Organizational Strategies Ford Motor Company
Ford Case: By June 2009, Ford Motor Company was the only remaining member of Detroit2019s 201CBig Three201D to have escaped bankruptcy. Chrysler had filed for Chapter 11 protection on April 30; General Motors had followed on June 1. For Chief Financial Officer, Lewis Booth, the eight months since his appointment in November 2008 had involved unremitting pressure. The financial crisis that followed the collapse of Lehman Brothers in September 2008 had engulfed the entire U.S. automobile sector. By the time President Obama took office in January 2009, U.S. auto sales were half of those a year previously. This fall in demand was unprecedented in the industry2019s history. Ford reported a $14.7 billion loss for 2008; a result of which was the elimination of stockholders2019 equity.
Ford's (Case 4) challenge in meeting the needs of shareholders versus stakeholders. What ethical challenges and dilemmas might this pose?
How should a corporate strategy be adjusted to meet those challenges? Provide rationale for your answer.Using concepts from Chapter 3 of Contemporary Strategy Analysis, address how Ford's position in the global auto industry impacts these strategic choices.
Compare Ford's situation to Google's
Google2019s announcement on July 7, 2009 that it would be adding a computer operating system to its Chrome internet browser set off shock waves through the IT community. The much-heralded battle between Google and Microsoft for dominance of cyberspace had taken a major step closer. This emerging 201CBattle of the Titans201D was a gift for news editors. Stock analysts were less impressed; they were awaiting the announcement of Google2019s second quarter financial results on July 15. Their key concern was that Google2019s many ambitious new initiatives were adding cost and distracting management at a time when advertising revenues were being squeezed by the economic downturn. Chris O2019Brien of the San Jose Mercury summed up the feelings of many in a blog entitled 201CGoogle2019s growing identity crisis201D:
There are a handful of reasons people generally cite for Google2019s success. The power of its search engine algorithm. The elegance of a business model that matches text ads to searches. A restless, innovative culture continually striving to improve and evolve its products. Here2019s what always struck me about Google: its simplicity. At the start, Google did one thing phenomenally well. Its search engine was so superior that the company2019s name became synonymous with search itself. And its home page was, and remains, a visual model of simplicity: a sea of white space, the Google logo, a search box, a couple of links2014and no ads. The homepage aside, though, Google increasingly feels like a company running in a thousand directions at once. Over the past year, it has released a steady stream of high-profile products that seem to have little or no relation to the core identity expressed on its corporate homepage: 201CGoogle2019s mission is to organize the world2019s information and make it universally accessible and useful.201D The problem is that in expanding into so many different areas2014productivity applications, mobile operating system, a Web browser2014that the identity of Google itself has become muddled. No doubt, this all follows some clear logic from inside the Googleplex. But from the outside, it2019s getting harder every day to articulate what Google is. Is it a Web company? A software company? Something else entirely?1
How are the situations for these two companies similar and different? What do you learn about strategy formulation from this comparison?
Ford Case: By June 2009, Ford Motor Company was the only remaining member of Detroit2019s 201CBig Three201D to have escaped bankruptcy. Chrysler had filed for Chapter 11 protection on April 30; General Motors had followed on June 1. For Chief Financial Officer, Lewis Booth, the eight months since his appointment in November 2008 had involved unremitting pressure. The financial crisis that followed the collapse of Lehman Brothers in September 2008 had engulfed the entire U.S. automobile sector. By the time President Obama took office in January 2009, U.S. auto sales were half of those a year previously. This fall in demand was unprecedented in the industry2019s history. Ford reported a $14.7 billion loss for 2008; a result of which was the elimination of stockholders2019 equity.
Ford's (Case 4) challenge in meeting the needs of shareholders versus stakeholders. What ethical challenges and dilemmas might this pose?
How should a corporate strategy be adjusted to meet those challenges? Provide rationale for your answer.Using concepts from Chapter 3 of Contemporary Strategy Analysis, address how Ford's position in the global auto industry impacts these strategic choices.
Compare Ford's situation to Google's
Google2019s announcement on July 7, 2009 that it would be adding a computer operating system to its Chrome internet browser set off shock waves through the IT community. The much-heralded battle between Google and Microsoft for dominance of cyberspace had taken a major step closer. This emerging 201CBattle of the Titans201D was a gift for news editors. Stock analysts were less impressed; they were awaiting the announcement of Google2019s second quarter financial results on July 15. Their key concern was that Google2019s many ambitious new initiatives were adding cost and distracting management at a time when advertising revenues were being squeezed by the economic downturn. Chris O2019Brien of the San Jose Mercury summed up the feelings of many in a blog entitled 201CGoogle2019s growing identity crisis201D:
There are a handful of reasons people generally cite for Google2019s success. The power of its search engine algorithm. The elegance of a business model that matches text ads to searches. A restless, innovative culture continually striving to improve and evolve its products. Here2019s what always struck me about Google: its simplicity. At the start, Google did one thing phenomenally well. Its search engine was so superior that the company2019s name became synonymous with search itself. And its home page was, and remains, a visual model of simplicity: a sea of white space, the Google logo, a search box, a couple of links2014and no ads. The homepage aside, though, Google increasingly feels like a company running in a thousand directions at once. Over the past year, it has released a steady stream of high-profile products that seem to have little or no relation to the core identity expressed on its corporate homepage: 201CGoogle2019s mission is to organize the world2019s information and make it universally accessible and useful.201D The problem is that in expanding into so many different areas2014productivity applications, mobile operating system, a Web browser2014that the identity of Google itself has become muddled. No doubt, this all follows some clear logic from inside the Googleplex. But from the outside, it2019s getting harder every day to articulate what Google is. Is it a Web company? A software company? Something else entirely?1
How are the situations for these two companies similar and different? What do you learn about strategy formulation from this comparison?
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