Running Head: LEADERSHIP 1

Critical Analysis and Review of the Leadership Capabilities of Henry Ford

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Table of Contents1. INTRODUCTION..............................................................................................................2

2. Henry Ford’s Key Capabilities as a leader.........................................................................4

3. Henry Ford’s Key Weaknesses...........................................................................................7

4. Literature Review...............................................................................................................8

4.1 Transformational Leadership Theory..........................................................................8

5. Critical benchmark of Henry Ford’s leadership against the transformational leadership theory........................................................................................................................................10

6. Conclusion........................................................................................................................12

7. References.........................................................................................................................13

1. INTRODUCTION

Henry Ford was born in 1863 in the State of Michigan on a certain farm. He went to

school for eight years during which time he would help his father on the farm or he would go

to Detroit to work in machine shops tinkering with internal-combustible engines. In 1888 he

got married and went to live in Detroit where he got a job with the Edison Light Company as

a chief engineer. His position required him to be on call 24 hours in a day. This allowed him

ample time to work on his own projects and working on his lifetime goal of developing a

petrol powered motor vehicle. In the year 1896 he came up with his own self-propelled

automobile and gave it the name quadricycle (Stern, 2013).

In this period he, together with other influential people known as the Detroit Automobile

Company, formed an organization. The influential people later left him because he did not

want his inventions to be made public. His intention was to keep improving on the model as it

was not ready at the time.

In the year 1902 he moved from the company, which at that time had been named the

Cadillac Motor Company. In 1903 he was suited to market an automobile. He sprang into

action by putting up the Ford Motor Company at 28,000 dollars which he acquired from the

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public since the wealthy people in Detroit had not forgiven him for the misunderstanding they

had earlier on (Stern, 2013). He was involved in court cases for the next eight years for

manufacturing an automobile since somebody had patented a vehicle and was given all the

rights over any new vehicle that was manufactured at the time. The first legal case went in

favor of his opponent but instead lodged an appeal to manufacture his car which he won

(Stern, 2013).

During this time he came up with cars, albeit a small number. The vehicles were

assembled by a groups of two or three workmen using parts that were made by other

companies. His dream was to come up with a car which was affordable, reliable, efficient and

available to the people. In 1908 he came up with the model T automobile which became so

popular that it sold greater than 16,000,000 globally

He used different methods to change the car industry by putting together precision

manufacturing and standardized parts and in the year 1913 he set up a movable assembly line

whereby the workers maintained their positions and the cars moved passed so that the

workers could add the various components. The result of this was a tremendous reduction in

the time of completion of a chassis from 728 minutes to about 93 minutes (Stern, 2013).

As the years progressed by Ford paid a minimum wage, lessened the working hours and

suggested that he would only build one type of car. His minor shareholders disagreed with

him and they took him to court. He opted to resign, but this prompted more legal action and

in the end after a heavy payout to them he owned the Ford Motor Company outright.

His focus was on stock levels in his productions that every day they would have enough

ore to be used for the day’s production needs. He never allowed stock piling since it would

come with other costs. The time they needed to finish up a car from the time the ore was

delivered was a minimum 28 hours (Stern, 2013).

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He became controversial in his life while condemning the “International Jew” for

sponsoring war by putting up a radio station to read messages to the locals of the region at the

time. He also developed a number of famous quotes. He died in 1947 at the age of 83 years.

2. Henry Ford’s Key Capabilities as a leader

Henry Ford was a brilliant engineer who liked design work (Nevins & Hill, 1957). He

was very enthusiastic at production engineering and process flows and had a very clear

understanding of the same. He paid particular attention to what he was doing and the purpose

of doing it. His leadership qualities are largely expressed in his writings where he had a lot to

say (Stern, 2013).

He acknowledged that throughout the time they were in business he had never found

business bad because of the outside forces (Ford, 1929). He reasoned that it was always due

to a defect they had internally and whenever they managed the defect then everything went

back to normal (Ford & Crowther, 1922). This is despite the efforts that any of them was

putting and what expertise was involved. He said that nationally the country had bad business

when the businessmen were not concentrating on their work and business improved when

people took a hold of their affairs, invoked their leadership skills into the jobs they did to

overcome the obstacles on their way (Nevins & Hill, 1954). He pointed out that its disastrous

not to put into practice the elementary principles of business and take the easiest way (Ford &

Crowther, 1926). The elementary principles of business as he put them include the following:

(entrepreneur.com, 2008).

