Volkswagen and Toyota: Strategies for Leading Organizational Change

This report provides a comprehensive analysis of change management within the automotive industry, using Volkswagen and Toyota as case studies. It explores the impact of change on organizational strategies and operations, examining both internal and external drivers that influence leadership, team, and individual behavior. The report identifies various barriers to change and their influence on leadership decision-making, while also discussing different leadership approaches for effectively managing change. Furthermore, it highlights measures taken to minimize the negative impacts of change within organizations. The study delves into the structural, strategic, process, and people-related aspects of organizational change, offering insights into how companies can adapt to evolving customer demands and technological advancements. The report also examines how factors such as political, economic, social, and technological shifts affect business operations and strategies. Overall, the report provides a valuable understanding of the complexities involved in leading and managing change in a dynamic business environment.

Understanding and Leading
Change

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P 1 The impact of change in organisation strategies and operations......................................3
P2 Ways in which internal and external drivers has affected leadership, team and individual
behaviour................................................................................................................................5
P3 Measures taken to minimise negative impact of change in organisation .........................6
TASK 2............................................................................................................................................7
P 4 Different barriers of change and its influence in leadership decision-making.................7
TASK 3............................................................................................................................................9
P5 Different leadership approach in dealing with change......................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Change is related to innovation in every sector that helps business to grow and develop. It
provides an insight to business for the future strategies and decisions to be taken. Change is
related to developing process, system, or procedures. This report shows the way in which change
in an organisation affects its business operations and strategies. How internal and external drivers
affects change to be implemented. It also shows barriers in implementing change and different
leadership approach that should be followed to deal with change.
For undertaking present assignment, organisations selected are Volkswagen and Toyota.
These organisations belong to auto mobile sector and operating their business all over the world.
The existence of companies on global level requires frequent change management to identify and
fulfil customers demand. Thus, this report will show impact of change in their strategies and
operations.
TASK 1
P 1 The impact of change in organisation strategies and operations
Change in business context is also known as change management. This refers to bringing
change in process or procedures and develops strategies for the future. It is considered as
modifying entire business goals and objectives to deal with changing needs of customers. This
includes changing job roles, structure, systems, etc. The change can affect organisation either in
positive or negative way. It depends upon how people and employees working in organisations
adopt these changes (Aitkenhead. and McCann, 2017) For instance, Volkswagen adopted
strategies of product and market development. It was done to create new product and develop
new markets to sell those products. For this, employees and managers developed new strategies
on how to innovate products by identifying customers’ demands. They created a strategy to
identify potential customers in the market and what are their tastes and preferences. Volkswagen
adopted new technology to bring changes in the business process. It helped them to improve their
product quality. Due to this, they were able to produce high quality cars and maintaining it.
Volkswagen allotted resources to each department and developed strategies for them. Moreover,
the entire systems and process was developed. They forced to hire new people to deal and work
with them. It happened because old workforce resisted that change.

Toyota is known as world leading auto mobile producer. It was because they were
implementing change management frequently. So, it was difficult for other companies to reach
their level. However, in 2009, a major disaster occurred in Toyota. They had to recall 3.8 million
cars in US due to quality problem (Anderson,, 2016). This incident shattered the whole
organisation and damaged brand image. Then, Toyota started adopting change management. For
this, they implemented new strategies of quality control and production. They to improve and
maintain product quality adopted strategies such as Just In Time (JIT), Six Sigma. This helped
them a lot in retaining customers and again competing in the market. This strategy included
innovating entire production system, process and procedure in manufacturing cars. Employees
were given new roles and responsibilities. Furthermore, new system was adopted to train
employee and leaders. They renowned its production system at global level. It was useful in
reducing cost per unit and expenses. Also, it helped in creating new product that was cheap and
of high quality. Thus, implementing change in way of process and system helped Toyota to
become a stronger brand again.
Types of organisation change-
 Structural- It refers to change that occurs within the organisation. This consists of
employees, managers etc. These changes are made to improve communication, working
etc. of employees, policies and duties are modified for smooth flow of business
operations.
 Strategic- It refers to making changes in goals, objectives, purpose etc. of organisation.
External environment plays crucial role in making this change. Various things like
products, services etc. are developed or modified.
 Process- This step is taken to modify process of working of operations in business. It is
done to bring creativity or innovation in working of employees to achieve better results.
Due to this, the efficiency and effectiveness of workers is improved leading to achieve
higher goals (Doppelt, 2017).
 People- It is related to workforce who is responsible for performing tasks to achieve
goals and objectives. Generally, it is performed to bring new talent in the organisation for
encouraging innovation.

