Mulally's approach to decision making at Ford can be characterized as a normative style. He faces constraints like the poor economy and high gas prices that limit optimal decisions. As a result, he uses frequent meetings and data reporting to make satisfactory decisions that address major problems incrementally. His style has low tolerance for ambiguity and focuses on tasks over people. The directive style, which also has low ambiguity tolerance and focuses on tasks, is most consistent with Mulally's approach, while the conceptual and behavioral styles are least consistent as they have higher ambiguity tolerance and focus more on people.

1. 1
A critique of Ford’s CEO Alan Mulally’s Approach to Decision Making.
By Ally M Mukasa
Executive Summary
Ford Motor Company is a public company founded on June 16th
1903 by Henry Ford.
It is headquartered at Dearborn, Michigan in the United States of America. Its
products are mainly automobiles but it also offers automotive finance, vehicle
leasing and vehicle servicing. Ford has three divisions which include; Ford, Lincoln
and Motocraft. Ford has subsidiaries all over the world. Mr Alan R. Mulally is its
president and Chief Executive Officer. Prior to his appointment as CEO, Mr Mulally
worked at Boeing. His journey from aerospace to automaker industry was a new
challenge but an opportunity for him to prove to the sceptics that an aerospace
person can run an automaker. Among the challenges he faced were; the economy in
recession, soaring prices of gas, a calcified corporate culture, a general lack of
transparency in decision making, fractious divisions, the penchant cycling of
executives into new jobs every few years, the problem of pre-meetings that was anti-
ethical to decision-making, and hiding problems. Mulally had to make decisions to
address the challenges mentioned. His decision making style is much of directive
with low tolerance for ambiguity than behavioural or people-centred. He did not
involve Ford staffers below top echelon in decision-making. He downsized the
company, closed down underperforming factories, stopped the cycling of executives
into new jobs every year, and instituted a culture of transparency in decision making.
He introduced a weekly business plan review system and holding daily meetings with
the global team. In a nutshell, he reshaped the company’s strategy. The decisions he
made produced the following results among others:
 Ford kept its independence by escaping the USA’s Treasury loan window.
 Decision making became much more transparent.
 Cars of better quality are moving faster from design studio to showrooms.
 Ford has switched to vehicles that could be sold in several markets.
 Plants are handling multiple models.
 Problems are reported as soon as they are identified, and,
 Decision-making is guided by available data.

2. 2
Mulally’s decisions have succeeded in imposing discipline on Ford Motors and
sharpened its competitive advantage.
A description of Mulally’s approach to decision making.
1. (a) The meaning and practice of Decision Making.
Decision making is the thought process of selecting a logical choice from the
available options (www.Business Dictionary.com, Online September 2013). When
trying to make a good decision, a person must weigh the positives and negatives of
each option, and consider all the alternatives. For effective decision making a person
must be able to forecast the outcome of each option as well and based on all these
items, determine which option is the best for that particular situation. It is the mental
processes resulting in the selection of a course of action among several alternative
scenarios. According to Kreitner and Kinicki (2010:336) decision making is
identifying and choosing solutions that lead to a desired end result. It is the art of
choosing alternative solutions that lead to a desired state of affairs. Kreitner and
Kinicki (2010:336) maintain that there are two broad approaches to making
decisions; the first is rational and the second is non-rational.
1. (b) A description of Mulally’s approach to Decision Making.
Decisions managers occasionally take are influenced by the prevailing
circumstances within the company. The size of the company, its liquidity, the
behaviour of its employees, the competitiveness of its products, the attitude of its
shareholders, the market environment and others have a tremendous impact on
decision making. Before the researcher interrogates the approach to decision
making Mulally is using, it is imperative to give an outline of the business
environment at Ford Motor and reveal some facts about Mulally as the CEO.
Mentioned below, are some business facts at Ford Motors:
 Since Mulally’s appointment as CEO he has left most of the team he inherited
intact and dispelled rumours that a former aerospace manager cannot run an
automaker.
 He has the support of the Board of Directors of Ford Motors.
 He has transformed the calcified culture of the company thus saving it from
bankruptcy and from the Department of Treasury’s loan window.

