project management lessons learned from a global project
Last century, Ford Motor Company created a massive international project to start a new rubber plantation in the Amazon region of Brazil called Fordlandia. Principles of global project management, and specifically culture and managing projects across cultures will be covered. The areas covered will be why understanding culture is important, the cultural iceberg, and six rules of thumb for doing business across cultures. From this project, many valuable lessons can be learned and applied to our global projects today. Lessons learned are discussed from the perspective of the nine Knowledge Areas in A Guide to the Project Management Body of Knowledge (PMBOK® Guide), culture, and the PMI Code of Ethics and Professional Conduct.
Project managers today are challenged by managing projects across different cultures and in different countries. Project managers need to understand the principles of global project management and understand the impact of culture on projects. Project managers also need to study the lessons learned from other global projects. George Santayana said, “Those who cannot remember the past are condemned to repeat it” (Boehm, 2006, p.12); thus, the Fordlandia project in Brazil by the Ford Motor Company will be covered to demonstrate learn lessons that can be applied to global projects today.
Global projects add several additional layers of complexity compared to traditional projects performed in one country. Some of those challenges include dealing with multiple physical locations, currency exchange, regulations and laws, political instability, attitudes toward work and time, religion, language, and food (Marchewka, 2012). Currency exchange, regulations, and laws can usually be addressed with straightforward research, whereas many of the other challenges have more to do with culture, which can be more difficult to address.
What is Culture?
One of the most important aspects of global project management is culture. In International Business: The Challenge of Global Competition culture is defined as the “sum total of beliefs, rules, techniques, institutions, and artifacts that characterize human populations.” (2002, p. 303) Exhibit 1 shows the Cultural Iceberg, where surface culture is the visible things above the water that everyone sees and what usually comes to mind, such as folk culture. Below the water are unspoken rules and even deeper are the unconscious rules. Similar to the Titanic, when managing projects, it is what we do not realize is below the water that usually gets us into trouble.
Exhibit 1 – Cultural Iceberg (Stewart, 2006).
Six Rules of Thumb for doing business across cultures
International Business: The Challenge of Global Competition provides Six Rules of Thumb for doing business across cultures (Ball, et al. 2002, pp 301–302):
- Be Prepared
- Slow Down
- Establish Trust
- Understand the Importance of Language
- Respect the Culture
- Understand Components of Culture
Similar to the Boy Scout motto, being prepared means that you do your homework and research the countries and cultures that you will be managing a project in. Today, in addition to books and articles, there is a wealth of information about other cultures available on the Internet. Americans often need to slow down and understand the members of the culture and take time to explain their own intentions. This also leads into the third rule of taking time to establish trust, especially when in other cultures where relationships may be more important than just facts or taking action.
Language is very important and goes beyond just the words and also includes tone, infliction, and non-verbal cues, such as gestures. “While it is a great benefit to Americans that English is the common global language of business, always be careful to talk slower, as others may be interpreting it as a second (or third) language. Also remember, it is usually easier to speak in a second language than it is to listen and fully comprehend” (Stewart, 2006, pp 2–3). When traveling in another country always respect the culture by remembering who the foreigner is. As the old saying goes, “When in Rome, do as the Romans do.” Finally, take time to understand the various components of culture.
Ford Motor Company
In 2011, Ford Motor Company had revenue of US$136 billion (www.ford.com). Ford Motor Company was started by Henry Ford with US$28,000 of cash in 1903. Ford Motor Company had become one of the most powerful companies of the early 20th century, thanks to their implementation of the assembly line making the Model T. In 1927, Ford Motor Company stopped making the Model T and spent US$250 million converting their factories to make the new Model A (Grandin, 2009). Just as earlier, leading the auto industry with the innovation of the assembly line, Ford Motor Company was also now innovatively leading with virtual integration. An example of this was the River Rouge Complex making its own steel instead of buying it from suppliers.
