Global Leadership at Volkswagen: A Critical Analysis

Running head: Global leadership
Global leadership

Global leadership
Abstract
In today’s era, leadership is an effective and significant part of the every company. As the same
way, it also plays a vital and crucial role Volkswagen Company. Volkswagen is a well known
brand in the automotive industry. Nature, scope of VW group, achievements and position of the
company have been discussed in the paper. A critical analysis of Volkswagen leadership has
been presented in the task. The paper also explains the strengths and limitations of VW’s
leadership. Here is the discussion about the emission scandal that was occurred in 2015 at
Volkswagen group that hampered the goodwill of the company negatively.
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Global leadership
Table of Contents
Abstract.......................................................................................................................................................2
Introduction.................................................................................................................................................4
Nature, scope of VW group, its achievements and its global position and stature.......................................4
A comprehensive and critical analyze VW’s leadership..............................................................................6
The evolution and nature of VW’s leadership.............................................................................................8
The interdependence of leadership, corporate culture and organizational change.......................................9
VW’s leadership styles and practices across the globe..............................................................................11
Strengths and limitations of VW’s leadership and cost fit analysis of leader effectiveness.......................12
Enduring consequences and contribution of VW’s leadership...................................................................13
A concise diagnostic statement on VW’s leadership.................................................................................13
Recommendations to improve VW’s leadership........................................................................................14
Conclusion.................................................................................................................................................14
References.................................................................................................................................................15
Appendices................................................................................................................................................18
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Global leadership
Introduction
The primary motive of this task is to outline and discuss the leadership style, and corporate
culture of Volkswagen group. It is well reputed German company that provides ample of
automotive vehicles to the customers across the world. In 2015, the company had to face various
issues and challenges due to emission scandal. Besides this, role and significance of leadership
and management of change also have been explained in the task. The paper also discusses the
pros and cons of VW’s leadership. More detail of the task has been discussed below.
Volkswagen AG is known as the Volkswagen group, it is a German multinational automotive
manufacturing company having headquarter is located in Wolfsbung, Lower Saxony Germany.
The company was incorporated in 1937 in Germany. The company is designing and
manufacturing various types of vehicles for the customers in all over the world to increase
profitability and revenue. It is one of the biggest automakers measured by sales in the market.
Volkswagen group sells passenger cars under the Bentley, Bugatti, Audi, Seat, Volkswagen
marques and Lamborghini. It is one of the oldest and leading automobile manufacturers with
worth more than $75billion as of 20171.
Nature, scope of VW group, its achievements and its global position and stature
The firm operates and manages its business activities and operations in around 150 countries.
The main aim of the company is to sell automotive vehicles to the customers in the international
market. Along with this, the firm wants to become a global leader automotive industry. It has
been identified that the organization wants to be the no.1 car seller in volumes overtaking Toyota
by 2018. The company is well known auto importer of the United States. Since 1993, Ferinand
Piech was the chief executive officer of the company with an authoritative perspective. As the
1 Raj, A.S, 2017 "The Volkswagen Way, Profits over Sustainability." Journal of Marketing
Vistas 7, no. 2.
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Global leadership
CEO, Ferinand Piech maintained enormous power in the organization2. He followed
transactional leadership in the organization. The German government has analyzed that
Volkswagen group is responsible for a new attempt to hid harmful emissions of nitrogen oxides,
this time on Audi luxury models. The company recalled and modifies around 24,000 A7 and A8
models built between 2009 and 2013. VW group has factories at more than 119 locations
worldwide and employs around 600,000 employees in 20 European countries plus 11 countries
in Asia, Africa and the America. The first factory of Volkswagen was opened at Wolfsburg in
1938. VW group was one of the first and biggest western companies to invest in China as its
economic transformation began in the mid 1980. The company opened a new engine factory in
the China in 2013. It has been identified that the company is focusing on the diversification
strategy to improve and enhance the quality as well as performance. The company also has
manufacturing facilities in the US, China, India, Mexico, Slovakia, Russia, Indonesia, Brazil,
Argentina, Spain, Poland, Brazil, Kenya and South Africa3.
VW group presents group award 2017 to 19excellent suppliers for innovative and unique
strength and entrepreneurial reliability. The brands of the company include Audi, Bentley,
Skoda, Porsche, Volkswagen and Lamborghini. The company is awarded in 2015 to its best
suppliers. It is the 13th time in this year that Volkswagen group has pleased the entrepreneurial
performance of its best suppliers with the Volkswagen group award4.
It has been identified that the company maintains a good position in the competitive market. The
firm develops and improves vehicles and components for its brand. The organization also
produces passengers cars and light commercial vehicles for the Volkswagen passenger cars and
2 Ferrell, A., Ondracek. J, Saeed. M, and Bertsch.M, 2016. "Failed Decision-making at
Volkswagen." In Annual Eurasian Business Research Conference. Manila, Philippines.
3 Hrzone, 2018. Leadership lesions from the Volkswagen scandal, Accessed as on 7th June,<
https://www.hrzone.com/lead/culture/leadership-lessons-from-the-volkswagen-scandal>
4 Rhodes.C, 2016. "Democratic business ethics: Volkswagen’s emissions scandal and the
disruption of corporate sovereignty." Organization Studies 37, no. 10: 1501-1518.
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Global leadership
Volkswagen commercial vehicles brands. The firm has divided its division in two parts that
include the financial services division and automotive division. The motive of the company is to
become the number one leader in electronic mobility across the world by 2025. The company
comprises twelve brands from the seven European countries. Along with this, the company
provides ample of financial services such as customer and dealing financing, banking and
insurance activities, leasing and fleet management. Group is paying the path for the largest
change process in its history: the realignment of one of the biggest and excellent automakers to
become a leader of sustainable mobility. To achieve that goal, the company will be transforming
its automotive core functions and business and will among other things be introducing a further
30 plus completely electric cars by 2025 and exploring battery technology and autonomous
driving as new core competences.
A comprehensive and critical analyze VW’s leadership
Leadership is ability of a company’s management to set and attain the challenging and effective
goals by influencing the other people within the organization. It is a process of directing and
controlling the other people in order to attain desired goals and objectives. No company can
survive and grow its business without using effective leadership styles in the workplace. As the
same way, Volkswagen group also uses unique and dynamic leadership styles at the workplace
for gaining competitive benefits in the global market. Currently, Martin Winterkorn is the CEO
and managing director of the company who delegate the roles and responsibilities towards the
employees and top management5. After the various researchers, it has been identified that
workers at Volkswagen group have previously stepped out to explain the culture of the company
as a fearful one where there is no liberty to speak out about the organizational processes and
ample of pressures to deliver6. It has been found that Martin Winterkorn was a highly demanding
5 Brian.L,2014. "The People's Car: A Global History of the Volkswagen Beetle by Bernhard
Rieger." Technology and Culture 55, no. 1: 275-276.
6 Barrett.S. RH, Speth.R.L, Eastham.S.D,. Dedoussi.I.C, Ashok.A, Malina.R, and Keith. D. W,
2015. "Impact of the Volkswagen emissions control defeat device on US public
health." Environmental Research Letters 10, no. 11 114005.
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