3. 3
 With his appointment, decision making has become much more transparent at
Ford Motors.
 It is only top management executives that are involved in decision making;
Ford staffers below the top echelon are not sufficiently involved in decision
making.
 A change in the company strategy in order to improve Ford’s competitiveness
is underway. There is a plan to modernise plants so that they could handle
multiple models rather than just one, and, a switch to vehicles that could be
sold to several markets.
 Some executives seeking audience with Bill Ford to complain to him is an
explicit manifestation that there is some resistance to change at Ford Motor.
 Anew ethics regime is in place to remedy the ‘old culture’ of ‘pre-meetings’
that was used by managers to scheme how to get their stories straight to
higher-ups.
 Providing a constant stream of data to give Mulally’s team a weekly snapshot
of Ford’s global operations is underway. The data will be used to improve
performance.
 Mulally has imposed desclipline on a company that veered from one strategy
to the next.
With the above mentioned, Mulally’s approach to decision making is what the
University of Leeds (Online: 2013) calls ‘muddling through’ since most of his work is
target-driven. A weekly business plan review has been established. Weekly targets
are set; divisions around the world are monitored to ensure they meet the set
targets. A daily meeting with the global team to discuss problems as they occur and
suggest remedial actions has been proposed. Those that do not meet targets
represent ‘red flags’. The weekly sales outcomes determine the course of action at
Ford Motor. The course of action is the decision making process that emanates from
the weekly statistics at Ford Motor which is non-prescriptive in its formation. A
problem is approached according to its magnitude after putting into consideration the
available resources. His decision making approach is guided by the fact that the
remedial action to major company challenges is incremental, there are frequent
policy decisions, several centres of power and influence, reasonable attempts to
obtain consensus through the daily meetings with the global team thus satisficing

4. 4
rather than seeking the best solutions. The major problems such as the global
recession and soaring prices of fuel are beyond his control.
With the above examples mentioned, the researcher is of the view that Mullaly’s
approach to decision making is task-focused that has no tolerance for ambiguity.
According to Kreitner and Kinicki (2010:346) task focused managers are those that
do not pay much attention to people issues.
2. Is Mulally’s approach more of characteristic of the rational, normative, or
garbage can models of decision making?
(a) The meaning of Rational Decision Making.
This is the prescriptive model of decision making. It is a logical four-step to decision
making. According to Kreitner and Kinicki (2010:337) this model proposes the using
of a rational four step sequence when making decisions. They mention the four
following steps:
 Identifying a problem.
 Generating alternative solutions.
 Selecting a solution, and;
 Implementing and evaluating the decision.
Managers use available information to make decisions that shape the activities and
strategy of the company. The business dictionary (www.businessdictionary.com)
states that rational decision making is a method for systematically selecting among
possible choices that is based on reason and facts. It goes on to mention that in a
rational decision making process a business manager always employs a series of
analytical steps to review relevant facts, observations and possible outcomes before
choosing a particular course of action. Practically, in the recent business decisions,
this model was used by Mr Stephen Elop of Nokia in 2011 to discontinue the using of
Symbian software that was used to power Nokia’s mobile phones. To Stephen Elop,
the problem was not that Nokia could not produce smartphones; the problem was
the continuous use of Symbian software. Stephen Elop according to Lynch (2012:
359) argued that the using of Symbian software was stunting the growth of Nokia
and thus checking its successful entry into the world of smartphones. Stephen Elop

