FORD MOTOR COMPANY:

I.Introduction:

As the second-largest automobile company in the world, Ford Motor Company represents a
$164 billion multinational business empire. Known primarily as a manufacturer of
automobiles, Ford also operates Ford Credit, which generates more than $3 billion in income,
and owns The Hertz Corporation, the largest automobile rental company in the world.

Ford Motor Company produces and sells automotive vehicles under the brand names Ford,
Mercury, Lincoln, Volvo, Jaguar , Land Rover, and Aston Martin. Ford also engages in other
businesses such as car rental, through its Hertz Corporation subsidiary.

Ford also maintains controlling interest in Mazda Motor Corporation. Ford's financial
stability was shaken in early years of the new millennium as a result of slowing sales, quality
issues, and a debacle involving Firestone tires.

History :

Ford Motor Company was founded in 1903 by Henry Ford and 11 associate investors. In
1919 the company was reincorporated, with Ford, his wife, Clara, and his son, Edsel,
acquiring full ownership; they, their heirs, and the Ford Foundation (formed 1936) were sole
stockholders until January 1956, when public sale of the common stock was first offered. Its
Headquarters are in Dearborn, Michigan.

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Reorganization And Expansion :

As early as 1906 Henry Ford had acquired 58.5 percent of the company’s stock; and, when
the other stockholders balked at the idea of building the giant (and expensive) River Rouge
plant in Dearborn, he bought them out; Edsel Ford (1893–1943) became president (1919). On
Edsel’s death in 1943, Henry Ford returned to the presidency, but in 1945 he turned it over to
his grandson, Henry Ford II, who reorganized the company’s tangled system of financial
management and reinvigorated its corporate culture by hiring talented younger managers. The
failed introduction of the Edsel (model years 1958–60) occurred amid these successes. Henry
Ford II continued to guide the company as chief executive officer (1945–70) and chairman of
the board (1960–80).

In the 1950s and ’60s the Ford Motor Company began limited diversification, but by the
1990s it had refocused attention on its automotive concerns and financial services. In
1989–90 Ford acquired Jaguar, a British manufacturer of luxury cars. Aston Martin became a
wholly owned subsidiary in 1993. Later acquisitions included the rental car company Hertz
Corporation in 1994, the automobile division.

Vision , mission & values :

Vision:

People working together as a lean, global enterprise to make people’s lives better through
automotive and mobility leadership.

Mission:

To strengthen communities and help make people’s lives better.

This is rooted in the timeless wisdom of Henry Ford who believed that a sustainable company
goes hand-in-hand with a sustainable society.

Values:

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 ● Quality comes first.
● Customers are the focus.
● Continuous improvement is essential.
● Integrity is never compromised.

2.1 CORPORATE SOCIAL RESPONSIBILITY:

Ford Motor Company is one of the leading forces in Corporate Social Responsibility in the
automotive industry .Being a good corporate citizen is an essential part of doing business.
Both globally and locally, ford have an ongoing commitment to helping and supporting the
communities they operate in, better understanding environmental issues and investing in
people.

Ford's commitment to India is not just business centric. At the heart of the company’s
business plans are people and communities. With unwavering commitment to the country and
its people, Ford’s CSR initiatives are a reflection of its ‘Go Further’ journey in India.

Operation Better World :

Going Further to make areas around its operations in Tamil Nadu, India a better place, Ford
India in association with Ford Motor Company Fund announced Operation Better World in
2012. The endeavour is to address issues related to Education, Sustainability, Auto Safety and
Local Priorities - the 4 priorities outlined by Ford Motor Company Fund.

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Ford India has adopted the Allies and Associations route wherein Ford operates the program
with the assistance of Global Giving, local NGO partners and strong volunteer-led support
from its employees in Ford India Private Limited and Global Business Services. Through
active involvement, the goal is to build relationships with organizations that have a
well-defined sense of purpose, a demonstrated commitment to maximizing available
resources and a reputation for meeting objectives and delivering high-quality programs and
services to the community.

Focus on Communities – Local Priorities :

Ford supports a tailoring training program for women in 7 villages close to the plant. More
than 600 women have been trained in this skill over the last two years, of whom a significant
number have started leveraging this as an additional source of income. Aimed at enabling the
women to enhance their employability, this program is one of Ford’s key initiatives towards
women’s empowerment.