To make a big number of goods of the best quality, the most economical and finally take

them to the market, make sure their products are of high quality and lower prices and costs,

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To increase the costs eventually with time and never to reduce them and ensure the goods

finally reach the consumers. The principles he summed them up into what he called service

which entails getting to know what people need and getting them the need in line with the

elementary principles.

Ford’s strengths and weaknesses are evident from the philosophies he lived by. There is

the aspect of attention to quality that he exhibited to the goods and enterprises. He overlooked

his critics to the market needs. He ignored competition and had all the responsibility on

himself as the manager. What is seen is he as the superman who solves all the problems by

being the overall authority and the one in control.

Later, he abandoned the philosophy of the elementary principles of business. He

embraced autocracy in his behavior. He chased away the members of his management team

thereby losing a number of his management team that had in the past steered the company to

success earlier.

He greatly bullied and humiliated his son and this was widely spoken about. The always

loyal Sorenson criticized him for this and viewed his bullying of the son as his greatest

failure. He developed paranoia and suspicion towards all the people he interacted with and

this changed his relationship to that of fear from the earlier one of cooperation (Farnaz,

2014).

By the year 1890s most people were involved in invention in the US. Ford came up with

the design of an automobile in 1896 which he quickly sold to get capital for further

experimentation. He continued with this trend for quite some time (Chandler, 1990).

In the year 1899 after getting capital from a Detroit lumber dealer he put up the Detroit

Automobile Company after leaving Edison to be the company’s superintendent heading

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production. His efforts of producing motor cars commercially failed at first because was not

experienced in production and only managed to make a few cars. They joined hands and set

up the Henry Ford Company in 1900. They managed to manufacture few cars but one became

a very successful car for racing. He, subsequently, neglected his business after putting a lot of

interest in racing cars (Chandler, 1977). This caused him to be fired from the Henry Ford

Company in 1902.

He went back to his earlier vision of producing cheap, affordable cars and teamed up

afresh with other partners to form the Ford Motor Company in Detroit in June 1903. Here he

was appointed the vice-president and general manager (Sward, 1948). He provided

engineering and production expertise while here. He won a legal battle with the Association

of Licensed Automobile Manufacturers (ALAM) and rivals like Packard and Olds Motor

Company which argued they had sole rights to manufacture gasoline-powered vehicles. He

won the case in 1911.

He was viewed as a visionary person in terms of his work relations. In the year 1914 he

reduced the working day to eight hours since he believed this was enough time for a worker

to be efficient in his job. He came up with the famous 5 dollar daily wage which was more

than the rate at the time in the industry (Farnaz, 2014).

What he did in the period 1910 to 1920 made him to be feted as a hero in the United

States because his dream of coming up with cheap motoring finally revolutionized the

transport sector.

In the year 1921 his concentration was still in low-price market which he largely gained

from. He accounted for 56 % of the passenger cars in the United States. At the time General

Motors was the major competitor of Ford and it had 12% of the share of the market

(Burlinghame, 1949).

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3. Henry Ford’s Key Weaknesses

Cracks in the success of Henry Ford came up during the First World War. He was a

convinced pacifist and in the year 1915 he chartered a ‘Peace Ship’ to go to Europe to try and

solve the war by making use of negotiation. In the same vain, he tried to give out pacifist

literature with every car that he sold. The result of this was a break with James Couzens the

talented administrator and salesman who was in charge of his marketing efforts who became

a politician after leaving in 1915.

The next person to go was Knudsen. He resigned in 1921 because Ford refused to get a

replacement for the aging Model T and joined the rival General Motors. At the time GM was

run by Pierre du Pont and Alfred Sloan and heavily contributed in developing the Chevrolet

which ultimately made Model T come out of the market. Either, Sorenson and Edsel Ford

who replaced Couzens could not cope up with Ford since he had become very aristocratic

(Farnaz, 2014).

Apart from being autocratic in manner and chasing away most members of his

management he turned to bullying and humiliating his son. His loyal friend Sorenson became

so critical of him and called it his greatest failure (Nevins & Hill, 1962). This manner of

treating of people, which was largely filled with paranoia and suspicion changed his

interaction with people to one filled with fear from the cooperative one it was in the past

(Sorenson & Williamson, 1957). Sorenson at one time reported that Ford was afraid and

never welcomed ostentation and was never at ease in the luxurious mansion he put up at Fair

Lane (Farnaz, 2014).

