•Built his first Steam Engine

when he was 15 years old at

his family farm
•Has been awarded a Doctoral
degree of Engineering at both
Michigan State University and
Michigan University
•Was awarded a Doctor of Law
degree from Colgate College
•Henry Ford was an anti-war
activist, however, when Japan
bombed Pearl Harbor, he
transformed his manufacturing
facilities to supply the United
States Military with airplanes,
engines, jeeps and tanks
•Was one of the richest men
ever to live with a final net
RESEARCH PAPER ON worth of $200,000 billion,
(adjusted for inflation) at the

HENRY FORD time of his death

•He considered running for
President of the United States
after his son’s death in 1943
 Strategic Leadership Group Project

Henry Ford

Submitted To
Prof. Jagannath Mohanty

Submitted By - Group 4
Mohit Prasad (202032067)
Abhishek Jha (202012048)
Raveena Sharma (202012071)
Yash Jhunjhunuwala (202022051)
Roshan Kunal (202011029)

Our Group follows Diffused Leadership paradigm. Leadership is diffused

throughout the group, with different individuals performing functions and
roles according to their competencies.
 Acknowledgement

We would like to thank our esteemed faculty – Prof. Jagannath

Mohanty for his invaluable guidance, support and tutelage during the
Strategic Leadership course. His immense knowledge and plentiful
experience have encouraged us in all the time of our academic research
and daily life.
 CONTENTS

1. Introduction of the leader and his background

2. Strategic Challenges
3. Strategic Intent
4. Strategic actions
5. Analyses of Actions
6. Impact of Actions
7. Success Stories
8. Non corporate parallel
9. Learnings
10. Analysis of leader
11. References

3
 1. Introduction of the leader and his background
‘‘If money is your hope for independence you will never have it. The only
real security that a man will have in this world is a reserve of knowledge,
experience, and ability.’’

Henry Ford is one of America’s foremost

industrialists, a business magnate, and the inventor of
the Ford Model T car and the founder of Ford Motor
Company.

Formative years

Young Henry Ford showed an early interest in

mechanics. By the time he was 12, he was spending most of his spare time
in a small machine shop he had equipped himself. At 15, he constructed his
first steam engine.

Ford was never interested in the family farm so he started his journey by
working as an apprentice machinist in Detroit. He completed his
apprenticeship in 1882 and spent a year setting up and repairing
Westinghouse steam engines in southern Michigan. Because he put passion
in what he was doing, he managed to become an engineer at the Edison
Illuminating Company in July 1891. Soon he became Chief engineer on
November 6, 1893 so had enough money to focus on his personal
experiments. Thomas Edison would become a lifelong mentor and friend
to Henry Ford.
 Henry Ford’s career as a builder of automobiles dated
from the winter of 1893 as his interest in internal
combustion engines led him to construct a small one
– cylinder gasoline model. The first Ford engine did
not go well. A later version of that engine powered
his first automobile, which was essentially a frame
with four bicycle wheels. This first Ford Car, the Quadricycle, was
completed in June 1896.

His Early Ventures

In 1899, he left Edison Illuminating Company and organized the Detroit

Automobile Company that went bankrupt within 18 months. Meanwhile he
built many racing cars also like Sweepstakes.

Henry Ford founded his second automobile venture, the Henry Ford
Company. He would leave that enterprise, which would become the
Cadillac Motor Car Company, in early 1902.

On June 16, 1903, Henry and 12 others invested and created Ford Motor
Company. Their first car built by company was sold in July 1903. He
became president and controlling owner in 1906. By 1919 his family
members acquired the interest of all minority stockholders and became the
sole owners of the company. Edsel, who succeeded his father as president
in 1919 occupied that position until his death in 1943, when Henry Ford
returned to the post.

In 1945, he resigned the presidency for a second time but he recommended

his grandson, Henry Ford II for the position and it was accepted by Board
of Directors.

His Contributions

5
In collaboration with Samuel Crowther, he wrote My Life and Work
(1922), today and Tomorrow (1926) and Moving Forward (1930), which
described the development of Ford Motor Company and outlined his
industrial and social theories. Doctor of Engineering degrees were
conferred on him by the University of Michigan and Michigan State
College (now Michigan State University) He received an honorary Doctor
of Law degree from Colgate University.

In 1946 Ford was lauded at the Automotive Golden Jubilee for his
contributions to the automotive industry.

In 1946, the American Petroleum Institute awarded him its first Gold medal
annual award for outstanding contributions to the welfare of humanity.

In 1965, The United States government honoured him by featuring his

likeness with a Model T on a postage stamp as part of their Prominent
Americans series.

In 1999, Fortune magazine named Henry Ford the Businessman of the

Century.

He developed the assembly line mode of production, which revolutionized

the whole industry. This initiative led to selling millions of cars and made
Ford Motor Company one of the most famous companies worldwide.

Henry Ford Transformational Leader

https://youtu.be/UxqWSXCZzQ4

2. Strategic Challenges
‘‘The best we can do it size up the chances, calculate the risks involved,
estimate our ability to deal with them, and then make our plans with
confidence.’’

1) Primitive manufacturing technique:

6
The first strategic challenge to Henry Ford arose in 1899 with the Detroit
Automobile company, with Ford as superintendent in charge of production.
Rapid production was a challenge with Henry Ford. Even though he could
build a car, the production of his cars just wasn’t fast enough to keep the
company afloat.

