Strategic Alignment of IT and Business

This assignment requires a comprehensive review of various academic sources to analyze how business strategy influences IT alignment. Key aspects include the role of the Chief Information Officer (CIO) characteristics, information systems innovation for environmental sustainability, project portfolio management success, digital business strategies, resource-based theories, knowledge management capabilities, and international business strategies. The goal is to understand how strategic alignment between IT and business can enhance organizational effectiveness.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1, 1.2 & 1.3 covered in PPT.....................................................................................................1
TASK 2............................................................................................................................................1
2.1 Organisational Audit.............................................................................................................1
2.2 Environmental audit of Volkswagen.....................................................................................3
2.3 The importance of the stakeholders in preparing of the strategies........................................5
2.4 New strategies for Volkswagen............................................................................................5
3.1 Alternatives strategy appropriateness...................................................................................6
3.2 Justification for selection of strategy....................................................................................7
4.1 Roles & responsibilities of personnel in strategy implementation........................................8
4.2 Resource requirements for implementing the new strategy for VW AG..............................9
4.3 Contribution of SMART targets in business strategy.........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy is a plan of action which aids in building a path that will assist
employees in achieving desired goals. In the words of Morris Chang, “without strategy, it is
impossible to accomplish a task, and without achievement as well as implementation, a well
prepared strategy is useless”. This statement defines the importance of plan of action as well as
how important it is to implement it in a proper manner so that aims and objectives can be
achieved (Astrachan, 2010). In other words, strategy is a tactic that provides direction in a
specified path to achieve set goals, mission, vision of company. It is a compulsory element for
each and every business organisation. Long run of business survival is based on the effectiveness
of strategy. If a company wants to achieve better level of profitability then it will require a plan
of action that will support its activities and ensure that all resources are used in a proper manner.
In this report it will be stated as how strategy assist an organisation in achieving its goals and
objectives. It will also determine various tools and techniques which are used by managers in
increasing effectiveness of an strategy for an organisation like Volkswagen. The use of various
auditing methods as well as importance of setting SMART targets is stated in this project. These
days companies need a proper strategy which can be used for achieving goals and objectives in a
set period of time.
TASK 1
1.1, 1.2 & 1.3 covered in PPT
TASK 2
2.1 Organisational Audit
If a company wants to grow further and survive for long period of time, then it needs to
keep on analysing itself as to ensure that strategy is being implemented in a proper manner or
not. Organisational audit is made up of analysis of plan that needs to be implemented within
company as to identify various changes that are required and necessary (Bharadwaj and et. al.,
2013). VW AG is one of the leading manufacturer of auto-mobile in the whole world. It is highly
diversified and required separate planning for each project or sub-company (Bentley, Rolls
Royce, etc.). SWOT analysis is used by the organisation as to ensure that they identify all the
existing strengths, weakness, opportunities and threats. It also assist them in preparing plans that
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will be used for ensuring that all future uncertainties are overcome. The SWOT of company is a s
follows:
Strengths VW AG is a leading company in auto mobile industry. It has a brand name and
good image in the mind of people (Campbell, D., Edgar, D. and Stonehouse,
G., 2011). The strengths of company are:
 Wide range of products and services are offered by company catering to
the needs of consumers.
 It has a higher level of brand presence as well as recognition
 One of the oldest car manufacturer.
 Has a massive workforce of more than 350,000 employees
 Well established manufacturing plants in more than 27 countries.
 Good presence into hybrid and motor-sports
 Excellent advertising and marketing department.
 Highly efficient in conducting as well as completing day to day task.
Weakness There are certain weakness which organisation currently has:
 The number competitors is increasing in market. The level of
competition is very high which is making it difficult of company to
survive and grow.
 Limited market share
 Recently company got involved in a controversy related to emission
scandal in which it cheated through software (Casadesus-Masanell and
Ricart, 2010).
 It has caused a loss in image of brand globally.
Opportunities There are some opportunities which can be used by company to ensure that it
achieves its objective of being world leader in auto-mobile:
 They have some opportunities to establish a relationship with non
German auto mobile manufacturer.
 They can implement innovative features in cars as to attract more
consumers and stand competition.
 It can enter into new developing markets such as African countries.
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 Also the purchasing power of people is increasing which is an
opportunity for company to exploit.
Threats There are certain threats to the company:
 There are many new innovative features which are being introduced by
competitors that can impact market share of the company in a negative
manner (Eccles and Krzus, 2010).