5. 5
had two alternatives as key to solving the problem and thus guide his choice of
decision:
 Either switching to Google’s Android open-source software, or;
 Migrating to Microsoft Windows 7 mobile operating system.
He zeroed on Microsoft Windows 7 mobile operating system as the kernel to power
Nokia’s entry into the world of smartphones and also reinvent its competitive
advantage. As the researcher stated earlier, the rational model is a prescriptive one
outlining a logical sequence that decision makers should use when making
decisions.
(b) The meaning of Simon’s Normative Decision Making Model.
This process describes how managers make decisions guided by a decision maker’s
bounded rationality. It represents the notion as Kreitner and Kinicki (2010:340)
explain that decision makers are bounded or restricted by a variety of constraints
when making decisions. The constraints include any personal or environmental
characteristics such as limited capacity of the human mind, problem complexity and
uncertainty, amount and timelines of information at hand, criticality of the decision
and time demands that reduce rational decision making. The authors further state
that because of the above mentioned constraints, managers tend to acquire
manageable rather than optimal amount of information that profoundly restrict the
managers’ ability to identify all possible alternative solutions and as a result they
resort to satisficing. Satisficing as they maintain, resolves problems by producing
solutions that are satisfactory not optimal. It is choosing a solution that meets a
minimum standard of acceptance. The satisficing theory as Herbert Simon
(1959:263) explained if used in business, the firm’s goals are expected to be not
maximising profit, but attaining a certain level or rate of profit, holding a certain share
of the market or a certain level of sales. Models of satisficing behaviour he argued
are richer than models of maximizing behaviour, because they treat not only of
equilibrium but of the method of reaching it as well.

6. 6
(c) The meaning of Garbage Can model of Decision Making.
The Garbage Can theory, or model, according to York University (online: 2013)
attempts to explain some organizational decision-making anomalies-in particular,
decision making by "organized anarchies" where preferences are not clear,
technology is not clear, or participation is fluid. Problems, solutions, and decision
makers move from one choice to another depending on the mix of recognized
problems, the choices available, the mix of solutions available for problems, and
outside influences on the decision makers. In short, problems are uncoupled from
choices giving an image of "rummaging around" inside a garbage can. Problems are
addressed based on a solution choice, but choices are made based on shifting
combinations of problems, solutions, and decision makers. In this sense, decision-
making appears "pathological" instead of rational. The Garbage Can theory allows
problems to be addressed and choices to be made, but does not necessarily follow a
rational process. Poorly understood and addressed problems can drift into and out of
the garbage can process, depending on the situation and factors.
The University of Minnesota (Online: 2013) explains that the garbage can model is
based on the assumption that decision making is sloppy and haphazard. Decisions
result from an interaction between four independent streams of events: problems,
solutions, participants, and choice opportunities.
The following diagram gives a simplified overview of the Garbage Can Model of
decision making:
Adapted from University of Minnesota (Online, September 2013)

7. 7
Concurring with the above arguments, Kreitner and Kinicki (2010:341) mention that
this approach grew from the rational model’s inability to explain how decisions are
actually made. It assumes that decision making does not follow an orderly series of
steps they assert that the garbage can model has four practical implications, initially
they argue that many decisions are made by oversight or by the presence of a
salient opportunity, they also highlight that political motives frequently guide the
process by which participants make decisions. Kreitner and Kinicki (2010:341)
continue to state that decision-making process is sensitive to load; that is, as the
number of problems increases relative to the amount of time available to solve them
problems are less likely to be solved. Lastly, important problems are more likely to
be solved than unimportant ones because they are more salient to organisational
participants.
(d) The rationale behind Mulally’s choice of Decision Making.
The researcher submits that decision makers are bounded or restricted by a variety
of constraints when making decisions. This is the position Mulally is in, as a result,
he is using Simon’s Normative Model of decision making. This model follows the fact
that there is a ‘roadblock’ to decision making that leads to optimal performance and
results. Personal environmental characteristics which are beyond his control such as
the recession which occurred in the USA in 2008, General Motors discounting its
pickup trucks, autonomous Ford Motor branches located in China, Russia and South
America, the soaring of gas prices which affected the sale of its 2008 pickup trucks
that resulted in the delay of the launch of Ford F-series, the sluggish pace at which
the corporate culture is changing and so on. Mulally acknowledges the dire business
conditions; in order to position Ford to be able to react to rapidly changing
circumstances he warrants daily meetings with the global team in order to react to
situations as they appear and try to achieve not the optimal but what could be
achieved. This is a characteristic of satisficing. The management team at Ford
Motors would like to maximize profits if they could, but have been limited in doing so
by the conceptual and computational difficulties of finding the optimal courses of
action (Herbert Simon: June 1959: 259).

