How did Mulally change Ford’s organizational structure, for example, the form of its vertical and horizontal differentiation and integration? In what ways does he hope to increase performance by making these organizational design changes?
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Allan R. Mulally was appointed CEO of Ford Motors in September 2006. Prior to assuming the role at Ford, Mulally was the Executive Vice President at Boeing Company, which is a major aerospace and defense corporation. He was well known for his role for turning around the airplane division of Boeing, especially when the industry experienced a slump. At Ford, Mulally was expected to perform a similar job of turning around Ford.
Initially, many felt that Mulally was not suited for the job as he had no background in the automobile industry, whereas analysts felt that Mulally would have to face a series of challenges for restructuring Ford. Ford Motors was then known for its complex hierarchy and bureaucracy, which has made the company environmentally lethargic. The company was not able to successfully integrate the brands it acquired over the time to evolve a competitive strategy. All these factors had led to a state of crisis at Ford. In the face of these challenges, Ford had a onus of huge responsibility.
Since he joined the company, Mulally’s impact so far has been to challenge the automaker’s recalcitrant corporate culture. He attacked the bureaucratic plague that had caused the degradation of the working environment at Ford. Executive managers were shaken to wake up from their organizational silos. His way of working, with meetings everyday with the executive committee made them come out from their hiding places. With much emphasis on operational metrics and financial results, he attacked every corner of non-performance.
Organizational problems began when the auto industry’s growth slowed, thereby limiting …
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