INTRODUCTION

Entrepreneurs and entrepreneurship are two terms that are often cited by people since a long time
ago. This term bring it to various purposes or according to the definition or understanding of
their respective fields.

Entrepreneur coming from France entreprendre which means to the task or experiment.
Entrepreneurs generally defined as someone who runs a business that is successful with a profit
motive. The definition is very wide and varies by individual. But there are also of the opinion
that the entrepreneurs is comes from the French word entrepredre which means to undertake.
In the Malay language as it can mean mengambil alih. The studies in the field of
entrepreneurship, there is no single definition of entrepreneur conclusive due to its cross-
discipline (multi-disciplinary).

Entrepreneurs are individuals who do business with his own business, think creatively and
innovation opportunities available to develop its business. This means that they are individuals
who are always alert and the business opportunities when others do not notice it. Action taken by
the entrepreneur is the business opportunities for creative and innovative.

Essentially, entrepreneurship is a behavioral characteristic of a person internal (personality and

skills) and external factors (social, psychology and economic) provide the stimulus for
innovative activity for example entrepreneurship to manifest itself.

THEORY OF ETREPENEURSHIP

1. Economy

In the field of entrepreneurship emphasizes the economic gain and wealth. Both of these
aspects will encourage someone to engage in entrepreneurial activities. Entrepreneurs
will work to identify and pursue business opportunities that can generate profits for the
organization. Entrepreneurs are part of the input expenditure other than raw materials,
land and capital. The cost for an entrepreneur is profit. The advantage is the price paid for
the risk taken by an entrepreneur.
 Early theories about the function and role of entrepreneur and entrepreneurship in
economic development. This is because part of the concept of entrepreneurship has been
introduced by members of the economy such as Richard Cantillon, Adam Smith, Joseph
Schumpeter and others that touch on entrepreneurship and its impact on the economic
development of society.

Among the economists who contributed in the field of entrepreneurship is Joseph

Schumpeter (1934) who sees entrepreneurship as a creative force of destruction. Models
carried by Schumpeter saw innovation as the core of entrepreneurial activity when these
innovations implemented by individual entrepreneur. According to Schumpeter,
entrepreneurship activities include all activities or operations leading to a process of
reform, including the new technologies or new products. An example of wireless by
Marconis invention has become a revolutionary communication industry and increase
economic activity as a whole. Schumpeter also discuss the question of balance
(equilibrium) when he raises the question 'who and what' rather than 'why' that cause
imbalances in the economy. He attributed this situation to the actions of entrepreneurs
through the power of innovation and creativity and believes entrepreneurs to bring
changes to the economic development of a country.

In addition, Israel Kirzner (1979) has been connecting entrepreneurship with uncertainty,
when he tried to explain that there is no profit element in economic activity. According to
him, an entrepreneur acts as the middleman, ie all the opportunities that will be taken full
advantage

2. Psychology

Psychology study entrepreneurship from the aspect of personality characteristics of an

entrepreneur. Personality characteristics such as performance requirements, focus control
and inclination to take risks it can differentiate an entrepreneur to non-entrepreneur.

The nature entrepreneurship behavior associated with themselves tend to focus more
internally (where success is achieved is the result of the strength and ability of self rather
than because of fate). This includes the personal qualities such as perseverance, effort,
innovative, creative and persistent spirit.
 According to McClelland (1971), the theory of the need to achieve or 'need for
achievement' is based on intelligence as a child by stating that entrepreneurs are driven to
achieve success influenced elements from childhood to emphasize the excellence,
motherhood, self-reliance and the domination of the father.

Besides, people who contribute to the theory and model of entrepreneurship is Rotter
(1966), entrepreneurs have self-control for internal source. He said entrepreneurs have
characteristics that are born of his own identity. These characteristics differentiate
yourself an entrepreneur with non-entrepreneurs. McClelland, Theory wishes to achieve.
This theory states that entrepreneurs have high expectations of achievement and courage
to take responsibility. De Vries, Psychodynamic model states that the current depressed
individual small and did not get certain facilities. Thus, this encourages them to prove to
the world about its capabilities.

3. Sociology

Entrepreneurship is often closely related to the sociological perspective. Sociological

approach describes the social conditions that affect the appearance of an entrepreneur and
social factors that influence the decision to become an entrepreneur.