Another key program that Ford supports is a Maternal & Child Healthcare intervention in
Kalvarayan Hills in Villupuram district, 300 kms from the Chennai facility. Ford’s program
is aimed at enabling access to quality healthcare for expectant mothers in the region, while
also including community awareness initiatives that address other issues here like child
marriage and dropout rate amongst girls. A unique feature about this program is that Ford is
working with IIT-RTBI, to explore how technology can be leveraged to address on-ground
social needs.

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Ford India has been supporting Sanjeevi, a primary healthcare centre near the plant for close
to 15 years. Over the years, the centre has provided near-free medical care to more than
400,000 people in surrounding villages.

Recently, Ford also commissioned a project to upgrade infrastructure and facilities at a

community health centre that is located close to its upcoming facility in Sanand, Gujarat.

Some of the NGOs that Ford has partnered for programs addressing local priorities include
Round Table, Society for Poor People Development, Hand in Hand India and Rotary Club.

Focus on Education :

Going further in its commitment to lay foundations for a Better World, Ford India announced
the launch of its Happy School's' program in Chennai, in September 2014.

As part of the Happy Schools program, Ford is partnering with reputed NGOs working in the
field of education to collectively conceptualize and design a social intervention model that
addresses the identified gaps in the areas of academics, health, nutrition and infrastructure. A
critical component of the intervention will be engagement with key stakeholders, including
the management in schools, the teachers and parents, in order to create a sustained support
system for the child.

The program will be implemented in schools close to Ford’s operations in Chennai, Sanand
and Gurgaon.

Ford is also currently supporting a pilot project aimed at addressing the issue of dropout rate
amongst girls in 2 schools in Chennai, as well as an infrastructure enhancement project in 2
schools near its upcoming manufacturing facility in Sanand, Gujarat.

Focus on Auto Safety Through Driving Skills for Life:

Driving Skills for Life is a global corporate social responsibility and road safety awareness
program by Ford Motor Company that encourages old and new drivers to use effective
driving tips and techniques leading to safe, economic and eco- friendly driving. Launched in
2009 in India, the program is in keeping with Ford’s objective of creating Safe Roads and a

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Better World. The program focuses on safe driving, while emphasizing on maximising the
driving experience through economic and eco-friendly driving behaviour (including
anticipation of road conditions, applying fuel-efficient driving techniques, avoiding over
speeding and having a well-maintained vehicle). Their trainers have been a part of an
intensive training conducted by global experts, who have pioneered this program for Ford
Motor Company in many countries.

Year after year, the DSFL program is working towards reducing the number of traffic
fatalities and injuries by reinforcing safe and economical driving skills and has trained more
than 11,000 people in India since its launch here.

2.2 ​TOTAL QUALITY MANAGEMENT:

Total Quality Management describes a management approach to long-term success through

customer satisfaction. In a TQM effort, all members of an organization participate in
improving processes, products, services, and the culture in which they work.

Ford Motor Company total quality management or TQM practices started in the 1980s when
“Quality Is Job 1” was their slogan. Ford wanted to produce better quality products, a stable
work environment for the workforce, effective management, and profitability.

Through a partnership with ChemFil, a division of PPG Industries, paint process were
developed to ensure a quality product that meets customer’s needs ,translates into financial
success. all by the 1990s, “Quality is Job 1” became “Quality People, Quality Products”.

TQM was forefront in their painting design as the process of preparation (based on customer
quality standards) was implemented by ChemFil with Ford management and workers
informed of all steps needed to follow the application of paint to a quality outcome.

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Gone were the days of guessing, and TQM meant processes at all levels of production were
strictly followed, constantly developed upon, and improved mostly through customer quality
satisfaction surveys.

In 1999, Terry Chenault joined Ford, a risk management specialist who along with Phong
Vu,helped to further the TQM methodology through a Consumer Driven Six Sigma Process.

Perhaps this is a way for Ford Motor Company Total Quality Management to improve to a
process such as Six Sigma that will involve everyone from the consumer to top management.
As “Quality is Job 1” fades to the background at Ford, don’t be fooled, they still want that as
any automaker, but through Six Sigma practices, they feel they’ve got a grand hold on the
industry's market share.