Henry became the world's wealthiest man and at times was also considered the world's most controversial one (Collier & Horrowitz, 1987). In addition to the assembly line and vertical integration, he also introduced the US$5 day wage and reduced the work day to 8 hours (Jardim, 1970; Ford Motor Company & Crowther, 1923). He also arranged plant shutdowns (such as for new-year models) around the time when workers could harvest crops. Another innovation was creating village industries, combining factories, with logging and hydroelectric plants and agriculture throughout Michigan (Grandin, 2009). Ford Motor Company proposed to take the village industries to a much larger scale with his Muscle Shoals project in the Tennessee Valley, which did not receive government approval. Ironically, the U.S. federal government then did their own very similar project with Tennessee Valley Authority based on Henry Ford's proposal.
Fordism can be defined as a paternalistic approach providing higher wages for workers, utilizing innovative manufacturing processes. One purpose for the higher wages was to enable the workers to buy the products they build. A simpler definition of Fordism was providing cheap goods and high wages to the masses (Jackson, 2008). Another innovation Henry Ford can be credited with as a leader was hiring a diverse workforce (Grandin, 2009).
Henry Ford was successful in many areas beyond the automobile industry, including turning around a bankrupt Michigan railroad, improved coal mining technology, and innovative new glass-making techniques (Galey, 1979). In the 1920s, Henry Ford received more press coverage than any American other than President Calvin Coolidge (Grandin, 2009). Every new venture and project Henry Ford attempted appeared to be successful.
Brazil and the Amazon
Brazil is the size of the contiguous 48 states of the United States. The Amazonian region contains about 60% of Brazil's national territory, while containing only 12% of the population (Fujita, 1998). The Amazon is famous for being wild, diverse, and a place of adventure. Amazon legends include the disappearance of explorer British Colonel Percy Fawcett in the search of the lost city of Z, El Dorado with the Indian king so rich that he powdered himself with gold, and Theodore Roosevelt's life-threatening jungle expedition described in Through the Brazilian Wilderness (Grandin, 2009).
Fordlandia is the Portuguese word for Fordville. Fordlandia is located along the Trapajos River in the Brazil state of Para. Henry Ford wanted to apply his vision of mass production and social order to the rubber industry by creating a rubber plantation, where the plant was first founded (Soluri, 2011).
The Rubber Market
In 1839 in Woburn, Massachusetts, USA, Charles Goodyear invented the process of the vulcanization of rubber. This solved the problem of the instability of rubber, and transitioned it from a novelty item to a valuable material used in everything from erasers to gaskets for large steam engines (Jackson, 2008). Wild rubber from the Amazon originally dominated the world market and experienced a boom from 1890 to 1913. In 1908, the Amazon provided over 94% of the world's rubber, but by 1918 its market share had dropped to less than 11% and was barely more than 2% by 1928 (Galey, 1979). Rubber trees worldwide occupied less than 1,000 acres in 1900, increasing to 300,000 by 1915, and an estimated 1,300,000 by 1930 (Soluri, 2011). The product the rubber trees actually produce is latex, which comes from the Portuguese (and Spanish) word for milk.
Henry Wickham was a British explorer who smuggled 70,000 rubber seeds from the Amazon back to England (Jackson, 2008). From there seedlings were planted in Malaysia, Africa, and other tropical climates throughout the then colonies of the British Empire. Wickham was knighted and became Sir Henry Wickham, but in Brazil he was considered a bio-pirate and the executioner of the Amazon.
The British Stevenson Plan in 1922 formed a cartel with British and French rubber plantations in Asia. This created an artificial rubber shortage and correspondingly inflated the price on the international market. This significantly impacted the United States, which consumed over 70% of the world's rubber supply (Galey, 1979). Herbert Hoover, then the U.S. Secretary of Commerce, first urged the United States to grow its own rubber supply to remove this dependency. He also sent a team down to investigate the Amazon and the potential of working with Brazilian authorities.
