History
Ferrari is a manufacturer of Italian sports cars, and is based in Maranello, Italy (2006). It was founded by Enzo Ferrari in 1929, and was orinally named Scuderia Ferrari (2006). During its initial years, the company sponsored drivers and manufactured race cars, but in 1946, it moved into the production of street legal vehicles, as Ferrari S.p.A (2006). Through the years, Ferrari has been celebrated for its unceasing contributions in the field of racing, specifically in Formula One, where it has been considerably successful (2006).
Development of the Organization
Enzo Ferrari as Founder of the Ferrari
When Enzo Ferrari established the Scuderia Ferrari in Modena, his main objective was to organize racing for its members (2006). This, then, was the birth of a rigorous participation in motor racing, which led to the formation of an official car and motorbike team racing (2006). Eventually, Scuderia Ferrari became the engineering-racing section of Alfa Romeo; consequently, in 1933, the entire racing function was taken over by the company (2006).
In 1940, Enzo Ferrari left the Alfa Romeo because of the company’s proposal to absorb and take possession of the Scuderia Ferrari, along with his racing efforts (2006). When he quit Alfa, he was held back with the agreement that he will not be able to make use of the name Ferrari in any event connected to racing or racing cars (2006). But Ferrari was determined that one day, he would defeat the very team that he developed for almost 20 years (2006). Thus, Scuderia was briefly transformed into Auto Avio Costruzioni Ferrari, a company that supposedly manufactured machine equipments and aircraft tools (2006).
In 1943, the Ferrari factory was transferred to Maranello, where it has stayed since (2006). During the second world war, the factory was bombed but was immediately reconstructed (2006) to include production for road cars. Then in 1960, the company became a joint stock firm (2006). In 1969, upon the realization that an influential business partner is necessary in the automotive sector, to assure the company’s successful industrial expansion, the Fiat became Ferrari’s 50% partner (2006).
In 1987, the F40—the last car under the creation of Enzo Ferrari—was manufactured, and on August 14, 1988, Enzo Ferrari died at the age of 90 (2006).
Luca di Montezemolo as Present CEO of Ferrari
Luca Cordero di Montezemolo was born on August 31, 1947, in Bologna (2006). From 1873 to 1977, he took the role as the assistant of Enzo Ferrari and, later, as Team Manager of the Scuderia Ferrari (2006). From 1977 to 1981, he became the Director of External Relations for the Fiat Group (2006).
In 1991, the Chairman of FIAT, Gianni Agnelli, assigned di Montezemolo as president of Ferrari, which has become unproductive due to Enzo Ferrari’s death (2006). In the 1990s, di Montezemolo restored the road car production of Ferrari from severe debts to secure profits (2006). In 1997, he also became the president of the Maserati, which FIAT acquired in the mentioned year (2006). And from May 2004, di Montezemolo also became the president of the Association of Italian Industrialists or Confindustria (2006).
Figure 1. Ferrari’s Organizational Chart
Structure and Design
As was mentioned and illustrated above, Luca di Montezemolo is the current President and CEO of Ferrari. Along with him are his other associates, Jean Todt, Amedeo Felisa, Giancarlo Coppa, Mario Almondo, Antonio Ghini, and Giulio Zambeletti.
Jean Todt is a part of the Ferrari S.p.A Board of Directors, is Ferrari’s General Manager, and is therefore accountable for all the sporting activities of the company (2006). Amadeo Felisa is appointed Vice General Manager of the organization and is also the Head of the Granturismo Department. With these positions, he administers the processes of “planning, development, production, sales and assistance of road cars (2006).” Moreover, he is in charge of synchronizing the product development of Ferrari and Maserati, since these two brands have diverse market positions (2006).
Giancarlo Coppa is the head of the Finance and Control Administration Department (2006). Consequently, he devises strategies utilized by the company, as well as administers the “planning, budgeting, company reports, profit and loss balance sheets, and planning of the budget flow (2006).” Moreover, he supervises the dispensation of the public balance sheet and the associated tax returns (2006).