The problem clung to the back of Henry Ford even after he made Founded
Ford Motor Company. The company couldn’t keep pace with the rising
levels of demand and in 1908 announced that it couldn’t accept any more
orders for Tin Lizzie because its factories were already swamped meeting
the production requirements.

Details of the strategic challenge and how Henry Ford overcame it:

At the dawn of the eighteenth century, craft manufacturing was the status
quo, defined by a highly skilled workforce. Many craft manufacturers
would go on to run their own machine shops after an apprenticeship, where
they learnt the tricks of the manufacturing while immersing themselves in
the craft. These were less employees and more contractors. In those days a
machine like an automobile was not built entirely in house. Parts would
come from smaller machine shops, from all over the city. They used general
purpose tools and machines to create the parts needed, which would be sent
to the final assembler. These parts would vary massively from one batch to
another, requiring skilled assembling team workers needed to understand
the function of the part they were working on and skillfully manipulate the
parts together into the final vehicle. There was no mass manufacturing of
complex machines like this. At this slow production volume, no company
would create monopoly.

On the first day of production of the Model - T in 1908, the average task
cycle for the Model – T lasted 514 minutes. The task cycle time is the length
of time before a single task can be repeated. So, the average could not repeat
a task for eight and a half hours. For Ford, this was essentially how a single

7
production line was producing vehicles, as assembly lines cannot start a
new vehicle before the vehicle prior to it has been finished and exited.

Solution – The Mass Manufacturing Technique: Sensing the problem,

he set to reduce that cycle time down, and by 1913, it was down to just 2.3
minutes. For a product this complex, consisting of hundreds of parts with
hundreds of processes, that is astounding and was something no other
company had ever achieved. At the high point of the Model - T’s success
in 1923, Ford was manufacturing 2.1 million Model – T’s a year, a figure
that would only be matched by a single vehicle model again with the VW
Beetle.
2) Availability in a single color only:
“You can have any color, as long as it’s black.”

Every strategic innovation comes with a downside of its own. Henry Ford
was obsessed with manufacturing speeds. The painting process he used
allowed the paint to dry quickly, and it was only available in black color at
that time. He shaved time off everywhere possible to achieve the
monumental milestone of 2.1 million Model - T’s a year.

3) High turnover rate:

While the Moving Assembly Line was a solution to one of the biggest
problems of Henry Ford- The production Speeds, it introduced another
problem in the company – monotonicity. Delegating each worker with a
task which he owned in a wholesome manner, it reduced their scope of
learning and innovation, and the repetitiveness of the process disconnected
the workforce from their profession. As a result of this, there was a high
turnover rate in the company. Ford and company had to hire 1000 people
for 100 vacant positions keeping in mind the high turnovers.

Solution: With the cost that Henry Ford managed to cut on the production
time, he doubled the wages of each worker to $5 a day, a wage which was
double the industry standards of $2.34 a day. He had also managed to

8
reduce the labor time from nine hours to eight hours, thus bringing a
revolution in the automobile industry. As a result of these dramatic steps
by Henry Ford, labors flocked in again Ford and Company in large
numbers. This is also a classic example of Transactional Leadership.

4) SERIOUS COMPETITION – CHEVROLET:

A problem which catches on with visionaries is that visionaries often
understand a little late that their vision is not timeless and does need
upgrading from time to time. When Chevrolet entered the market
identifying the need of more models of affordable cars as compared to
Ford’s Model - T, Ford found itself surpassed in sales volumes. Chevrolet’s
success proved that people now wanted style too, and not just utility. To
respond to competition, Henry Ford had to bring its massive production line
to a halt, and in 1927, Ford laid down thousands of workers for months
until at the age of 64, Henry Ford was searching for an answer to this
competition. Ford came roaring back to life with Model A, and even as the
stock market crashed in 1929, Ford remained relatively unaffected for three
years.

However, in 1931, depression, along with Chevrolet’s new six-cylinder

model from Plymouth cut into Henry Ford’s market share. After three years
of being back in business with Model A , Henry Ford had to lay down
workers and send them home, until he came out with the power V-8, an
eight-cylinder engine vehicle. This innovation put Ford right back on top.

Being outclassed by Chevrolet at times also reflects on the lack of proactive

nature of Henry Ford. His understanding of his competitors was flawed at
best, and he undermined their capabilities to innovate a design which was
better than Ford’s.

Ford Model-T took over the world - https://youtu.be/UxqWSXCZzQ4

9
 3. Strategic Intent
“A market is never saturated with a good product, but it is very quickly
saturated with a bad one.”

1. Courtesy of his rural upbringing, Henry Ford had his basics right
from the very beginning. His intent had never been to further the
luxuries of the rich ones in the urban patches of America, rather he
wanted his automotive to accommodate the semi-urban and rural
population, thereby elevating their standards of living. In line with
this vision, Henry Ford formed the Model T, nicknamed as the “Tin
Lizzie”, an automobile everyone could afford.
The mass implications of his intent started coming to light when in
1920, the United States was in possession of 9,211,295 motor
vehicles, which was one in every eleven people of the population.
The statistic also enforces the fact that USA, at that time had eighty
three percent of the world’s motor cars, and Ford Motor made up
for fifty percent of this proportion. Out of this fifty percent, thirty
three percent of the automobiles were owned by farmers, thus
bringing to life the revolutionary vision of Henry Ford of making
lives convenient for those farmers who generally had to traverse
long distances over bad roads.
2. At the crux of Ford’s strategic intent was to create value for the
masses, and that constant value creation would also need constant
innovation. When Henry Ford had to announce that Ford Motor Co.
could not accept any more orders for Model – T because his factory
was already swamped with orders, Ford made sense of the situation
as an obstacle to his purpose of creating value. Thus, he came up
with the solution of a moving assembly line to ramp up production
to satisfy the ever-increasing demand of Tin Lizzie.
However, it is worth mentioning that Ford’s intent for mass utility
ultimately cost him his apex position in the market, because Ford
was a little too late in realizing that the market around him was
evolving from planetary gear transmission to conventional

