strive for improvement, Ford established the Ford Motor Company and his first car was assembled. Back then, only two or three cars were produced in one day, and it took the effort of groups of men. Ford wanted a more efficient production assembly, and that was when the Model T was born. Ford created the system of paying workers a steady wage to guarantee their loyalty, and moving assembly lines for mass production, which included interchangeable parts. This idea of efficiency revolutionized the American
As the demand for the Model T kept growing it rapidly became a dominant instrument in the swift changes occurring in the lives of the citizens of America. After added experimentation by Ford and his aids he moved the business to Highland Park, Michigan. As the manufacturing system evolved by 1913, a new and modified plant was built which was able to deliver parts, subassemblies and assemblies, both with precise timing to a constantly moving main assembly line. Although this new design of the assembly line saved time and money, and increased production, the one flaw was the work of the employees was still tedious and tiresome. The workers were involved, but also executed the same task again and again, psychologically wearing them down as the days pasted. Pushing his employees with strict offenses, Ford accomplished what the others in the industry could not, finding a way to build a reliable automobile quickly and inexpensively. However, he theoretically turned people into machine parts to complete the task.
Because of the high rate at which an assembly line can produce goods, it helps the companies with them gain more control over the economy over the nation and drive out businesses that cannot afford an assembly line. Before the assembly line was introduced, each Model T cost about $850, but after the assembly line, it cost less than $300 (6 - 9). Henry Ford had always envisioned a car that could be bought by the average family (9 - 12). He wanted to become rich and knew that aiming to have every American as a potential consumer was the best way to do so (11). When his prices fell by that much, it opened the market to many more people, so the demand for a lower price car went up, and Ford was able to sell over 850,000 Model T cars in under
Out of all the new industries, the automobile was an essential one. It was the development that changed American lives in the 20th century the most. Henry Ford was the person who revolutionised the large-scale manufacturing of vehicles. He utilised the assembly line idea for automobile production. The critically acclaimed assembly line allowed for manufacturing companies to create the extra product to sell, one of these products was your everyday automobiles. The model T Ford was the most well-known car at the time with more than fifteen million being sold across the country by 1927. It was the first car to be
Ford Motor Company is an American automobile manufacturer founded and headquartered in Dearborn, Michigan but incorporated in the state of Delaware. The company was started by Henry Ford in 1903 and is historically famous for the creation and implementation of the assembly line in manufacturing processes. Ford’s mission is to produce and sell automobiles – cars, trucks, SUVs, etc – from the ones initially designed and engineered by Henry Ford all the way through the newer versions created in the last few years. (Profitable Growth for All, 2012)
When the design of the Model T proved successful, Ford turned to the problem of producing the car in large volumes and at a low unit cost. The solution was found in the moving assembly line. After more experimentation, in 1913 the Ford Motor Company displayed to the world the complete assembly-line mass production of motor vehicles. The technique consisted of two basic elements: a conveyor system and the limitation of each worker to a single repetitive task. Despite its deceptive simplicity, the technique required elaborate planning and synchronization. The first Ford assembly line permitted only very minor variations in the basic model, a limitation that was compensated for by the low cost. The price of the Model T touring car dropped from $950 in 1908 to $360 in 1916, and yet the profit per car remained the same, at about $100 per car. The 1920's saw Ford's new plant at River Rouge opened. It was nearly self-sufficient, with all the components needed to manufacture the car, controlled and owned by Ford. General Motors at this time began
The automobile industry put American citizens into action. Mass production was a big component in the success of automobiles. Although successful, it became very repetitive. Skilled workers who were once worshipped, were no longer needed. Henry Ford was described as racist, bitter, but he brought success to citizens in the 1920s. Ford started the Ford Motor Company in 1903 with the help of a limited amount of workers in a shed. It was not until 1914 where custom-made cars turned into many cars, such as the Model T, moving down an assembly line. The Model T was a very popular car that benefitted cheap labor and easy mobility for its owners. Ford became a billionaire from the help of the federal government’s actions. At this point, the government decided that funds should be spent more on roads. Automobiles introduced
