Impact Of Globalization As A Structural Force Management Essay

Globalization as a structural force can act upon how states and histrions within these states develop and respond to regulative policies. Globalization force per unit areas can flux through multiple locales: trade among states, state-to-state ties generated from common rank in intergovernmental organisations, and nongovernmental ties from citizen engagement in international webs.

About the company:

Major events that shaped company ‘s policies in the altering planetary environment:

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1914: Ford introduced $ 5 workday minimal pay – double the bing rate.

In 1914 Ford innovated the 5 dollar working day. 5 dollar was merely twice the rewards being paid at that clip. The interesting thing about this was it was far more than the balance between demand and supply. The figure of worker willing to work exceeded the required. The Ford company came to be associated with “ good rewards ” in 1914. This policy of high rewards and mass production gave rise to a new term “ Fordist ” ( the planetary environment of business-Fredrick cat )

Political: was vehemently anti-union, and sympathetic to fascism


In the 1913 the handiness of labours must hold increased as the national economic system and Detroit backwoods suffered a important downswing. This is apparent from the following tabular array 1 which shows the figure of people having the particular unemployment alleviation in the state including Detroit increased approximately two 3rd between the period of July 1912-june 1913

Ford ‘s high pay policy is in by the “ efficient pay theory ” ( gift and efficiency ) . There are assorted theories for these alterations like the Dual labor market theory ( International labour market and manpower analysis-peter b. Doeringer and Michael j. Piore )

Although the same “ efficient pay theory besides says the in a competitory market some people must be stuck in bad, low paid occupations or unemployed ( Shapiro and stiglitz1984, Bowles 1985 ; Gintis and Ishikawa1987 ) . The option to the Ford ‘s offer of 5 dollar pay was unemployment or really low paid occupation hence can be the ground why workers showed up.


Worker dissatisfaction took seeable from.In 1913 Ford ‘s worker turnover rate increased to 380 per centum ( sward 1972, cited in hounshell 1984, page. 275 ) . High turnover rate during the 20th century was a common job faced by many makers. The ground for dissatisfaction of labors harmonizing to ford direction repost ( meyer,1981, pp 100-101 )

Excessively long hours

Low rewards

Bad lodging conditions

Undesirable store conditions

Unintelligent handling of the work forces on the portion of chiefs and overseer ( did Henry Ford wage efficiency rewards? )

Ford ‘s method of 5 dollar pay made workers motivated, punctual. This although should hold been a dearly-won matter turned out to be profitable measure for the concern.

The higher the pay rate offered by houses, the more attempt will be supplied by the employees, ceteris paribus ( californium. Akerlof, 1982


Dramatic development in production engineering by Fords assembly line technique. The high expeditiously of this system raised the importance of High worker bend over, high worker attempt, and high worker quality. ( Principals of macroeconomics by N. Gregory Mankiw )

By 1910 two tierce of the Fords workforce were either workingmans or mechanics who were over rated as “ extremely skilled ‘ or “ skilled ” ( meyer 1981, p48 ) . this is because Ford was non a fabrication company instead piecing company. This job was suppressed by



1996: Ford certifies all workss in 26 states to ISO 9000 quality and ISO 14001 environmental criterions


World War II gave birth to the thought of quality confidence. The U.S. Department of Defense instituted one of the first formal quality control plans in the universe, to cover with quality jobs related to fabrication of defence equipment..The thought of industry criterions continued to distribute and develop throughout the universe and formed the footing for a set of quality confidence criterions adopted by other members of the North Atlantic Treaty Organization ( NATO ) . Those criterions were called the Allied Quality Assurance Publication ( AQAP )

At the stopping point of World War II, in 1947, the International Organization for Standardization ( ISO ) was created with central offices in Geneva, Switzerland.

