Principles of Fords’ Theory Essay

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Introduction

A number of theories are often employed in organizational development to explain the efficiency companies. Ford’s theory is one such theory that has always been utilized in measuring the performance of the organization.

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The theory is based on the principles of Taylor’s theory and the ideas of Henry Ford, who was one of the engineers that shaped the manufacturing system in the motor industry.

The theory suggests that efficiency is achieved through tight control of employee movement, as well as instituting adequate policies that would separate planning functions from executive tasks.

Edwards (1990, p. 35) was of the view that ideas of Taylor were criticized for neglecting the role of employees in organizational development. Taylor’s management theory treated employees in an inhumane way since it viewed them as properties of the organization.

In this regard, Ford’s theory was embraced as an alternative to the views of Taylor on management. As the name suggests, Henry Ford developed the theory during the post-war era in European.

The theory was widely supported by the working class since it suggested a wage rise and domestic production, as opposed to external production. The theory respected the contributions of workers in the organization.

Several organizations adopted Ford’s theory as a production model after it was applied successfully in the Ford Motor Company (Sobrero & Roberts 2001, p. 499). Ford’s theory insisted on the development of production methods and manufacturing techniques.

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Ford was of the view that economic development would be sustained through integrating mass consumption into production accountabilities. This meant that the organization had to improve production processes in order to realize full benefits.

In this regard, the welfare of workers had to be taken care of for the organization to sustain the market. In the motor industry, the idea of deskilling had to be adopted to ensure constant mass production and technological improvement.

In the modern management systems, Ford’s ideas have continued to influence many organizations. Organizations utilize the ideas of Ford in order to tackle the contemporary demands of the highly competitive market.

The modern market is very complex meaning that it needs improved operation management strategies.

Consequently, businesses find themselves implementing lean management principles, the ideas related to flexible production systems, inventory systems, referred to as just-in-time inventory systems, and leaderless work groups in order to remain competitive.

Hounshell (1984, p. 112) commented that the above factors can only be achieved through rapid manufacturing life cycles, globalization of customer merchandise and markets, and exhaustive merchandise and market segmentation and demarcation.

This article aims at reviewing the ideas of Henry Ford, which have shaped the management systems in various parts of the world.

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The article looks at the positive and negative impacts of Ford’s theory. Before delving into the positive and negative effects of the theory, the paper will first discuss the major principles of Ford’s theory.

Principles of Ford’s Theory

Hardy and Clegg (1996, p. 32) underscored the fact that skills are always expected to develop as organizations grow bigger. The organization tends to adopt the idea of specialization and division of labor, as each employee would want to be given a particular role to play.

In this regard, functional units and positions in the organization would become differentiated. The best management will always try its best to ensure that customers are updated on the progress of the firm.

Through this, the top officials of the organization would be proving that they care about the demands of customers. Customers on the other hand are always keen on the products they consume in the market.

They can easily switch to different suppliers or even companies in case their demands are not met adequately. Based on this, Ford noted that the organization had to shift its focus from production of goods to customer satisfaction.

In other words, the organization has to redefine its aims to focus on sustaining the market other than producing goods. Therefore, the role of the management is to differentiate its products in order to convene the needs of various customers.

The management has no option, but to rethink and reformulate policies that would help it retain customers.

Cohen and Moore (2002, p. 13) suggested that a number of factors would have to be put into consideration for this to happen, including manufacturing and distribution processes, the utilization of technology in production, environmental conservation, and participative decision-making.

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Lowenstein (1997, p. 21) supported the ideas of Ford by arguing that for an organization to realize customer satisfaction, it has to adopt fine-tuned organizational restructuring.

Many analysts are of the belief that Ford’ theory was an example of Taylor’s principles since the two applied similar styles of management. The main concern was production of goods and services, which had to be produced in mass.

Fredrick Taylor insisted on the role of rationality and efficiency in the production of goods and services. His view was that the organization had to standardize its production systems in order to achieve high results.

In this regard, the management had the role of ensuring that the production system is organized since the workforce does not know the practical work of production. In one of the statements, Taylor noted that all possible brainwork ought to be detached from the shop and be focused on planning.

The role of the boss is to draft executive policies. The role of the management is to select the best staff that would fulfill organizational goals and objectives. Those employed in the organization had to be competent, with adequate experience.

In this view, the executive was the ‘denktank’ of the organization. Without an experienced management, the company would definitely suffer from sabotage.

In this case, employees had no role to play in the running of the organization, apart from fulfilling the roles assigned to them by the top executive (Lowenstein 1997, p. 7).

In other words, Taylor’s idea was focused on accomplishing the organizational objectives, as opposed to fulfilling the needs of the workforce.