One of the early sociologist, Max Weber (1958) has been associating entrepreneurship
with The religious element is used as a foundation for success in economic activity.
According to Weber, religious values are universal, such as honesty becomes an
important factor in moving entrepreneurial activity. Belief in religious life expressed their
diligence and responsible work and an impetus to the accumulation of productive assets.
He said that the success of the Protestant in economic activity caused by religion itself. A
strong grip on religion has been the impetus for them to achieve success in the economic
field.

Gibbs (1972) also present the entrepreneurial model she is known as a social
development model. This model explains the processes and social relations are conducted
by a person and force them weeks to make a change by taking the decision to get
involved in the business. This model requires a determination of mental preparation,
physical and financial, as well as certain personality. Meanwhile, the model introduced
 by Sokol associate Shapero and social situation and the factors that influence a person's
decision to become entrepreneurs, which includes encouragement of entrepreneurship
and situational factors.

PROFIFE ETREPENEURSHIP

1. Background Entrepreneurship (Henry Ford)

Henry Ford was fortunate in his surroundings and early life. His father was a prosperous,
respected citizen of the community, and he grew to maturity in the longest era of peace
the young republic had known. Michigan, with the rest of the country was to begin a
period of industrial expansion unequaled in history. Boys were to leave the farms as part
of a growing urbanization that would not be checked until mass- produced automobiles
made possible the suburban movement.
In 1863 these deep and swift running currents of change were still but a springhead, and
the childhood memories of Henry Ford were of a simple life. Years later (1913) Henry
Ford was to write that his first memory was of his father showing him and his brother
John a bird's nest under a fallen oak some twenty rods east of his home. The awakening
of the child to the beauty of nature was not accidental, and he was to see his father turn
his plow from the furrow to leave a bird's nest undisturbed. In one of his many jot books,
Henry Ford had written his own story of this incident. Grandfather O'Hern (as he was
called) also taught the child the simple pleasures of nature-the names of the flowers that
bordered the field, the trees in the woods, and the feathered and furred creatures that
made their homes in the fields and forests near the homestead. A love of nature was a
central part of Henry Ford's being throughout his life.

Mary Ford, despite the burdens of a growing family, (John 1865, Margaret 1867, Jane
1869, William 1871 and Robert 1873) found time to instill in the child her own sense of
cleanliness and order. She also taught him to read, and when on January 11, 1871, Henry
walked 1 1/2 miles to the Scotch Settlement School for the first time; he had already
mastered the first McGuffey Reader.
Henry was not a book-minded" scholar. His interest in mechanics was predominant, and
machines were to be his library. However he and his seatmate, Edsel Ruddiman, along
with the other children in the neighborhood mastered their three r's in the small brick
school of the Scotch Settlement.
In 1873 Henry changed to the Miller School, about the same distance from his home but
located to the west in Dearborn Township. He had become curious about the power of
steam, and in what was to be his customary approach, subjected his ideas to a practical
test. He tied down the lid of an earthen pot filled with water, placed it over the fire and
awaited with interest the results of his experiment. The inevitable explosion not only
ruined the pot but scalded the curious boy with boiling water. Reprimanded by his
mother, his next experiments were more controlled, one of them being a baking powder
can steam engine with a watch wheel for a power drive. This was followed by a larger
steam engine made in cooperation with his classmates at the Miller School, but once
again a boiler explosion proved the power of steam and burned down the Miller School
fence in the process.
Watches next attracted his attention and he soon mastered their intricate mechanisms. He
had no tools for the delicate task of watch repairing so he made his own; a filed shingle
nail became a screw driver, a corset stay became a pair of tweezers and extra knitting
needles were similarly adapted by the skilled boy. The small workbench before the
window in his bedroom was soon covered with the watches of his friends and neighbors.

Henry's interest in watches was only one phase of his curiosity about all things
mechanical, and while watch repairing was always to remain his hobby, he discovered the
adult world of steam. In July 1876, Fred Reden brought into the Dearborn area the first
portable steam engine Henry Ford had ever seen. Reden encouraged Henry's youthful
enthusiasm by letting him fire and run the engine. Years later Henry Ford was to testify
that this proved to him that he was by instinct an engineer. The same year, Henry's
already aroused interest and talent were diverted into new channels when in company
with his father he saw a portable engine moving along the road under its own power. The
excited youth jumped off of his father's wagon and was examining this new curiosity
before the amused and tolerant man was really aware of what had happened. The
intensity of Henry's interest is indicated by his own sharp memory of this incident a
quarter of a century later. The youth had seen the possibilities of a self-contained, self-
propelled vehicle and the vision of a horseless carriage born at this moment was never to
leave Henry Ford until success fulfilled his dream.

