Car Wars at Wolfsburg: Conflict between Porsche and Volkswagen executives

This paper analyzes the conflict between Porsche and Volkswagen executives in the case study Car Wars at Wolfsburg. It discusses the sources of conflict, conflict handling styles used by Wendelin Wiedeking and Ferdinand Piech, and the eventual outcome of the conflict.

Running head: CAR WARS AT WOLFSBURG
Car Wars at Wolfsburg
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
1. Write a synopsis of the case in approximately...................................................................2
2. Identify and discuss the sources of conflict between Porsche and Volkswagen
executives...............................................................................................................................3
3. Describe the conflict handling styles used by Wendelin Wiedeking and Ferdinand Piech.
................................................................................................................................................3
4. What was the eventual outcome of this conflict?...............................................................4
Conclusion..................................................................................................................................4
References:.................................................................................................................................5

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Introduction
This paper is going to present a brief analysis of the case study- Car Wars of
Wolfsburg by means of answering some of the below mentioned questions. The paper shall
focus on the two renowned companies- the Porsche and Volkswagen. It shall present a brief
summary of the case study which is based on the conflict in between the executives and the
chairmen of these two companies. It shall discuss the sources of conflict in between both the
chairmen and would describe the conflict handling styles that are used by both of them.
Finally, it shall evaluate the outcome of this conflict.
Discussion
1. Write a synopsis of the case in approximately
- In the case study, Car Wars of Wolfsburg, the conflict in between the CEO of two renowned
car companies- the Volkswagen and the Porsche has been discussed. The CEO of
Volkswagen is Ferdinand Piech and that of Porsche is Wendelin Wiedeking (Stowell &
McLarty, 2017). Both the companies were popular in their own field of businesses. It is after
their joint venture that made such a significant difference. The joint venture was a
collaborative decision of both the chairman. Although Porsche depends on Volkswahen
Group for the production of many of its cars, they had a conflict because of difference in their
opinions regarding their vision for the growth and development of the companies after they
had merged. Porsche was not ready to sell its products to Volkswagen and also it had a
significant amount of debts in the market that reached about billions of dollars. This made
Porsche to request Volkswagen to buy some of its businesses. The chairman of Porsche
Wendelin Wiedeking was in an intension of increasing the profit of Porsche at the expense of
its employees and therefore, he tried to display a very bade behaviour towards the
management group which assisted in developing internal conflicts between both the
chairmen.

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2. Identify and discuss the sources of conflict between Porsche and Volkswagen
executives.
- The major sources of conflict in between the executive of Porsche and Volkswagen are the
fact that both the chairmen had a significant breakdown in their style of communication and
this has led to difference in their view points in regard to the goals and directions, which both
of them wanted the company to follow after getting merged. Wendelin Wiedeking, the
Chairman or the CEO of Porsche wanted the company to maximize its profits at the expense
of its employees (Sharpe, 2017). His bad attitude and behaviour towards the management
team also contributed significantly in increasing the internal conflicts in between him and
Ferdinand Piech. Also, one of the other reasons for this conflict was that the CEO of Porsche
used to belief that Volkswagen could be much more profitable if they get rid of the Bugatti
and the Phaeton, the luxurious cars as because of the fact that they were very costly. This
made the other chainman to think that his visions are been overlooked and threatened. This
again contributed to the conflict of dissimilarities among both of them. This disagreements in
between these chairmen tend to deepen with each passing day as Ferdinand Piech started
focusing more on the concept of impressive engineering instead on the outstanding profits
and this again resulted in the formation of turbulence in between the two CEOs (Mollers,
2015). Also, as neither of them had communicated about their visions with each other prior
to the merger, problems began to occur and this too then resulted in the display of
relationship conflict in between them.
3. Describe the conflict handling styles used by Wendelin Wiedeking and Ferdinand
Piech.
- As it is shown by both the chairmen, the conflict handling style that they used would be of
“forcing”. It is regarded to be the use of formal authority in order to satisfy the personal
concern of one’s own by neglecting that of the other party who too is engaged or is involved

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in the very conflict. To my point of view, Wendelin Wiedeking in this case had stronger
forcing style than that which is held by Ferdinand Piech. This is because Wendelin
Wiedeking tried to succeed in the battle of automobiles at the expense of Volkswagen and
Piech. This conflict handling style would not be applicable or appropriate for any of the
parties to use because this style was jeopardising the business itself. They should have made
use of the problem solving or the compromising techniques in order to fix the problem by
finding out proper solution for the same and this would have benefited to both of them and
the business (Simon, 2015). The compromising technique could have formed a common
ground in which both the chairmen would sacrifice something or the other in order to gain
something beneficial and more advantageous. This would have stopped the growth and
development of the company from being jeopardised.
4. What was the eventual outcome of this conflict?
- Eventually, Porsche have to end up with facing severe financial issues which had led to the
termination of Wendelin Wiedeking, the CEO of the company (Macrae, 2015). The conflict
was never resolved.
Conclusion
Hence, from the above discussion it is clear that it was because of the failure of both
the chairmen and their communication style that they had used to resolve the prevailing issue
that have resulted in the termination of the Wendelin Wiedeking. The conflict would have
never taken place if any one of them would be ready to sacrifice and compromise with the
situation. With the same, the conflict handling style that they have used was also
inappropriate to resolve the conflict.

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References:
Macrae, V. (2015). Mastering Interest Rate Risk Strategy: A practical guide to managing
corporate financial risk. Pearson UK.
Möllers, T. M. (2015). The takeover battle Volkswagen/Porsche: the Piëch-Porsche clan–
family clan acquires a majority holding in Volkswagen. Capital Markets Law
Journal, 10(3), 410-430.
Sharpe, N. F. (2017). Volkswagen's Bad Decisions & Harmful Emissions: How Poor Process
Corrupted Codetermination in Germany's Dual Board Structure. Mich. Bus. &
Entrepreneurial L. Rev., 7, 49.
Simon, H. (2015). Pricing in Crises and Price Wars. In Confessions of the Pricing Man (pp.
177-191). Copernicus, Cham.
Stowell, D. P., & McLarty, T. (2017). Porsche, Volkswagen, and CSX: Cars, Trains, and
Derivatives. Kellogg School of Management Cases, 1-10.