Consequently, the employee had to separate thinking from doing the work. The main function of the employee was to do the work, but not engaging in any form of thinking.

This type of organizational practice discouraged innovation and creativity since employees were never given permission to come up with something new in their life.

The idea behind this reasoning was that the employee would think more about his actions and would probably think of improving them. The employee had to work in the same way as machines in order to realize high results.

However, the worker was not to assume that he or she is a robot. The relationship that existed between the worker and the employer was referred to as a social-technical relationship meaning that the two had different needs and aspirations.

The major aim of the worker was to improve life while the organization was concerned with improving production.

In other words, the organization looked for ways through which production would be improved while workers were concerned with things such as salary increment since it would improve their standards of living (Katsikeas, Schlegelmilch & Skarmeas 2002, p. 762).

To the contrary, workers at the time were never concerned with things such as over time and improved working conditions. This would definitely result to conflicts between the workforce and the management.

Unlike Taylor’s theory, Ford’s idea was more concerned with the relationship between the worker and the employee. For instance, Ford came up with an idea of eight-hour policy, which meant that an employee had to work for only eight hours a day.

Moreover, he came up with the idea that the employee had to be paid well in case the organization registers high returns. However, the social welfare of the employee would only increase with increased production. This was to facilitate a better profit of labor.

For this to be attained, the management had to be hierarchical implying that the top management was superior to other junior management units. Just as Taylor’s principle, the power of the organization rested in the hands of the top management (Piore & Charles 1985, p. 33).

The top management was in charge of policy and decision-making processes. Employees were not given an opportunity to make decisions on major organizational tasks.

Positive Effects of Ford’s Ideas

The ideas of Ford contributed to economic development in various parts of the world. Before Ford’s theory, artisans, who had high understanding, mainly produced cars in the motor industry. The process of manufacturing vehicles took several weeks and even months.

For instance, it took at least thirteen weeks to manufacture a single vehicle. For a single car to be produced, a team of highly trained personnel had to be consulted. This team would move from one organization to the other making cars and giving their contributions.

This process was tiresome and mostly inefficient since the products manufactured were fewer. Later on, the production system was adjusted to ensure efficiency, but the plan was still unproductive.

Employees would be stationed in one place and cars would be moved from one organization to the other. Employees had direct control over the production system since they determined the exact time that any good would be ready.

Ford changed this production system since he established that production would be stronger in case the management takes over the process. He made two contributions, one of them being driving the mechanical assembly line while the other was assigning the production role to the management.

The rate at which cars were produced depended on the management meaning that it had the major role of coming up with a plan that would ensure efficient production (Celly, Kamauff & Spekman 1999, p. 299).

For the management to control the production process, it had to employ three managerial practices.

First, it had to ensure that the pace of production was up to the required standard.

Secondly, scientific management was to be applied in managing employees whereby they had to be treated as human beings, as opposed to machines.

Finally, each employee had to be compensated based on the nature of the work.

Some employees had incomparable skills that were extremely important in the organization. Such workers had to be taken care of to prevent their turn over, which would hurt the production process.

Within a very short period, the ideas of Ford had taken over the running of many companies in North America and Europe. A number of companies dealing in household goods and electronics applied the ideas of Ford successfully.

In the United States, an organization run by Ford employed over eighty-thousand people. The factory had adequate supply of raw materials, which enabled it to manufacture new brands of cars at a very high rate.

Unfortunately, employees were intolerant to the working conditions, forcing them to quit. Ford was very wise since he understood that employees could be retained through salary increment (Lovelock & Young 1979, p. 174).

He ensured that the welfare of employees was taken care of, by allowing them to be consumers of the manufactured goods. Employees were given permission of accumulating their savings in the company in order to acquire a car.

Through the ideas of Ford, the issue of market fragmentation emerged since the market was identified as a major issue in the production system. Before Ford’s principles, the market was less competitive since the goods produced were insufficient.

The idea of mass production presented a new challenge to the management since it had to deal with competition and consumer satisfaction.

The product had to be updated at intervals and timing was a critical issue. The management had to come up with ways through which it could engage the consumer in the production system.

Through Ford’s ideas, modern organizations came to the realization that adaptability can be incorporated into the production processes. An organization can end up producing a number of products from the same set of raw materials and personnel.

In terms of improving productivity, Ford proved that the management should be at the forefront in spearheading production. This implies that the production function should not be left to employees, but instead the top management should always take its control.

In the modern managerial practices, the organization cannot apply the ideas of Ford in their purest form, but instead they are to be adjusted to suit the demands of the current market.

