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Examination of Organizational Management of Reputation Ford Motor Company was founded in 1903. It is now one of the worlds largest corporations that operates three distinct businesses: Automotive Operations, Ford Financial and Hertz. The Automotive business consists of the design, development, manufacture, sale and service of cars, trucks and service parts. According to the survey (Reuters Fundamentals, 2004), in 2003, the Company organized its Automotive business as two primary segments, Americas and International.
The Americas segment includes primarily the sale of Ford, Lincoln and Mercury brand vehicles and related service parts in North America, and Ford-brand vehicles and related service parts in South America. The International segment includes primarily the sale of Ford-brand vehicles and related service parts outside of North and South America and the sale of Premier Automotive Group brand vehicles (i. e. , Volvo, Jaguar, Land Rover and Aston Martin) and related service parts throughout the world. In 2003, the Company sold 6, 724, 000 vehicles all over the world.
Ford Motor Credit Company is the worlds largest finance company dedicated to serving the automotive industry, it provides vehicle and dealer financing in 36 countries to more than 11 million customers and more than 12, 500 automotive dealers. Ford Credit is an indirect, wholly owned subsidiary of Ford. Its primary financial products fall into three categories: retail, wholesale and other financing. Hertz is the worlds first and largest car rental organization. It rents cars, light trucks and industrial and construction equipment. The Hertz Corporation and its affiliates, associates and independent licensees maintain a substantial network of company-owned car rental locations both in the United States and in Europe.
Hertz operates its businesses from approximately 7, 200 locations throughout the United States and in over 150 foreign countries and jurisdictions. Hertz is an indirect, wholly owned subsidiary of Ford. Other activities of Hertz include self-insurance operations for both its car rental and industrial and construction equipment rental businesses, the sale of its used cars and equipment and third-party claim management services. Clip and Center (2000, Effective Public Relations) define public relations as the management function that identifies, establishes and maintains mutually beneficial relationships between an organization and the various publics on whom its success or failure depends. " Ford Motor Company as a large corporation has been successfully using mutually beneficial relationships with different publics that help it prosper and be one of the automotive industry's leaders with a hundred years experience on the worlds market. In this survey I would like to point out two spheres of the companys reputation management which I find most interesting. These are employee relations and crisis management.
For completion of the given survey the following data sources were used: press releases, information from the official website of Ford Motor Company, annual reports, interviews and analytical materials. Ford Motor Company as a global corporation with subsidiaries all over the world and the number of employees exceeding 327 thousand people takes much care of the employees relations. The good image and reputation of the company is reflected through its attitude to employees. The management of the company understands that creating favorable working conditions for its employees, the company can significantly improve its economic performance. These good relations begin from the hiring process.
As the market of human resources is shrinking the company is conducting recruitment and selection of professionals around the clock. Using the companys website everybody can apply and even pass a test evaluating his / her skills and knowledge. Recruitment and selection process is conducted for all the companys departments: Marketing, Sales & Service, Information Technology, Finance, Product Development, Manufacturing, Purchasing, Ford Land, Ford Credit, Technical Affairs, Global Business Development, and Human Resources. The Ford Company pays a particular attention to recruitment of young specialists. It organizes career fairs at schools and universities and arranges meetings with representatives of the company at campuses and various organisations. Young specialists who would like to join the Ford family can easily check the date and the place of the career fair in their city and learn all information about the company first hand.
The hiring process is also very quick, thorough and personal, it allows to justly evaluate personal and professional skills of candidates. Apart from career fairs, the Ford Company widely uses student programs. Summer intern programs let successful candidates build a network of friends and contacts, have fun, and make their first steps in their career with the Ford Motor Company. The Cooperative Education Program helps young people develop valuable experience and try out their classroom knowledge while alternating semesters between school and work. The history of Ford training programs dates back to 1951 when Henry Ford II launched the Ford Graduate Training Program to develop company leaders. Today, the Ford College Graduate program is a proven program that provides broad experience and training at the outset of young specialists career.
