1. Explain how does good planning at Ferrari shape its highly-successful managerial philosophy?

Happiness at Ferraid Ferrari is an elite ltalias mutomobile company that sold 7,200 sports cars in 2011 with a price tag of, on average, 200,000 each. That year the company had record sales, with revenues of 2.2 billion, up 17 percent from 2010 , and profits of 6310 millice, ap 9.5 percent. Forty million earos of that came from brand licensing of products which ranged from sporty Puma clothing and shoes for racing fans, to luxury products such as Vertu mobile phones, to electroaic games for various devices with Sony, Microsoft and Electronic Arts. Farari had four main goals: hire the best people, make the best products, extend the company's global reach, and be victorious in Formula One-the most prestigious racing series, where Ferrari could beast unprecedented success since the Formula started in 1950. The company did not market its product, its marketing came from its Formula One victories Ferrari owners enjoyed a close relationship with the company through a wide range of exclusive services and activities they could take part in, from driving coenses to rallies. Ferrari organized special events, stech as a three-day driving tout through flaly. Owners could fly or ship their cars by boat to ltaly from as far away as Japan-to be part of this elite event. Purpose: Ferrari employees had a sense of parpose becasse they were part of something special and elite. Ferrari's view was that it did not simply sell cars, it sold dreams. As the consistent winner in Formula One, its cmaployees knew they were part of a winaing team. The company cmployed the best people, so the winning team fecling went beyood the race track to the company itself. After work employees could go bome in their red Ferrari work overalls, which was a status symbol for some. Autoneny: Ferrari gave employees a fecling of ausonomy by helping them plan their careers from the moment they were hired until their last day on the job. One of the first things new hires did was sit down with a manager to figure out where they wanted to go. They were encouraged to do what they were good at and to figure out in which areas they wanted to grow. Younger employees were assigned a mentor to guide them in making the best career decisions. Older workers were not pet out to pasture but became mentons. Collaboration: Ferrari worked hard to build a company that was employee driven, rather than the other way around. Salaries were slightly higher than at similar cempunies, but above all Ferrari provided important benefits. Fot example, the company belped its employees get the best interest rate possible on a first mortgage by directly negotiating with banks. The company also provided inexpensive flights for employess with family outside the area to get home for the weekends, and free summer camp and school books for children of employees, Employees had an 8 a.m. to 5 p.m. work day with a one-hour lunch in the factory restaurant, and the company had a sustainable environment with trees and vegetation inside and outside the building to create a pleasant atmosphere. There was also a doctor's office at the headquarters with free medical facilities for employees and their families. Excellence: Ferrari designed multiple ways to drive employees toward excellence, including a yearly competition among its 1,500 blue-collar workers (mostly skilled workers involved in all the production processes) to come up with the best idea to improve the process or the product. 2 The prize was a weekend for two away in another city like Vienna, or a similar type of prize. Ferrari Director of Communications Stefano Lai said the employees did not enter the contest simply because of the prize, but because it gave them a sense of ownership and pride because they were helping the company to succeed. Employees also played an important role in keeping the accident rate low through a robust safety reporting system. In addition, the first public showing of a new Ferrari model was inside the company for cmployees only to show them the fruits of their labor before everyone else in the world got to see the car. The Downsides of Happiness: A potential downside of happiness at Ferrari was that employees could put so much energy and emotion into their job because they felt part of something special that it could lead to frustration if they did not become high-level managers. While employees received their eamed promotions and pay raises, not everyone could become the CEO. One other point related to younger employees: if Ferrari was their first employer, they might not appreciate the benefits they had and might think it was the same everywhere. 'Blue-collar workers at Ferrari were mainly the skilled workforce itrvolved in all the prodaction processex, from founding the aluminum alloys for the engines, welding and assembling the all-aluminum bedies-in-white, muchining engine components, awembling the engines, assembling the carr, plus mechanics who worked in the experimental and R.D areas