 Increasing fuel cost
 Environmental laws stating that some countries will ban purchase or
sell of petrol and diesel cars completely.
 Government regulations in developing countries to protect local car
manufacturer.
2.2 Environmental audit of Volkswagen
The environmental audit will assist organisation in evaluating the factors which can have
direct and indirect impact on company capabilities. The managers in firm need to keep on
analysing all internal as well as external environmental factors (Elliot, 2011). This will assist
organisation in making proper strategy (that can overcome challenges presented by factors). The
impact of this can be positive or negative it depends on the changes that will take place in a set
period of time. Also company do not have control over external factors which makes it more
important for them to prepare a contingency plan as well. PESTLE analysis will be conducted for
Volkswagen.
PESTLE for company is as follow:
Political factor There are many issues which are faced by Volkswagen due to political
instability in many countries in which it is operating. Currently middle east is
going through a political turmoil which is causing losses and also Brexit is
putting a lot of strain on company policies and working in Britain.
Economical
factor
The European union is still making recovery from the recession (Hahn, Kolk
and Winn, 2010). Also the changes in inflation rate as well as rates of raw
material is impacting company ability to produce cars.
Social factor There are social changes that keeps on taking place, these needs to be
analysed by managers as to ensure that they able to cater to changing needs
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of consumers.
Technological
factor
The company has a well established research and development department
that assist it in competing in dynamic market (Haley, Haley and Tan, 2011).
It introduces new technologies and features in its cars in a set period of time.
Also company keeps on analysing technologies developed by others as to
take idea and create something which is of higher level.
Legal factor There are different laws and legislations that needs to be followed by
company. The laws are changing as Britain is leaving EU. Also change in
government and laws in US needs to be adapted by organisation as to ensure
better effectiveness.
Environmental
factor
Recently Paris treaty has been signed by many countries and as per plans
Britain as well as France will be banning manufacturing of petrol as well as
diesel car sell by 2040 (Li and Tan, 2013). Volkswagen needs to shift its
focus on hybrid or electric car segment to ensure proper survival.
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2.3 The importance of the stakeholders in preparing of the strategies
Volkswagen and its services are spread to a substantial topographical range. It indicates
the size and scope of organisation, also it states about its commitment to fulfil customer needs
and earn profits. It is very important for organisation to analyse its stakeholders in a proper
manner. They play a important role in success of organisation (Melville, 2010). Their main aim
is to assist organisation with their resources and advices as to lead it on the path of success. The
cited company has to take care of their interest in a proper manner. As stated in the matrix,
various stakeholders are put into different level as per their interest:
KEEP SATISFIED
(most interested, most power)
These individuals requires to be fully satisfied
because they are fully involved in the activities
of the enterprise.
 Shareholders
 Employee's
MANAGE CLOSELY
(less interested, more power)
These people are to be unceasingly satisfied
but the contentment must be at a level the
person should not be bored.
 Suppliers
 Government
MONITOR
(more interest, less power)
These people are to be informed about the
adequate info and should be assured that there
is no major issues arising.
 Customers
 Financiers
KEEP INFORMED
(less interested, less power)
Just need to be informed but do not irritate
them by continuous messages.
 Local Community
These stakeholders holds a significant level of importance for Volkswagen. It is very
important for company to ensure that all stakeholders are happy and do not have any issue with
company decision making and policies (Meskendahl, 2010). For getting more funds, resources
and acceptance, Volkswagen needs to develop procedures which will boost better interaction and
fulfilment of needs.
2.4 New strategies for Volkswagen
All the strategies as well as plans needs to be based on the stakeholders and the macro
factors. Decision are required to be taken as to increase profitability of various projects and boost
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welfare for stakeholders. That is why Volkswagen requires a new strategy so that they can
achieve different goals and objectives and also overcome the losses that they had and will have
due to emission scandal in USA (Mithas and Lucas, 2010). The company needs to focus more on
consumer needs, such as safety and security requirements. Also there is rise in pollution, for
which many treaties are being formed.
Different aspects needs to be covered as to ensure that company is able to overcome any
uncertainty in future. In regard of pollution, companies are not allowed to produce vehicles
which do not fall under the set limit. This is why, VW AG needs to change their current
standards as to produce more efficient and effective vehicles. Shifting their focus on electronic as
well as hybrid cars will assist them in overcoming future uncertainty regarding banning petrol
and diesel cars in various European countries. Also competitors like Volvo and others are
moving towards automatic or driverless cars, this needs to be adapted by Volkswagen so that it
can gain market share. If Volkswagen starts producing products with a eye on future, it will be
far ahead of other companies ans it will be able to achieve its objectives as well as goals. Also it
will be supported by government across different nations and the emission scandal impact will be
less.