Apart from the programs for students and graduates, Ford Motor Company is also interested in hiring experienced professionals that can continue their professional growth. Our people are our most valuable asset, and developing their talent makes plain business sense. (Ford Career Home, 2003) This statement has become a motto of the company that helps the management skilfully prioritize its policies. The company has a great variety of flexible and very generous benefits that include various kinds of insurance (health care, medical, dental, prescriptions, life insurance and disability), paid vacations and holidays, retirement and relocation benefits. The companys Personal Protection Plan allows employees and retirees to purchase auto, homeowner / renter and personal liability insurance at group rates through payroll and pension deductions. In addition, the company provides programs for vehicle purchases, matching gifts to qualified institutions, tuition assistance, a dependent scholarship program, and recreational programs. The amount of benefits depends on the number of years the person has spent with the company and increases drastically for employees that have been working for the company for twenty years.
This approach fosters loyalty and devotion among employees enhances their sense of security and care. Hendrix pointed out that within a company there needs to be a climate or trust, common purpose and the opportunity for all employees to develop skills to the fullest and to contribute to improving company performance. (Public Relations Cases, 1995) Ford Motor Company successfully follows this principle and can boast of the philosophy which it has developed. This philosophy takes into consideration both all essential human rights and demands of the modern society. Thus, one of the most important principles of the Ford team is diversity.
The management of the company recognizes that diversity is not only a reality of our global nature, its a distinct advantage, and one that we value and embrace. We also know that we can only leverage the benefits of diversity by understanding and respecting the differences among all employees. (Ford Motor Company Home Page, 2003) All employees have equal opportunities of advancement and no other factor as their own achievements will help them to make a good career at Ford Company. The management of the company also sponsors Employee Resource Groups that provide support and fellowship for employees, identify common problems and barriers, contribute to employees' professional development, and provide organized activities for employees of diverse backgrounds. Understanding the axiom that a good worker is first of all a happy and self-sufficient person, who can skillfully balance his / her working life with personal life, Ford Motor Company helps all its workers find that balance. There are a great number of programs for transitional work arrangements, flextime, telecommuting, childcare, parenting, elder care, wellness and fitness. These programs help employees maximize both their own personal growth and their contribution to the company.
Implementing these programs, the management aims to attract and retain top professional talent, generate goodwill inside and outside the company, make its people as productive as possible, and make these initiatives a valued part of the corporate culture. Much attention is also paid to recreation and fellowship. The Ford Employees Recreation Association (FERA) offers Ford employees deep discounts for travel, sporting events, shows and theme parks. All these initiatives undertaken by the management of the company play a great role in its relationship with employees and make the employees policy of Ford Motor Company one of the most sufficient, elaborate and successful. The situation with the crisis management of the company is not always successful, though. In August 2000, a US National Highway and Traffic Safety Association (NHTSA) made and investigation and proved that the main reason of the disproportionate number of accidents in Ford SUV Explorers was a tread separation fault in the Firestone tires fitted to the cars.
Both companies acted very quickly and recalled over six million tires. But it turned out that the companies had known about the problem with tires long before accidents started taking place in the USA, as they had encountered the same problem with tires a year earlier in Saudi Arabia. Moreover, accidents continued to occur in the United States after the product recall and that caused much criticism that Ford and Firestone did not respond quickly enough to protect their customers. Ford reacted by issuing a second recall of 13 million Firestone tires in May 2001. Firestone denied that their tires were to blame and accused Ford of alleged design flaws in the Ford SUV Explorer. The two companies continued to publicly blame each other and the true cause of the accidents is still unidentified.
Their unprofessional handling of the crisis led to a drastic fall in the share price, a fall in profits and the end of a long-term commercial partnership. This case proves that a quick response in a crisis is essential to decrease damage of reputation. Ford and Firestone were slow to initiate a product recall in the United States, which led to accusations that profits were put before customer safety. The two companies could not understand that communication between business partners is essential when a product recall takes place. Lack of agreement between the two companies caused even greater losses and a widespread public criticism.
Ford's CEO Jac Nasser was proud of his company's ability to post important information on its Web site within 48 of learning that many of its vehicles were equipped with faulty Firestone tires. But in the age of highly developed information technologies 48 hours are equal to 48 days. Companies can not afford in crisis situations thinking for a long time and then coming up with a solution. People want to know the companys decision immediately. That demands from each company a proactive plan of actions that will be the basis of the companys behavior in case of any critical situation.