8. 8
3. What type of decision-making styles are most and least consistent with
Mulally’s approach to decision making?
A Decision making style as Kreitner and Kinicki (2010:346) argue is the reflection of
the combination of how an individual perceives and comprehends stimuli and the
general manner in which he or she chooses to respond to such information. They
submit that styles vary along two different dimensions: value orientation and
tolerance for ambiguity. Value orientation reflects the extent to which an individual
focuses on either task and technical concerns or people and social concerns when
making decisions. Tolerance for ambiguity does not need structure. It can thrive in
uncertain situations. When the two dimensions are combined they form the following
four styles of decision making:
(a) The meaning of the directive style of decision making.
This is characterised by low tolerance for ambiguity. People with this style are
oriented towards task and technical concerns when making decisions. They are
efficient, logical, practical and systematic when making decisions (Kreitner and
Kinicki, 2010:347). They like to focus on facts, are action oriented and decisive.
However, their drawback is sometimes they tend to be autocratic, exercise power
and control and always focus on the short term because of their pursuit of speed and
results. The group leader solves the problem using the information he possesses. He
does not consult with anyone else nor seek information in any form. The style
assumes that the leader has sufficient information to examine all the relevant options
and make an effective decision.
(b) The meaning of the analytical style of decision making.
With this style, the manager does not possess sufficient information to make an
effective decision; he needs to obtain information or skill from others. He may not tell
them what the problem is, normally, they simply ask for information. The leader then
evaluates the information before making a decision. Kreitner and Kinicki (2010:348)
are of the view that this style has much higher tolerance for ambiguity and is

9. 9
characterised by the tendency to overanalyse a situation. People with this style like
to consider more information and alternatives than do directives. Kreitner and Kinicki
(2010:348) assert that analytic individuals are careful decision makers who take
longer to make decisions but who also respond well to new or uncertain situations.
(c) The meaning of the conceptual style of decision making.
Here, the leader explains the situation to the group or individuals whom he provides
with relevant information and together they generate and evaluate many possible
solutions. This style tends to have a long-term perspective and as a result,
individuals will be more creative and expansive in their approach entailing a higher
level of risk for the long-term benefit of the organisation. Kreitner and Kinicki,
(2010:348) point out that people with a conceptual style have a high tolerance for
ambiguity and tend to focus on the people or social aspects of a work situation. They
take a broad perspective to problem solving; rely on intuition and discussions with
others to acquire information. They are risk-takers and are good at finding creative
solutions to problems.
(d) The meaning of the behavioural style of decision making.
With this style according to www.boundless.com (Online: 2013), the leader explains
the situation to the group or individuals and provides the relevant information.
Together, they attempt to reconcile differences and negotiate a solution that is
acceptable to all parties. The leader may consult with others before the meeting in
order to prepare his case and generate alternative decisions that are acceptable to
them. Kreitner and Kinicki, (2010:349) state that this style is the most people-
oriented. People with this style work well with others and enjoy social interactions in
which opinions are exchanged. They argue that behavioural types are supportive,
receptive to suggestions, show warmth and prefer verbal to written information.
(e) Of the above mentioned styles, which ones are most and least
consistent with Mulally’s approach to decision making?
Using the table below, the researcher benchmarks the decision making styles in a
summarised form vis-à-vis Mulally’s approach to decision making.