The same year that Henry Ford first realized he had the instincts of an engineer; the Ford
family was shocked by the death of the mother, Mary on May 29, 1876. Her quiet
forcefulness and strong moral influence had been the guiding spirit for the entire family.
In his own words Henry Ford felt that, "the house was now a watch without a mainspring.
Henry Ford had now lost his strongest tie with the family home. Hating the drudgery of
farming, he devoted more and more time to mechanical subjects and finally resolved to
become a machinist apprentice in Detroit. Although his father regretted Henry's wish to
leave what to William was the ideal way of life, he did not oppose his son's decision. At
the age of 16 Henry Ford left his father's farm and traveled to Detroit where he could
learn what he needed to know about mechanics in order to fulfill his dreams.

He returned home in 1882 but did little farming. Instead he operated and serviced
portable steam engines used by farmers, occasionally worked in factories in Detroit, and
cut and sold timber from 40 acres of his fathers land. By now Ford was demonstrating
another characteristic a preference for working on his own rather than for somebody else.
In 1888 Ford married Clara Bryant and in 1891 they moved to Detroit where Henry had
taken a job as night engineer for the Edison Electric Illuminating Company. Ford did not
know a great deal about electricity. He saw the job in part as an opportunity to learn.
Henry was an apt pupil, and by 1896 had risen to chief engineer of the Illuminating
Company. But he had other interests. He became one of scores of people working in
barns and small shops across the country trying to build horseless carriages. Aided by a
 team of friends, his experiments culminated in 1896 with the completion of his first self-
propelled vehicle, the Quadricycle. It had four wire wheels that looked like heavy bicycle
wheels, was steered with a tiller like a boat, and had only two forward speeds with no
reverse.

A second car followed in 1898. Ford now demonstrated one of the keys to his future
success the ability to articulate a vision and convince other people to sign on and help
him achieve that vision. He persuaded a group of businessmen to back him in the biggest
risk of his life a company to make and sell horseless carriages. But Ford knew nothing
about running a business, and learning by trial-and-error always involves failure. The
new company failed, as did a second. To revive his fortunes Ford took bigger risks,
building and even driving racing cars. The success of these cars attracted additional
financial backers, and on June 16, 1903 Henry incorporated his third automotive venture,
Ford Motor Company.