Advantages of TQM in Ford:

The major thrust of Total Quality Management (TQM) is to achieve productivity and process
efficiency by identifying and eliminating problems in work processes and systems. TQM
addresses key problem areas such as mistakes in work processes, redundant processes,
unnecessary tasks, and duplicate efforts. Improving process efficiency brings about many
benefits to the organizations in terms of costs and time. The major benefits of TQM in terms
of cost savings include:

● elimination of non-confirmation and repetitive work.

● elimination of waste costs and reject products.

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 ● elimination of repairs and reworks.
● reduced warranty and customer support costs.
● process efficiency leading to improved profit per product or service.
● fiscal discipline through elimination of unnecessary steps and wasteful expenditure.

2.3 ​SUSTAINABLE SUPPLY CHAIN :

Ford Motor Company has expanded its Partnership for A Cleaner Environment (PACE)
sustainable supply chain initiative to include waste and carbon emission reduction practices
as well as water and energy conservation.

Through its Partnership for A Cleaner Environment (PACE) initiative, Ford is sharing with
its strategic suppliers more than 350 best practices and tools that it originally developed to
improve the environmental sustainability its own manufacturing sites. In return, the suppliers
report on their progress and share best practices with their own suppliers. In this way, Ford
hopes the initiative will reduce the collective environmental footprint of its entire automotive
supply chain.

PACE began as a pilot in 2014 with just a handful of key suppliers and has now grown to
include more than 40 suppliers, which represent 1,100 manufacturing sites in 40 countries
across the globe. It also features Energy Treasure Hunts, where suppliers allow experts into

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their own facilities to identify opportunities to save resources. It was cutting back electricity
and water use with efficient equipment, installing closed circuit cooling systems and
replacing metal halide lights with T-8 LED lighting.

Ford Motor Co.'s commitment to making manufacturing more environmentally friendly does
not stop at its own factories' gates. Instead, the automotive giant wants its suppliers to "keep
pace" with its own efforts to reduce carbon emissions, conserve water and energy, and cut
down on waste.

As a result of the program, Ford reports, its suppliers are on track to reduce carbon emissions
by 500,000 metric tons and save an estimated 550 million gallons of water (or the equivalent
of 837 Olympic-sized pools) over the next five years.

Software tool for suppliers:

Ford shares its best practices through an interactive software tool that it developed internally.
The software asks the supplier to input its size and current environmental footprint as well as
its environmental goals for the future (for example, reduce energy consumption by 5 percent
over five years). The supplier then selects potential actions from Ford's list of its best
practices. The best practices range from easy to implement to more complex.

Some examples include:

● replacing incandescent light bulbs with more energy-efficient LED light bulbs.
● conducting energy treasure hunts, where experts walk through a facility and look for
ways to lower energy consumption.
● reducing compressed air usage, which can reduce energy usage.
● eliminating single-pass cooling systems, which can consume a lot of water.
● installing solar panels and using wind power.

After the suppliers make their selections, the tool will then tell them whether the actions will
help them achieve their goals. Ford purposefully designed the software to be as flexible as
possible and suggest practices that would be most aligned with the supplier's own goals.

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Ford also designed the program, which is run through its purchasing department, to be
completely voluntary. The company does not use incentives or penalties to drive
participation. Instead, Ford encourages its suppliers to participate by letting them know the
environmental and economic benefits such actions have had.

Ford also carefully considered which of its suppliers to invite to participate in the program.
Currently it is focusing only on strategic partners that have the greatest potential to impact
sustainability. Ford was recognized not only for PACE but also its programs for monitoring
human rights and safe working conditions and sourcing conflict-free minerals.

2.4 SIX SIGMA:

To actualize the vision of becoming a consumer products company, Ford Motor Company
implemented Six Sigma in late 1990s with the twin goals of enhancing vehicle quality and
improving the level of customer satisfaction.Their approach towards achieving these goals
they referred to as Consumer-driven Six Sigma. Furthermore, Ford was the world’s very first
automaker company to implement Six Sigma methodology into their business operations on a
large scale. The Six Sigma is a means to measure quality that tries to strive for perfection.