In terms of coping with risks, the ideas of Ford could be applied validly to resolve various issues since employees are aware of the challenges. In an organization employing the ideas of Ford, each employee is expected to know the risks that the organization is likely to face.

The introduction of change would probably bring about risks hence the management should develop some mechanisms that would help it in dealing with these problems effectively and quickly (Hashmi 2004, p. 82).

Negative Effects

Even though the ideas of Ford contributed to mass production, they brought about some problems that interfered with the normal functioning of organizations at the time. In fact, his ideas cannot be applied in the modern organization in their purest form.

This means that they have to be interpreted to suit the demands of the modern organization. The major issue regarding Ford’s ideas is flexibility since he never considered the issue of change in his analysis. Flexibility is viewed from a number of perspectives.

It can be viewed in terms of job flexibility, location flexibility, or even temporal flexibility.

Ford’s management model does not facilitate flexibility since it is too rigid. Employees are instructed to perform a similar job for several years, which might result to boredom and subsequent turnover, which is a blow to the organization (Kotelnikov 2006, p. 41).

Another problem related to Ford’s idea is the issue of alienation. In fact, many scholars underscore the fact that Ford’s theory results to alienation of the workforce since employees of any organization are not involved in decision-making processes.

Even though some analysts observe that alienation gives employees some kind of independence, the type of managerial skills suggested by Ford were out of balance since they excluded employees from the production process.

Just as the views of Taylor suggested, employees were simply viewed as objects or tools of production in Ford’s model. In this regard, compliance should be differentiated from commitment (Martin 2005, p. 89).

Ford misinterpreted commitment to mean compliance. Employees would be committed to the production process in case they are allowed to own it.

Forcing them to do something would only make them comply with the organizational rules and regulations, but they would be comfortable doing what they like best. Studies show that human beings are not usually willing to follow the ideas of others without conducting a critical review.

In this case, people will always try as much as possible to express their ideas, even in difficult situations. This is an attempt to prevent domination, as well as advocate for freedom.

Martin (2005, p. 95) was of the view that even prisoners of war will always try to express some independence, even though conditions might be unfavorable.

Modern management theories suggest that the advantages of hiring or employing people in the organization must always outweigh the costs or the disadvantages of hiring. In this regard, the methods employed in controlling and directing the personnel should be efficient.

Employees are considered the social capital of the organization hence they should be beneficial to the organization. They should have some freedom that would enable them to come up with new products.

In other words, they should be creative and innovative. Instituting stricter laws would not allow employees to develop new products.

List of References

Celly, KS, Kamauff, JW & Spekman, RE 1999, ”Technological Uncertainty, Buyer Preferences and Supplier Assurances: An Examination of Pacific Rim Purchasing Arrangements’, Journal of International Business Studies, Vol. 30, no. 2, pp 297-321.

Cohen, S & Moore, J 2002,”Today’s Buzzword: CRM”, Public Management, Vol. 82, no. 4, pp 10-31.

Edwards, PK 1990, Understanding conflict in the labor process: the logic and autonomy of struggle, Houndmills: Macmillan.

Hardy, C & Clegg, S 1996, Handbook of organization studies, Sage, London.

Hashmi, K 2004, Introduction and Implementation of Total Quality Management (TQM), Six Sigma LLC, London.

Hounshell, D 1984, From the American System to Mass Production, 1880-1932, Johns Hopkins University, Press Baltimore.

Katsikeas, CS, Schlegelmilch, BB & Skarmeas, D 2002, “Drivers of Commitment and Its Impact on Performance in Cross-Cultural Buyer-Seller Relationships: The Importer’s Perspective”, Journal of International Business Studies, Vol. 33, no. 4, pp 757-801.

Kotelnikov, V 2006, “Managing Your Value Chain: Receiving Raw Materials as Input, Adding Value, and Selling Finished Products to Customers”, Business Ventures, Vol. 5, no. 17, pp 38-67.

Lovelock, CH & Young, RF 1979, “Look to Consumers to Increase Productivity”, Harvard Business Review, Vol. 57. No. 2, pp 168-178.

Lowenstein, MW 1997, The Customer Loyalty Pyramid, Westport, Quorum Books.

Martin, J 2005, Organizational behavior and management, Thomson, Learning.

Piore, MJ & Charles, S 1985, Das Ende der Massen production, Wagenbach, Berlin.

Sobrero, M & Roberts, EB 2001, “The trade-off between efficiency and learning in inter-organizational relationships for product development”, Management Science, Vol. 47, no. 4, pp 493-511.

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IvyPanda. 2019. "Principles of Fords’ Theory." December 28, 2019. https://ivypanda.com/essays/fords-theory/.

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