2. Type of business Henry Ford

Origins of an American Legend

Henry Ford, the founder of the Ford Motor Company, was born on a farm near Dearborn,
Michigan, in 1863. He had a talent for engineering, which he pursued as a hobby from
boyhood, but it was not until 1890 that he commenced his engineering career as an
employee of the Detroit Edison Company. In his spare time, Ford constructed
experimental gasoline engines and in 1892 completed his first gasoline buggy.
Dissatisfied with the buggy's weight, he sold it in 1896 to help fund the construction of a
new car. Ford's superiors at the electric company felt his hobby distracted him from his
regular occupation and, despite his promotion to chief engineer, he was forced to quit in
1899. Shortly afterwards, with financial backing from private investors, Ford established
the Detroit Automobile Company. He later withdrew from the venture after a
disagreement with business associates over the numbers and prices of cars to be
produced. Ford advocated a business strategy which combined a lower profit margin on
each car with greater production volumes. In this way, he hoped to gain a larger market
share and maintain profitability.
Independently in a small shed in Detroit, Henry Ford developed two four-cylinder, 80-
horsepower race cars, called the 999 and the Arrow. These cars won several races and
helped to create a new market for Ford automobiles. With $28,000 of capital raised from
friends and neighbors, Henry Ford established a new shop on June 16, 1903. In this
facility, a converted wagon factory on Mack Avenue in Detroit, the Ford Motor Company
began production of a two-cylinder, eight-horsepower design called the Model A. The
company produced 1,708 of these models in the first year of operation.
The Ford Motor Company was sued by the Licensed Association of Automobile
Manufacturers, an industrial syndicate which held patent rights for road locomotives with
internal combustion engines. Ford responded by taking the matter to the courts, arguing
that the patent, granted to George B. Selden in 1895, was invalid. During the long process
of adjudication, Ford continued to manufacture cars and relocated to a larger plant on
Piquette and Beaubien Streets. A Canadian plant was established in Walkerville, Ontario,
on August 17, 1904. Henry Ford and his engineers designed several automobiles, each
one designated by a letter of the alphabet; these included the small, four-cylinder Model
N (which sold for $500), and the more luxurious six-cylinder Model K (which sold
poorly for $2,500). The failure of the Model K, coupled with Henry Ford's persistence in
developing inexpensive cars for mass production, caused a dispute between Ford and his
associate Alexander Malcolmson. The latter, who helped to establish the company in
1903, resigned and his share of the company was acquired by Henry Ford. Ford's
holdings then amounted to 58.5 percent. In a further consolidation of his control, Ford
replaced John S. Gray, a Detroit banker, as president of the company in 1906.
In October 1908, despite the continuing litigation with the Selden syndicate, Ford
introduced the durable and practical Model T. Demand for this car was so great that Ford
was forced to enlarge its production facilities. Over 10,000 Model Ts were produced in
1909. Able to vote down business associates who favored more conventional methods of
production, Henry Ford applied his assembly line concept of manufacturing to the Model
T.
In developing the assembly line, Ford noted that the average worker performed several
tasks in the production of each component, and used a variety of tools in the process. He
improved efficiency by having each worker specialize in one task with one tool. The
component on which the employee worked was conveyed to him on a moving belt, and
after allowing a set time for the task to be performed, the component was moved on to the
next operation. Slower workers thus needed to increase their work rate in order to
maintain production at the rate determined by the speed of the belts.
Ford's battle with the Selden group led to a decision by the Supreme Court in 1911, eight
years after the initial suit. The Court ruled that the Selden patent was invalid. The
decision freed many automobile manufacturers from costly licensing obligations; it also
enabled others to enter the business.
When the United States became involved in World War I (April 1917), the Ford Motor
Company placed its resources at the disposal of the government. For the duration of the
war, Ford Motor produced large quantities of automobiles, trucks, and ambulances, as
well as Liberty airplane motors, Whippet tanks, Eagle submarine chasers, and munitions.
In 1918, Henry Ford officially retired from the company, naming his son Edsel president
and ceding to him a controlling interest. But, in fact, Henry continued to direct company
strategy and spent much of his time developing a farm tractor called the Fordson. He also
published a conservative weekly journal, the Dearborn Independent. Edsel, who was
more reserved and pragmatic than his father, concerned himself with routine operations.
At the end of the war Henry and Edsel Ford disagreed with fellow stockholders over the
planned expenditure of several million dollars for a large new manufacturing complex at
River Rouge, near Detroit. The Fords eventually resolved the conflict by buying out all
the other shareholders. Their company was re-registered as a Delaware corporation in
July 1919. The River Rouge facility, built shortly afterward, was a large integrated
manufacturing and assembly complex which included a steel mill of substantial capacity.

The War Years

In 1940, Henry Ford, who opposed American involvement in World War II, canceled a
contract (arranged by Edsel) to build 6,000 Rolls-Royce Merlin aircraft engines for the
British Royal Air Force, and 3,000 more for the U.S. Army. In time, however, public
opinion led Ford to change his mind. Plans were made for the construction of a large new
government-sponsored facility to manufacture aircraft at Willow Run, west of Dearborn.
Unionization activities climaxed in April 1941 when Ford employees went on strike. The
NLRB called an employee election, under the terms of the Wagner Act, to establish a
union representation for Ford workers. When the ballots were tabulated in June, the UAW
drew 70 percent of the votes. Henry Ford, an avowed opponent of labor unions, suddenly
altered his stand. He agreed to a contract with union representatives which met all worker
demands.