Mario Almondo is the chief of Personnel and Organization, whereas Antonio Ghini leads the Department of Communication and Brand Management. Accordingly, Ghini, as director of a team of staff, is in charge of the communication activities in various departments (2006). He also manages the official website of the company, and is responsible for different press relations (2006). Hence, he guarantees the definition of communication, corporate image, and identity guidelines and norms of the company (2006).
Lastly, Giulio Zambeletti is tasked with the position of Brand Development and Partners (“Guilio Zambeletti,” 2006).
Personality Type of Luca di Montezemolo
Organizational behavior, akin to psychology, sociology, cultural anthropology, economics, and political science, is a social science discipline (Miner 2002, p. 3). Its focus is on world organizations, and is mainly concerned on two matters—the behavior and character of the individuals within organizations, and the behavior and character of organizations within their environments (Miner 2002, p. 3).
One useful descriptive model of personality is the Five Factor Model of Personality, also termed as the Big Five (“Big Five Personality Traits,” 2006). The Big Five categorizes an individual’s personality into five features or aspects of personality traits—neuroticism, extraversion, agreeableness, conscientiousness, and openness to experience.
Neuroticism an individual’s inclination to feel negative emotions such as anger, anxiety, vulnerability, and depression, whereas extraversion is the measure of one’s energy and inclination to seek motivation from others (“Big Five Personality Traits,” 2006).
On the other hand, agreeableness is a person’s inclination to be sympathetic and helpful as oppose to being distrustful and aggressive towards other people (“Big Five Personality Traits,” 2006). While a person who has conscientiousness employs self-discipline, strives for success, and acts obediently. Lastly, a person who is open to experience has high appreciation for arts, is imaginative and intellectually curious,
are more aware of their feelings, and tend to hold unconventional and individualistic beliefs (“Big Five Personality Traits,” 2006).
Assessment of President di Montezemolo’s Personality Type
It can be observed that di Montezemolo does not have high levels of neuroticism since he is not emotionally reactive and has the capability to make sound decisions and effectively handle stress. Moreover, the Ferrari CEO also exemplifies conscientiousness because he is able to persevere and devise clever plans for the organization.
For instance, a successful company such as the Ferrari is also faced with various crises. One example of such is its difficulty with its connection to the Formula 1 races (2004). According to di Montezemolo, “we are coming to the end of an era in terms of the way we present our sport to the public (2004).” He added that the Ferrari teams received only 47% of the TV rights money; with such an amount, they would not be able to endure, and they need to struggle to obtain the finances necessary to race in the following year (2004).
To answer this issue, di Montezemolo suggested that changes be made with the current Formula 1 (2004). Moreover, he proposed that further study of the situation is also necessary, since they could no longer rely on their current strategies, such as cost cutting (2004). Amidst all these difficulties, he did show anger or excessive anxiety over the situation; in fact, he even congratulated the efforts of the Scuderia and the company’s drivers and suppliers, in the mentioned year (2004).
Moreover, President di Montezemolo may be perceived as an individual with high levels of extraversion. This may be proven by the fact that he usually holds and attends festivities with his associates and friends. For instance, in the year 2004, he attended the annual Christmas party for Ferrari together with more than a thousand individuals, the staff of Gestione Sportiva, the key delegates of the Gestione Granturismo Ferrari, and the organization’s other partners and sponsors (2004).
During this party, di Montezemolo surely attracted the attention of the people in a positive way; he proudly acknowledged the efforts exerted by the people, and the families, behind the success of his company (2004). Moreover, he expressed enthusiasm towards an action-oriented goal for the employees of the Ferrari to continually be motivated and work together to further the development of the organization (2004).