10
 gearshifts and from mechanical breaks to hydraulic ones and six to
eight cylinder vehicles from for cylinder vehicles.
3. Constant innovation is fueled by learning. An individual wouldn’t
be in a position to innovate if his/her learning isn’t abreast with the
times that he/she is in. Henry Ford reflects this philosophy in his
life, where he moved from one automobile shop to the other as soon
as he realized that there is nothing more which he could learn from
a particular place.
4. Ford’s upbringing pushed him towards entrepreneurship. Born to a
farmer and equipped with a genius for mechanical engineering,
Ford quickly realized the gap between the hardships faced by the
agricultural population in travelling long distances and absence of
a solution to this problem. His patriotism towards the people of soil,
combined with his genius of mechanical engineering and acumen
for realizing the bigger picture in context of the condition of his
people made him to devise Model – T.
How Ford Build America - https://youtu.be/n1IzetXHttI

4. Strategic Actions
‘‘There is one rule for the industrialist and that is: Make the best quality of
goods possible at the lowest cost possible, paying the highest wages
possible.’’

Improvement and innovation of Assembly Line

Henry Ford improved and innovated the idea for the assembly line which
he came to know about from another Michigan based automobile company
run by Ransom Olds

While Ransom Old’s assembly line was limited down by process, Ford
perfected the design He did this by introducing conveyor belts to his
assembly line. This allowed his employees to not have to leave their area
to carry parts from their work area to another. Instead, they could be

11
stationed in an ergonomically comfortable position to relief pressure from
the heavy lifting and luging of parts.

Use of Scientific Management paradigm

Ford was a learner he was always looking for opportunities to learn. During
the early 20th century, Frederick Winslow Taylor formulated a number of
management and organizational theories that led to significant
breakthroughs in business practices and how the concept manufacturing
efficiency was understood.

His theory is known as Scientific Management Theory. It was about

discovering the "Best possible way of doing a task” In those early days of
automobile manufacturing, during the assembly stage the body of the car
would be fixed into a stationary position as workers brought and added
individual parts and to the vehicle. Each car was produced by teams of
skilled laborers, and, working together, these groups collectively spent over
12 hours building each car. This process was very expensive and time
consuming, thus making it impossible

For Ford to mass-produce his cars at affordable prices. Ford soon sought
ways to streamline this process and produce a larger volume of vehicles in
a shorter amount of time. Ultimately, Ford hired management theorist
Frederick Winslow Taylor to help map out possible solutions. Taylor was
tasked to observe the workers and determine the most efficient and time-
saving methods for increasing the company’s productivity. Ford studied
Taylor’s observations and began to incorporate Taylor’s scientific
management theory into his production techniques. This strategy sped up
the production process significantly.

Innovation and improvement in Production Process

To further reduce his cars’ building time, Ford had his laborers remain
stationary in an assembly line as the body of the car was moved through

12
individual workstations. Workers would pull the car, by rope, through one
workstation after another, allowing each worker to perform his specified
task before moving the car to the next station. This process was repeated
until the car’s construction was complete. Ford continued to improve and
refine his new production process, as a consequence he found even more
areas that could be improved upon. For example, he noticed that certain
tasks took longer on average to complete than others, leading him to
recalibrate tooling methods in other areas to compensate for the longer wait
times. Improvement and streamline of the process continued and by 1913
Ford introduced a completely power-driven assembly line in his newly
opened factory in Highland Park, Michigan. After only a few short years,
Ford had managed to bring the average time of production for a Model T
down to 93 minutes, and as a consequence was able to lower the price down
to $575. By 1914, Ford had captured 48% of the automobile market

The $5 a day concept

In 1914, Henry Ford did a novel thing by increasing the wages of his
employees. He gave $10,000,000 in profits to his employees, raised the
wage of his factory workers from $2.34 a day to $5.00 a day.Ford also
shortened work days to only 8 hours. This was a path breaking move at that
time as many workers worked longer than 8 hours and made a lot less. This
made working at the Ford factory a very enticing prospect as people from
all over started lining up at the doors of the company’s office. Furthermore
there were certain conditions that went along with making $5 a day like the
workers had to abstain from alcohol, not physically abuse their families,
not take in boarders, keep their homes clean, and contribute regularly to a
savings account. Ford was trying to help create a new version of the middle
class out of his employees.

40-Hour Work Week https://youtu.be/61lfZGReQHU

Michigan’s WW1 Centennial News Report January 2014

https://youtu.be/Dkhdg4Ec8vQ

13
 5. Analysis of Actions
‘‘Whether you think you can, or you think you can’t–you’re right.’’