3.1 Alternatives strategy appropriateness
Volkswagen AG needs to analyse various aspects and factors before preparing any
strategy related to market entry and expansion. It is currently burdened with the penalties which
are levied on it by US environmental panel and these need to be kept in mind before using any
strategy (Montgomery, 2011). There are many strategies which will be used by company as to
enter into new market and expand: Substantive growth: According to this strategy, company will enter into a market with
the aid of horizontal or vertical approach. Basically they are also called merger and
acquisition. Merging takes place between two organisation which are in same field and
offering same type of products. It is also called horizontal integration while on the other
hand organisation acquires a supplier or lower level company which assist in
manufacturing products or supplying them is known as vertical integration. For VW AG
this strategy is too expansive and hence they can not use it. Limited growth: This is a strategy which uses various elements such as product
development, innovation, market penetration and other combinations of approaches. It is
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useful for Volkswagen as it guarantees a limited growth at a time when it is being heavily
penalised and its image in other countries is spoiled (Scholes, 2015). VW AG can form a
joint venture with other companies which will assist it in dividing various resources and
limit its expenditure.
 Retrenchment: this theory states that company will need to pull back all the resources as
well as it has to close down other operations in order to clear its debts. In other terms it
can be said that company will need to close down those units which it can not maintain
and are causing huge losses. The organisation need to withdraw its resources as to assist
it in reducing its cost. This is not a approach which is advisable to VW AG as it will
impact its ability to grow in future. Today company needs re-establish its image in the
mind of consumers so that it can boost its sales and profitability. But it is an option as to
reduce burden on the organisation resources and improve efficiency.
According to current situation, VW AG needs to invest more in its current business
model and needs to stop expansion as to ensure that there are less wastage of resources. The
company has adopted strategy of limited growth with establishing a joint venture in China. It will
assist them in setting its roots in market and capture high market share with less investment. Also
it will assist company in paying off its penalties to US government. VW AG will also start
focusing on green vehicles which are future of auto mobile industry.
3.2 Justification for selection of strategy
There is requirement of a strategy that will make sure that all problems that are existing
can be solved in a effective manner. The company still aims to achieve its goals and objectives in
a set period of time (Smith, Mill and Dion, 2012). As per present situation that is hurting
Volkswagen AG in UK as well as USA, it needs to develop engines which are greener and more
efficient than its predecessors. They need to focus more on hybrid or electric cars which are the
future of whole auto-mobile industry. In United Kingdom also, company is facing a lot of issues
related to environment and performance of vehicles. The emission scandal in US has triggered a
debate in UK also that states that company needs to be properly monitored as to ensure that it do
not violate any environmental law. Also currently authorities are investigating, whether
organisation has not sold any vehicle which violate environmental laws. If VW AG do not follow
trends and market demands while focusing on its strengths as well as weakness then it will fail
very badly.
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The company needs to follows all the norms and strategy will be prepared on these laws
only, so that it do not get impacted again. It will also need to take care of its social
responsibilities while carrying out different task (Spender, 2014). The approach will be
environmental friendly and it will ensure that the strategy of limited growth is implemented in a
proper manner. It is in joint venture in China, so it will save more resources while investing same
in improving its engines and other services. It will assist them in attaining higher level of
efficiency and effectiveness.
4.1 Roles & responsibilities of personnel in strategy implementation
Whenever there is new strategy formulated and implemented, roles and responsibilities of
different employees changes. Also there is requirement of new personnel who will assist in
getting every task completing in a set period of time. They aid in achieving various goals and
objectives of organisation while overcoming problems that has caused damage to the company.
Volkswagen AG needs various types of individual who will assist it in functioning as per the
required standards (Teece, 2010). There are different roles and responsibilities which needs to be
fulfilled by managers and employees working at different level of organisation. Individual will
be required to work as per the plans and strategy which are made to lessen impact of penalties
and other punishment that will be levied on company for violating environmental laws. Roles
and responsibilities of people associated with project is as follows: Engineers: These are the individuals who are qualified to do technical as well as support
work that is needs to keep manufacturing as well as other assembly units functional. They
need to fulfil their roles and responsibilities as to ensure that a level of efficiency is
achieved in producing various products (Verbeke, 2013). Engineers need to have
knowledge about their field of work as to make sure that they accomplish all desired task
and maintain a level of efficiency in production.