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4. Literature Review

4.1 Transformational Leadership Theory

Transformational leadership may be explained in terms of theoretical trajectory. The

origin of the concept were people like James MacGregor Burns and further developed by

Bernard Bass and coauthors in their writings and research. Transformational leadership

heavily builds on transactional leadership (Steinwart & Jennifer, 2014). It is therefore

important to note that transformational leadership has the benefit of rewarding the employees

at the present time and has the long term impact on the employees even in time to come. With

transformational leadership the status quo is not maintained, rather there is improvement of

both the individual and the company (lausdsmh.net, n.d).

With transformational leadership the leader has to grow first then later on the employees

grow as they are impacted on by the leader. The self-development is a gradual process that

begins with the individual knowing who they are and what they want to be (lausdsmh.net,

n.d). This is developed when the individual has emotional intelligence. For transformational

leadership to be seen to be existent, there must be an interaction between the leader and the

follower. At times the leader and the follower may be working together on totally different

situations but the situations become conjoined into one as they work together (Steinwart &

Jennifer, 2014).

Transformational leadership has been seen as a potential force where the authority who is

the leader realizes and makes an improvement on the needs and wants of the people he or she

is leading. This happens when the leader examines the needs of the followers and tries to find

out the opportunities for the employees to grow (lausdsmh.net, n.d). The result of the

relationship between the leader and the follower is that which ultimately makes the follower a

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leader. Also the result of the relationship is such that both the leader and the follower learn or

benefit from the interaction.

From the research that has been done transformational leadership entails the leader

expecting high performance from the followers while expecting the followers to have a better

future and ultimately benefit (lausdsmh.net, n.d). They are stimulated to think and know that

the work they do has benefits. The advantages of transformational leadership are numerous

and the firms and companies that make use of it really benefit their employees apart from the

relationships and the networks that are developed as a result of the same (Steinwart &

Jennifer, 2014). This kind of leadership style in the end equips the workers with the tools and

the resources both from outside or from inside and in the end they prosper.

Teams in today’s work environment really work to ensure the success of transformational

leadership. It is generally a tendency to give support to the teams as opposed to the self-

serving leaders. In the recent years the organizations are to a large extent composed of teams

and followers who are ready to work. In the team scenarios, the leader is not the

organization’s interest because the activities of the organization are the responsibilities of all

the employees of the firm. The focus is the growth of the teams in that case. At times the

leaders may look like they are portraying the style of transformational leadership yet they are

actually fulfilling their own self-interests. Such leaders are said to be exhibiting pseudo

transformational leadership and the traits are self-centeredness, self-aggrandizement,

exploitative and power seeking with principles which are out of line with those of the

company (Steinwart & Jennifer, 2014).

At present, transformational leadership entails the teaching of leadership in schools,

colleges and universities. The transformational leaders have unique leadership capabilities

like creativity, efforts to change the status quo to meet goals, with calculated visions and to

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benefit ultimately the followers as they will grow. The transformational leaders are good in

communication and are able to understand difficult concepts that other people cannot

interpret (lausdsmh.net, n.d).

5. Critical benchmark of Henry Ford’s leadership against the transformational leadership theory

Transformational leaders change things. They are innovators. They make use of new

ideas, at times their own and other times those of other people and develop them and promote

them into those that are used daily. Transformational leadership requires self-confidence a

taste for risk-taking, leadership ability and always looking ahead to see what the future

should look like. Henry Ford had all these qualities and some of it took time to develop and

be expressed outwardly (Stern, 2013).

Henry Ford sponsored pacifist expedition to Europe during the First World War. He

adopted a paternalistic policy to change the lives of his workers both at home and at the

workplace. He promoted the use of aviation technology. He came up with village industries,

small factories in sub-urban Michigan where people could work and farm during dissimilar

seasons hence bridging the gap between the rural and urban experience (Stern, 2013).

He came up with ways to make use of agricultural products in industrial production and

these included soybean-based plastic automobile components like experimental vehicle trunk.

He was at the fore-front of labour unions in the years 1930s and made it a priority to

assemble his workers. He mobilized his factories for the war effort and manufactured

bombers, jeeps and tanks for World War two. He set up schools in many parts of the country

that gave educational experiences and taught the new techniques at the time (Stern, 2013). He

came up with an indoor and outdoor museum to preserve the historical items that had

American origin (Stern, 2013).