On the other hand, di Montezemolo also has an introverted side in his personality. As indicated in the article, Italian GP – Montezemolo: We Need to Change the Current Formula 1 (2004), the Ferrari president is not a regular visitor to the race tracks; he prefers to stay at home and watch on television. Still, during important events, he sees to it that he would go to the race track to watch the actual episodes (2004).
In addition, President di Montezemolo is also highly agreeable, since he is optimistic and considerate, as is proven by the success of his company. Moreover, he is greatly generous and he values the wellbeing of other people, especially the underprivileged.
This trait of di Montezemolo is proven by the fact that he does not forget his social corporate responsibility amidst the prosperity of his organization. To illustrate, in the year 2005, di Montezemolo auctioned the 400th “Enzo” which is a car specifically created to be sold for charity (“Ferrari Delegation Received in Private Audience by Pope Benedict XVI,” 2005). The CEO of Ferrari presented to the Holy Father, Pope Benedict XVI, a cheque worth 950,000 Euro, which would be allocated for humanitarian purposes (“Ferrari Delegation Received in Private Audience by Pope Benedict XVI,” 2005).
Aside from these, it is also proven that the Ferrari President and CEO has high level of openness to experience, because the field he excels in requires a creative and highly innovative spirit. Ferrari is a leading manufacturer of Italian sports car, and for this company to flourish, ingenuity and inventiveness of the people who propel its success are vital. To promote the aforementioned traits, Ferrari, together with Pininfarina, held a contest entitled “New Concepts of the Myth,” so as to explore car designers for the future, from 13 countries all over the world ( 2005). Four winners were then chosen, all of which would have the chance to work at Ferrari’s or Pininfarina’s Concept Design’s Department ( 2005).
With this example, di Montezemolo showed his appreciation for the contestants who displayed refreshing alternatives to the globally celebrated forms of the present and prior mid-engined twelve cylinder vehicles, while the identifiable characteristics and traits of the Ferrari Marque are still retained ( 2005).
Organizational Structure
Although various organizations differ in a number of ways, there are similarities that allow their classification (1998). One such categorization is the twofold system, developed by Tom Burns and G.M. Stalker, which involves the mechanistic versus organic forms of organizational structure (1998).
The Mechanistic Structure is a traditional design and is usually applied in medium- and large-sized companies (1998). Such structure is characterized by rigidity, since it consists of clearly delineated works, has a distinct hierarchical structure, and greatly depends on the formal sequence of command for control (1998).
Bureaucratic companies are usually the organizations that have mechanistic structures (1998). These organizations are tall, and are composed of hierarchies with various levels of management. Bureaucracies are characterized by a command and control method, wherein supervisors have the ability to direct and control other employees of the organization (1998). Other traits of such an organization are useful division of labor and work specialization (1998).
In contrast, an Organic Structure is less focused on a clearly outlined structure, is more flexible, and could easily adapt to a participative type of management (1998). Furthermore, such structure opens the organization to its environment so as to make the most of out of new prospects (1998).
Organic organizations promote a flat structure, with one or two stages of management (1998). Flat organizations are decentralized, thus managers tend to have a more personal affiliation with his or her associates (1998). Moreover, such organizations aim to involve employees in important decision making processes that would result to a quick reaction to customers’ needs and quick flexibility to changes in the business setting (1998).
Ferrari, as an organization, is utilizes both the mechanistic and organic structure of organization. Since Ferrari is a large company and is composed of numerous employees, it is only practical to employ a rigid hierarchical structure in order to have an efficient flow of command, from the CEO, to his key colleagues, and towards the other associates of the organization.
Moreover, as can be seen in the organizational chart illustrated above, rigid departmentalization exists in Ferrari. As a consequence, the corporation’s human resources work independently and specialize in one undertaking. For instance, one staff member—Jean Todt—is the organization’s General Manager. Accordingly, he specializes in matters that concern the sporting activities of Ferrari (2006).