The company devoted its resources to the construction of the Willow Run Aircraft plant.
Eight months later, in December 1941, the Japanese bombing of Pearl Harbor resulted in
a declaration of war by the United States against Japan, Germany, and Italy. Willow Run
was completed the following May. It was the largest manufacturing facility in the world,
occupying 2.5 million square feet of floor space, with an assembly line three miles long.
Adjacent to the plant were hangars, covering 1.2 million square feet, and a large airfield.
The airplanes produced at this facility were four-engine B-24E Liberator bombers,
the Consolidated Aircraft version of the Boeing B-24. Production of aircraft got off to a
slow start, but after adjustments the rate of production was raised to one plane per hour,
24 hours a day. During the war, other Ford Motor plants produced a variety of engines, as
well as trucks, jeeps, 4 tanks, 10 tank destroyers, and transport gliders. The company also
manufactured large quantities of tires, despite the removal of its tire plant to the Soviet
Union.
Edsel Ford died unexpectedly in May 1943 at the age of 49. At the time of his death,
Edsel was recognized as a far better manager than his father. Indeed, Henry Ford was
often criticized for repeatedly undermining his son's efforts to improve the company, and
the managerial crisis which occurred after Edsel's death is directly attributable to Henry
Ford's persistent failure to prepare capable managers for future leadership of the
company.
Edsel had been responsible for much of the company's wartime mobilization and his
absence was deeply felt by his aging father, who was forced to resume the company
presidency. In need of assistance, Henry Ford sought a special discharge from the Navy
for Edsel's son Henry II. The navy complied, citing the special needs of Ford
management during wartime. Henry Ford vigorously prepared his grandson to succeed
him. By the end of the war, when the Willow Run plant was turned over to the
government, Ford had produced 8,600 B-24E bombers and over 57,000 aircraft engines.
In September 1945, Henry Ford II, aged 28, was named president of the Ford Motor
Company. The inexperienced man could not have started at a worse time. No longer
supported by government contracts, the company began to lose money at a rate of $10
million per month. The source of the problem was Henry Ford I's financial management
policy, specifically designed to perplex the Internal Revenue Service and discourage
audits. The severe economic conditions after the war made Ford's finances an albatross.
Unable to bring the company's finances under control, Henry II hired Ernest R. Breech, a
General Motors executive and past chairperson of Bendix, in 1946. Breech was placed in
charge of two groups--a managerial group and a financial one. The first one was
comprised of several managers hired away from General Motors, and the second group
was made up of ten talented financial experts who had served with the Air Force Office
of Statistical Control. The Air Force group included Robert S. McNamara, J. Edward
Lundy, Arjay Miller, and Charles Tex Thornton; they spent several years reconstructing
the company's system of financial management.
Henry Ford I, who had retained the title of chairperson since 1945, died in April 1947 at
the age of 83. Henry II and Ernest Breech were then able to implement their own
strategies for recovery, and these included the adoption of the proven General Motors
management structure, and the decision to establish the Ford Motor Company in foreign
markets. In its first year under Breech, the company registered a profit and it continued to
gain strength in the late 1940s and early 1950s. Breech's top priority was strict adherence
to a financial plan with strong profit margins; unfortunately, this proved to be at the
expense of developing automobiles for an increasingly complex market.
Over the previous two decades, the Ford Motor Company had been a notable pioneer and
achiever in the industry, and it was the first company to cast a V-8 engine block (1932).
Ford had produced its 25 millionth automobile in 1937 and the following year its Lincoln
Division introduced the Mercury line, which proved highly successful in the growing
market for medium-priced automobiles. Ford's good image had been further enhanced by
its contributions to the Allied effort in World War II; even Josef Stalin had kind words for
the enterprising American company.
Before he died, Henry Ford I had created two classes of Ford stock. The B Class was
reserved for family members and constituted the controlling 40 percent voting interest.
The ordinary common shares were to be retained by the company until January 1956,
when they were to be offered to the public for the first time.
Two years after Henry I's death, in 1949, the company unveiled a number of new
automatic styles. But while the cars were practical, and to a degree fashionable, the
company no longer appeared to be a pioneer; indeed it gained a reputation, not wholly
justified, as being an imitator of General Motors.
Regaining its initiative, the Ford Motor Company decided to introduce a new model to
fill a gap in the market between the Ford and Lincoln-Mercury lines. In 1958, the much
heralded 410 horsepower Edsel made its debut. It was a terrible flop. Ford's market
researchers had been very wrong; there was no gap in the market for the Edsel to fill.
After just two years, production of the ill-fated car ceased 110,847 units had been
produced, at a loss of some $250 million.

