Leadership Issues at Ford Motors

¶ … Leadership Issues at Ford Motors

Does the leadership style that Mulally has adopted match the situation confronting the organization?

Yes, the task-oriented leadership of Mulally matched the situation confronting the Ford company at the time that he took over. Mulally recognized the importance of branding and immediately ordered a reinstatement of the Taurus brand that had been discontinued prior to his assumption of authority (Hochleutner, 2011). Mulally issued instructions to re-introduce the Taurus to recoup the long-term investment in its successful reputation prior to its discontinuation. Another major decision that demonstrated Mulally's strategic vision and decisiveness was his selling off of the Land Rover and Jaguar brands in 2007, despite the fact that the selling price, $2.3 billion was substantially below what Ford had paid for them. Subsequently, the purchaser, Tata Motors, lost so much money on those brands as a result of the 2008 increases in the price of oil that they relied on a bailout from the British government to remain viable (Hochleutner, 2011).

At the same time, Mulally has demonstrated that he does not suffer from the inability to admit mistakes or to make personal sacrifices for the benefit of his organization. Specifically, he sold of five of Ford's six corporate jets after automobile industry executives were criticized for arriving in Washington for congressional hearings about the industry bailouts in corporate jets. Similarly, Mulally had offered to halve his $2 million salary in the event that Ford accepted bailout funds (Hochleutner, 2011). Ultimately, this balance of strategic decision-making with a personal perspective that values the needs of the organization above personal needs (Hill & McShane, 2007) has enabled Mulally to turn ford around successfully even in the face of economic crisis.

Would you characterize Mulally as an effective leader? How would you explain his or her success or lack thereof?

Mulally has been a tremendously effective leader since taking over at Ford. One of the main reasons for his success has been the fact that Mulally was not intimidated by the necessary decision to divest large assets despite possible concerns that doing so demonstrated weakness of fear on the part of the organization. Mulally recognized that the current challenges facing the organization required consolidation and solidarity of Ford brand names instead of diversity (Hochleutner, 2011), which conflicts with traditional business management theory in many situations (Hill & McShane, 2007). The strategic vision that Mulally demonstrated in that respect is a fundamental component of effective organizational leadership (Hill & McShane, 2007).