Firms decision to decline the federal loan

Reference no: EM13750843

Ford drivers out of the financial mud

When the other major U.S. automakers accepted federal funds in order to stay in business, Ford Motor Company-in the voice of CEO Alan R. Mulally-said no.

The federal funds were to come in the form of short-term loans, which Ford determined it didn't need at the time. Several years earlier, the firm had restructured its debt so that when the economy slowed down, Ford didn't. Mulally observes that this timing was a bit of luck and
a bit of strategic planning. To implement this overall strategy, Ford sold off its luxury brands Aston Martin, Jaguar, and Land Rover and invested in the development of moderately priced, fuel-efficient cars and trucks. Ford took on some extra debt as a hedge against a recession-and had the cash on hand when other U.S. automakers didn't.

Decisions like these require strong leadership qualities that include a will to persevere during tough times. Mulally's first management position was at Boeing. He overmanaged his employees so closely that one engineer finally quit.

Mulally says that this early experience taught him that his job as a manager was "to help connect people to a bigger goal, a bigger program and help them move forward to even bigger contributions. That experience stayed with me forever on what it really means to manage and lead."

Mulally believes that every employee has something to offer and that each worker must be clear about the firm's mission. He says that his job is to focus on four things:

(1) the process of connecting his firm to the outside world

(2) keeping track of the firm s identity in the marketplace

(3) balancing short-term objectives with long-term

(4) the values and standards of the organization. when career advice he would give to young recruit business world, Mulally answers without hesitation, Don't manage your career.

Questions for Critical Thinking

1. How does Alan Mulally's "focus on four things help him with strategic planning for Ford? Do you believe it made a difference in the firm's decision to decline the federal loan?

2. Mulally emphasizes the importance of having every employee understand the firm's mission. How might this understanding help employ contribute to the company's performance?

Reference no: EM13750843

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