 Managers: They are responsible for making sure that all strategies are implemented
properly. Basically managers are involved in process of decision making and strategy
formulation, which ask them to ensure that all practices and advices are favorable for
company. They plan, organise, staff, direct and control, as well as look after various
polices and procedures. Managers also play the role of supervising employees who are
working in the VW AG and direct them on path that will lead to success and growth.
There are few roles and responsibilities of these managers that needs to be fulfilled:
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◦ They need to identify various market trends as well as problems that can have impact
on organisation functioning.
◦ They need to make changes to strategy as per dynamics of market.
◦ They are responsible with communicating information to all employees and
departments.
◦ Delegation of various roles and responsibilities between sub ordinates. Expatriates: These are the individual who are sent out on projects of company by
management. They are responsible for looking after various task which are important for
profitability of project (Wang and Verma, 2012). Employees from home branch are
transferred to new ventures opening up in developing countries or new markets as to
manage those projects. They are considered to know about organisation goals and
objectives and also act as per the requirement of company.
 Employees: They are the one who accomplish all task that are formulated and planned by
to management managers. They need to complete all duties given or delegated to them in
a set period of time. But their roles and responsibilities are limited to the set task.
4.2 Resource requirements for implementing the new strategy for VW AG
There are certain resources which are required by VW AG as to formulate and implement
new strategies. They have planned to make changes in their manufacturing as well as sell of
products, such as plans for manufacturing hybrid and electric cars. To make sure that company is
able to successfully implement, below are the resources mentioned:
 Financial resources- They are very essential as to run day to day as well as long term
projects. As said by many researchers, without money, nothing can be done. Funds are
very essential as to ensure that all projects are completed in a set period of time (Teece,
2010). Better financial condition assist organisation in completing a task in a more
efficient and effective manner. VW AG can raise funds from various national as well as
international banks, sharer markets or any individual with good investment history. It can
also use retained earning as a source of finance. If company is able to use its financial
resources in a proper manner than it will be able to carry out its activities in a effective
manner.
 People- It is the most important factor that is required by company at this point of time. If
managers are able to formulate policies and procedures which are favourable for
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employees then it will achieve efficiency levels. VW AG needs manpower and they need
to hire as well as manage existing force in a proper manner.
 Parts of car- VW AG can use two ways to get parts of cars, one way is that it can
manufacture them while other way is that it can buy them in cheap rates from other
companies (Spender, 2014). It needs to choose the best option as to reduce coast of
production while maintaining quality of products.
 Fixed resources- These are the resources which can not move, such as plants and
machinery. They are needed to produce and manufacture cars. VW AG management has
to find methods to improve the time taken in assembly as well as movement of in process
goods, as to make whole process more efficient.
 Equipments- If a organisation wants to produce goods, then it requires certain types of
equipments and tools. VW AG has massive manufacturing facilities where it
manufactures different parts as well as assembles its cars. Hence, it needs resources
which will not create any disturbance or hamper company capability in any manner.
4.3 Contribution of SMART targets in business strategy
Business strategy needs to be realistic and achievable, it do not has to be a something that
can not be followed in a practical environment. Managers in company needs to be very cautious
in their approach while formulating various plans and procedures. They need to use the concept
of SMART targets which will assist in formation of justified and realistic targets (Woodcock,
Green and Starkey, 2011). For getting appropriate results company needs to set specified,
measurable, achievable, relevant and time oriented objectives. SMART targets are given below:
 Specific(S): The goals of company needs to be specific and clear.
 Measurable(M): They needs to be measurable so that changes can be made in future.
 Acceptable(A): Goals need to be accepted by all employees and management.
 Relevant(R): They need to be relevant, genuine and integrated with company mission and
vision.
 Time bound(T): They need to be achieved in a specified time period for keeping
efficiency higher.
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CONCLUSION
Concluding this report, it can be said that company needs to be true to its stakeholders
and conduct its activities as per the protocol. It needs to implement strategy in a manner that
assist it in achieving its targets in a efficient and effective way. Volkswagen AG failed in
following the ethical code of conduct which has impacted organisation and its capability to
complete its task. Also its image of being a environmental friendly manufactures got damaged.
Now they need to adopt a strategy that will assist them in building greener manufacturing
facilities as well as its products. There are certain told and techniques which are required to be
used by managers, such as, SMART targets. This will aid in establishing goals which are
achievable for organisation.
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