When such a situation occurs the company will not need to spend much time for taking the right decision, it will implement the existing plan and actively use chat rooms, message boards, discussion groups, surveys and post the latest information about the critical situation in the Internet. At the same time the company should not forget about the importance of communication with the media. Ford Company underestimated the role of media in crisis management and neglected one of the most important principles suggested by Fearn-Banks: If the situation is urgent, e. g. , the disaster has already resulted in death, injury, or poses a safety threat to peoples health, contact the media and let them know that you are working on the situation.
This shows that you care about the peoples well-being and are aware of the medias needs. (Crisis Communications: A Casebook Approach, 2002) Keeping silence for a long time, the company caused many negative talks in media that resulted in overall negative public opinion of the company. Ford Motor Company, a huge corporation with offices and subsidiaries all over the world, pays much attention to its reputation management. One of the most successful spheres of its public relations is relations with employees. The company shows much care and consideration by introducing various recreational programs, benefits, and clubs for its employees. Such attention helps foster kind and caring atmosphere at work. But judging by the information posted on the Ford Motor Company Web Page, most of the companys benefits, insurance, educational and recreational programs are functioning for employees in the USA only.
That is a weak point of the companys policy, as now most of its plants are situated outside of the United States and workers in other countries also need to feel the support of the management of the company. As for crisis management, I think that after the scandal with Firestone tires, the management of the company learned that bitter lesson and made right conclusions. Though further recalls were inevitable, the company always responded very quickly, and showed that it really cared for safety of its customers and was taking immediate actions to prevent any accidents. Thus, the unsuccessful management of the tire crisis became an impetus for improvement of the companys proactive activities. References: 1. Albee, D. (2004, February, 2).
There are several methods to build a company's reputation. Denver Business Journal Online. Retrieved July 8, 2004, from web 2. Baskin, O. , C. Aron off, and D.
Lattimore (1997), Public Relations, the Profession and the Practice, WI: Brown and Benchmark 3. Brown, Peggy Simcic and Erick L. Olson (1999), "Mapping the Strategic Thinking of Public Relations Managers in a Crisis Situation: An Illustrative Example Using Conjoint Analysis, " Public Relations Review, 25 (3), pp. 351 - 368 4. Clip, S M, Center, A H & Broom, G M (2000), Effective Public Relations, 8 th edn, Prentice-Hall, Englewood Cliffs, NJ. 5. Fearn-Banks, K 2002, Crisis Communications: A Casebook Approach, 2 nd edn, Lawrence Erlbaum, Hillsdale, NJ. 6. Ford Motor Company Home Page (2003).
Career Home. Retrieved July 20, 2004, from web 7. Grunig, James E. (1992), Excellence in Public Relations and Communications Management, NJ: Hillsdale 8. Haywood, R. 1994.
Managing Your Reputation: How to Plan and Run Communications Programmes that Win Friends and Build Success. Mc Great-Hill, Basingstoke 9. Hendrix, J. (1995) Public Relations Cases, Wadsworth Publishing Company, Melbourne. 10. Kruckeberg, D & Starck, K 1988, Public Relations and Community: A Reconstructed Theory, Greenwood Publishing Group, New York. 11.
L'Eating, J & Pieczra, M 1997, Critical Perspectives in Public Relations, International Thomson Business Press, Boston. 12. Mcnamara, J. (1996) Public Relations Handbook for Managers and Executives, Prentice-Hall, Sydney. 13. Morley, M. 2002 How to manage your global reputation: a guide to the dynamics of International public relations, New York (NY), New York University Press. 14. Name, N R & Truitt, R H 1991, Strategic Public Relations Counseling, University Press of America, Lanham, MD. 15. Newsom, D 2000, This is PR: The Realities of Public Relations, 7 th edn, Wadsworth, Belmont, California. 16. Patterson, B. (2004).
Crises Impact on Reputation Management. Reputation Management Associates Website. Retrieved July 8, 2004, from web 17. Plowman, Kenneth D. (1998), "Power in Conflict for Public Relations, " Journal of Public Relations Research, 10 (4), pp. 237 - 261 18.
Reuters Fundamentals (2004). Ford Motor Company. Full Description. Retrieved July 16, 2004, from web 19. Spicer, C 1996, Organizational Public Relations: A Political Perspective, Lawrence Erlbaum Associates, Mahwah, NJ.
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