10. 10
Style. Characteristic of style. Mulally’s approach that is
consistent with the style.
Directive.  Low tolerance for ambiguity.
 Task oriented.
 Logical, efficient, systematic in
solving problems.
 Action oriented.
 Autocratic.
 Changing a ‘culture
that loved to meet’.
 Not involving Ford
staffers below the top
echelon sufficiently in
decision making.
 Barring some
executives to meet
Bill Ford.
 Saying to employees,
‘that does not work
for me’.
Analytical.  High tolerance for ambiguity.
 Tendency to overanalyse a situation
present.
 Careful when making decisions.
 Take longer to make decisions.
 Autocratic.
 Leaving ‘most of the
team he inherited in
place’.
 Requesting data from
divisions on a daily
basis.
Conceptual.  High tolerance for ambiguity.
 Tendency to focus on people and
social aspects of a work situation.
 Broad perspective to problem solving.
 Rely on intuition and discussions with
others.
 Willing to take risks.
 Good at finding creative solutions to
problems.
 Idealistic and indecisive approach to
 Kicking-off a new era
of radical
transparency that
makes it harder to
hide problems.
 Having a constant
stream of data to give
his team ‘a weekly
snapshot of Ford’s
global operations.

11. 11
decision making.
Behavioural.  People-centred or people oriented.
 Supportive to suggestions.
 Receptive to suggestions.
 Prefer verbal to written information.
 Always avoid conflict.
 Have a hard time to say no to others.
 In his regime,
‘decision making is
more transparent’
(Kreitner and Kinick,
2010, 367)
 Not using information
as weapon on a team.
With the above analysis of Mulally’s approach to decision making, the researcher is
of the view that there is no single or dominant decision-making style that he is
following. To support this point of view, Kreitner and Kinicki (2010:349) point out that
most managers have characteristics that fall into two or three styles. They maintain
that decision-making styles vary by age, occupation, job level, gender, and countries.
Mulally’s approach to decision making is cross-cutting all styles. Kreitner and Kinicki
(2010:349) hold that there is not a best decision making style that applies to all
situations; a manager is best off to use a contingency approach where a style that
best suits the situation is used.
(f) To what extent is Ford following the practical recommendations of
increasing creativity?
The meaning of creativity.
Kreitner and Kinicki (2010:361) define creativity as the process of using imagination
and skill to develop a new or unique product, object, process or thought. They argue
that creative individuals are highly motivated and spend a considerable time
developing both tacit and explicit knowledge about their field of interest or
occupation. Creative individuals are dissatisfied with the status quo. They look for
new and exciting solutions to problems and are always perceived as disruptive and
hard to get along with. Creativity involves a convergence between tacit and explicit
knowledge. Creative ideas at work are often triggered by work-related problems,

12. 12
incongruities or failures. In organisations, creativity can be enhanced by effectively
managing the creativity process and by fostering a positive and supportive work
environment. Ford is effectively following the practical recommendations of creativity
as illustrated in the following diagram:
Characteristic associated with
creativity (Kreitner and Kinicki
, 2010:362)
Is it present
at Ford
Motors?
The extent to which Ford’s CEO is adopting
the characteristic in order to increase
creativity.
A manager’s ability to see
problems in new ways and to
escape bounds of
conventional thinking.
Present.  Shaking up a calcified culture to keep
the company solvent.
 Delaying the launch of Ford’s F-
series in order to clear out the old
stock.
 Making the once fractious divisions
work together.
The manager’s ability to
recognise which ideas are
worth pursuing and which are
not.
Present.  Doing away with a culture that loved
to meet.
 Having a constant stream of data to
give his team ‘a weekly snapshot of
Ford’s global operations.
 Downsizing.
 Closing down unproductive factories.
 Switching to production of vehicles
that could be sold to several markets.
The manager’s ability to
persuade and influence
others.
Present.  Instituting the weekly business plan
review system.
 Daily meetings with the global team.
Preference for thinking in
novel ways of one’s own
choosing.
Present.  Switching to production of vehicles
that could be sold to several markets.
 Modernising plants.