Ford hired Fredrick Taylor, a motion study expert, to evaluate and refine the efficiency of his factories after years of trying to find ways himself (History.com, 2009). Taylor took what he saw in the factories to make a more efficient workforce while Henry Ford developed tools and equipment to help with a better flow of the workforce. Together, they realized four distinct things from other smaller businesses that they wanted to immolate and bring to the big stage. These four principles were the use of interchangeable parts, division of labor, continuous flow, and reduced wasted effort (Science Odyssey, 1998). With these four principles in mind and the dream to produce a more cost efficient vehicle, Henry Ford and Fredrick Taylor created the first large scale assembly line in 1913 (Goss, 2014). This assembly line was able to transfer the time it took to build a single Model T from twelve hours to a mere two hours and thirty minutes (History.com, 2009). With its eighty-four distinct steps in the flow of the assembly line, a division of labor was created where a worker could be trained to do one specific task making him more efficient at that task and able to do a much better job (History.com, 2009). Secondly, having interchangeable parts that would could be used between any model of Ford allowed Henry to focus on machinery that would produce these
Ford was created in 1903 by Henry Ford in Detroit, MI. He quickly revolutionize the development of the automobile as a product and he also was the visionary behind the assembly line for mass production, and in turn made it possible for automobiles to become more affordable for the average household. Ford had a strong belief in his mission statement, which defines the kind of actions that are needed to fulfill organizational goal. However, Ford also had a vision statement that helped drive its global organization to reach its higher performance levels. Both areas assist in the overall foundation that Ford’s strong beliefs stand on. Both mission and vision statement are factors that solidify the success and strategic direction in the automotive industry.
The Ford company had always been a major player in the growth of the US economy, being one of the Big Three (along with GM and Chrysler) in the US automobile industry. Ford has been credited for having made the automobile attainable to the middle-class that emerged through the 20th to the 21st centuries, due in part to its refinement of the assembly line concept. It was the first manufacturing company to make use of the moving assembly line, which created so much efficiency that made owning a car highly affordable to the common American.
The automobile industry made owning an automobile more available to the public. Factories began producing cars in higher numbers than one craftsman would ever be able to. “The first automotive production on a commercial scale began in France in 1980, but the United States in the 1900’s became equal to the European automobile factories. The Europeans used engineering and handcraft methods, while the U.S. had plants that used the assembly line” (The History). Frank Duryea of Springfield, Massachusetts developed the first gasoline powered automobile in the United States, and over the next twenty years 8 million cars were manufactured and sold (Clayton 501). On the other hand, Henry Ford’s first working gasoline engine was completed at the end of 1843, and “by 1896, he had completed his first horseless carriage, the Quadricycle, so called because the chassis of the four- horsepower vehicle was a buggy frame mounted on four bicycle wheels” (Curley 165). Ford revolutionized factory production with his assembly line methods (Curly 163). The assembly line remained hard on laborers, required them to perform routinely repetitive tasks for hours on end. To retain workers, Henry Ford paid workers five dollars a day, and employees only work eight hour days. Mass production techniques rapidly increased worker productivity and output, allowing more cars to be made and to sell for less money. By the 1920’s, the number of registered vehicles rose over fifteen million, because of Henry Ford’s assembly line, which made manufacturing automobiles more time efficient and less costly, making automobiles less expensive. In 1929, Ford, who was one of Thomas Edison’s greatest admirers, asked him to design a battery for a self-starter, to be introduced on the Model T, which was Ford’s car for the common man (Curley 139). At the time of his death in 1947, Henry Ford’s
In 1908 Henry Ford had constructed the Model T; the time it took him to create this automobile was 13 days. Now eager to achieve more, Ford knew that he needed a place to construct these cars. He also knew that to sell mass amounts he would have to sell cheap, and buy parts and supplies even cheaper (Douglas, 25). The construction of the first Ford Motor plant used the world’s only conveyer belt. This was part of the Fords plan to build fast, when he constructed the assembly line cars were pumped out in as fast as 15 minuets, this was down from 19 days. Ford was able to make the automobile a car for everyman, a working man with a family.