Leadership Framework of Volkswagen: Analysis of the Emission Scandal

This report provides a detailed analysis of the leadership framework employed by Volkswagen, focusing on the challenges and implications arising from the emission scandal. The report begins with an introduction that outlines the context of the scandal and its impact on the company's practices. Part A explores the external and internal factors affecting Volkswagen using PESTEL and Force Field analyses. Part B delves into the leadership approach, examining various models and frameworks such as the Change Kaleidoscope, McKinsey 7S, Kotter's model, and GROW model, along with leadership styles and the Leadership Domains framework. The analysis also covers the application of transactional leadership, leadership lifecycle, and the 'Colors of Leadership' concept. Part C discusses the role of the CEO in addressing dilemmas and paradoxes, as well as the critical factors for any senior executive team to consider. The report concludes with a summary of the key findings and recommendations. The assignment assesses VW's response to the crisis, ethical considerations, and the need for effective change management and leadership strategies to restore trust and ensure future success. The report uses the case study of Volkswagen to analyze leadership frameworks and offer insights for the organization.

RUNNING HEAD: LEADERSHIP FRAMEWORK OF VOLKSWAGEN 1
LEADERSHIP FRAMEWORK OF VOLKSWAGEN
Student Name
Institute Name

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 2
Contents
Introduction....................................................................................................................................3
Part A.............................................................................................................................................3
Part B.............................................................................................................................................5
The leadership approach using a range of the models and frameworks...................................6
The outcome from the leadership of change and what does the organisation need now........12
Learning from the case............................................................................................................13
Part C...........................................................................................................................................13
As chief executive of the organisation, how to engage with the dilemmas and paradoxes.....13
The critical generic factors any senior executive team would have to consider......................13
Conclusion...................................................................................................................................14
Reference....................................................................................................................................15

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 3
Introduction
The report will discuss in detail various leadership framework in light of Volkswagen. The
company recently came in picture for cheating emission test and the scandals questioned many
kinds of practices. It further has also described how the CEO of the company completely
oversaw the culture in which challenging the decisions and speaking up was de-motivated. 1
Part A
This is based on examining and offering the attractive and the safe environmental sound
vehicles that could easily be able to compete with the higher standards in the respective
classes. The management of the culture and the collaboration is mainly for the integral
component of the corporate culture, providing a frame of reference with the guide for the
decision-making process. The code of conduct is important for the management culture and
collaboration. Here, the major responsibility is to work towards the development, where CEO is
producing the better cars with the very low emissions under some strict conditions.
PESTEL – Volkswagen
1. Political: the company has faced a lot of political challenges over a period of time since
the company is not present in more than hundred and fifty countries.
2. Economic: the automobile industry is an important industry that helps in developing any
country since it helps in contributing in the present national income of the country.2
3. Social: society plays an important role in the growth of the automobile industry and a
company like Volkswagen impact the society as well in which it functions. 3
1 Nahavandi, A.. The Art and Science of Leadership -Global Edition. Pearson. 2016
2 Fabbio, P. “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal in
Italy. Journal of European Consumer and Market Law, 6(2), pp.94-96. 2017
3 Bush, T. and Glover, D.. School leadership models: What do we know?. School Leadership &
Management, 34(5), pp.553-571. 2014