Ford’s Approach to Six Sigma :

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One of the most pressing problems facing Ford at the time was the 20,000 plus opportunities
for defects that came with manufacturing cars. Despite the company’s prior history of quality
control and innovation, some defects inevitably slipped through their fingers. Following this
revelation, they achieved substantial improvements using Six Sigma by investing in training
its people, new equipment, as well as making some software updates. Their aim was to
reduce their defect rate to only a single defect per every 14.8 vehicles, and they succeeded.
Furthermore, this also satisfied their goal of enhancing customer satisfaction. In Six Sigma,
even the smallest change can have a ripple effect, helping to change other processes and
move towards continuous improvement.

Core factors behind Ford’s Six Sigma initiative :

● Cost reduction: ​Ford’s old production process was surprisingly costly. By

introducing Six Sigma, they were no longer using resources that were not necessary.
● Improving quality: Ford has always been known for their quality products, but event
heir standards slip from time to time. While, for most companies, a mere 99% quality
level is considered acceptable, this lets through a surprising amount of defect. As
much as 20,000 instances of defect. Six Sigma espouses that only 99.99966% (and
up) is ideal. This percentage limits the number of defects per million to just seven As
such, Ford made some great astonishing strides in quality improvement using Six
Sigma.
● Poor customer satisfaction rates: ​Satisfying customer demand is as critical to
success as leveraging it. Many of these issues link to one another, as multiple
instances of defect are likely to add up to a defective product. This will inevitably
dissatisfy the customer which is why Ford chose to implement Six Sigma, to
streamline their processes, and improve production issues. All of which adds up to a
more productive company and happier customers.
● Lowering environmental impact by reducing solvent consumption: Six Sigma is
an extremely green philosophy, and Ford uses it to make some great changes in their
environmental awareness. Ford’s consumption of vital resources proved very costly in
the long-term. But by committing to a green work culture with Six Sigma, they
reduced costs, increased quality, and improved customer satisfaction.

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Obstacles for Ford’s Six Sigma Initiative:

● Employee commitment: ​As is often the case, many employees at Ford, including
top-level and senior management, initially viewed Six Sigma with skepticism. This
meant a lack of commitment was present from the beginning, proving a major cause
of concern for Ford’s Six Sigma implementation.
● Time, Money, Productivity : ​Furthermore, along with a lack of commitment, key
resources like time and money meant employee training was often difficult. The lack
of commitment also led to a lack of productivity.
● Data needs: ​Finally, Ford was new to Six Sigma and poorly equipped to follow
through with its Six Sigma initiative. Six Sigma, of course, relies on vast amounts of
data to This meant that Ford needed to create and implement new measurement
systems to tackle the needs of Six Sigma.

Ford’s Six Sigma Successes:

Ford’s use of Six Sigma methodology, while it did provide some road bumps, enabled them
to eliminate more than $2.19 billion in waste over the last decade and a half. They solved this
problem by applying Lean Six Sigma techniques, such as a data-driven problem-solving
process, to devise solutions to waste issues. Moreover, the company’s methodologies for
quality improvement and waste elimination saw a staggering impact on the company’s
operations. Ford’s Consumer-driven Six Sigma has saved them over a billion dollars
worldwide, helping complete almost 10,000 improvement projects since the early 2000s.
Regarding customer satisfaction, Ford managed to increase their percentage by five points.
We may go as far as to say that Six Sigma saved Ford from its deep-rooted problems. These
issues include inadequate productivity, poor use of resources, low customer satisfaction, and
environmental unfriendliness.

2.5 ​BALANCED SCORECARD:

The Balanced Scorecard translates an organization’s mission and strategy into a

comprehensive set of performance measures that provides the framework for a strategic
measurement and management system. The scorecard measures organizational performance

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across four balanced perspectives: financial, customers, internal business processes, and
learning and growth.

Norton (1996) developed the balanced scorecard strategy to assess the performance of
businesses by virtue of their internal competencies measured through key performance
indicators (KPIs). The balanced scorecard is presented in the figure below:

The strategy is based on four primary factors that balance each other in a strategic framework
– Customer, Financial, Internal Business Process and Learning and Growth. The Customer
and Financial perspective is the way the company appears to the customers and the Stake
Holders whereas the Internal Business Processes and Learning and Growth perspective is the
way the company appears to the internal employees and managers.
The primary purpose of the balanced scorecard is to set goals for a well-rounded
organizational performance. While financial measures are important in analysing
performance, they do not provide any insight into non-quantifiable measures that can be
equally important in performance assessment.