Firestone Tire Company built a large plantation in Liberia (Soluri, 2011), and Goodyear built plantations in both Sumatra and the Philippines (Galey, 1979). Henry Ford wanted a closer source than Asia or Africa, so he first had his friend, Thomas Edison, explore the possibility of growing rubber in the United States. The Florida Everglades were also considered for a rubber plantation. The Everglades, in addition to being logistically closer and easier, would have avoided the cultural and legal issues Ford Motor Company later faced in Brazil. When Edison was not successful in this endeavor, Henry Ford next moved on to Brazil in the Amazon.
Fordlandia as a Project
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) defines a project as “a temporary endeavor undertaken to create a unique product, service, or result (PMI, 2008, p. 442). Fordlandia was temporary endeavor with a beginning and an end. It was definitely unique for a U.S. company to create a large-scale rubber plantation in the Amazon. Henry Ford was the project sponsor of the Fordlandia project. Based on his autobiography, A Man and His Life (published in Portuguese in 1926) and reputation, Brazilian officials had great faith in Henry Ford, which the project initially benefited from. Brazil's consular inspector Jose Custodio Alves de Lima called Henry Ford the “Moses of the twentieth century who will turn the Amazon into the Promised Land” (Grandin, 2009, p.79).
Henry Ford promised to transform the world's rubber industry with the project, develop the state of Para, and that the company would manufacture tires and other rubber products in Brazil (Galey, 1979). 1927, Ford Motor Company bought a tract of land the size of Tennessee, 2.5 million acres (Galey, 1979). Henry Ford would also attempt to export middle-American life from Michigan to the Amazon rain forest.
Ford Motor Company paid US$125,000 for the 2.5 million acres in the Brazilian state of Para, and renamed the village of Boa Vista (Portuguese for “beautiful view”) to Fordlandia. Para offered to forgive the taxes for 50 years in return for 7% return on all profits after 12 years (Jackson, 2008).
Lessons Learned from the Fordlandia Project
One of the first things a project manager should do when considering and starting a new project is to look for lessons learned from similar types of projects. Ford Motor Company should have studied other global projects in Brazil and Latin America. The 226-mile Maderia-Mamore Railroad was completed in western Amazonia, Brazil in 1910. The railroad exceeded the proposed budget, costing US$33 million in which European investors alone lost US$10 million (Galey, 1979). In addition to the financial losses, the death toll for the project was 3,600 men who died from yellow fever, malaria, and other causes (Gauld, 1964). Another project Ford Motor Company could have learned lessons from was the Panama Canal. A French company started the project in 1870, but eventually went bankrupt due to budget overruns and sold the project to the United States in 1903. In addition to the financial problems, the initial project suffered from technological challenges and health problems such as malaria. After taking over the project, the United States would go on to complete it in 1914 (Cleland & Garies, 2006).
Attempts had been made by European companies in the 1890s to implement rubber plantations in the Amazon. These projects had failed due to poor management, labor shortages, and yellow fever (Galey, 1979). These failed projects led “European authors to portray the basin as the true heart of darkness” (p. 265). Henry Forld felt “history was bunk” and would go on to say “history is bunk – bunk – double bunk, why it isn't even true” (Grandin, 2009, p. 252). This position was very much opposed to that of George Santayana's “those who cannot remember the past are condemned to repeat it” (Boehm, 2006, p. 12). Therefore we see Henry Ford and the Ford Motor Company were not willing to learn lessons from the projects before them, and thus were condemned to repeating some of the same mistakes.
Henry Ford felt that “what the people of the interior of Brazil need is to have their economic life stabilized by fair returns for their labor paid in cash and their mode of living brought up to modern standards in sanitation and cure of disease” (Grandin, 2009, p.16). Thus, in addition to being a construction and agriculture project, Fordlandia was also a social engineering project to which Henry Ford was deeply committed.
