Ford and the Global Strategies of Multinationals: The North American Auto Industry

By Isabel Studer-Noguez | Go to book overview

11

Conclusion

This book has proved the simplicity of commonly held views about the negative effects of MNEs' global strategies on the State, and has shown the difficulty of capturing the complexity and dynamism of MNEs-States relations. While the Ford Motor Co. case study cannot serve as the basis for broad generalizations about MNEs' strategies and their impact on different countries, it does suggest a number of propositions and hypotheses that warrant further empirical study. The Ford case also provides important insights about the factors that shape MNEs' strategies, particularly global integration strategies.


Ford's strategies

An actor's success or basic survival depends, first and foremost, upon its ability to comply with the rules of the game. Ford's range of strategic options were influenced, first, by its ability to comply with the rules of competition, i.e. those rules that were determined by mass production. The company's strategic choices were also influenced by its position or capabilities relative to the other competitors. The distribution of relative capabilities among the Big Three and other auto makers set the limits for Ford's attempts to follow strategic actions that were independent of its competitors' moves. Being a “price taker” meant that Ford's actual strategic choices, particularly regarding product and price, were set by GM, owing to the dominant position of the latter. Ford's strategic choices for profit maximization were actually interdependent with the collective behavior of other industry competitors.

In addition, an actor's specific traits, such as organizational/institutional structure, previous strategies/policies, and ideology/culture determine its capability to respond to exogenous factors. These factors explained Ford's ability to design distinct strategies relative to GM, such as its lower level of vertical integration, its leadership in seeking market niches, and its broader network of international operations. Their importance (particularly its organizational structure) was revealed by Ford's loss of its leadership position to GM and its decline in the industry during the 1930s and 1940s, and also by its success in the 1980s.

Strategies are also shaped by exogenous factors and other contextual variables, such as cataclysmic events which modify the actors' preferences, as

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Ford and the Global Strategies of Multinationals: The North American Auto Industry
Table of contents

Table of contents

  • Title Page v
  • Contents ix
  • Figures xi
  • Tables xiv
  • Acknowledgments xvii
  • Abbreviations xix
  • 1 - Introduction 1
  • 2 - Ford Motor Company's Multidomestic Strategy 14
  • 3 - Ford of Canada 30
  • 4 - Ford of Mexico 51
  • 5 - The 1970s 73
  • 6 - Ford's Survival Strategy 98
  • 7 - Ford's Global Strategy 118
  • 8 - Successful Bargaining in a Situation of Increasing Interdependence 142
  • 9 - Export Dynamism 161
  • 10 - A North American System of Production 187
  • 11 - Conclusion 218
  • Notes 235
  • Bibliography 254
  • Periodicals (Newspapers, Newsletters, and Magazines) 275
  • Appendix 1 276
  • Appendix 2 302
  • Appendix 3 326
  • Index 351
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