Ford Project - Family Dynamics

Ford Project:

Family Dynamics

Henry Ford served a well-respected tenure as Ford’s CEO and President. Though, his management style was difficult to assess. Henry was open to ideas from all of his employees if they felt It could contribute to the company.  At the same time though, Henry had the tendency to be dictatorial and autocratic. This could be understood when Henry passed the position of President to his son Edsel, but remained CEO. He still wanted to be in control and make important decisions.  Yet, henry was all about people. He placed heavy emphasis on how important it was to take care of the people working for ford and their families. This is a contradiction to the autocratic style. That’s why many believe his success could be attributed to his ability to balance the autocratic style with a participative management style.

Edsel Ford brought a new creative aspect to Ford but appeared to be on a short leash. He tried to introduce a new model for production but that proposal was denied by Henry. Not once, but numerous times this has happened. It continued until it was inevitable for the Ford company. Although Edsel and Henry had a good relationship, it was tested by many unhealthy aspects. Edsel was often an opponent of Henry’s when it came to major decisions. It has even been reported that there were multiple occasions that Henry would humiliate Edsel in public. Despite the difficulty of getting anything approved, Edsel has been recognized for his accomplishments of improving production overseas and contributions to car design.

Henry II believed his grandfather’s autocratic rule was what led the company to begin to falter. There were things that needed to be improved, like recording the financials, in order to get the company where it needed to be. He used this to convince his grandfather to place him in charge. As we know had to be difficult. With this newly obtained power, Henry II was able to restore the company’s dominance. He used his experience from the navy to bring order to the company. Henry II believed more in an individualistic rule rather than autocratic. His individualistic proponents were tested by social responsibility. He would find himself serving for a variety of different cabinets and committees. Eventually he felt confident in the company and himself that he began running the company in the same manner as his grandfather did.

It seems as though when the Ford family held the CEO position, they believed in operating in a balanced system. Henry and Henry II were both great examples of this. The ability to incorporate both styles has led to the company’s success. Though the way Henry treated Edsel was the only negative aspect to look at. Edsel was serving as his president, yet he felt the need to embarrass him in public to other high-profile figures. Fortunately, those actions didn’t impact their relationship and the company as a whole was able to persevere.

Family Ownership

When Ford was created, there were about twelve investors in the company. Eventually Henry Ford was able to set forth a plan that would give he and his family sole ownership. For a long time it was just the Family that owned the company until Henry II decided to take the company public. In 1956, when the company went public, Ford family were given special Class B shares. The Ford’s are the majority owners, they have an influence on the company boards but do not have an impact on daily operations. Ford is a publicly traded on the NYSE, S&P 100, and S&P 500. According to Forbes, Ford Motor Company is the 5th largest family owned company in the world.

Today 86 extended family members hold 71 million class B shares plus a good amount of common shares out of the 3.8 billion total shares outstanding. The Ford family still owns about 2%, which is the smallest it has ever been, but hold 40% of the voting power. It was reported by Automotive news that Bill owns 8.1 million Class B shares, including shares held in trusts for others, including his children. That isa about 11% of the shares held by the descendants. His cousin Lyn Alandt owns 8.3 million shares herself.