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Alan Mulally CEO Ford Motor Company

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Discuss the role of leadership and how it can impact organizational performance

This paper is a book report of answering questions concerning the case study of Alan Mulally the CEO Ford Motor Company found in strategic management book by Hitt, Duane, and Hoskisson. In almost all the organizations, leaders have a great impact on the organizational performance. The changes in the organizations depend mainly on the actions, behaviours attitude, and personal influence of the leader. That the reason why in case there is a problem in organizational performance, the first action is to change the leader, with expectations of receiving a new leader who will bring a positive change in the organization. It’s believed that in any organization leadership makes a difference because through leadership, the organization gets a clear vision, with which the leader communicates with the rest of the management. By the vision of the organization, it becomes possible for the leader to resolve various conflicts among the employees, as they are the people to make it possible for the organization to complete and fulfil the vision.

 Leaders mostly are relied by the whole organization to make a tone through which the rest will follow. Leaders come up with the values, policies, and guidelines through which they would like their organizations to follow so as to achieve the set objectives. The leader has also the authority to use these values to measure the performance of the employees, and if possible remove the underperforming employees from the organization of the well-being of the entire organization.

If by any chance the leader fails to set the policies, values and guidelines it will be hard for him to determine the level of performance of the employees. An organization where the employees are underperforming, without the leader realizing, there is a likelihood of the organizational fall. The type of the leadership that the leader is applying in the organization also matters a lot as far as the performance of the organization is concerned. The most appropriate type of leadership is democratic as it encourages the contribution of every worker in the organization. This type of leadership, gives the leader a chance to gather all the views and suggestions from the rest in the organization.

Discuss Mulally’s leadership style at Ford Motor Company and provide examples of how his actions fit this style

            Since 2006 when Mulally joined Ford Company, there was a great change in the organizations performance due to the leadership that Mulally applied. According to this CEO, the result oriented leadership style was the best for the company to become more productive. The CEO decided to work as an authoritative leader, so as to rectify the previous mistakes that had affected the company a great deal. According to his views, it was best for him to make decisions that would be followed by other employees instead of consulting them due to the previous mistakes that were experienced in the company.

 In December 2008, the CEO was able to confess before other leaders that, through following his decisions in Ford the company will survive the toughest economic times without struggle. Mulally, have excellent analysing skills that made him to lead the company well without many consultations. During the first months after joining Ford in 2006, Mulally applied the past facts that made the company to underperform and analyzed several situations with the managers, assuring them that through his support and persistence, they will rise to the best point and succeed.

            When Mulally arrived at Ford and started exercising his leadership styles every one in the company was surprised by his actions. The company looked more of a school as the CEO conducted continuous interviews to the employees, financial and management analysts, and other consulting firms as he was busy taking notes on what they were saying. This was a research to give him the background information of the company to set up a starting point. Through the information that he collected from various stakeholders of the company, Mulally decided even to abolish the mission statement of the company that was made in 1990, and created plastic cards that was written the four major goals of the company on one side to act as a guide to every employee. His leadership style was felt by everyone in the organisation, setting them ready, to work with him and revive the company. This CEO came up with the colour coding for the company reports whereby the green colour showed good, yellow colour represented a need for caution, and colour red represented signs of problems.

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Discuss how goal setting helped Ford improve its performance

 Mulally leadership in Ford went to an extent of setting up new set of goals to be achieved by the company. He realized that by setting out goals, it would be a good way of motivating the employees in their duties. The set goals in the organization it is something that is recognized by the management system of the organization as well as the employees and other company stakeholders. Ford Company came up with SMART goals that specified what the leader from the employees expected, the set goals were also attainable something that Ford and its management measured the possibility of achieving.

The set goals still were relevant to the overall goal of the company, the CEO knew that through attaining all those goals, the company would be in the right path to the achieving the right objective. The goals set were also under a certain time limit to avoid the last minute rush and to ensure effectiveness throughout the working period. This would save much time and resources of the company. Through setting clear goals, it was possible for the company to know the behaviours in the company that needed to be rewarded, and those that required to be cautioned for better performance.

When every employee knows what is expected of him or her in the company, it creates an opportunity for him to work tirelessly and even request some additional time to accomplish the goals. For the employees to know the company expectations from them, and the duration of time through which they are supposed to do their work is the best way of motivating them. This is a way of making the employees to see what is ahead of them and keep updating the management of any challenges that they are expecting on their way to achieve targets. This moves the whole organization at a level of planning their work in advance and getting ready to meet any challenge. Through this, the company would improve its performance without many difficulties.

Assess Mulally on each element in communication openness including message transmission, trust, agendas and goals

 Mulally is very open in his communication, for instance, when he arrived in Ford, he decided to have an open talk with the employees about some of the products of Ford like Taurus. Mulally questioned the employees directly about Taurus product, and they confessed that they killed the products. He gave them an opportunity to explain the reasons of killing it, and basing his decisions on their arguments, he set up a goal of reviving the product as soon as possible. The CEO welcomed the discussions of the employees, consultants, and other stakeholders to arrive at facts of guiding him to make decisions.

CEO Mulally placed the agendas of the company in well-organised manner, to give the employees opportunities as well to give their views. He made the agendas to be discussed by him and other management team allowing everyone to contribute according to his or her views. His main theme was not to harass the employees or to push them hard, but the main issue was to motivate them and set targets for them to be achieved. CEO Mulally placed much trust to his team of workers who would be working on the ground to make it possible in achieving the company goals. He trusted that whatever goals he would set for them, they would achieve as long as they are attainable goals.

            His ways of setting the company goals was very essential to him and the entire company. He used to conduct an initial research from the people concerned especially the employees and the analysts, to arrive at his final decisions. His goals were based on facts, and that is why he faced criticisms with much courage knowing that he would finally prove the public wrong. At times, the public doubted his decisions especially the financial ones, but later challenged them with the results of his work.

Evaluate the effectiveness of Mulally’s leadership style and recommend whether he should continue with this style, or use a different style

 The leadership style of Mulally that he expressed in Ford, is one that can be used by various leaders to bring change in their organizations. His actions were like lessons to other companies to look for leaders who can improve the performances of their companies. His leadership qualities was admired by many and taught many leaders on how to handle challenges. To begin with, Mulally did not delay in taking actions, he made the right moves at the right time in Ford. For instance, he joined Ford when the production was down and the company was practicing layoffs. His first actions when he arrived was to act on this problem by extending 0% financial aspect to six years. 

He also did not hesitate to check on the down turn of the products, and to enquire the reasons of killing the most famous Taurus product, from which he gave some goals of achieving the revival of this product. Through his leadership, Mulally used to take criticism and acting on them without shying off. During the time when Ford received a bailout proposal, he received much criticism concerning that issue and he acted accordingly. Instead of relying on the government bailout, Mulally made a quick decision of selling five company’s jets to get a good source of funds. He even promised to cut salary in case the company takes a bailout.

This was successful as the company opposed the idea of bailout, and this made the company to be among the independent companies that are not facing the challenge of bankruptcy. The leadership of Mulally is of being fearless in the face of the world like for instance in 2007 when he made a tough decision of putting Jaguar and Land Rover  on sale specific to Tata Motors. This was a decision that required much courage and he managed the action. Mulally as well exercised a leadership style that embraced innovation like how the company adopted the social media to get their products out to the public. His leadership style is wonderful and of great help to Ford and other companies as well, and he should continue in the same working spirit.

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