Ford Motor Company brought electronic appliances, sidewalks, and Cape Cod–style houses based upon Michigan to Fordlandia. Nine thousand acres of dense forest were cleared between 1928 and 1934. Much of the lumber was useless due to excessive moisture and hardness. The same types of trees seldom grow together in the Amazon, with a single acre containing dozens of different types of trees. This made the clearing much more difficult and did not allow Ford Motor Company to receive the financial benefit they thought they would receive from the lumber.
Captain Einar Oxholm, with his two ships the Ormoc and the Farge, brought most of the equipment and supplies to create Fordlandia. By the early 1930s, the physical plant at Fordlandia had:
- extensive and comfortable employee housing
- schools with Brazilian teachers using Portuguese
- a hospital with modern and sophisticated equipment
- a power plant
- sanitary water supply
- 30 miles of road
- sawmill with 25,000 board foot capacity
- five soccer fields
- movie theatres
- water tower and indoor plumbing
- along with plans for a city of 10,000
By the time Thomas Edison had failed to produce domestic rubber, the Stevenson Plan had also failed due to the Dutch and native Asian growers refusing to cooperate with the cartel (Galey, 1979). Henry Ford could have still canceled the project, but after the failure for approval of the Muscle Shoals project, and the past successes of village industries in Michigan, he pushed forward with the idea of implementing his type of village in the Amazon. Based on all of his past successes, Henry Ford felt the efficiencies of Fordism would make the new rubber plantation in the Amazon also a success.
Multiple times Henry Ford ignored the seasonal calendar and instead pushed forward based on his own personal calendar and desire to make things happen. First, Captain Oxholm recommended waiting for the rainy season to bring the Ormac and Farge up the Amazon and Trapajos Rivers. But Henry Ford demanded they not wait, so all of the equipment and supplies had to be moved to barges to get it to Fordlandia when the Trapajos River was low. Optimal times for clearing land and planting based on the agricultural calendar were also ignored in the interest of satisfying Henry Ford's timeline. In Henry Ford's world of manufacturing efficiency, speeding up time was all that mattered, whereas in the agricultural world, the seasonal calendar must be adhered to.
It takes eight years for a rubber tree to grow to where it can produce latex. Therefore, even under the perfect climate and other conditions, it would take eight years before profit could be seen from the plantation. Due to contractual requirements to have so many trees planted in a certain time, inferior seeds were used and rubber trees were hastily planted, which soon ended up dying.
A key part of Fordism was that workers were often paid twice what they were paid in other jobs, which allowed them to buy the products they were producing. In Fordlandia there were no products actually being produced, and workers needed places and things to spend their money on.
The project continued to spend more and more money with a minimal amount of lumber being exported. The concept of sunk cost should have been applied sooner, meaning disregarding the amount of money already spent, but instead focusing on what additional money would need to be spent, and what the expected return would be. Once it was determined that this was not favorable, the project should have been canceled (Marchewka, 2012).
Ford Motor Company found it easier to burn land than to clear it as originally planned. Agricultural techniques utilized were inappropriate for the local soil (Duarte, 2000). In the Amazon, wild rubber grows best with only a few trees per acre, which keeps the bugs and blight at bay. Ford Motor Company planted dense groves that attracted blight and led to an ecological disaster. Caterpillar problems were temporarily solved by sauva ants, but then after eating the caterpillars the ants started eating the rubber trees. Later the ants quit eating the caterpillars, leaving both to destroy the rubber trees even faster. Perhaps the biggest quality issue was trying to grow rubber in the Amazon plantation style, where in the past it had only grown in the wild.
Brazilians feared foreigners might seize the Amazon area for its resources and living space. Due to the boom and crash of the wild rubber in the 1900s, the northern states lost their main source of income from rubber export taxes (Galey, 1979). The northern states had borrowed money during the boom, but then had to default on loans after the crash. Political risk emerged as Getulio Vargas overthrew the Old Republic and came to power in 1930 (Grandin, 2009). Despite the company eventually building a cafeteria and hospital, in the first two years, 92 people died from malnutrition, snakebites, malaria, and yellow fever.