The 1960s-70s
The 1960s saw many changes at Ford: dissatisfied with his secondary role in the
company decision-making, Henry Ford stripped Breech of his power, replacing him with
Robert McNamara. But McNamara left the Ford Motor Company in 1961 to serve as
Secretary of Defense in the Kennedy administration. Many of McNamara's duties were
taken over by Arjay Miller, who succeeded the interim president, John Dykstra, in 1963.
The Ford Motor Company purchased the Philco Corporation in 1961 and established a
tractor division in 1962. The following year, Ford introduced its highly successful
Mustang; more than 500,000 of these cars were sold in 18 months. The man most
responsible for developing the Mustang was a protege of Robert McNamara named Lee
Iacocca.
In another move intended to assert his authority over management, Henry Ford II
dismissed Arjay Miller in 1968 and named Semon E. Knudsen as president. Knudsen, a
former executive vice-president at General Motors known for his aggressive personality,
found himself in constant conflict with Henry Ford, and after 19 months he was replaced
by Lee Iacocca. Iacocca was a popular figure, highly talented in marketing and sales, but
like Knudsen, he frequently disagreed with Henry Ford.
Ford Motor Company subsidiaries in Europe entered a period of strong growth and high
profitability in the early 1970s, and these subsidiaries produced components for the Pinto,
a sub-compact introduced in the United States in 1971. Pinto models from 1971 to 1976
and similarly configured Bobcats from 1975 to 1976 drew a great deal of attention after
several incidents in which the car's gas tank exploded in rear-end collisions. The
unfavorable publicity from news reports damaged Ford's public image, as did wrongful
death litigation.
In April 1977, Henry Ford II reduced Iacocca's power by creating a new executive
triumvirate. Iacocca was a member of this, along with Ford himself and Philip Caldwell.
But a year later, Ford added his brother William Clay Ford to the group and relegated
Iacocca to a subordinate position; then within a few months, Ford suddenly fired Iacocca
and installed Caldwell as president. Henry Ford was battling stockholder allegations of
financial misconduct and bribery at the time and his dismissal of Iacocca made him more
unpopular than ever. Iacocca went on to head Chrysler Corporation.
Henry Ford made a critical decision and a very misguided one. He cancelled development
of a small car which had been proposed by Iacocca and which was intended to succeed
the aging Pinto. Thus, as the Japanese compacts became increasingly popular in the
United States, Ford found itself quite unable to compete. Adding to its woes, Ford, along
with other U.S. car manufacturers, was obligated by Congressional legislation
(particularly the Clean Air Act) to develop automobiles which would emit less pollutants.
Henry Ford relinquished his position as chief executive officer to Philip Caldwell in
October 1979. The following March, Ford retired and gave the chair to Caldwell, while
retaining his seat on the board of directors.
Ford Motor Company encountered severe economic losses as a result of a reduction in
market share, as well as the high costs incurred by labor contracts and the development of
automobiles that met the new federal standards. In 1980, the company lost $1.54 billion,
despite strong profits from the truck division and European operations. Ford lost a further
$1.06 billion in 1981 and $658 million in 1982 while trying to effect a recovery; its
market share fell from 3.6 percent in 1978 to 16.6 percent in 1981.
 Company officials studied Japanese methods of industrial management, and worked more
closely with Toyo Kogyo, the Japanese manufacturer of Mazda automobiles (Ford gained
a 25 percent share of Toyo Kogyo in November 1979, when a Ford subsidiary merged
with the company). Ford imported Mazda cars and trucks, and in many ways treated Toyo
Kogyo as a small car division until the Escort, its successor to the Pinto, reached the
showrooms. This new compact was modeled after the Ford (Europe) Erika; another
version of it, the Lynx, was produced by Ford's Lincoln-Mercury division.
Caldwell transferred the talented manager Harold Poling from the European division to
the United States in an attempt to apply successful European formulas to the American
operation. In the restructuring that followed, several plants were closed and more than
100,000 workers were dismissed. Ford's weakness in the market was a major concern of
the unions; consequently, the company inaugurated a policy of employee involvement in
plant operations and was able to secure more favorable labor contracts. Productivity
improved dramatically.
In 1984, with costs reduced, Ford started to repurchase 30 million shares (about 10
percent of the company's stock). Its production of cars in Mexico was increased, and
through its interest in Kia Motors, output was stepped up in South Korea. The following
year, Ford introduced the Taurus (another version, the Sable, was produced by its
Mercury division), a modern full-size automobile which had taken five years to develop
at a cost of $3 billion. The Taurus proved highly successful and won several design and
safety awards.
Sales and profits reached record levels in 1984, and in 1986 Ford surpassed General
Motors in income for the first time since 1924. In addition, Ford's market share increased
to just under 20 percent. Ford Motor purchased several companies in the mid-1980s,
including the First Nationwide Financial Corporation and the New Holland tractor
division of Sperry, which was later merged with Ford Tractor. Ford also purchased a 30
percent share of Otosan, the automotive subsidiary of the Turkish KoX Group. The
attempted acquisition of the Italian car maker Alfa Romeo in 1986 failed, due to a rival
bid from Fiat