On the other hand, Ferrari also applies an organic organizational structure, because although hierarchy in the company is definite, the employees could still participate in the important processes within the organization, such as making decisions that concern the organization, its partners, and its customers. This occurs because president di Montezemolo, along with the other individuals that belong in different departments, could still communicate with the other associates regarding matters that concern the organization’s efficiency. This is exemplified by Ghini’s task to oversee the interaction and consultation that occurs among the various departments of the organization (2006).
Advantages and Disadvantages of the Structure
The application of both organic and mechanistic organizational structures in Ferrari leads to advantageous and disadvantageous results for the company. For example, since Ferrari is a large organization, a mechanistic structure is ideal for its effective performance. According to (2002), employees in organic organizations have a tendency to frankly or implicitly reject the attempts of authorities to exercise control over them (). Fortunately Ferrari employs a definite flow of command, from its key officials to the other members of the organization. That way, the knowledge and proficiency possessed by the key officials will be acknowledged within the company.
On the other hand, it is also beneficial for Ferrari to make use of an organic structure because the interaction that occurs among the organization’s employees is composed of recommendations and information, rather than of directives and conclusions; therefore, consultation exists in Ferrari, instead of command ( 2002).
Consequently, the combined organizational structures results to employees’ obedience to superiors and the devotion of all the members of the organization, as well as the staff’s dedication to their responsibilities and to the technological culture of material development and growth ( 2002).
In contrast, such a structure could also be detrimental for Ferrari. This could happen when employees in a mechanistic organization could not fully adapt to their environment, because of their commitment to their own sections or departments ( 2002).
On the other hand, it would also be unhelpful for Ferrari if formal hierarchy within the organization is not strictly followed by its members. As stated by (2002), uncertainty and deficiency of structure could cause anxiety for many (); in an organization that is as prominent as Ferrari, such a situation is not acceptable because this could lead to catastrophe. This is the reason why supervisors still frequently require a better extent of structure ( 2002).
Organizational Culture
Organizational culture, also known as the corporate culture, is the set of norms, values, artifacts, and assumptions, shared by individuals and groups who belong in organizations (2006). These influence the members of the organization with regard to how they relate with one another, as well as with stakeholders in the external environment (2006).
An organization’s culture is exposed at three interrelated levels—values, artifacts, and basic assumptions (2002). Values exist to guide employees for them to exhibit suitable behavior towards each other and during certain circumstances (2006). For a newcomer, these values are difficult to see, but he or she may be able to learn through observation of veteran employees (2002).
On the other hand, artifacts are the physical manifestations of an organization’s culture, which is why it is immediately visible to a new employee (2002). Artifacts consist of the organization’s honors, products, apparent ceremonies and rituals, stories and myths, and the like (2002).
These artifacts could be easily altered, as compared to the less visible levels of the corporate culture—the norms and basic assumptions of the human resources in an organization (2002). These are usually instituted by the founder of the organization or by the top administrative team in the company, and are therefore inclined to continue over time and are also resilient to change (2002).
With the case of Ferrari’s artifacts, it has already won numerous awards in the field of car manufacture and racing. For instance, in the year 2005, renowned automotive journal—Auto Moto und Sport—awarded Ferrari’s new F430 the Auto Motor und Sport Readers’ Poll under the category of “Best Cars (2005).” Also in 2005, two Ferrari models, F430 and 430 Spider, were voted as Best Imported Supersports Car and Best Imported Cabriolet, respectively, in the German magazine Auto Zeitung (2005).
As for the Formula 1 races, Ferrari is recognized as the oldest and most successful team in the championships. From 2005, the team already won fourteen titles in the World Drivers Championship, fourteen more in the World Constructors Championship, 179 triumphs in the Grand Prix, and much more (2006).
Evidently Ferrari’s produces cars meant for racing and even for street use. Some examples of Ferrari cars manufactured by the company are the Ferrari F2006, Ferrari F40, Ferrari 612 Scaglietti, the Evoluzione, Ferrari Enzo, Ferrari Testarossa (“Ferrari Turbo,” 2006), and so on. All of which exemplify high quality and excellent standard to satisfy the consumers.