Since the Ford Motor Company employees were accustomed to building factories, they clear cut the forest, burned the underbrush, and bulldozed everything flat. This depleted the thin layer of soil and nutrients on which the tropical forest depended. The Amazon is a rain forest, where the forest itself creates the rain, so “by cutting down the trees in hopes of introducing a machine like predictability, Ford Motor Company might well have created a desert instead” (Jackson, 2008). Rubber had grown in the wild in the Amazon, and by clearing the land and planting the trees close together plantation style, blight had now become a problem. By communicating better with and listening to the local Brazilian guides and translators, these mistakes could have been avoided.
Most U.S. workers never mastered Portuguese. A running joke among Brazilians on the plantation was “What do Americans learn how to say after their first year in the Amazon? Uma cerveja (a beer). After two years? Duas cervejas (two beers).” (Grandin, p.194)
As part of Henry Ford's cradle to grave paternalism, lots of benefits were provided to workers at Fordlandia. Benefits included free homes, free medical and dental care, recreational facilities, and wages at double or more than what they would have received elsewhere. The benefits ranged from soy milk provided for babies to burial in the Fordlandia company cemetery. Soy milk was provided because Henry Ford despised dairy cows, calling them the “crudest machine in the world” (Grandin, 2009, p. 60). Like in Michigan, Ford Motor Company encouraged employees to grow vegetables in their own gardens. Proper hygiene was promoted along with square dancing.
Henry Ford pushed a healthy diet for the workers, which they did not always appreciate. Prohibition was probably the most unpopular of Ford's policies, and the enforcement was not successful. The traditional tappers of the wild rubber in the Amazon worked at their own leisurely pace. During the rainy months, they might not even work at all, just resting for days in their hammocks (Grandin, 2009). Therefore, the concept of time clocks and the company whistle were also unpopular, which led to conflict with workers (Duarte, 2000). There was also a cultural clash due to the volatile mix of Anglo managers overseeing Indian workers and Afro-Caribbean migrants (Citino, 2001). Things finally boiled over after a change in the cafeteria system, when workers wrecked the cafeteria and rioted with guns and machetes, and some even shouted “kill all of the Americans.” The U.S. staff escaped on company boats in the Tapajos River until Brazilian troops arrived. Ford Motor Company believed the riots were due to professional agitators. Henry Ford was opposed to unions, as he felt “people can be manipulated only when they are organized” (Grandin, 2009, p.72). Para Governor Joaquim de Maghaleaes Barata berated the rioters saying “you'd better get down on your knees and thank God for the benefits the Ford company has brought you” (Galey, 1979, p. 277).
The Ford Motor Company negotiated a contract with the state of Para, but failed to have it ratified by the Brazilian federal government. The most critical point was the import tax exemption. Ford Motor Company assumed this would apply to all of the equipment and supplies they would bring in, but the federal authorities took a much more limited view and interpreted it to mean only the equipment and supplies to be used in the manufacturing of tires.