3. How Henry Ford involve in business

Henry Ford was nearly 40 when he founded Ford Motor Co. in 1903. At the time,
"horseless carriages" were expensive toys available only to a wealthy few. Yet in just four
decades, Ford's innovative vision of mass production would not only produce the first
reliable, affordable "automobile for the masses," but would also spark a modern industrial
revolution.
Ford's fascination with gasoline-powered automobiles began in Detroit, where he worked
as chief engineer for the Edison Illuminating Co. The automobile offered the promise of a
bright new future.a future Ford wanted to part of. So in 1891, Ford began devoting his
spare time to building what he called the "Quadricycle"-a crude contraption that consisted
of two bicycles placed side by side, powered by a gasoline engine. After working on the
Quadricycle for nearly a decade, Ford took Detroit lumber tycoon William H. Murphy for
a ride in his hand-built automobile. By the time the ride was over, they were in business.
The Detroit Automobile Company opened in 1899 with Ford as superintendent in charge
of production. But the venture only lasted a year. Ford could build a car, but he couldn't
build them fast enough to keep the company afloat. Undaunted, Ford hatched a new plan-
to build a racer. Ford saw racing as a way to spread the word about his cars and his name.
Through the notoriety generated by his racing success, Ford attracted the attention of the
backers he needed to start Ford Motor Co. in June 1903.
Ford set up shop in a converted wagon factory, hired workers, then designed and
produced the Model A, the first of which he sold to a Chicago dentist in July 1903. By
1904, more than 500 Model A's had been sold.
While most other automakers were building luxury-laden automobiles for the wealthy,
Ford had a different vision. His dream was to create an automobile that everyone could
afford. The Model T made this dream a reality. Simpler, more reliable and cheaper to
build than the Model A, the Model T-nicknamed the "Tin Lizzie" Hwent on sale in 1908
and was so successful within just a few months that Ford had to announce that the
company couldn't accept any more orders-the factory was already swamped. Ford had
succeeded in making an automobile for the masses, but only to create a new challenge.
How to build up production to satisfy demand. His solution? The moving assembly line.
Ford reasoned that if each worker remained in one assigned place and performed one
specific task, they could build automobiles more quickly and efficiently. To test his
theory, in August 1913, he dragged a chassis by rope and windlass across the floor of his
Highland Park plant-and modern mass production was born. At peak efficiency, the old
system had spit out a finished Model T in 12 and a half working hours. The new system
cut that time by more than half. Ford refined and perfected the system, and within a year
it took just 93 minutes to make a car.
Because of the more efficient production, Ford was able to cut hundreds of dollars off the
price of his car. Cutting the price enabled Ford to achieve his two aims in life-to bring the
pleasures of the automobile to as many people as possible, and to provide a large number
of high-paying jobs.
But there was one problem Ford hadn't foreseen. Doing the same task hour after hour, day
after day quickly burned out his work force. The turnover rate became such a problem
that the company had to hire close to 1,000 workers for every 100 jobs it hoped to fill. To
solve the problem, Ford decided to pay his employees $5 per day-nearly twice the going
rate. Workers flocked to Ford's gates.
His labor problems solved, Ford turned his attention to another matter-the issue of who
really controlled Ford Motor Co. Believing they were parasites who continually
interfered with his plans, Ford bought out all his stockholders in 1919. Free to lead the
company as he chose, Ford explored a number of different ventures. In addition to
building tractors and single-passenger planes, Ford also operated an early mail route and
the first regularly scheduled passenger flights. Undoubtedly the grandest of Ford's
ventures was The Rouge-a factory that was in itself one giant machine. Built on the
Rouge River, the 1,096-acre plant was the largest industry complex of its time.
SUCESSFUL CHARECTERISTIC