Henry Ford is one of the most successful business men of all time. His
company Ford Motor Co. is still running today almost 100 years later. His
ideas have led to success by helping allow him to get maximum production
and profit. He transformed the automobile industry for the better and set
many new standards. He kept his workers well paid and loyal to his
company. In 1927, Ford moved past the Model T and created a new model
car, the Model A. This was when the automobile industry started to become
competitive Newer models of cars were coming sooner and more rapidly
as cars were starting to become more luxurious. Ford eventually started
experimenting with manufacturing and crafted tractors and single-
passenger planes. Henry Ford was one of the most well-known business
men of his time and it started all with just an idea.

Henry Ford is one of the most successful business men of all time. His
company Ford Motor Co. is still running today almost 100 years later. His

14
ideas have led to success by helping allow him to get maximum production
and profit. He transformed the automobile industry for the better and set
many new standards. He kept his workers well paid and loyal to his
company. In 1927, Ford moved past the Model T and created a new model
car, the Model A. This was when the automobile industry started to become
competitive Newer models of cars were coming sooner and more rapidly
as cars were starting to become more luxurious. Ford eventually started
experimenting with manufacturing and crafted tractors and single-
passenger planes. Henry Ford was one of the most well-known business
men of his time and it started all with just an idea.

Ford was an inventor with keen interest in mechanics, but that’s not all it
was particularly and above all mechanics applied to the land. It is
impossible to understand Henry Ford’s purpose and achievement without
remembering that he came from the land and that his real interest lies in the
development of the land. Thus Ford was able to develop a Vision, he was
able to Invent ways to realise his vision, he was able to Relate and build
relationships within and across the organisation made his workers loyal to
him by paying higher wages. Building a community of confidants who can
collaborate to solve problems like Alexander Y. Malcomson, Taylor, and
James J. Couzens. Ford was also able to make sense of his company and
the context it was operating- mass producing affordable cars which would
make life easier for common man. (Sense making, Relating, Visioning,
Inventing)

Ford during his early years worked on a farm locomotives mounted on

mowing machines cast iron wheels and driven by single cylinder steam
engine. It was not designed for any special service, the idea was to make it
serve as a general farm tractor. From such a perspective Ford was able to
conceptualise the “road car “based on petrol engine it was a passenger car.
Thus Ford was able to reconceptualize and see cognitively distant goals
(psychology of strategic leadership). Ford was an inventor with keen

15
interest in mechanics, but that’s not all it was particularly and above all
mechanics applied to the land. It is impossible to understand Henry Ford’s
purpose and achievement without remembering that he came from the land
and that his real interest lies in the development of the land. Thus Ford was
able to develop a Vision , he was able to Invent ways to realise his vision,
he was able to Relate and build relationships within and across the
organisation made his workers loyal to him by paying higher
wages.Building a community of confidants who can collaborate to solve
problems like Alexander Y. Malcomson , Taylor , James J. Couzens. Ford
was also able to make sense of his company and the context it was
operating- mass producing affordable cars which would make life easier for
common man. (Sense making, Relating, Visioning, Inventing)

Ford during his early years worked on a farm locomotives mounted on

mowing machines cast iron wheels and driven by single cylinder steam
engine. It was not designed for any special service, the idea was to make it
serve as a general farm tractor. From such a perspective Ford was able to
conceptualize the “road car “based on petrol engine it was a passenger car.
Thus Ford was able to reconceptualizing and see cognitively distant goals
(psychology of strategic leadership)

Ford was above all a keen learner and innovator he improved and perfected
the assembly line which not only gave him a competitive edge but also
revolutionized the automotive industry. Symbolizing enterprise,
entrepreneurship and ability to see the big picture. Ford also gave due
importance to contemporary wisdom on management practices and when
he was faced with the problem of how to mass produce affordable cars in
the most efficient manner he took help from Taylor expounder of Scientific
Management Theory showing that he was ready to embrace new methods
and creative solutions to problems. His improvement to the production
process highlight his genius as a visionary and the ability to focus on minute
details.

16
Ford’s concept of $5 a day wage and restructuring of working hours and
the way he tried to model a new middle class which was not only well paid
but had the ethos and taste necessary to enjoy the products of his
manufacturing shows his meticulous understanding of consumer behavior
and market dynamics. With a single move he was able to garner loyalty of
his workers, cause disruptions in competitor’s business practices and find
a new segment for his products.

Henry Ford’s Assembly line turns 100 https://youtu.be/qFbsDArAWj8

Ford Motors History: How did Henry Ford create Ford motors
https://youtu.be/g2Xr_21QMis

6. Impact of actions
‘‘If everyone is moving forward together, then success takes care of itself.’’

Henry Ford’s impact goes way beyond cars. He was instrumental in giving
higher wages to employees, he changed the way manufacturing plants
worked. He was even able to change the economy of a city. Above all, he
changed the way people travel to this day.
Ford was revolutionary. He introduced the manufacturing world to the
conveyer belt assembly line. He reconceptualized the way passanger
automotive were perceived, from a novelty item, to something which the
common masses can afford and enjoy, to almost what they have become
today, a necessity. It can be said that the biggest impact Ford had during
his lifetime was introducing his laborers to the $5 work day. When he
announced this plan in 1914, it more than doubled his labor forces salary.
Soon he was able to pick and choose the best workers he wanted from a
large pool of candidates. This did wonders for the Detroit economy. With
higher wages, Ford was able to increase the living of many of his
employees, taking most of them from working class up to middle class
where they were able to enjoy many of luxuries that the market offered
Allowing his employees, the ability to buy the very thing they are. Offering

17
such high wages in turn created a higher supply of people moving to Detroit
wanting to work for Ford and his motor company. In 1930, at Detroit, there
was over 1 million people living there and population had increased by
57%. A large part is due to Ford and his new higher wages. Ford put Detroit
on the world map.

