Ford Motor Company: The Product Warranty Program (A)
Decision-Making
Introduction
Change they say is evitable for there comes a time when an organization has to make important decisions (Blenko, Mankins & Rogers, 2013). This does not mean that decisions are not made regularly; in every organization there are decisions that are made on a regular basis that ensure smooth running of the organization. However, there comes a time when pivotal decisions that will shape the future and outlook of the organization are made and such decisions call for the involvement of the board of directors, the chairman of the firm and the executives in highest hierarchy (Blenko, Mankins & Rogers, 2013). In the case study at hand, Ford Motors is presented with a tough issue that calls for immediate decision making that calls for the involvement of topmost leaders.
Issue that calls for a decision/ decision to be made
The company has to make a decision on the alternatives it should take regarding its warranty policy. This follows an earlier announcement by Ford’s arch rivals GM that is had improved its warranty coverage to back its contention that the quality of its cars had reached an unprecedented high (Menes, 1990). That announcement by GM was a game changer in the automobile manufacturing industry meaning that other key manufacturers would lose out. GM would enjoy a huge market share as their clients would be guaranteed of extended coverage and thus would get the full value of their cars. However, this comes at an extra cost that GM had planned for. Ford for that matter had a big decision to make: maintain its warranty policy and lose out market share to GM or rework on its warranty policy to counter the announcement made by GM in order to maintain its market share.
Decision makers
Since it is an important decision, it calls for the involvement of the highest executives of the organization and that is the chairman of the board, the board, and the organization’s Chief Executive Office. These are the deciders; the key to creating a new warranty policy or maintaining the status quo is with them. However, they have no expertise in certain areas and must rely on the recommendations made by experts/executives in different departments such as finance, manufacturing, sales and marketing, QAD, after sale service, extended service, warranty, parts, and engineering.
Recommendations
There only two sides of the coin to this issue. 1. Maintain status quo and allow GM to dominate the market. 2. Edit the warranty policy to counter GM’s announcement and maintain market share and possibly increase it.
In line with that, it is recommended that Ford amends its warranty policy in order to maintain its supremacy and market share. However, since the decision is going to affect the entire organization, it is paramount that all stakeholders, and in this case, executives in all affected departments and the board to work hand in hand to decide the best way to implement the policy in a way that will not weaken the company’s profitability (Blenko, Mankins & Rogers, 2013). In that case, a collaborative decision making approach ought to be adopted. Here, the manner in which the current warranty policy will be readjusted and the consequences ought to be thoroughly investigated and then compared to that of GM. A key step that should be observed is the ability to counter GM’s move so that Ford has a warranty policy that is equal to or better than that of GM’s.
References
Blenko, M., Mankins, M. & Rogers, P. (Dec. 2013). Decide and Deliver: Five Steps to Breakthrough Performance in Your Organization. Harvard Business Review, pp. 1-192.
Menes, M. (May, 1990). Ford Motor Company: The Product Warranty Program (A). Harvard Business Review, pp. 1-18.