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 4
4. Technological: technology is a heart of the car manufacturing industry and the company
like Volkswagen is among those organizations that have also believed in having the best
technology in car manufacturing.
5. Environmental: the car manufacturing industry makes a huge impact on the environment
of the country and it also impacts the growth of the industry. 4
6. Legal: it is crucial for the automobile industry to follow the legal needs of a country and
for a company like Volkswagen it is a challenge since the number of countries in which it
operate are huge and legal needs for every country is different.
Force field analysis – Volkswagen
The CEO should focus on the functioning with driving the changes where the internal drivers
include the outdated machinery with the declining of the team morale. It also includes the need
to increase the profitability and working on training the staff. Along with this, there is a possibility
to focus on the management of the change in the workplace with the use of the assigning
actions to the differently set and required activities. 5 The CEO should also focus on the
technologies which reflects the new productivity.6 The forces for the change are the operating
environment, change in the demographic trends and the technology. The forces which are
against the change are the fears of the competitors, the other commitments to the other partner
organisations.
4 Parkay, F.W., Anctil, E.J. and Hass, G.. Curriculum leadership: Readings for developing
quality educational programs. Prentice Hall. 2014
5 Avolio, B.J. and Yammarino, F.J. eds., 2013. Introduction to, and overview of, transformational
and charismatic leadership. In Transformational and Charismatic Leadership: The Road Ahead
10th Anniversary Edition (pp. xxvii-xxxiii). Emerald Group Publishing Limited.
6 Nilsen, P., 2015. Making sense of implementation theories, models and
frameworks. Implementation Science, 10(1), p.53.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 5
The responsibility in the organisations is mainly through the push responsibility with the
organisational hierarchy and the management of the cog in the machine syndrome. The role
fulfilment with the product of the context is important for proper organisation culture along with
hitting the sales goals. The leadership is also based on the engagement of the employees to
work towards the better outcome.
Part B
To handle the DAS problem, there have been different conferences which relates to handling
the Environmental Protection Agency (EPA) which has been accused with the cheating
emission tests. 7 EPA has been able to find about the defeat device or the software that was
installed. Along with this, the scandal was also able to raise the awareness of the high level of
pollution that is being emitted by the cars. The wide range of the car makers are likely finding it
legal to exceed the limitation of the pollution. Volkswagen works on the ethical analysis with the
observed deception, corporate governance and the corporate culture. The CSR holds the
responsibility for the trust of the customers, and the public, with easy manipulation of
regulators.8
7 Birkland, T.A., 2014. An introduction to the policy process: Theories, concepts and models of
public policy making. Routledge.
8 Shapiro, J.P. and Stefkovich, J.A., 2016. Ethical leadership and decision making in education:
Applying theoretical perspectives to complex dilemmas. Routledge.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 6
The leadership approach using a range of the models and frameworks
1. Kaleidoscope: the theory is actually developed by Hope Hailer and Balogun and called
as Change Kaleidoscope theory. The theory mainly aims on three things which are: -
After the results, CEO Volkswagen need to focus on the different perspectives for the handling
of the scandals in the automobile sector. It is important to focus on the management,
organization and the setting of the proper sectors for the internal and the external stakeholders.
This is not involved in the technology based fraud rather they are for the labor union
representatives, where one of the managers is involved with the collection to the politicians.
Hence, a proper communication is important for the CSR which will be able to interpret the
sustainability and measure the corporate social responsibility performance. The managerial
actions are attended with the disclosed documents. The media coverage and the scandals are
concerning the involvement of the buyer, competitor or the employer. The understanding is
about how the local disclosure works with the different functions which relate to the local
stakeholder interests.9
9 Lebbon, V., 2017. Without Proper Regulation, is Corporate Social Responsibility just a Public
Relations Tool?. Journal of Promotional Communications, 5(1).

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 7
2. Mc Kinsey 7S
Hard elements are strategy, structure and systems. Soft elements are shared values,
skills, style and staff. The system should be able to work on managing the relationship
with the effective corporate governance control. The ethics is also based on the
embeddedness of ethics in the organizational policies and control. The research is
based on the regulations and how the compliance work, interpret and struggle with the
management to implement the regulations. The staff and the reputation is also focusing
on the reactions and processes that are based on handling the operations with the VW
scandal considered as a major case for the public scrutiny that increase with affecting
the different organizations in the industry.
3. Kotter’s model – Sense of Urgency framework
The model was proposed by Kotter who happens to a professor at Harvard Business
School and is also a founder of a firm called Kotter International. 10 As per the case study
of Volkswagen Unethical Practice in Diesel Emission test, there have been
investigations about how the emission scandal has been a major deception scandal
which leads to the issues related to the concern of globalization and the environmental
pollution. The change management will be important for the successful integration and
the operations. Create the urgency, include the powerful coalition, create the vision for
the change and communicate the vision. This will help in removing restrictions which are
based on the automobile functioning and the sport-utility cars. Volkswagen urgency of
the work include the ethical approaches with the major impact on the due to the
corporate culture of the company.
4. Rewards (transactional leadership): Leadership is mainly to enhance the coordination
of the people, which will help in improving the communication in between the employees
with better understanding. The transactional leadership is chosen in VW which consists
10 Bolos, M.A.G., 2016. Equity research of Volkswagen: valuation amidst of an emissions
scandal (Doctoral dissertation, Instituto Superior de Economia e Gestão).