Henry Ford had had a unsurmountable impact on motor vehicles and how
people use them. It cannot be stated enough that while history often
remembers Ford as the inventor of the car, he wasn’t. What he was, and
still is, is the innovator of the car. Prior to the twentieth century,
automobiles were only for the rich. Henry Ford however saw the potential
of automobiles and choose to spend his life perfecting them and creating
them for the working class. Introducing his Model T, a car that was
designed and made so that it could be afforded by his own workers. The
Model T Represented a car made by and made for working class people.
Allowing normal, everyday people the ability to purchase a car. This
allowed the transformation of America. Instead of having to take the train,
trolley, or walk everywhere, common working class people were able to
drive themselves.

The Fifteen Millionth Ford Model T https://youtu.be/c8ObnK8RSU0

7. Success Stories

18
‘‘Things work out best for those who make the best of how things work out."

THE MODEL-T: Thanks to Henry Ford’s connection with his roots, his
inclination towards simplicity and his patriotism towards the people of
land, Henry Ford managed to come up with an automobile, which around
1920’s could be counted as approximately 50% of the total number of cars
in the world. The Model -T was the pioneer for affordable automobiles
across the world, and inspired many companies primarily its rivals, General
Motors, to further the innovations of Ford and launch various cars into the
markets which would be affordable to many, thus making cars no longer a
property which only the wealthy could afford.

THE MOVING ASSEMBLY LINE: Ford has always kept delivering

value to his people in precedence to garnering profits. So, when he
realized that all that is coming in between delivering value to the masses
is a slow rate of production, he worked for accelerating the production
line and finally managed to release an automobile every 93 minutes. Ford
dominated the market for more than ten years, delivering value to the
masses owing to the revamped production line.
GAINING CONTROL OF THE ENTIRE FORD COMPANY: In 1909
Ford, who owned 58 percent of the stock, announced that he was only going
to make one car in the future, the Model T. The only thing the minority
stockholders could do to protect their dividends from his all-consuming
imagination was to take him to court, which Horace and John Dodge did in
1916.For Henry Ford to take control of the entire Ford Company, he had to
buy out all the minority stockholders. Ford’s vision of using profits for
expansion did not settle well with the stockholders and they eventually
lodged a case against Henry Ford in 1906 and won. Henry Ford in
retaliation, announced that he’ll launch his own company and make cars
cheaper than Model T. The trick worked, and in 1919 Ford bought all his
minority stockholders and gained control of the entire business enterprise.
MINIMUM WAGE: In 1914 the Ford Motor Company announced that it
would henceforth pay eligible workers a minimum wage of $5 a day

19
(compared to an average of $2.34 for the industry) and would reduce the
work day from nine hours to eight, thereby converting the factory to a three-
shift day. Overnight Ford became a worldwide celebrity. Previously profit
had been based on paying wages as low as workers would take and pricing
cars as high as the traffic would bear. Ford, on the other hand, stressed low
pricing (the Model T cost $950 in 1908 and $290 in 1927) in order to
capture the widest possible market and then met the price by volume
and efficiency.

8. Non corporate Parallel

“The king said that he did not know what was lawful and unlawful
according to Sharia , but followed what he thought to be for the good of the
state or suitable for the emergency"

Alaudin khilji was the greatest ruler of the Khilji Dynasty and was the first
Muslim ruler to extend his empire right up to the extreme South of India.
Ala-ud-din was as illiterate but a scholar. Although he was illiterate, he was
quite wise. He also had a lot of experience and was also a smart guy. He
was able to handle the complex problems of the state beautifully.

Ala-ud-din was not only a great general he was also a wise administrator.
He removed the unrest all over the country and established a state of peace.
He eliminated the fear of thieves and robbers. He had a powerful army to
protect the country from outside threats. He was the first great ruler who
kept the religious class out of his administration and did not allow them to
interfere. He was certainly a dictator but a liberal and benevolent one. His
administration was stern and even ruthless, but he had the fortitude to
control the provinces and the parganas.He reformed the agricultural tax
system. Alauddin abolished almost all small Iqtas and brought these lands
under Khalsa or Crown lands. He deprived the Khuts, Maqaddams and
Chaudhuris (the hereditary middlemen) of their privileges. They were
forced to pay arrears of land revenue in a newly established department of

