The following study has been prepared to highlight on the importance of the organizational management and the importance of the automobile industry. The study have also focused on the importance of the automobile industry in the world as the techniques and innovative management measures taken by the industry have been a learning example for the other industries. The main discussion is based upon a number of earmarked components of the automobile industry which are considered as revolutions in the organization. Some of the earmarked components are as follows;
- Henry Ford “Bringing the Work to the Worker”
- The “World Car Concept”
- Alfred P Sloan “Cost Centers”
- Mergers such as the Chrysler Mercedes-Benz or Nissan Renault
The automobile industry is one of the largest industries of the world and has changed the face of the organization gradually (Castillod 2016). The start of the 20th century there was a huge demand of the cars but the demand however failed to lower the prices of the cars as because the cars were still manufactured and assembled manually. Henry Ford started the revolution by the introduction of Ford T model in the market which was meant for the middle class people. The idea was to ensure the ownership of the cars to even the middle class people. The following model introduced the term assembly line and cars began to be produced in large numbers. The start of the First World War saw cars from the vintage era while there was a sharp decrease in the production of cars as well as the car companies in the 1930’s (Colley et al. 2018). Most of the demand was from that of the military or the personal transport of the people. The modern era designing of the cars began from the year 1980. Globalization has changed the face of the Automobile Industry in today’s world and the sector has made a number of hubs in the different continents like America, Europe and Asia (Colley et al. 2018). These hubs serve the different purposes of the automobile industry and are therefore referred to as the best in line. The components used in the following study has highlighted the importance of the automobile industry as well as pointed out its importance to the success of the other industries in the competitive market. The study has provided the importance of innovation as the only possible way to survive the competitive market.
The introduction will be followed by the discussion and review of the components where the concept of the components and the advantages and the disadvantages will be provided. This will then end with a brief conclusion.
First Component- Henry Ford: “Bringing the work to the worker”
The Assemble Line emerged at the Ford Motor Company Whose new 1910 Highland Park plant wanted a setting that was conductive to the manufacturing of the innovation process. The idea of moving work to the men remained in a number of fixed locations along a line where each employee or individual of the company was provided a single task to perform. Thus the main concept of “Bringing the work to the worker” was to improve the efficiency and think about a long term plan. In order to build a standardized car and make it available for all the people in the market, Henry Ford inaugurated the Detroit factory and made it a new kind of facility that was totally different from that of the traditional factories (Deyo 2016). The most common assumption while building the car was to ensure the presence of electric, light and power to be present everywhere. The floor plan of the factory was more open in nature and flexible than the other kind of facilities. This helped the managers to encourage innovational production and manage the other types of the organizational activities in a proper way. The precise role of innovation and bringing the work to the worker was a success as because it helped to double up the production facility and ensure the origination of the innovation process in the organization. Ford deserves credit for the innovation of the process as because the same process was copied and implemented by the other organizations to achieve success in the market.
Some of the major defining features of the assembly Line production are as follows;
- The main principal of the assembly line is the sub division of the labors that holds the key to achieving success in the market
- The division of the labor and the presence of a number of departments help in the easy maintenance and smooth operations of the company. This is one of the major benefits of the following process as it makes easier for the organization to track the different business operations easily
- The more the people the more is the production. It is important to recruit more people with fewer skills than employ a handful of people with exclusive skills. The presence of more people be it unskilled can help in the increase of production
- Another important feature of the company is the idea of the interchangeable parts in the assembly line production. The presence of identical parts of the automobile has to be fitted together without the need for the last minute adjustments. The absence of such last minute adjustments is one of the major milestones achieved by Ford as such kind of adjustments consume more time and tend to disturb and lower the production quantity of the company
- The introduction of electric drive machines and their use was one of the major milestones of this particular era. The electric drive machines helped in the development of standardized parts that were important for the automobile business
- The parts or assemblies moved from one stage of the production to the other stage in a proper and efficient manner
Second Component-The “World Car Concept”
The “World Car” Concept is an Engineering Strategy that is generally used to describe the automobile designed to suit the needs of the global automobile markets with minimum changes in each of the market where it is sold. The main objective of the World Car program is to ensure the savings and increase the quality of the cars by the standardization of the parts and design for a single car in a particular class. There are different types of examples that can be cited in the following case. Some of the cars are Ford Mondeo, BMW series 3, Lexus LS and many more as such. The world cars though share a specific concern generally have specific changes as per the national laws and regulations or the different types of cultural differences. The cars are however to be designed and produced according to the rules and regulations of the country where the manufacturing plant of the company is located (Deyo 2016). This is because there are different types of trends which are followed in different ways across the country accordingly. Toyota Corolla which is in the C-segment cars is believed to be the most important and best example of the concept of World Car in the globe.
The most important benefits of the World Car concepts is the innovation provided by the company to make the automobile a futuristic one. The cars in this particular segment are nowadays considered to be the rolling smart phones with easy access to different social media platforms, calling facilities and other dedicated features. The car companies are nowadays creating their own software or portable applications that will be totally used in their cars. For example the management of Honda claimed that they are in the process of building a new dedicated web link called Honda Link that will enable the users to easily use internet and other facilities while travelling in their cars. Most of the people owning a car are of the belief that it is important to have a connected and well developed modern car to enjoy the varied range of technologies. Popular surveys among the owners of the car have revealed that most of the people owning a car want to have the latest technologies installed in their cars and the people in the age group between 18 to 35 years have claimed that the presence of the technologies in the cars influence the buying decision of their next cars. The younger drivers also claimed about the different types of online privacy risks that could reveal their driving skills to others. On the other hand they were also concerned about the amount of the insurance rates that the companies can provide them. The World Car concept and the use of the technology in the cars also help the organization to reduce and mitigate the risk of using the phones while driving. Extensive research is also going on in developing driverless cars that will help to totally mitigate the risks of accidents.