The state of Amazonas was jealous of the state of Para getting the rubber plantation. To seek revenge, the governor of Amazonas confiscated 24 boxes of rubber seeds from Mato Grosso. They falsely accused Ford Motor Company of trying to export the seeds to California or the Philippines. The Brazilian Supreme Court originally ruled against Ford, and later reversed their decision, but by that time it was too late and Ford Motor Company was forced to use inferior rubber seeds from Para (Galey, 1979). Another problem with the location of Fordlandia was that it was too far from other Amazon settlements to reasonably purchase supplies
The initial project manager was a Ford Motor Company man with no agricultural experience, and out of 2.5 million acres he chose a hilly location, making rubber cultivation and erosion control difficult. That project manager soon quit, and Henry Ford chose Captain Oxholm, a Norwegian sea captain from the two ships (Ormoc and Farge) that brought the equipment and supplies from Michigan to take over as project manager. Henry Ford chose him because of his integrity, an admirable trait, but Oxholm knew nothing about agriculture or how to build a plantation and a town. While being honest he was also naïve and was often taken advantage of and overcharged by Brazilian and European entrepreneurs in Para. Oxholm managed the project for two years, and after that he was replaced by two different project managers who gave up and returned to the United States in the following next year. Archibald Johnston would eventually provide some stability as project manager, but was limited in his independence and success due to having to take detailed direction from Michigan, despite being on the on the scene in Brazil and dealing with the challenges daily (Grandin, 2009).
The Fordlandia project suffered from a “clash between Ford's industrial system and the Amazon's ecological one” (Grandin, 2009, p. 295). While the Ford Motor Company assembly line was very efficient, it was due to a process of trial and error, where the policy was to act first and then plan afterword. While this worked on an assembly line where adjustments cold be quickly made, on an agricultural project in which a rubber tree takes 8 years to produce the product, research and strategic planning are much more important.
There was a big disconnection between Henry Ford and the Ford Motor Company's reputation of efficiency and what was happening at Fordlandia. By 1929, 95% of the rubber trees planted were dying or dead. Half the timber that had been cleared for lumber was either burned or wasted. Ford Motor Company brought engineering experience but was unable to leverage this as much as hoped into what was primarily an agricultural project. Although Henry Ford was a very strong project sponsor, the project really suffered from not having an independent and competent project manager on site at Fordlandia.
In 1933, Ford Motor Company finally hired an agriculture professional, James Weir. Weir had worked for the U.S. Department of Agriculture and directed Goodyear's research in Sumatra. Weir had also helped organize the British Rubber Research Institute in Malaysia. Weir's findings included that the plantation was too hilly and too much attention had been dedicated to non-rubber growing activities. He recommended building a new plantation in a better geographical location, utilizing high-yield clones from Asia developed from bud grafting (Galey, 1979).
Weir brought back 2,046 stumped buddings from Singapore, which had been derived from 53 of the best Asian clones. Within a few months, the International Rubber Commission of the British, Dutch, and French Asian colonies prohibited the export of planting material. Interestingly, Weir had reversed the Henry Wickham seed theft, this time bringing back the best of the Asian rubber to the Amazon (Jackson, 2008).
In 1934, Ford Motor Company traded 703,750 acres at Fordlandia to the state of Para for an equal amount of land at Belterra. Belterra is 30 miles up the Trapajos River from where it meets the Amazon River, and is also near Santarem, the Amazon's third largest city. 1n 1941, after moving to Belterra, progress was made in transitioning more staff positions from U.S. personnel to local Brazilians; there were only six U.S. employees along with 2,042 other employees, most of them Brazilian.
Wier developed some rubber trees, which were resistant to the South American leaf disease, but they produced inferior latex with excessive resin. In 1935, Edsel Ford tried to sell both the properties, but could not find anyone interested.
In 1940, due to the fear of Asian rubber suppliers being shut down because of World War II, interest increased in alternative sources of rubber. Unfortunately, in 1941, the United States realized expansion was not practical, since due to the eight years required to grow rubber trees, it would be almost 1950 before this would help. During the war Ford Motor Company sold the River Rouge Tire Plant in Michigan to Soviet Russia. In 1943, the United States finally developed synthetic rubber. Also, in 1943, Belterra suffered the worst caterpillar attack in the history of state of Para. In 1945, after Edsel Ford passed away, his son Henry Ford II became the president of the Ford Motor Company and, as part of a cost-cutting campaign, sold Fordlandia and Belterra to the Brazilian government for only US$244,200 (despite being valued at nearly US$8 million). At this point, Ford Motor Company had invested over US$20 million, while never producing any rubber for large scale commercial use (Grandin, 2009).