20
arrears called Mustkharaj. He was the first Sultan who paid attention to
measurement (paimaish) of the cultivable land, which he called zabita, and
estimated yield per Biswa was fixed as unit of revenue collection. His
primary objective in introducing the changes was to collect the maximum
revenue for the state so that he could maintain a strong army, which was
needed both to combat the Mongol danger and to effect fresh conquests.
Ala-ud-Din Khilji took drastic steps to eradicate corruption prevail-ing in
the revenue department. He increased the salaries of the Patwaris, but
inflicted heavy punishment on them if they resorted to corrupt practices.
The economic reforms of Alauddin are considered as the ‘miracles of
history’. The distinctive feature of his economic reforms was his Price
Control Policy which have ensured a place of prominence for him in the
annals of socio-economic history of the times. Alauddin Khalji was more
or less, the first ruler who looked at the problem of price control in a
systematic manner, and was able to maintain stable prices for a
considerable period. This policy of Alauddin Khalji has always been
admired by the historians of different shades from all ages. The reasons
included need to avert food crises when foreign threats (like Mongols)
launched offensive on Delhi, controlling inflation etc. It was for the first
time that relations between peasant and government grew and revenue
administration was regularized. The cheapness during Alauddin‟s reign
indicates that the producing classes had not only plentiful supplies for their
daily use but they had much to spare.Thus, the market system of Alauddin
was a novel and successful experiment. The peasants were saved from
falling a victim to the seduction of the profiteering from middle man and
speculation. Another significant and lasting impact of these reforms was
the furthering of the growth of a market economy in the villages and
bringing about a more integral relationship between the town and the
country, the furthering of the process of the internal restructuring of the
sultanate. Though Alauddin Khaljis market reforms were oriented more
towards administrative and military necessities than internal restructuring
but he adopted a holistic approach to see the reform working properly.

21
 We can delineate many points of parity between Henry Ford and Alauddin
Khalji. They both were strongly opinionated and stubborn in their outlook.
They both knew what they wanted and displayed conviction and confidence
in their decision making. They both were learners and innovators and
adopted novel solutions to solve their problems. They both were stern and
hegemonic in their administration but recognised and appreciated honesty
in work. They both believed that efficient administration is the key to
success. They were both Charismatic leaders and influenced public
behavior.

Taking History Delhi: Era of Alauddin Khilji https://youtu.be/PrTs0B1qQ9s

9. Learnings - Implications for Modern Leaders

‘‘The most dangerous leadership myth is that leaders are born-that there
is a genetic factor to leadership. That’s nonsense; in fact, the opposite is
true. Leaders are made rather than born.’’

 Fords Vision – the vision of the application of Taylorism would

change his company and the world how we see it. Prior to Fords
Model T car, the production of manufacturing a car was very
inefficient and expensive to buy one. But at Ford Motor Company
Taylor's scientific method of management meant that at each phase
of the work was divided amongst laborers that is (Division of
Labour) to be done in simple repeated steps.

 Fordism targeted standardized and less volatile markets, it

recognized working-class consumption, displaced a division of
labor more centered on craft production, creating low-skilled
production jobs, high levels of specialization, workers with little or

22
 no job experience and, hence, offered barely any on-site training.

 In relation to the Ford Motor Company, it can be seen where while

the application of
Taylorism was present, there was an absence of a humanistic
approach.
The human relations theory proposed by Mayo has relevance in
modern world as
1. Human beings are not only motivated by financial benefits but
they also need recognition and appreciation
2. Workers are human beings and as such, they must be treated
like human beings and not like machines so sustainable
development of workers is needed
3. Employees would appreciate if they were allowed to participate
in the decision-making process of the business, especially, in
matters concerning them. Management must encourage
workers' participation in management. Accordingly
This will increase productivity and job satisfaction
 Listen to feedback and being responsive –
General Motors beat Ford by listening to feedback and being
responsive which Henry Ford ignored so getting feedback and
constant improvement is need of the hour to sustain in the market
 Innovation – Don’t focus on innovation for sake of innovation. Do
continuous experiments with new product design and keep in mind
that would this innovation satisfy my customers in the long run or
not. It should create value.
 Create Products for Everyone - Ford created products that appealed
to everyone. He made car affordable for all so had mass appeal.
 Efficiency – The concept of Fordism – a system based on efficient,
standardized form of mass production. Keeping efficiency of
workers at optimal level and giving incentives to them. This lesson
is useful as an Entrepreneurs – as they strive to work minimum
number of hours for maximum reward. Thus targeted, effective
work beats generalized, hard work every time.

23
 HENRY FORD and His Great Lessons for Entrepreneurship
https://youtu.be/T3JkwHn7m6w

10.Analysis of the Leader

‘‘Men make history and not the other way around. In periods where
there is no leadership, society stands still. Progress occurs when
courageous, skillful leaders seize the opportunity to change things
for the better.’’

To conclude our Research on Henry Ford we are going to assess him based
on prominent models of Leadership -

Behavioral theory- The behavioral leadership theory revolves around

leader’s behavior and believes that these traits can be copied by other
leaders. It is also known as the style theory, it states that leaders aren’t born
successful, but can be created based on learnable behavior. Behavioral
theories of leadership focus heavily on the actions of a leader. This theory
suggests that the best predictor of leadership success is analysis of how a
leader acts. Action rather than qualities are the core points of behavioral
theory. Patterns of behavior are analyzed and then categorized as “styles of
leadership” Some of the styles of leadership include

 People-oriented leaders
 Task-oriented leaders
 Participative leaders
 Status-quo leaders
 Indifferent leaders
 Dictatorial leaders
 Country club leaders

24
  Sound leaders
 Opportunistic leaders
 Paternalistic leaders

Observing Henry Ford and his work ethics and administrative style we can
deduce that he was Task-Oriented leader who perhaps at times showed
Glimpses of Dictatorial leadership.