1. In Economy
Henry Ford made a big announcement that shocked the country. Ford employees would
begin paying $ 5.00 a day, over twice the average wage for automakers in 1914.In
addition, he was reducing the work day from 9 hours to 8 hours, a significant drop from
the 60-hour work week that was the standard in American manufacturing. the minimum
pay of $ 2.34 for a nine-hour day "Figure out how much more we can give our men."
Higher wages were necessary, Ford realized, to retain workers who could handle the
pressure and the monotony of his assembly line. In January of 1914, his continuous
motion system reduced the time to build a car from 12 and a half hours to 93 minutes.
But the pace and the repetitiveness of the jobs was so demanding, many workers found
themselves unable to withstand it for eight hours a day, no matter how much they were
paid.
But Ford had an even bigger reason for raising his wages, which he noted in a 1926 book,
Today and Tomorrow. It's as challenging as it a statement today as 100 years ago. "The
owner, the employees, and the buying public are all one and the same, and unless an
industry can so manage itself as to keep wages high and prices low it destroys itself, for
otherwise it limits the number of its customers. One's own employees ought to be one's
own best customers. "
It might have been just another of Ford's wild ideas, except that it proved successful. In
1914, the company sold 308,000 of its Model Ts-more than all other carmakers
combined. By 1915, sales had climbed to 501,000. By 1920, Ford was selling a million
cars a year.
"We increased the buying power of our own people, and they increased the buying power
of other people, and so on and on," Ford wrote. "It is this thought of enlarging buying
power by paying high wages and selling at low prices that is behind the prosperity of this
country."
In 1919, Ford raised his minimum wage again, this time to $ 6.00 a day. Again, the wage
hike produced higher production numbers. Ford told Garrett, "The payment of five
dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever
made, and the six-dollar-a-day wage is cheaper than the five. How far this will go we do
not know. "
 While it worked, though, Fords $5.00-a-day policy helped the company achieve record
profits. It made its cars affordable to its workers (who could purchase a Model T with
four months wages.) It helped put 15 million Americans behind the wheel of an
automobile. And it set a standard for wages that, despite all the predictions of doom for
the Ford Motor Company, every other car company eventually adopted.

2. In Psychology

Henry Ford found his career success by applying the values of mass production to the
automobile industry, essentially bridging two disparate fields. He rejected conventional
production methods that were only available to the very wealthy and tried a radical new
approach that democratized the automobile.
This is the place where creativity lives and thrives. Thinking outside the box is not
enough, because the way we think has been conditioned since birth, just like those kittens
raised with striped walls. Thinking outside the box generally amounts to coming up with
new thoughts while adhering to the same basic mentality.
Creativity is more than just new thoughts; its an entirely new way of thinking. Creativity
finds its basis in the integration of two or even multiple mentalities. It amounts to a
freedom of awareness.
It all comes down to paradigm identity. Paradigms are the thought and emotional systems
that determine how you function. Ones entire worldview is determined then by the
paradigm into which they have been indoctrinated. New thoughts are received and
assimilated or rejected based upon that paradigm identity. Each paradigm then is not so
much about new thoughts as it is an entirely new way of thinking a completely unique
way of observing, assimilating and interpreting information. Its a rare individual who is
capable of freely switching from one paradigm to another.

3. In Sociology

Ford completely changed the American society with his Model T car. As more and more
Americans bought this affordable necessity development patterns began to alter. Gas
stations were built, roads became finer and gradually the entire system became better
with the creation of the national highway system, the progression of suburbia and the
realization that it was possible to go anywhere at any time. It was Fords vision that led to
 a better lifestyle. Ford finally decided to diversify and so the Ford Model A was
introduced in 1927 which was also a success.

In the late 1930s because of Fords strict policies regarding smoking inside the premises
and labor organizers, he had to face internal labor problems that resulted in a huge strike
in 1941. The company faced a lot of turmoil however Henry Ford II managed to rescue
his fathers legacy. Henry Ford died in 1947 as a result of a cerebral hemorrhage.

REFERENCE
1.William A. Levinson, Henry Ford (2013). The expanded and annotated my life and work : Henry
Ford's universal code for world-class success. Boca Raton : CRC, 2013
2.Bak, Richard (2003). Henry and Edsel : the creation of the ford empire. Hoboken, NJ : John Wiley
3.Henry Ford (1998). Today and tomorrow. New York : Productivity.