Third Component- Alfred P Sloan “Cost Centers”
In order to comprehend how the famous American Business executive in the Motor Vehicles industry, Alfred P Sloan influenced the entire corporate system by the invention of a particular technique popularly called as the Cost Center. It is very much important to have a clear understanding of the technique as it defines the scope of the organization. On one hand the profit center directly has an impact on the profits that are earned by the company and on the other hand the cost center plays a similar role but in a different manner (Drucker 2016). During the phase of downsizing, the departments like that of the cost centers are generally the first ones to be on the target list. However the nature and the importance of the department must never be underestimated at all. The following directly adds to the cost of the company and also the profit earning of the company by direct or by indirect means. There are other kind of the examples of the cost centers that has a direct relation to the human resources, research and development. It also has a direct link to the marketing process of the organization. The management system developed in the process has formed the base of the different types of the contemporary corporations with the multidivisional system in place since a long time back. The drawbacks of the system introduced by Henry Ford were eradicated ion this particular process. The decentralized process was introduced which made the company independent and reduced their dependency on a single person.
Firstly the Alfred P Sloan concept improves the performance measurement and helps the managers of the organization in making complex decisions and operating and maintaining the departments with strict actions. The outcome and the quality of the decisions taken by the managers of the organization is largely developed and improved under this particular system. As said earlier the profitability of the company is also improved by means of managing the information and also helping in improving the budgeting of the organization (Hahn et al. 2015). The concept revolutionized the corporate sector in America. The brilliant approach of the company towards the leadership, management of the employees and the customers and the way the company negotiates with the employees have totally been revolutionized by the use of the particular sector. Some of the most important cars that were developed using this model is the Opel Corsa and Volkswagen Beetle. The worldwide success and sales of two of these cars is mainly because of the implementation and the use of this particular concept to produce the cars. The economy and durability offered by these two important cars were replicated by Nissan Sunny and Toyota Corolla in Asia and especially Japan. Over the years this kind of cars has undergone a massive change in the design and thus has been successful to achieve huge range of commercial success. The success of these vehicles have provided the power and the confidence in the global car makers to research and experiment new kind of vehicles and increase the use of the vehicles that are run on alternative fuels.
Fourth Component- Mergers such as the Chrysler Mercedes-Benz or Nissan Renault
The Nissan Renault merger was organized in the year 1999 and took the world by storm. This is because it signified the merger of two of the most powerful companies. The relationship between the companies involved joint development, cross holding and the involvement of the entire business domain of both the countries. The merger helped both the companies to innovate and reduce the cost of production (Hahn et al. 2015). It also helped to increase competitiveness and increase profit making power of the companies. The alliance was mainly undertaken by the management of both the companies to ensure the openings in the different potential markets. According to, Helmers Dietz and Hartard (2017) it also helped in the reduction of cost and to develop new technologies that were not possible for the companies to acquire single handedly. The main aim of Nissan was to revive the company from its declining state at that particular time and increase the profitability and growth of the company. Though the culture and the system of work in each of the company remain intact the merger helped to change and increase the capacity of the assembly line of the organization. The companies hired and recruited able professionals to manage their production and be the best in the competitive market.
The following merger was important and beneficial to both the companies. It helped the firms to mitigate wastes, improve the competition among the firms in the market and help in the earning of healthy profits. The most important among the features of the merger was the ability to achieve benchmarks and also improve the efficiency of the company. Both the companies came to each other’s help in times of distress and also helped each other in designing and making new innovations to be at the topmost position in the market. The merger also helped both the organizations to fund extensively on their research and development process as because such process was necessary for the organization to develop new and innovative models. This new and innovative models includes features like that of the electric vehicles, technological advancements, developing vehicles that will be run on different renewable energies and also developing future ready ethanol driven vehicles. The two companies however, excluded joint development and production of cars in developing markets which made them independent in these markets and helped them to assume a greater role in leading the markets (Hertenstein Sutherland and Anderson 2017). Apart from this there are also other challenges that are to be faced by the two companies as a result of this merger. The internal challenges in front of the organizations is lowering their chances of being the top European leader in the cars segment as Volkswagen Group is slowly taking up the position of the number one automobile manufacturer of Europe. Various issues in the composition of the company have occurred ever since the inception of the two organizations. The hurdles faced by the companies in the alliance must be cleared immediately to ensure the status of the market leader.
The report has described all the essential components of the management and innovation of the Automobile industry with a detailed description of the concepts, advantages and problems with each of the revolutionary components in the automobile sector. The enhancement of the automobile industry will increase in the coming years and thus the motor vehicle industry will be one of the most profitable in the organization. The increase in the manufacturing flexibility also sees the beginning of new and unseen challenges on the management and organization in the industry. These kind of hurdles include the likes of not following the style and design of the manufacturing systems, but also coordinating with the logistics and the supply chain management systems of the organizations. Proper and efficient scheduling and intelligent planning are also required to minimize the differences between the need to enhance the capital-incentive resources and the demand for the different varieties of the product. The increase in the competition amongst the automobile companies will lead to a new market and the companies have to be innovative and search for new opportunities to be the best in the market so as to sustain themselves in the market. The thorough analysis of the report will help the future researches on the same subject or topic to be more accurate and effective in nature.
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