Contingency theory - The contingency leadership theory, also called

situational theory, focuses on the context of a leader. This theory looks at
the situational effects of the success or failure or a leader. A leader’s
effectiveness is directly proportional to how he manages the situational
contexts. Leader’s personality is a relatively small factor in their success,
the most important factor is the context and situation of the leader. This
theory takes the specific leadership styles and suggests that good leaders
can adjust their leadership style situationally. It also suggests that it may be
best to find the right kind of leader for a specific situation. Types of
contingency theories include-

 Hershey and Blanchard’s Situational Theory,

 The Evans and House Path-Goal Theory,
 Fiedler’s Contingency Theory.
 Transformational Leader - theory charismatic leaders,
Inspirational leaders, Intellectual leaders, leaders who use
individualized consideration.

Henry Ford was a Charismatic leader. He was very opiniated He also

displayed individualized consideration which was reflected in actions
such as raising the wages of the workers and trying to mold the
workforce into a new type of American Middle class.

Management theory-The management theory also known as transactional

leadership theory this mode focuses on supervision, organization, and

25
group performance. Transactional leadership is a system of rewards and
punishments, (positive reinforcement and punishment) When employees
do something successful, managers reward them. When they fail, they may
get punished. Transactional rewards and punishments are given based on
the idea that people really only do things for the reward. Their psychology
doesn't allow human beings to do things out of their goodness. A common
example of this management style is a leader that offers a cash bonus for
employees who meet a goal. Or a leader who makes employees do extra
paperwork if they miss a deadline.

Henry Ford used the concept of Contingent reward and positive

reinforcement to ensure work efficiency.

Power theory - This theory looks at the way a leader utilizes their power
and influence to get things accomplished. It looks at positional power and
personal power and how they impact leader’s choices and outcomes.

 French and Raven's Five Forms of Power

Henry Ford derived his position of Power on the basis of –

 Legitimacy
 Rewards
 Expertise

Behavioral Leadership theories https://youtu.be/vCyInWhvgG0

Contingency Approaches to Leadership https://youtu.be/yrvLHkf35i0
Transactional Leadership https://youtu.be/jVde5oPm8aM
French and Raven’s Bases of power https://youtu.be/S4V2FlNR_h4

To sum up this research paper we now propose a framework for strategic

leadership and measure Henry Ford’s success according to the developed
framework.

26
Strategic leadership in most simple way can be summarized as the array of
interrelated functions performed by individuals at the top levels of an
organization (CEOs, TMT members, Directors, General Managers) that are
intended to have strategic consequences for the firm. To simplify the
concept, eight functions can be highlighted which a strategic leader is
expected to handle.

 making strategic decisions

 engaging with external stakeholders
 performing human resource management activities
 Motivating and influencing
 Managing information
 overseeing operations and administration
 managing social and ethical issues
 managing conflicting demands

27
Making strategic decisions

Strategic leaders influence organizations through the decisions they make.

Unlike decisions made at lower organizational levels, upper echelons'
decisions imply major allocations of resources and commitments that can
have lasting implications for firms. Henry Ford’s several decisions
showcase this.

 To Make the Model T, Ford built the largest factory of its time.
Inside the factory, car parts moved to the workers exactly when they
needed them. Other factories moved some parts to the workers. Ford
was the first to design his factory completely around this novel
production system.
 As production rose, Ford lowered prices. By nineteen sixteen, the
price had dropped to 345$.
 Henry Ford raised his workers' pay. With wages the same
everywhere, turnover rate was high. Henry Ford wanted loyal
workers. He raised wages to five dollars a day. Henry Ford was
demonstrated his idea that if workers received good wages, they
became better buyers and if manufacturers sold more products, they
could lower prices and still earn money

Engaging with external stakeholders

Strategic leaders build and manage relationships outside the firm and
represent the image of the firm to external parties. The external leadership
function encompasses leaders' interactions with external parties that have
the potential to influence the firm. These external leadership behaviors can
deliver strategic advantages, such as providing access to important
resources or enhancing the firm's reputation. External relationships can also
help strategic leaders to navigate crises. Henry Ford ensured that he had
good professional relationship with the various external stakeholders.

28
  Ford’s relationship with Alexander Y. Malcomson, C. Harold
Willis, Tom Cooper and James J. Couzens reflect this.
 In January 1919, Henry Ford began publication of the Dearborn
Independent, a small financially troubled community weekly he had
purchased the previous year. Carrying the subtitle, The Chronicler
of the Neglected Truth, the paper primarily served as a forum for
Henry Ford’s views.
 Ford’s Biographer William Greenleaf records “impulsive and
warm-hearted acts of individual generosity that saw him give away
money, food, automobiles, or other articles.” While driving through
the Massachusetts countryside, for example, Ford came across an
elderly couple whose farmhouse had just been destroyed in a storm.
He asked a few questions, then reached into his pocket and gave the
farmers all the cash he had on him, some $200. Such acts bolstered
his personal and Ford as a company’s public image.

Performing human resource management activities

Strategic leaders make decisions regarding the selection, evaluation,

compensation, and development of other organization members. Which has
important implications for the firm.

Following decisions highlight this aspect

 The $5 a day compensation, reduction in working hours.

 His appointment of Fredrick Winslow Taylor to implement
scientific management principles to the production process.

Managing information

Strategic leaders gather, process, and use the information available in both
internal and external environments. Besides using that information to make
decisions, strategic leaders can influence the firm's access to information as

29
well as its integration and distribution throughout the firm. Ford’s strategic
decision proved this.