It is more flexible in nature to use both financial and non-financial indicators that are needed
to achieve critical success factors of Ford Motors i.e. profitability, quality assurance and
customer satisfaction.

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To measure the performance of Ford motors, Balance Scorecard ensures that “what get
measured, get done”. Ford motor company uses the Balanced Scorecard Approach to answer
the following questions such as:

● How do customers view us?

● How do we create value?
● What core competencies do we need?
● How do shareholders or stakeholders view us?

Ford motors will not grow without quality guaranteed to their customers and introduce new
technology to be competent in the dynamic nature of automobile market. So, this cycle moves
on and helps Ford to become a real leader in automobile market.

2.6 ​CORPORATE GOVERNANCE:

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Ford has a long history of operating under sound corporate governance practices. Corporate
officers and board of directors are dedicated to serving the interests of shareholders and
creating long-term value.

Ford’s Creating Value Roadmap Process is designed to ensure that our business manages risk
and operates in a transparent and accountable way. Board of directors includes a diverse
range of international experience and includes a Lead Independent Director in addition to the
CEO and Chairman

They have institutionalized the Creating Value Roadmap Process, which includes a Business
Plan Review and a Special Attention Review process where the senior leadership of the
Company regularly reviews the status of the business, the risk and opportunities presented to
the business, and specific plans to address those risks and opportunities.

Their executives’ compensation is tied to performance against defined metrics that are
aligned with our strategic objectives to incentivize focus on strengthening our business for
the long term

They promote a culture of compliance and ethics across their business and around the world,
formalized in company policies and reinforced by management and the brand promise to Go
Further

Solid principles of corporate governance are key to maintaining the trust of investors. The
Board of Directors or Ford Motor Company has adopted these corporate governance practices
to promote the effective functioning of the board, its committees, and the Company.

The Board and each of the Committees will perform an annual self-evaluation. Each of the
directors will be requested to provide his or her assessment of the effectiveness of the Board
and the Committees on which he or she serves. If determined by the Board to be desirable,
the Board may retain independent corporate governance experts to assist the Board and the
Committees with the self-evaluations.

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FINDINGS & CONCLUSIONS:

Findings :

● Ford is rapidly expanding its advanced manufacturing capabilities and boosting global
production to meet surging consumer demand. By which they put the company on
pace to produce 6 million vehicles (approximately 16 vehicles every 60 seconds )
around the world.
● Ford’s recent expansions in global manufacturing and production have helped to
retain 130,000 hourly and salaried jobs around the world.
● The new process revolutionized production and dropped the assembly time for a
single vehicle from 12 hours to about 90 minutes.
● There is an opportunity for Ford to explore the possibility of developing new mobility
solutions in collaboration with local partners from business, government and civil
society.
● The Company is building on its legacy of innovation by expanding advanced
manufacturing capabilities and introducing groundbreaking technologies that could
revolutionize mass production for decades to come.

Conclusions:
● Inspite of having a strong competition in market, ford is still dominating the motor
industry as well as their business strategies and practices are quite strong for
sustaining in the market.
● The hard work global team has positioned ford to survive the current recession ,and
succeed to earn good amount of profits and increase value of the company.
● Ford motors is well positioned in worldwide market offering consumers a variety of
vehicles incorporated with new levels of quality, safety, affordability, performance,
and luxury that meet all the needs, all while retaining ford legacy for great value.

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BIBLIOGRAPHY:

Websites:

https://en.wikipedia.org/wiki/Ford_Motor_Company

https://corporate.ford.com/homepage.html

www.nytimes.com/topic/company/ford-motor-company

https://auto.economictimes.indiatimes.com › Latest Auto News

https://www.jdrf.org/corporate-partners/ford.html

http://www.ideafinder.com/history/inventors/ford.html

Newpapers:
● Business standard.
● Economic times.
● Financial express.

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Magazines:
● Motor Trend
● Hot Rod Magazine
● Road & Track
● Autoweek
● Hemmings Motor News

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