The Five Key Management Principles and Their Possible Influence on Ford Motors

Abstract

Over the years people have developed management strategies to enhance work productivity, personal relations, and overall organization comradery. These strategies might have been created due to the time and situation in which the business was being developed. Through experience, people have formulated these ideas or principles that in one way or another affect the way current industries are being managed. The text below highlights milestones throughout the late and mid-19th and 20th century. In addition, these principles are compared to how the automotive industry evolved from vehicles being hand made to being mass-produced.

The success of the automotive industry has caused a ripple effect that has changed the infrastructure that we see today. The five key management principles discussed could be applied to any large or small business and could be utilized into any personal routine. The following questions were examined when creating this paper; Why was this milestone significant for the period it was created? What was going on in the world of work that allowed the environment to know the time was right for this milestone? Which theorist “fathered” the principle? What were the signs of the time which led the theorist to develop the management concept? What are the highlights and limitations of the theory/principle?

Keywords: Five Key Management Theory/Principles, Henri Fayol, Frederick Windslow Taylor, Frank and Lillian Gilbreth, Tom Peters, Robert Waterman, Warren Bennis, 19 Management Principles, Scientific Management, Time Studies, Motion Studies, Nine Management Principles, Vision

Since the time of early civilization, societies have created empires built on the foundation of management. Although at the time they did not use terms such as empowerment, stakeholders, or account profit, they had processes set into place to fulfill their set goal. Examples of how management has affected early civilization would be forms of government, armies, or the creation of the pyramids. With the desire to be more successful, people from different backgrounds have formulated management theories or principles to improve how we manage ourselves or organizations. As times changed, the need to be more efficient at the workplace grew. People began strategizing on how best to manage an industry. Certain industries such as the growing automotive industry faced similar challenges when trying to expand itself into what it is today. Below is a timeline comparison of how management theories evolved in relation to the automotive industry.

During early 1900’s, Frederick Windslow Taylor known for his “Scientific Management” principles developed a process that focused primarily on production efficiency, utilizing a “Time Studies” approach. Taylor would analyze a worker’s movement and base their productivity on time. In the reading, Taylor determined that a worker would be more productive if they were to apply less stress on themselves preventing them from being overexerted thus producing more. In addition, Taylor determined that using the right tools for the job was also a factor in production, in regards how much time was taken while using the correct tools. At the early stage, the automotive industry began building their vehicles by hand. This process did not seem efficient due to the amount of labor that was required to build one vehicle. Thus, coming up with the idea of mass-producing vehicles. As technology advanced, the capability to mass produce vehicles became more feasible. This concept was started but mastered when Henry Ford created the Assembly Line concept.

During the same time, miner and engineer from Istanbul, Henri Fayol developed a set of management theories that focused more on the personnel aspect rather than just productivity. During this period, he was appointed as the director of the mining company and literally saved the company from complete shutdown. Using his management abilities, he developed the five management functions he felt encompassed management; Planning, organizing, commanding, coordinating, and controlling. In 1913 on the other side of the world, Henry Ford was faced with a similar challenge when trying to resolve the problem of mass-producing cars at a less expensive price. Inadvertently utilizing Fayol’s 19 Management principles and five functions, Ford developed the Assembly Line concept using the conveyor belt method and having workers specialize in one area of expertise. The assembly line concept changed the way automotive industries mass-produce automobiles today.

In relation to Frederick Taylor’s “Time Study” theory, Frank and Lillian Gilbreth analyzed work productivity by “Motion Studies”. In the reading, they would capture a worker’s movement by photographing each step to determine the most effective way to perform the task. In the automotive industry, to make mass-producing automobiles possible, the concept of interchangeability was demonstrated when the British Royal Automobile Club removed parts from three different Cadillacs and rebuilt the cars using mixed parts and drove them 500 miles with no issues. This changed the process in how automobiles were produced allowing manufacturers to generate large quantities in less amounts of time.

As technology advanced, the need for a manager to be more actively involved in the labor field of business lessened and need to be more intelligent on how a company was managed was required. With machines capable of producing automotive parts in a matter of minutes, the need for manual laborers decreased, thus, requiring more positions in sales or marketing. People like Tom Peters and Robert Waterman had a different approach in management and in 1982, developed the “Nine Principles of Management” which focused more on the worker and customer aspect of management.

These management principles fostered personal interaction between manager, employee, and the customer. The automotive industries’ success in mass-producing vehicles also posed an issue because initially cars were being sold directly from the factory or an independent dealership, this created an over stock in assets. To remedy the situation and improve sales, manufactures would outsource their vehicles to other dealerships with specific requirements on what type of vehicle to sell and how to manage their own facility in accordance with the manufactures’ requirements.

“People working together as a lean, global enterprise for automotive leadership” Thompson, A. (2017). Ford Motor Company’s Vision Statement, Mission Statement. Ford Motor’s strives to be the leading automotive manufacturer in the world stems from its vision statement. In 1970, Warren Bennis came up with the theory that leaders must have a vision in order to articulate what they want to achieve. The success of business is built on the foundation of management and how you sell your vision to employees and consumers.

Ford Motors is one the top five industries in the world and second in the United States. All stemming from how workers initially developed a process on how production is managed and creating innovative ways to enhance that process. Although the five key theories that I explained may or may not have directly impacted the automotive industry, their fundamentals were utilized. In conclusion, the basics of managing resources such as personnel or money will always be similar, but there are always new innovative ways to improve a process through properly assessing a situation and utilizing your best assets, your people.