P2 Ways in which internal and external drivers has affected leadership, team and individual
behaviour
Internal and external factors play an important role in bringing change in business. These
factors are directly related to their operations and strategies. It affects culture of organisation
largely. There are various types of internal drivers: -
Strengths- It refers to organisation strengths for which it is able to compete in the market. This
makes business unique for its strategy and operations. In Volkswagen, it has highly affected
leadership as due to strategic change, employee’s performance is reduced. It is due type of
leadership that is followed. Leaders are forcing them to adopt these changes by applying new
techniques or tools. Toyota has also suffered from this as quality control has enabled leaders to
imply workers to work with set standards.(Espedal,., 2017.).
Weakness- In order to improve weakness, change management is adopted by organisation. It
helps in overcoming weakness and transforming that to strength. This is important for entity to
identify its weakness to survive. Volkswagen weakness is that it is not having enough market
share in India. So, it has affected leaders to create new strategies
Opportunities- Implementing change in order to grab opportunities is essential as it helps in
growth of business. On the other hand, it becomes difficult for leader and employees to adopt
these changes. Leaders create procedures to implement these changes but it is hard to understand
how it will affect individual behaviour.
Threats- These are factors that affect business operations and strategies in long run. So, to
remove threat, change in process of systems is implemented. It forces individuals to change their
working in order to bring creativity. For this, different leadership style is implemented that
makes it difficult for employees to work. In addition, it affects team working as implementing
change restricts them to work creatively. (Fullan, 2014).
Now, external drives include outside environment of business. It refers to PEST whose
description is given below-
Political- It means any change in political situation of a country. It affects law and legislation
that has a direct impact on business strategies. If there is change in rules or policies, then it has to

be followed by organisation. By implementing this, it changes behaviour of individuals as they
resist adopting any change in policies.
Economic - It indicates change in GDP or economic condition of a nation. It happens due to
fluctuations in currency rate, inflation, etc. Therefore, if there is rise in inflation rate, then
company reduces employee’s salary. It creates negative impact on their behaviour. Also, their
confidence level reduces resulting in quality of product.(Glass and Cook, 2016).
Social- It is related to societal change that involves increase in level of income, or improving
living standards of people. This is important to identify change in their taste so that their needs
can be fulfilled. Therefore, any change in social environment will impact culture of organisation.
It has to make changes in policy. This allows leaders to implement and adopt new policies. Thus,
it affects behaviour of workers.
Technological- It is the major factor due to which change management occurs. It is related to
innovating new process or technology to develop and grow business. New innovations allow
business to implement in their operations to improve product quality. For doing this, new role
and duties of employees are developed. Leaders are given instructions to implement them and
motivate employees. Moreover, new talent is hired to bring creativity and replace old ones. This
highly affects individual behaviour as they resist change and leader finds it hard to implement
new process.
P3 Measures taken to minimise negative impact of change in organisation
It is very important to minimise negative impact of changes in organisation as it can
create a huge impact on its overall functioning. It can sometimes lead to huge loss to
organisation and reducing it profits. Timely measures are taken to ensure that employees are able
to adopt changes as quickly as possible (Komives, and Wagner,., 2016.) This will be useful for
them as well as for business. Proper training is provided to them before implementing change.
Apart from this, there are various other measures are taken to reduce negative impact. These are
as follows:-
Communicate the change- This is the most important measure taken to reduce negative impact
on employees. Proper and effective communication will help in listening to their problem while
implementing change. It will be useful for business to collaborate with them to develop strategies

on how to implement change management. Communication is the best way to deal with any issue
that arises while implementing change. It helps in identifying in which stage employees are
facing difficulty and what measures can be taken.
Helping employees to identify what are the benefits- When employees are clear about what
changes will occur and how it will benefit them then they work in way that is more effective.
Managers and leaders along with implementing change should help them to identify benefits that
will occur due to change. (Simons, 2015). This will give them a clear insight of positive impact
of change in his career. Also, employees time, energy and focus to implement change will
compensate by benefits they will attain by making change.
Listen to employees- By listening to their thoughts, views, etc. it will help in solving their
problems and giving suggestions. This will be useful in emotionally supporting them. This will
also show that how seriously change has influenced their behaviour. Also, what employees think
about adopting these changes.
Employee contribution- Involving employees in decision-making and developing strategies to
implement change will help in giving what they want. This will provide control to them in doing
their task effectively. The employees will be clear about their goals and duties within
organisation. Also, in critical situations it will help in taking decisions to solve problems related
to change.
Feedback and improvement loop- Taking employee feedback and improving it by providing
training can be done to reduce negative impact of change. (Richards,, 2015. ). Feedback gives an
insight on how employee reacted to change and what was change in his behaviour. It allows in
identifying weak areas where employee was not able to perform after implementation of change.
Also, it can be corrected by giving them training to motivate and boost their morale.
Re- motivate employees- This helps in re-motivating employees who have not performed well.
Also, awards and appreciation is given to those who are able to successfully adopt change. This
encourages other employees to get those awards by giving more efforts to adopt change.