ISO 9000 & A ; ISO 14001:

In December 1996, Ford became the largest automotive organisation in the universe to have ISO 9001 quality enfranchisement, for quality direction and quality confidence. On Sept. 9, 1999, Ford Motor Co. became the first U.S. automotive company to necessitate all of its production and nonproduction providers to go certified to ISO 14001 international criterions for environmental considerations.

Factors impacting Ford ‘s determination to implement ISO 9000 and ISO 14001:


Governments may hold actively promoted ISO 14001 if their economic systems relied on exporting to states with high degrees of ISO 14001 acceptance rates ( Roht-Arriaza 1997 ) . Further, many claimed that following ISO 14001 will go a de facto status of making concern: houses that outsource their operations sometimes require that their providers adopt ISO 14001.

United States formed the Registrar Accreditation Board ( RAB ) to standardise process for enfranchisement. The US Congress adopted the National Technology Transfer and Advancement Act necessitating federal bureaus to follow International Standards where they exist, alternatively of making their ain.

Intergovernmental webs played limited function in diffusion of ISO as it was nongovernmental government.

Adversarial legalism attack was practiced in the U.S ( Kelly kolman and aseem prakash )

Relationss between environmental groups, authorities regulators and industry were characterized by changing degrees of ill will and high degrees of misgiving.


International criterions were of import tendencies in concern pattern. During the Early twentieth century, quality was viewed as an extra cost of production for the concern. But as companies realized that high quality leads to more efficient and less expensive production processes, the quest for quality became their major consideration. Both ISO 9000 and ISO 14001 helped companies to increase their market portion. Encouragement by World Trade Organization for creative activity of supranational criterions helped cut down barriers on trade and investing ( UNCTAD, 2002 ) . As a effect of which Foreign Direct Investment from international Market started pouring in.

Changes were besides go oning at domestic degrees which led to Rise in intercompany ( trade within value the value ironss of the company ) trade

Possibility of “ California consequence ” ( vogels,1995 ) because of presence of double trade linkage. The influence of external markets on domestic policy may stem from the policies of the dominant trading spouse. If state A absorbs a important proportion of state B ‘s exports, so state B can be expected to mime or react to the policies of state A


Employee morale improved as they felt portion of the procedure. Directors and employees accepted duty for quality. This created better cooperation and communicating among workers to make a better occupation and made the company more efficient. This in bend led to Improved client satisfaction and trust.

Reduced the demand for client audits ( This can ensue in major nest eggs ) .

However, Many citizen and militant groups were wary of EMS criterions and viewed them as ‘private governments ‘ that were outside public examination.


Development of pollution-prevention techniques and company-specific EMSs to cut down waste production every bit good as disposal costs.Presence of new signifier of Information and engineering and greater interaction among people of different states led to the diffusion.

Ford was perceived as “ good corporate citizens ” that produced higher quality merchandises. Therefore, they gain prestigiousnesss that helped retain old clients and pull new 1s.


There was NO legal deduction for the companies to follow such criterion but since EMS had become a “ gilded criterion ” for CSR witting houses therefore most of the MNC ‘s adopted them. ( Mike. W peng )


In the 1980s, environmental ordinances on risky waste disposal at both the local and national degrees became more rigorous. This forced companies to alter their method for risky waste disposal from arrangement in landfills to intervention and recycling.

procedures of globalization impacting Fords enfranchisement of ISO 9000 & amp ; 14001:

By accommodating to such Industry criterions, FORD motor company contributed toward CSR and created some distant societal value in the eyes of the clients. CSR although there is some chance of window dressing and a pursuit for better net incomes ( Mike. W peng )

Even though domestic criterions and clients may non be doing demands, houses may detect that their international clients require ISO 14001 enfranchisement to guarantee that that environmental hazards with minimum.

Globalization convergence force per unit areas may besides flux through the channels of the governmental and nongovernmental ties that states hold Governments can fall in a scope of intergovernmental organisations and governments such as the European Union and the World Trade Organization Citizens can fall in likewise international nongovernmental organisations runing from Greenpeace to the International Political Science Association.