PMI Code of Ethics and Professional Conduct
Intermediaries negotiating the land purchase received US$125,000 from Ford Motor Company representatives. Henry Ford strongly disapproved of any transaction even remotely resembling a bribe, so when he found out about this, from that point on, Ford Motor Company officials “strictly adhered to a policy of refusing to seek favors or special considerations though lobbying with public officials” (Galey, 1979, p. 269). Unfortunately, lobbying with government officials was a standard practice between foreign companies and the Brazilian government, and when Ford Motor Company did not participate in this, the company was seen as stubborn and unwilling to compromise and suffered petty harassment, especially from the state of Para authorities.
Jorge Villares, a Brazilian businessman, and Carl LaRue, a University of Michigan agronomist, were the most responsible for Ford Motor Company paying the US$125,000 for the land they could have had for free from the Brazilian state of Para. Based upon this Henry Ford felt betrayed and from that point on relied on Ford Motor Company men, when what he really needed was both local Brazilian and agricultural expertise.
Based upon Henry Ford's paternalistic approach it appears that Ford Motor Company always wanted to do what “they thought” was best for their employees. But based upon the PMI Code of Ethics and Professional Conduct (2011) they could have done better with respect to aspirational standards. The first of these is “we inform ourselves about the norms and customs of others and avoid in engaging in behaviors they might consider disrespectful” (p. 3). A better understanding of Brazilian and, more specifically the Amazonian culture, diet, and their perspective on time management, could have reduced conflict and potentially even prevented the riots. The second respect, aspirational standard is “we listen to others points of view, seeking to understand them” (p. 3). If Ford Motor Company had listened to local Brazilians about agricultural aspects relate to growing rubber they may have prevented many of the problems they had with initially picking a poor location and their plantation approach.
Six Rules of Thumb for Doing Business across Cultures
From the perspective of an engineering project and building the town and physical resources, Ford Motor Company was very prepared, but from the aspect of culture, they were not so prepared. They would have been off slowing down and establishing more trust with the local Brazilians, both at Fordlandia and the various government departments in Brazil. The language barriers between the English and Portuguese probably contributed to the communication problems, where the Brazilians probably could have prevented or at least minimized the problems encountered. Henry Ford “deliberately rejected expert advice and set out to turn the Amazon into the Midwest of his imagination” (Grandin, 2009, p. 16). While Henry Ford with his paternalistic approach had what he thought were the best interests of the Brazilian workers in mind, the company probably would have been much more successful if they had taken more time to better understand the local culture and made the appropriate adjustments from what had previously worked for them in Michigan.
Other Global Factors
In addition to doing a poor job of working and negotiating with the various levels of the Brazilian government, there was a political revolution in Brazil in 1930, which changed the presidency of Brazil. This revolution also changed the power balance between the federal and local government bodies.
It has been said to the man who only has a hammer: everything looks like a nail. This can be a problem when you have a screw, or need to cut a board (Stewart, 2008). If Fordlandia was just an engineering project of building a town with a power plant, saw mill, roads, hospital, school, houses, and railroad then it probably would have been considered a success. But instead, the ultimate goal was an agricultural project of growing rubber in the Amazon. The idea of a rubber plantation in the Amazon was not even a good idea, but because the project was run in a remote control fashion from Michigan, local Brazilian expertise was not given the voice it needed, nor was agricultural expertise in growing rubber. While Henry Ford with his paternalistic nature wanted to do what he thought was best for Brazilian workers, the company and project would have been better off studying the culture and the agricultural environment in which the project was actually being executed. In the same way, we need to look at a global project we take on today and make sure we clearly understand the scope and type of project it is, while also factoring in its cultural aspects.
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© 2012, Jacob S. Stewart
Originally published as a part of the 2012 PMI Global Congress Proceedings – Vancouver, BC, Canada