TASK 2
P 4 Different barriers of change and its influence in leadership decision-making
While implementing change management, many barriers are faced by organisation. These
barriers restrict organisation to implement change. If not removed it can impact the working
efficiency of organisation and strategies that are made to achieve goals and objectives. It also
affects the leadership style and decision-making process. Therefore, it is necessary to eliminate
these barriers in order to implement change (Sundberg, and et..al., 2017). Some common barriers
are:-
Resistance to change- It is the most common barrier that occurs in change management. This is
also the most common form of barrier. Most of the people within the organisation resist adopting
or implementing change. It is because they prefer working in same way as before. They want to
remain stable in their working efficiency. In addition, they think that change will make them
more lethargic and activities more complex. In this situation, leaders have to follow different
styles to motivate workers. Sometimes, this leads in making decisions that implementing change
will beneficial to them or not.
Unknown current state- It becomes very difficult to find out what impact changes will have in
the organisation. In addition, organisation implements change without knowing their current
process or systems. They develop strategies without identifying current policies and regulations.
Business just wants to implement change because of new technology or for improvement. It is
done by following competitors strategies. This influences their current focus on achieving goals
and operations. Leader are forced to encourage employees to implement changes. This makes
them more harsh towards workers and it leads to conflicts among them.
Integration- Managers find it hard to implement change, as they know that this will affect
employee’s productivity. Moreover, it will change organisation structure, process and systems. It
becomes quite hard for manager and leader to integrate all activities to implement change.
Managers do not understand what process is to be changed and how to develop strategies for
employees to achieve goals. (Wylie, and et..al,., 2017)
Competitive forces- In many cases, several external forces restrict organisation for
implementing change. These forces are competitors, market conditions, economic factors, etc.
This creates a major impact on organisation strategies and operations. These forces bring a high

complexity along with them and puts business in a dilemma whether to implement change or not.
If change is implemented it can bring positive or negative impact in the enterprise.
Complexity- By implementing change, activities becomes more complex. The process, system
and structure create an environment of complexity. In order to tackle these complex changes,
managers require more skills and experience. Therefore, it is quite risky for them to control and
manage these complex situations. In addition, change requires highly effective project
knowledge and risk to take decisions.
In Volkswagen, changes occurred due to innovating new technology to design new products.
This made leaders to encourage employees by applying various leadership styles. Also, it
affected employee behaviour as they were influenced by different styles followed by leaders.
Moreover, leaders were bound to follow specific style even in harsh situations. They did not
changed their leadership style and allowed workers to follow it. (Yoder-Wise, , 2014).
On the other hand, in Toyota there was change to improve the quality of product. So for this,
new technology was implemented. Leaders have to change their style to make employees adopt
changes. This was a complex task as workers were resisting changing. So leaders provided
guidance to them on how it will be beneficial for them to adopt change.
TASK 3
P5 Different leadership approach in dealing with change
In order to tackle change within organisation, it is important that leaders support
employees in every situation. They are main pillars on which responsibility of implementing and
making employees adopt change is there. For this, leaders can follow different leadership styles
that will help them to deal with change.
Comfortable with ambiguity- It is s style in which a leader is already having experience on
how to deal with change. They know exactly that what will happen next and accordingly, take
action. They effectively control the environment.
Creative- Leaders following this approach are very creative in finding sources and information
on how to solve problem while implementing change. They are experts in dealing with change
and effectively communicate with internal sources. It helps them to create new strategies for
their employees and organisation. (O'Donnell, and et..al2015).

Open communicators- Communication is an important aspect in dealing with issues and
problems that occurs with respect to change. During change, employees face various problems
and issues that must be solved. Leader can allow employees to openly communicate with them,
if they are facing any problem. It will help people to express their views regarding difficulties
faced by them. Based on problem, leaders give suggestions to them. An open and positive
environment is created by this approach. Leaders can effectively manage people during times of
change.
Situational leadership- In this style, a leader first understand current situation and then take
measures to deal with it. This allows leader to select effective style accordingly and change with
situation. It is useful as leader change his approach according to change occurred.
Transformational- A type of leadership style in which leader sets goals and improve employee
performance by guiding him. He is able to identify worker strengths and accordingly assign task
to him. Leader provides them new and creative ideas of accomplishing a task in easier way.
Servant- In this style, leader is more concerned about growth and development of employees.
He divides individuals in teams and assigns task to them. His emphasis is on ethics rather than
culture. Moreover, his focus is to achieve long term goals (Aitkenhead. and McCann,, 2017)
Cross – cultural- This is the most common leadership approach followed to deal with change. In
this approach, leader allows employee in decision-making to consider their views and ideas
while developing strategies. Leaders believe that working together with employees will help in
achieving goals in way that is more effective. If any change occurs, leaders can allow employee
to give ideas on how to implement or adopt these changes. It will help them to identify which
employee can perform better and which will not.
CONCLUSION
From this report, it is concluded that change management is an essential part of every
organisation. Without implementing change, no business can survive for long term. Therefore,
change management helped Volkswagen and Toyota to expand their business with product
development. It shows process, structure, system change that can occur in organisation. Also,
how internal and external drives forces organisation to implement change. By communicating

with employees, listening and involving them in decision-making will reduce risk of negative
impact of change. Moreover, it elucidates that competitive forces, complexity, etc. are different
barriers that occur while implementing change. At last leadership approaches such as open
communication, creativity approaches can be followed by leaders to deal with change is
described.