Another famous artifact of the discussed company is the logo of the Ferrari race team. It is illustrated by a black prancing horse behind a yellow background in the shape of a shield (2006). Usually written on it are letters S and F which stands for Scuderia Ferrari, while three stripes colored green, white and red are on top of the logo, to symbolize Italy’s national colors (2006).
Such is the story behind the Ferrari symbol—on the 17th of June, 1973, Enzo Ferrari raced at a Savio track located in Ravenna, and won (2006). Here, he was introduced to Countess Paolina who is the mother of Count (2006). Baracca was a state hero in the first World War, who used to paint the surface of his planes with a horse (2006). Countess Paolina then told Enzo to do the same on his own cars, because she believed that it would bring him good luck (2006). Ferrari did so, allowed the horse to remain black, but included a canary yellow backdrop since this is the color of his birthplace, (2006).
The first race that used the logo on the Alfa Romeos that were entered by the Scuderia Ferrari, won the Spa 24 Hours on July 9, 1932 (2006). Ever since, the symbol was shown on the racing cars that contended against the Mercedes-Benz’s Silver Arrows, among others (2006).
Organizational Change
If one were to scrutinize various organizational changes, diverse goals would appear to exist (1970). For instance, the most frequent objective can be classified under the labels of increased innovation, enhanced motivation, more effective performance, acceptance of modern techniques, improved cooperation, and the like (1970).
Behind these evident objectives are two overachieving goals—to change an organization’s ability to adapt to the environment, and to change the employees’ internal social patterns (1970). Organizations constantly struggle to better adjust to the outside environment (1970). But since the management of companies cannot entirely supervise their environment, they have to continuously initiate internal modifications so as to more effectively cope with new challenges brought about by enhanced competition, technological advancements, or vital social demands (1970).
The second objective of organizational change becomes evident if one realizes that the level of adaptation of an organization does not experience development, unless its human resources behave differently (1970). In connection to this, it should be noted that to experience the effects of organizational changes, the performance patterns introduced should not only transpire in superior-subordinate associations, but also between departments, and even the larger subsystems (1970).
Ferrari, as an organization, has already experienced changes more specifically transformations that concern the internal dealings in the company as well as external matters. For example, after years of collaboration with , Enzo Ferrari quit Alfa because he did not want Scuderia Ferrari to be absorbed by the company (2006). Another example is when the organization decided to pursue a partnership with Fiat, as well as with the Mediobanca, Commerzbank, the Lehman Brothers and Piero Ferrari, Enzo’s son (2006).
At present, more changes are needed towards the further success of the Ferrari. An example of which is di Montezemolo’s suggestions with regard to Ferrari’s collaboration with the Formula 1 races. According to him, modifications have to done because problems already exist with regard to financial matters and the Ferrari racing team (2004). To answer this, Ferrari president and CEO plans to conduct further study of the situation at hand since the current strategies devised in his company are no longer efficient (2004).
Such previous and future changes prove to be effective for the organization, since it is quite evident that after years of existence, the Ferrari is still one of the most prestigious and highly acclaimed company in its respective field.
Assessment
Presently, the Ferrari continues to be successful in its field due to the intense and passionate efforts of the people behind this prestigious organization. Moreover, these people who operate in their specialized fields also possess the vital characteristics to continually uphold the Ferrari’s triumph over relentless threats.
Also, along with these is the effective construction of the organization, which proves to be beneficial to the development of the organization. Furthermore, positive corporate culture as well as effective adaptation to persistent changes cause Ferrari’s further development as manufacturer of Italian sports cars.
Unfortunately, challenges to the Ferrari still exists, in the form of constant internal and external risks. It is therefore recommended that disadvantages to the organization mentioned within this essay be reduced or even eradicated, through the joint efforts of the Ferrari’s human resources, key employees, and current CEO and President,
Credit:ivythesis.typepad.com
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