Networks of international organisations, governmental or nongovernmental, can function as the conduit through which states and their citizens exchange thoughts, develop common apprehension, and possibly even pressure each other to follow common patterns ( Matthew Potoski, Aseem Prakash )

2008: Ford sells Jaguar and Land Rover to Tata Motors:


After confronting a loss of North American market portion to Asiatic challengers like Toyota, Ford CEO Bill Ford declared to cut 25,000 to 30,000 occupations and idle 14 installations by 2012 therefore declaring the revival of Ford Motor company. ( hypertext transfer protocol: // article_id=22465 ) .


Allan R. Mulally succeeded Bill Ford as the new president CEO of Ford Motor Company. He was known as the turnaround expert as he

Change in the leading


Ford reported a loss of 1.2 Billion Dollar with a lessening in the market portion from 23.7 % to 15.5 % since the twelvemonth 2000.It faced tough competition from Asiatic maker such as Toyota which had fabrication capacity of over 1.5 million vehicles in North America alone.High monetary values of oil posed a menace that planetary economic system might steal into recession and would make high uncertainness for the concern ( planetary automotive, report SURE October, 2004 ) as clients were exchanging over from sport public-service corporation vehicles to smaller, more fuel efficient autos.

Because of high addition in labour and material costs, U.S parts fabricating company like Delphi declared bankruptcy in 2005 ( plunkettt ‘s advertisement and stigmatization industry almanac 2007 ) .

Ford did non desire to sell its panther and land wanderer trade name to similar car manufacturer company which had broad scope of merchandise in order to avoid competitory force per unit areas on Ford ‘s other car lines ( Haward concern reappraisal )


Rigorous relationship between united car workers and American auto shaper as the domestic auto makers bore the load of heavy pension and wellness attention costs both for current and retired workers, as stipulated in contracts with the UAW ( plunkettt ‘s advertisement and stigmatization industry almanac 2007 ) . This was non the instance with Nipponese makers

UAW member at Fords allowed non brotherhood workers to execute certain undertakings and did non pay them even for overtime some of which fell on weekends

6000 salaried occupations were cut in September, 2006 and extra 30,000 occupation scheduled for 2012


U.S authoritiess new regulation in August, 2005 brought a alteration in the bing fuel efficiency criterions. ( plunkettt ‘s advertisement and stigmatization industry almanac 2007 )

Though Ford lacked invention in mid sized and little autos it projected that by 2015 one half of the vehicles on route would hold a six velocity automatic transmittal, which would ensue in increased milage. ( plunkettt ‘s advertisement and stigmatization industry almanac 2007 )


Pressure from conservationist on auto and truck industry to clean up emanations.

Bill Ford he instituted a “ Revival Plan ” in 2002, after the car manufacturer lost $ 5 billion a twelvemonth earlier. But the program failed to run into the ends set for 2005.

Despite all these challenges

Effectss of globalisation on MNC-


Cons-Expanding abroad specially towards emerging economic systems may non merely increase corporate net incomes and stockholder ‘s returns but besides provide employment to host states and develop these economic systems at the base of the “ pyramid “ all of which have baronial CSR dimensions. However this is besides done on the disbursal of domestic employees and communities. One can vividly appreciate the desolation of occupation losingss on such employees and communities by watching the film “ the full Monty “ , which took topographic point in Sheffield, England the former steel capital of Europe and the universe

Ford 2000 Vision:

The altering gait of planetary market meant that the company had to execute every bit good in the international markets.

Ford created a strategic program to come out as the universe ‘s prima automotive company. This was what FORD ‘s 2000 vision all about. It was indispensable for a company as a whole to back up the strategic program.


While the aealry massproduction mills of innovator H Ford ‘d yearss were vertically integrated, bring forthing about all the

During the cyberspace roar of 1990 ‘s some dotcom enthusiast forcasted the terminal of the traditional car franchise

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