13. 13
A manager’s willingness to
overcome obstacles.
Present.  Winning over James Farley.
A manager’s willingness to
take sensible risks.
Present.  Postponing the launching of Ford’s
F-series.
A manager’s willingness to
tolerate ambiguity.
Not present.  Needs improvement.
The manager’s Self-efficacy. Present.  Imposing discipline on a company
that veered from strategy to another.
The manager’s openness to
experience and
conscientiousness.
Present.  Making decision making much more
transparent.
Prudent management of the
creativity process.
Present.  Stopping the cycling of executives
into new jobs every few years in order
to create a supportive work
environment.
Autonomy, collaboration and
trusting relationships among
employees.
Present.  Ford does not use ‘data as a weapon
on employees’.
Willingness to give and
accept on going feedback in
a nondefensive manner.
Present.  Instituting the weekly business plan
review system.
 Daily meetings with the global team.
Keeping abreast with
innovations taking place in
the academic community.
Not present.  Not present at Ford Motors.
4. Lessons to learn from the case:
(a) Knowledge should be prudently managed to improve production. Some
executives’ desire to complain to Bill Ford about the new changes is an indication

14. 14
that knowledge management is not fully utilised at Ford Motor. Changes initiated
from the top must be communicated to all workers and other key stakeholders to
prevent resistance to change and innovation. Resistance to change may significantly
harm or undermine the strategy of the company and therefore stunt its competitive
advantage.
(b) To prudently manage a company the manager does not need to be either an
industry insider or outsider, what matters is skills and being people-oriented.
(c) There is no one single style of decision making that a manager can rely on to
solve complicated problems. A manager has to wonder through other styles in order
for him to arrive to a decision.
(d) There are a myriad of complexities in managing a multinational company such as
Ford with branches spread all-over the world.
(e) Resistance is always prevalent when a manager initiates a process of changing
the corporate culture without solidly sensitising his subordinates about the benefits
that would accrue from such changes.
(f) Transparency improves decision making and makes it harder to hide problems.
(g) It is imperative not to involve each and every staffer in decision making.
(h) Information collected should be used to improve the company’s processes,
strategy, and solve problems, but, should not be used against workers of a company.
(i) Cycling workers into new jobs every few years undermines the growth of a
company.
(j) A high-performance team if set up performs better than a single executive.

15. 15
Conclusion
The quality of a decision is influenced by the amount of information available. To fully
grow and graduate into learning organisations, companies need to put in place
practical data-collecting and collating mechanisms, then use the data to identify
problems. After the problem identification process, the leader should interact with his
or her team and exchange opinions openly. Together with the team, they should look
for alternative ways of solving the problem. Once all alternatives are investigated, a
single best solution or multiple solutions depending on the problem should be
adopted and implemented. A high-performance team works very well than a
charismatic leader.

16. 16
Bibliography.
Kreitner, R; & Kinick, A. (2010). Organizational behaviour. The MacGraw-Hill
Companies, Inc; 1221 Avenue of the Americas, New York, NY, 10020; 211-219
Lynch, R. (2012). Strategic Management. Sixth Edition. Pearson Education Limited,
Edinburg Gate, Harlow, Essex CM20 2JE
Simon, H. June 1959: Theories of Decision-Making in Economics and Behavioural
Science.
The Business Dictionary: (Online 2013) www.businessdictionary.com
The University of Minnesota (Online: 2013):
http://blog.lib.umn.edu/burn0277/pa5012/2013/03/garbage-can-model.html
University of Leeds (Online: 2013):
www.consult.leeds.ac.uk/public/level1/sec04/index.htm
www.boundless.com (Online: 2013): Managing decision making styles.
York University (online: 2013): http://www.istheory.yorku.ca/garbagecan.htm