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Lee Iacocca’s Rise

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    Leadership Summary Many people are familiar with Lee Iacocca’s rise to power starting at the Ford Motor Company because of many well orchestrated advertising and marketing campaigns. This initial introduction was followed by extreme press exposure of his subsequent termination from Ford and at this point in time nearly everyone has heard of his almost heroic efforts to save the Chrysler Corporation from bankruptcy. What most individuals do not realize is that Iacocca was a four year student of human psychology and that his leadership style can in part, be attributed to this background.

    He has been proclaimed as the embodiment of an effective modern leader and a marketing mastermind of his time. Leadership Critique Iacocca’s leadership approach was to create a passionate vision, align teams of like minded, talented individuals and give them a dream to pursue without too many limitations. Collins and Porras claim that, “The function of a leader—the one universal requirement of effective leadership—is to catalyze a clear and shared vision of the organization and to secure commitment to and vigorous pursuit of that vision. (Collins & Porras 2001). Although he appreciated the consensus opinions and capabilities of groups in order for him to be fully informed of the subject matter, he also prided himself on the ability to make executive decisions for the company without delay. Shortly after being named president, he borrowed a very effective appraisal idea from the stockholders quarterly review system that was already in place at Ford, and developed it as a management review tool so that he could focus his team on the goals and objectives for the upcoming quarter.

    Not only did this structure make the team members accountable, Iacocca felt that it was, “…an effective way to remind people not to lose sight of their dreams. ” (Iacocca & Novack, 1984) . Lee Iacocca provided the “psychological safety” we discussed in class our second week by allowing his cross functional teams to take interpersonal risks and feel that they were a very important part of the Ford team. According to Uzzi and Dunlap, “Networks deliver three unique advantages: private information, access to diverse skill sets, and power. ” ( Uzzi & Dunlap, 2005) .

    As president of one of the largest car manufactures in the world, Iacocca needed all three of these advantages. I believe that Iacocca created successful “Top Management Teams”, TMT, which we discussed in week four’s class and these teams were a positive force that carried out Ford’s strategic direction and were not the “Semiautonomous barons” that were corporately estranged that we also analyzed. The business environment at Ford Motor Company in the 70’s and 80’s was hectic and filled with change. The baby boomers were just emerging as a sizeable market but they had very different opinions and needs than the preceding generations.

    Henry Ford II was then the Chairman and CEO of the company and his leadership style was autocratic and very conventional. Ford II was the epitome of the definition of the “managerial leadership” that we discussed since his management style was to be exceedingly reactive and he wanted to preserve the past operating practices at Ford at all costs. On the other hand, Lee Iacocca while following many of the traits of the managerial leader such as focusing on both short and long term strategies, also leaned toward being more of a “visionary leader” who was always ready to take a risk and was very concerned with the future of the auto industry.

    He even brokered a proactive deal with Honda to purchase their smaller engines so that Ford could introduce less expensive compact vehicles but Ford II would not even consider the agreement. Ultimately, being late to produce a smaller car caused Ford to be so far behind this market trend that they lost their competitive advantage for many years. Iacocca was called “the father of the Mustang” and the wildly popular car transformed the Ford organization from a good quality company to a great company and Lee Iacocca became a household name.

    I consider the Mustang to be Iacocca’s greatest BHAG whether or not he realized it at the time since it had the opposite features, market and price-range of any car Ford had produced up to that point. He set out to create a car that would appeal to the younger baby boomers that featured sporty design, robust performance at an affordable price for the masses. The Mustang was a winner. Leadership Insights References Collins, J. C. , & Porras, J. I. (2001). Organizational Vision and Visionary Organizations. Erika Hayes James, and Lynn Perry Wooten. (2005). Leadership as (Un) usual:How to Display Competence in Times of Crisis.

    Organizational Dynamics, 34(2). Iacocca, L. , & Whitney, C. (2007). Where Have All The Leaders Gone? New York, New York: Scribner. Iacocca, L. , & Novack, W. (1984). Iacocca: An Autobiography: Lee Iacocca with William Novack. New York, New York: Bantam Books. Kotter, J. P. (2001). Best of HBR: What Leaders Really DO. Harvard Business Review. Thomas, T. , Schermerhorn, J. R. , Jr. , & Dienhart, J. W. (2004). Strategic leadership of ethical behaviorin Business. Academy of Management Executive, 18(No. 2). Uzzi, B. , & Dunlap, S. (2005). Managing Yourself:How to Build Your Network. Harvard Business Review.

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