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“When everything seems to be going against you, remember that the airplane takes off

against the wind, not with it,” Henry Ford (tripod.com, 2014). This quote easily tells of his

transformational leadership skills. The qualities of being a transformational leader include:

coming up with new ideas, always changing and adapting to situations. Henry Ford was

charismatic as is evidenced by his popularity and for producing a car that was affordable to

the general public (tripod.com, 2014).

Bernard Bass identified four significant components that are needed for one to be known

as a transformational leader. The four traits are idealized influence also called credibility,

inspired motivation, intellectual stimulation, and individualized consideration. Henry Ford

had these triats.

He exhibited having credibility by inventing automobile that would be affordable to the

general public. He had the perception of being a great man and therefore influenced other

people to join him.

He was very motivating to his workers in terms of rewards, work conditions. He

introduced the minimum working wage bill at the factory of 5 dollars when the actual wage

bill at the time was about 2 dollars (tripod.com, 2014).

His intellectual stimulation was the dream he had of coming up with an automobile. His

manner of thinking was purely transformational. He came up with the moving assembly line

and reducing wastage.

6. Conclusion

In conclusion to this paper of Henry Ford it is evident that his dream, one of a lifetime

was to come up with an affordable car for everybody to own a vehicle. He subsequently

reduced the price of the car by having many manufactured so quickly and so cheaply sold.

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His leadership skills accompanied his vision since he achieved his dream and at the same

time treated his employees well and gave them the right working conditions.

Ford is one person that had inspiration and people actually followed him because he

understood his work. He understood his work both from outside and from inside. Even

though his leadership and charisma outside the workplace was accompanied by controversies

and wrong decisions he managed to put across his point to the employees. They in the end

listened to him and loved him for what he did.

He looked at his staff as a whole and still he also had his weaknesses. He became very

powerful as a motivator in his business operations and this to some extent made him be

autocratic. He became a pacifist and never liked war and in the year 1915 he formed a “peace

ship” to Europe.

From all this, this paper concludes that Henry Ford was actually a transformational

leader. Some of his leadership qualities in support of this are: he valued human capital. This

was the case when he reduced the wage bill to 5 dollars. He believed in equality since he

offered employment to Women, African Americans and disabled individuals as well. He was

as well emotionally intelligent because he understood very well the needs of his employees

and was in-tune with their work life balance.

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7. References

Burlinghame, R. (1949). Backgrounds of Power: The Human Story of Mass Production. New York: Charles Scribner's Sons.

Chandler, D. (1977). The Visible Hand: The managerial Revolution in American Business. Cambridge, MA: Havard University Press.

Chandler, D. (1990). Scale and Scope: The Dynamics of Industrial Capitalism. Cambridge, MA: Havard University Press.

entrepreneur.com. (2008, October 8th). Henry Ford. Retrieved from www.entrepreneur.com: http://www.entrepreneur.com/article/197524

Farnaz, H. (2014, May 7th). 3 Leadership Qualities of Henry Ford. Retrieved from www.centerforworklife.com: http://www.centerforworklife.com/leadership-qualities-henry-ford/

Ford, H. &. (1922). My Life and Work. New York: Doubleday.

Ford, H. &. (1926). Today and Tomorrow. New York: Garden City.

Ford, H. (1929). My Philosophy of Industry. London: Harrap.

lausdsmh.net. (n.d). Retrieved from http://lausdsmh.net/wp-content/uploads/2012/03/Transformational-Leadership.pdf

Nevins, A. &. (1954). Ford: The Times, The Man, The Company. New York: Charles Schribner's Sons.

Nevins, A. &. (1957). Ford: Expansion and Challenge, 1915-1933. New York: Charles Schribner's Sons.

Nevins, A. &. (1962). Ford: Decline and Rebirth. New York: Charles Schribner's Sons.

Sorenson, C. &. (1957). Forty Years with Ford. London: Jonathan Cape.

Steinwart, M. &. (2014). Remembering Apple CEO Steve Jobs as a "Transformational Leader" Implications for Pedagogy. Journal of Leadership Education DOI: 10.12806/V13/12/R3, 1-15.

Stern, B. (2013, September 24th). Leadership Lessons from Henry Ford. Retrieved from www.bensternleadership.com: http://www.bensternleadership.com/2013/09/24/leadership-lessons-henry-ford/

Sward, K. (1948). The Legend of Henry Ford. New York: Rinehart.

tripod.com. (2014). Exemplary Leader- Henry Ford. Retrieved from lozalidea.tripod.com: http://lozalidea.tripod.com/id14.html

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