Transforming Ford’s Corporate Culture

The purpose of this memo is to address the main issues causing Ford’s poor performance over the years, especially the revenue downfall in 2006. We will analyze the causes of the issues such as lack of communication, collaboration, and sense of responsibility. We believe, by following our recommendations in changing corporate culture, Ford can improve on sales performance and bring back its reputation as one of the top leading automobile manufactures.

Issues

The main issue we found at Ford Company is the tall hierarchy structure of management level. Top managers all tried to protect and increase their power; instead of cooperating and sharing detailed information. Over the years, lack of communication between divisions has occurred, and Ford has built up a culture which allowed divisional and functional managers to hide their problems and poor performance. Therefore, Ford’s managerial culture of maintaining secrecy, ambiguity, and power is the main issue to cause a loss of sales.

Analysis

Ford’s hierarchical problems allow managers to hide responsibilities. It is a norm that divisional managers never admit their flaws. When asked about company’s issues, managers are unwilling or unable to give an answer. Instead of taking proper actions, managers of different divisions created a mindset of not taking blame nor responsibilities. Their main goal is to keep high reputation, maintain their jobs and power, even when the greater benefit of the company is at risk. As a result, Ford suffered from this self-interest approach.

Lack of communication is the second major problem. Ford high-ranking managers only choose to disclose information with people from the same level, never with subordinates. This is due to the mindset of emphasizing on social status and keeping flaws from being disclosed. Top managers are able to