 Henry Ford spent a long time researching his customer base and
looking at affordability and likely interest in his initial motor cars
before building them. He knew that by understanding his customers
he could save time and money by offering them a product that
provided a solution to a problem they didn’t even realize they had.
 When the Model T Ford was introduced on October 1st 1908, Ford
set about creating a huge publicity campaign that would ensure
every available newspaper would want to carry stories and adverts
about the new product. A combination of clever marketing and a
rapidly growing positive reputation meant that by 1918, half of all
cars owned in America were Model T’s.
 He understood the power of customer satisfaction and the spoken
word and he instilled his principles into his workforce.

Motivating and influencing

Behaviors displayed by strategic leaders can unify, motivate, and en-

courage followers to pursue a strategic vision as well as shape
organizational culture. Henry Ford’s numerous initiatives demonstrate this.

 In 1914, Henry Ford announced that none of his workers would earn
less than $5 a day working eight-hour shifts. He also offered
eighteen paid days off for vacation and illness, an uncommon
practice at the time, especially for unskilled workers. The pay
increase was set up as a profit-sharing system rather than a simple
wage, with conditions attached. Workers still made their original
base wages for merely fulfilling their jobs, but those who met
certain personal requirements could earn a maximum of $2.70 per
day extra, allowing the raise to apply equally to all workers, even
those who made more than the starting wages.

30
  He also paid African American workers the same wages as white
workers, reducing the ability of employers to benefit from a culture
of racial discrimination by paying black workers less than white
ones.
 By 1926, Ford advertised his decision to reduce the work week from
six days to five, he essentially established modern employment
standards: the forty-hour week, eight-hour day, vacation and sick
days, and standardized wages.

Overseeing operations and administration

Strategic leaders can be the architects of the organizational structure, set

conditions to support learning processes, and put procedures in place to
monitor other organizational members. The ability of these initiatives to
shape reporting relationships, procedures, and controls can have significant
implications for the implementation of strategies, adaptation to changing
environments, and firm performance. Henry Ford possessed these qualities
is aptly proved by

 Henry Ford’s deep involvement in production process and the

multitude of innovations and improvements he made to the various
aspects of the whole production process.
 Ford established the baseline for the Lean and Six Sigma techniques
to come. Some areas where this ideology is viable Standardization,
High wages, Wasted Movement (His factories were designed so that
workers could accomplish their given tasks with the fewest steps
and movements.), Wasted Material (Ford found uses for those
products that did not go into his cars) For example:
 Distilling wasted wood into chemicals that was used for, among
other products, charcoal
 Blast furnace slag was converted into road paving material
 Cooking of coal produced sulfur that was sold for use in fertilizers

31
Welding (Ford welded smaller parts together into a whole, rather than
having large cast parts that required machine shaving.)

Just in time manufacturing (Ford managed his supply chain to have enough
materials on-hand to manufacturing his cars based on demand.)

Customer Service (Ford smoothed out the delivery service so that cars
consistently arrived on time as scheduled to the customer.)

Managing social and ethical issues

Research has linked strategic leaders to a variety of outcomes related to

social or ethical issues. In turn, behaviors and initiatives taken by strategic
leaders have important implications for stakeholders, firm reputation, and
performance. Henry Ford’s numerous initiatives show that he paid due
regards to these aspects.

 His reforms in workers’ wages and working conditions (explained

previously).
 Improvements in production process which considerably reduced
the physical burden the labor had to endure.
 His management of waste products in a constructive manner
 His various philanthropic endeavors e.g. Ford foundation, Ford
English School (taught the company's immigrant workers more than
just how to speak English. It taught them about American culture
and history and instilled the importance of such virtues as
thriftiness, cleanliness, good manners, and timeliness.)

Managing conflicting demands one of the most important functions of a

strategic leader is to accommodate diverse and often conflicting demands
of various stakeholders.

32
Henry Ford’s handling of his investors and consumer aspirations.
Profitability and reforms in wages and working conditions, highlight this
ability.

Ford’s legacy

Henry Ford laid the foundation of the 20th century. His assembly line
became the became the dominant production mode, which not only
revolutionized automotive sector but was in time applied to production of
just about everything . Assembly line production method churned out vast
quantities of war material which proved crucial to the Allied victory in
World War II. High wage, low skilled factory model pioneered by Ford
accelerated immigration from overseas and the movement of Americans
from the farms to the cities thus fastening the pace of urbanization. The
creation of large numbers of low skilled and semi-skilled workers led to
emergence of industrial unionism which came to function as a social and
political force. Henry Ford was an innovator that benefited the economy
and helped to create a better standard of living for many. He helped guide
more people out of the working class and into the middle class and thus
transformed American cultural landscape. Fordism a model of production
and a socio-economic doctrine named after Ford and his management style
became the bedrock of modern capitalist mode of production. The system
of mass production and consumption became the characteristic of highly
developed economies during the 1940s-1960s. Under Fordism, mass
consumption combined with mass production to produce sustained
economic growth and widespread material advancement.

33
 11. References
http://projects.leadr.msu.edu/makingmodernus/exhibits/show/henry-ford-
assembly-line/henry-ford-facts
https://www.britannica.com/biography/Henry-Ford/Later-years
http://projects.leadr.msu.edu/makingmodernus/exhibits/show/henry-ford-
assembly-line/henry-ford-facts
https://www.sciencedirect.com/science/article/pii/B978008044910400166
8
https://resources.saylor.org/wwwresources/archived/site/wp-
content/uploads/2013/08/Saylor.orgs-Scientific-Management-Theory-and-
the-Ford-Motor-Company.pdf

https://www.fi.edu/case-files/henry-ford

34