Ford Motor Company’s Organizational Structure Analysis

Ford Motor Company’s organizational structure characteristics, advantages and disadvantages case study and analysis
A 2011 Ford Edge. The features of Ford Motor Company’s organizational structure support the firm’s global operations. (Photo: Public Domain)

Ford Motor Company’s organizational structure is based on business needs in varying market conditions around the world. A firm’s organizational structure defines the configuration of organizational components and their system of interaction. In Ford’s case, the organizational structure directly relates to the global automotive industry condition. The international scope of Ford’s operations also determines the key organizational structure components needed to withstand competition and market risks. In this regard, Ford’s position as the second biggest U.S.-based automobile manufacturer is an indication of its organizational structure’s effectiveness in supporting the firm for continuing business growth and high performance.

Ford Motor Company’s organizational structure is divided according to regional markets. Other characteristics of this organizational structure are based on the global scope and nature of Ford’s business.

Features of Ford Motor Company’s Organizational Structure

Ford’s organizational structure is based on the need to control operations according to regional market conditions. Markets belonging to the same region have similarities used as basis for regional structuring. The following are the main features of Ford Motor Company’s organizational structure:

  1. Corporate hierarchy
  2. Regional geographic divisions
  3. Global functional groups

Corporate Hierarchy. Ford has a traditional corporate hierarchy in its organizational structure. For example, Executive Vice Presidents report to CEO Mark Fields. Middle managers report to these executive VPs. This characteristic of Ford’s organizational structure supports traditional business management approaches that aim for effective top-down control.

Regional Geographic Divisions. Ford has large geographic divisions in its organizational structure. Typically, global companies divide their operations into several regions per continent or subcontinent. However, Ford’s organizational structure is divided into only three regional geographic divisions that cover all its markets around the world. A potential effect of this feature of the organizational structure is the relative ease of integration of business strategies. Ford’s main regional geographic divisions are (a) The Americas, (b) Europe, Middle East, and Africa, and (c) Asia Pacific. An executive VP heads each division.

Global Functional Groups. Ford Motor Company’s organizational structure also has functional groups, each of which represents a specific business function. A Vice President heads each of these groups. The main functional groups in Ford’s organizational structure are as follows:

  • Global Manufacturing and Labor Affairs
  • Global Marketing, Sales and Service
  • Human Resources and Corporate Services
  • Quality and New Model Launch
  • Global Product Development
  • Government and Community Relations
  • Global Purchasing
  • Communications
  • Finance
  • Legal
  • Accounting

Ford Motor Company’s Organizational Structure Advantages & Disadvantages

The corporate hierarchy in Ford’s organizational structure has the advantage of ensuring global direction and control. Also, the global functional groups maintain such hierarchy through functional support, such as HR management to maintain Ford’s workforce. On the other hand, the large regional geographic divisions have the advantage of easily implementing integrated policies and strategies throughout Ford’s organizational structure. However, these large regional geographic divisions also simplify the company’s approach to its markets. In this simplification, Ford’s organizational structure has the disadvantage or risk of disregarding the significant unique conditions or needs of national markets.

References
  • Child, J. (1972). Organizational structure, environment and performance: The role of strategic choice. Sociology6(1), 1-22.
  • Ford Motor Company (2015). Governance and Management Structures.
  • Ford Motor Company Form 10-K, 2014.
  • Markides, C. C., & Williamson, P. J. (1996). Corporate diversification and organizational structure: A resource-based view. Academy of Management journal39(2), 340-367.
  • Martin, R., Muuls, M., de Preux, L. B., & Wagner, U. J. (2012). Anatomy of a paradox: Management practices, organizational structure and energy efficiency. Journal of Environmental Economics and Management63(2), 208-223.