Management of Organizations in the Global Environment

This study highlights the importance of organizational management and the automobile industry in the global environment. It discusses innovative concepts that have changed the way automobile companies operate, such as Henry Ford's assembly line, the World Car Concept, Alfred P Sloan's Cost Centers, and mergers like Chrysler Mercedes-Benz or Nissan Renault. The study emphasizes the importance of innovation as the only way to survive the competitive market.

Running head: MANAGEMENT OF ORGANIZATIONS
Management of organizations in the global environment
Name of the student
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Management Summary
The automobile industry was always the best in line for a long time. The wheel is the
most important invention in the history of the man. The discovery has changed the lives of the
human beings and has scripted the future of the mankind. The wheel today is used everywhere
including the cars, planes, trains, wagons, as well as the machines. The mankind would have
been paused to the pre historic times without the invention of the following organization.
Automobile has been one of the major advancements of the world and the history and
development of the automobile has been one of the most enriching experiences of the world.
There are different kinds of impacts from the automobile economy. The automobile industry is
the industry involved in the design, development, manufacture, marketing and sales of the motor
vehicles. The largest number of automobiles is present in the US followed by Europe and China.
It is predicted that approximately 1 billion vehicles will hit the road by 2020. The industry has
provided the world with a number of different techniques that has been proven to be the best and
is applied and implemented in almost all the industrial sectors. The most important of them are
as follows;
1. Just in Time System- Just in Time is a management system of producing only what is
needed and what is required in an exact time. There is always confusion on the JIT
system as it is believed to be the inventory strategy. However the following is not an
inventory strategy and is rather a process of continuous improvement in the policies and
strategies. The following program helps to reduce time, improve quality, freeing up space
and changing the demands of the different customers. It also reduces cost and reduces the
response time of the organization to the customers.

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2. Kanbans- Kanbans system is a particular system that triggers production and the service
processes. It uses an array of simple visual signals, like the presence or absence of a part
of the shelf or some other things. The Kanbans system is a part of the JIT system and
generally leads to the dramatic improvement of the organizations with a major
improvement in the performance and the quality.
One of the most important milestones of the automobile industry is the merger between
Renault SA and Nissan Motor Co. The two companies generally cooperate each other on
engineering, manufacturing, purchasing, human resources and supply chain management. The
best example is the production of Nissan’s Micra small car designed especially for the European
market has been produced completely in Renault production line at Flins, France. The need for
the alliance has been made since a long time as the Japanese company has become the biggest
contributor to the profits of the three-pronged alliance which also involves Mitsubishi. Yet its 15
percent stake comes with no right to vote at Renault shareholder meetings, as opposed to the
French state. Therefore going with the agreement will help to prepare the companies for the day
when there will be no such deals left to coordinate the relationships of the companies and also to
round them together to formulate and implement a strategy that will help to increase and boost
the manufacturing capability of the electric cars of the future and also experiment with new
opportunities like that of autonomous driving technologies in future cars.
The following report has discussed and mentioned the importance of a number of
innovative automobile concepts that has changed the way the automobile companies operate.
The revolutionary changes have been possible just because of the innovative ideas of the
companies. The report has discussed all these aspects in a proper and efficient manner.

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Table of Contents
Sections 1.........................................................................................................................................5
Introduction..................................................................................................................................5
Section 2..........................................................................................................................................6
Individual Components....................................................................................................................6
First Component- Henry Ford: “Bringing the work to the worker”............................................6
Second Component-The “World Car Concept”..........................................................................8
Third Component- Alfred P Sloan “Cost Centers”......................................................................9
Fourth Component- Mergers such as the Chrysler Mercedes-Benz or Nissan Renault............11
Section 3........................................................................................................................................13
Conclusions................................................................................................................................13
References......................................................................................................................................14

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Sections 1
Introduction
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;
a. Henry Ford “Bringing the Work to the Worker”
b. The “World Car Concept”
c. Alfred P Sloan “Cost Centers”
d. 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

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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.
Section 2
Individual Components
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

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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;
a. The main principal of the assembly line is the sub division of the labors that holds the key
to achieving success in the market
b. 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
c. 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
d. 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

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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
e. 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
f. 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.

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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

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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

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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

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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.

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Section 3
Conclusions
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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