Ford Motor Company is known as the primary automobile manufacturing expert in the western world. During Ford's early years, the company was virtually indistinguishable from its founder. Fordism as it came to be known – a system of mass production which combined the principles of scientific management with new manufacturing techniques, such as the assembly line – created more than fantastic profits for his company but it literally revolutionized industry on a global scale within twenty years of its implementation (Kalliney, 2002).
It expanded its operations worldwide specifically in Europe, Asia Pacific, Central and South America, the Caribbean, Africa and the Middle East. During the earlier times, the firm’s activities outside U.S. mainly focus on sales and distributions. With the constant changes and economic integration of various nations, Ford manufactures and distributes automobiles in 200 markets across six continents and maintains 108 plants worldwide (www.ford.com, 2006). Traditionally, Ford's international operations were a source of strength that allowed the company to maintain its position as the second largest auto maker in the world and to respond to GM's competitive moves (Studer-Noguez, 2002). Today, Ford still maintains its competitive advantage among other automobile manufacturing companies by sustaining the needs and creating innovations on the automobile industry.
The company’s overseas operations are situated on the specific areas wherein Ford and its management maintain a corporate jurisdiction. For instance, the regions along the European continent do business in their own ways but still under the general supervision of the main office. There are also corporate websites designed to serve specific locations. Ford’s branches worldwide are composed of a head and a line of board of directors connected to the main responsibility.
In Ford’s operations to other countries, several economic concepts are used. In UK and other parts of Europe, Ford applies comparative advantage because it is highly important in proliferating and maintaining modern international trade relations. Thus, both countries are benefiting in their economies and national employment. Historically, Ford Mexico had a comparative advantage, especially after the 1982 devaluation of the peso to the US dollar in the production of aluminum and iron, as well as cost advantages in electricity and labor and transportation costs given the proximity to the US market (Studer-Noguez, 2002). Similar to the Asia and the Pacific, the free trade agreements and policies existing in the areas open wider opportunities for economic integration and alliances. With their free-trade policies, for instance, governments have an enhanced role in creating the comparative advantage of localities, especially, but not exclusively of those that have become global platforms for multinationals (Studer-Noguez, 2002). Further, the maintenance of international branches of Ford also utilizes the laissez faire economic policy due to the fact that the presence of free market is apparent. There is less interference from the government of the specific areas given that the main management complies with the predetermined economic and political policies. Most government policies affecting the industry were shaped by the underlying ideology of laissez-faire, which justified government intervention only when there were strong demands by powerful economic or social actors to do so, or when it was justified to correct market failure (Gilpin, 1996, 418-19).
In addressing Ford’s problems, these economic policies may contribute to the development of potential solutions. The comparative advantage as well as laissez faire will open better horizons in the exploration of the company’s potential opportunities. However, when used inappropriately, these concepts may also lead to corporate losses. Thus, it is still dependent on the overall management and strategic planning.
Free trade policies across the corporate branches of Ford affect the overall operations. Further, the utilization of the company’s research and development strategies and analyses guides the management in every crucial major or minor business decisions. They impact business decision by serving as sources of external information necessary in planning, decision making and taking. The advances in communication technology make it easier to enter the international market through the efficient marketing and advertising strategies. Together with the opportunities available, the emergence of technological advancement also contributes to the strategic advantage of Ford. At present, the use of new automated manufacturing technology that is adapted to product technologies makes their product ahead from others (Morales, 1996). The constant actions towards innovations serve as opportunity for competitive advantage. However, the use of these technologies has substantially raised the cost of new product development (Studer-Noguez, 2002). Thus, there is a need to maintain balance in the costing and implementations.
Meanwhile, globalization of both the economy and the society has confronted the world over the past decade. Globalization is currently the slogan for the threats and promises facing humanity in the 21st century (Giddens, 1999; Gilpin, 2000; Held and McGrew, 2000; Nye and Donahue, 2000). A comprehensive definition is provided by De Soysa (2003, p. 7);
“Globalization is generally understood as economic, political, and social integration of states and societies, both horizontally and vertically, in tighter webs of interdependence. Globalization is a process and not a qualitatively different endstate, where politics and the state have become superfluous and the market has taken over. Horizontal and vertical integration of states in the global economy is currently taking place through at least two major visible and measurable processes-the rapid spread of foreign capital, trade, and the spread of the ideas of political democracy and market principles to an extent never before witnessed in modern history.”
A shift of focus and interest from the local market to the international setting has demanded innovation. Fewer trade barriers and unprecedented technological advances have accelerated the pace of globalization. With this, Ford widened its operations worldwide. The fact that globalization is the process of worldwide integration of economy and the socio-political spectrum, Ford now expands its marketing operations and overcomes barriers of economic progress. Global amalgamation contributes to the providence of more potentialities for the automobile industry. Increased market competition identifies continuous adjustment and improvement in the production lines of countries to recognize the participation of smaller business units. The free flow of goods and services, the establishment of functioning trade blocs like the European Union, more favorable regulations for foreign direct investment, and e-commerce are now major features of the global market. The introduction of the new division of international labor calls for evaluation and reorganization of the business operations as well as a reassessment of the current technological practices. Thus, globalization is a major breakthrough for Ford to improve its globally competitive operations.
Despite current difficult economic conditions and uncertainties in the automobile industry, Ford continues to have a good return on investment. As one of the world's largest auto and truck manufacturers, Ford is continually looking for new ways to streamline its operations. Ford has set goals to increase vehicle production, while reducing costs and development time for new vehicles.
References
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Assessing Contours, Correlates, and Concomitants of Globalization, New York: Routledge.
Ford (2006) Overview – Ford Corporate Website. Retrieved May 19, 2006 from
Giddens, A. (1999) Runaway World: How Globalization Is Reshaping our Lives,
London: Profile Books.
Gilpin, R. (2000) The Challenge of Global Capitalism: The World Economy in the
21st Century, Princeton, NJ: Princeton University Press.
Gilpin, R. (1996) “Economic evolution of national systems,” International Studies
Quarterly, 40, no. 3, September: 411-31.
Held, D. and McGrew, A. (eds) (2000) The Global Transformations Literature: An
Introduction to the Globalization Debate, Cambridge: Polity Press.
Kalliney, P. (2002). Ford Motor Company. St. James Encyclopedia of
Popular Culture. Gale Group.
Morales, R. (1994) Flexible Production. Restructuring of the International
Automobile Industry, Cambridge, MA: Polity Press.
Nye, J.S. and Donahue, J.D. (eds) (2000) Governance in a Globalizing World,
Cambridge, MA, and Washington, DC: Visions of Governance for the 21st Century and Brookings Institute Press.
Studer-Noguez, I. (2002). Ford and the Global Strategies of Multinationals: The
North American Auto Industry. London: Routledge. 118.
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