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Rethinking at Ford

October 1, 1987 -

Kenneth W. Harrigan, President and Chief Executive Officer of Ford Motor Company of Canada, recently suggested to an industrial relations management conference that the economic setbacks of the early l980s were a blessing in disguise for the auto industry. Faced with severe financial losses, poor quality and productivity, Ford was forced to re-examine its rigid authoritarian structure and to look for long-term solutions.

Management soon realized that "the company had to shift from the culture and organizational structure that was impersonal, authoritarian and management-centred to one that is personal, participative and employee-centred," Harrigan explained. In other words, the main challenge was to motivate people, and in that way to overcome the serious difficulties faced by the company.

Through a massive retraining program called Participative Management and Employee Involvement, Ford set out to build a sense of teamwork and to open communications. This new focus on people meant that management began to treat employees as responsible participants in the design and production of automobiles. The results were the same as they are everywhere when people are treated as responsible human beings. Morale improved, and so did quality and productivity.

One example of Ford's new approach to communications is its 1986 annual report, which for the first time in 83 years is addressed to employees and dealers, as well as to shareholders. The new corporate culture at Ford, said Harrigan, is as follows: "Our people are the source of our strength. They provide our corporate intelligence and determine our reputation and vitality. Involvement and teamwork are our core human values." Through teamwork and communicating with one another, Mr. Harrigan told the conference, Ford has controlled costs and improved efficiency, quality, styling and profitability.

Harrigan admits, however, that in some areas the move to a participative style of management may require several years. "On this issue, we often console ourselves with the knowledge that it took us our first 75 years to fully develop our autocratic style of management," he explains. "It is unlikely that a complete change will be achieved quick1y—but it has begun."

Nobody finds it easy to admit mistakes and the need for a radical change. The Ford example shows that a measure of common sense and honesty does exist in some top management circles. Unions ought to warmly welcome these developments. As Canada ventures into a tariff-free world, cooperation and common sense become increasingly indispensable to a healthy economy.

This article originally appeared in Comment magazine, a journal founded by Harry Antonides. Find all of Harry’s pieces, and thousands more, at http://www.cardus.ca/comment