Formal Authority, Reputation, and Performance

On February 6, 1968, Henry Ford surprised the automotive world by naming S.E. Knudsen, at the time the fourth-highest executive in General Motors, to the job of president of Ford Motor. Nineteen months later, on September 11, 1969, Ford fired Knudsen. Lightning struck a second time when, on July 14, 1978, Henry Ford fired Lee Iacocca from the presidency of Ford, in spite of considerable opposition to this move from board members, dealers, and even members of his own family. “ ‘Never complain, never explain,’ Henry Ford II says. Because his name is Ford, he usually doesn’t have to.”1 Although Henry Ford had power because of his control over resources, it was his position as chief executive, as well ...

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