Henry Ford - A Great Innovator

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Case Details:

Case Code : LDEN025
Case Length : 13 Pages
Period : 1903
Pub Date : 2003
Teaching Note :Not Available
Organization : Ford Motor Corporation Industry : Automobile
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Model T - An Astounding Success

The first Model T finally rolled out in October 1908. It was affectionately called 'Tin Lizzie,' slang for an obedient and reliable servant. The Model T was priced at $850 and was simple, light, flexible, powerful, and easy to drive. The car was targeted primarily at farmers and had higher than normal ground clearance. In the very first year, Ford set new industry records by manufacturing nearly 10,660 Model Ts. In the second year, 18,257 more Model Ts were produced. With a significant increase in the demand for Model Ts, Ford decided to set up a new factory...

Ford's Employee-Friendly Practices

Ford had generous labor policies and believed in the importance of harmonious relations with workers. In order to retain the workers, Ford gave them bonuses and other benefits including free medical treatment, and invested heavily in training programs. A sociology department was established in mid-1910 to carry out research studies on employees' social attitudes, their loyalty and obedience. The studies helped improve the plant layout and the job description of workers. Sports facilities like fields and playgrounds for the company's employees and their families were set up. Ford said, "I want the whole organization dominated by a just, generous and humane policy"25...

The Criticism

Ford was held in high esteem for his invaluable contributions to the automobile and aviation (Refer Exhibit II) industry worldwide, but he also faced criticism on a few grounds. Some said that the segregation of the assembly process into 'thoughtless recurring tasks' made Ford workers into robots. The critics felt that the assembly line made workers' mechanical skill redundant. The workers no longer needed specialized technical skills and were only required to do standardized unskilled work. Ford rebutted these allegations and said, "I have heard it said, in fact, I believe it's quite a current thought, that we have taken skill out of work. We have not...


Exhibit I: A Brief Profile of Henry Ford
Exhibit II: Ford's Contribution to the Aviation Industry

25]  As quoted in the article, "Driving Force: Henry Ford," by Lee Iacocca, TIME.


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