Ford, Honda and global economy of scale
Rising costs and different tastes in car styling made the industry giants to use the global economy of scale. But companies like Ford and Honda chose different ways of development.
Ford is one of the world’s earliest multinationals. Its first foreign production unit was set up in 1904 in Canada. For years Ford operated on a regional basis. This means that production in regions was different.
Honda is much younger company. It grew from making motorcycles in 1950’s. Its cars were built in Japan for sale around the world. Honda is more flexible than Ford in developing new products because it uses structure based on multi-disciplinary teams.
In 1990’s both companies started to change their organizational structures. Ford implemented multi-disciplinary product teams that were based on 5 vehicle centres. Honda by contrast has decentralized. Ford and Honda both argue that their new structures represent the demands of global market more correctly. Much of what they done is similar, but there are still a lot of differences.