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 8
of people with right kind of motivation and direct followers mainly with the help of
appealing their own self-interest.11 There are four dimensions to it discussed below:
A. Contingent rewards: These kinds of leaders always link the goals with the
rewards, and also along with clear set of expectation along with important base
of resources, establish mutually agreed objectives along with providers of many
reward for successful performance.
B. Active management: these leaders are active part of supervising the work of the
subordinates and watch for right kind of changes that covers from standards to
rules and also taking corrective actions to save any kind of errors. 12
C. Passive management: the leader in transactional form should only interfere when
the standards are not rightly met or when the present performance is not
according the expectations.
D. Laissez Faire: the leaders also provide with a culture where the subordinates get
many opportunities to take right decisions. The leader himself can abdicate the
accountabilities and also avoid taking right decision and this is why the group
usually lacks the directions for the same. 13
5. Leadership lifecycle: leadership is followed by a lifecycle. Therefore, there comes a
time when a leader is born, then there is growth process, maturity stage where the CEO
focused on the market maturity rather than competition. In the end, it reaches the legacy
11 Haugh, T., 2016. Cadillac Compliance Breakdown. Stan. L. Rev. Online, 69, p.198.
12 Fabbio, P., 2017. “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal
in Italy. Journal of European Consumer and Market Law, 6(2), pp.94-96.
13 Shapiro, J.P. and Stefkovich, J.A., 2016. Ethical leadership and decision making in education:
Applying theoretical perspectives to complex dilemmas. Routledge.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 9
stage (which included how VW ignored the warning of the emission test triggering
software warnings from the employees) which followed by death. 14
6. GROW model: this model is actually an acronym for Goals, Reality, Options and Will
and the main highlight are four important steps in the execution of this model. With this,
there are efforts which are for the finalization of deals to solve any of the issues of
deception the solution also focuses on the automobile industry to advance for the
traditional technology. The zero emission cars are able to tighten the opportunity with the
cheating done in the emission tests. The awareness, responsibility and the purpose
oriented helped in bringing more opportunities to VW.
The solutions are related to the store operations and how the scandal is considered for the
international deception. The estimates are about the complicated factors where the deal is to
handle the overall customer traffic that has been reduced and work on assisting and dealing
with the other utilization factors where the sales workforce is set with the purpose to improve the
satisfaction and motivation. The factors are related to the need of the battery in the zero
emission cars which is also a high demand of the battery.
14 Dinh, J.E., Lord, R.G., Gardner, W.L., Meuser, J.D., Liden, R.C. and Hu, J., 2014. Leadership
theory and research in the new millennium: Current theoretical trends and changing
perspectives. The Leadership Quarterly, 25(1), pp.36-62.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 10
objectives.
7. Leadership styles: following is the detailed discussion of different leadership styles:
A. Autocratic leadership: this style is based on the boss and leaders hold all kind of
responsibility and authority and no consultation is taken from anyone while taking
decisions.
B. Democratic leadership: this style consists of subordinates that are involved in
making decision. The leader takes the final accountability of the decision but he
is known to delegate the authority to other people as well. 15
C. Strategic style: this style is one that consist of a leader who most importantly is
the head of the company and this leader is not restricted to those at top level of
company.
D. Transformational leadership this style is all about starting the change process in
company, group, oneself and other parts.
15 Shapiro, J.P. and Stefkovich, J.A., 2016. Ethical leadership and decision making in education:
Applying theoretical perspectives to complex dilemmas. Routledge.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 11
E. Team style: this style consists of the creation of future picture where the
organization is heading and what it actually stand for.
8. Leadership Domains framework: the present time is based on the approach to
broaden the current traditional methods for leadership and further forms new kind
approach based on complex science. In last ten years, it is important to apply principles
of this science on various public organizations like government along with broad range of
industries. With the CEO, the implications are related to the failure of the tests, and the
other operations with contributors help in developing a framework which permits the
managers and executives to see things from new perspective with complex concepts
and deal with real world issues and options.16
9. The colors of leadership: It has been seen that VW CEO is able to bring the best with
the different leadership colors, where: -
A. Green: this color represents growth. it is important for the leaders to constantly
grow and learn.
B. Blue: this color identifies with calming and soothing color. There is a time when
leaders should be calm, steady and consistent.
C. Red: this color shows fire and passion. As leaders, it is most important for the
leaders bring passion as an outcome to help to work and team must also lead.
D. Purple: this color is related to creativity and as a leader it is important to be
creative and motivate the innovation for the organization.
16 Nottensteiner, L., 2017. The influence of CSR on employer attractiveness and application for
the millennial generation: a case study on BMW (Doctoral dissertation).

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 12
Figure: Description of the different colors of CEO VW
The outcome from the leadership of change and what does the organisation need now
Volkswagen in the present time needs to make some wise changes and it is crucial for them to
put more power in the hand of its local brands like Seat or Skoda in Europe. It is also important
to engage more and more people and raise their voices in all the concerns in the company. The
offer is about the “buy-back program” where the company will be able to handle the affected
vehicles with the suitable pricing with the out of circulation. The forms are set with the combined
business profit where the social responsibility and sustainability which makes it to be fuel-
efficient and environmental friendly vehicles. 17
Learning from the case
A culture of the company was the problem since it discouraged the open dialogue and also
restricts check and balances that result in cheating and cases of fraud. A culture with high level
of standard can accept failure as development based option and on the contrary advantages for
organization and workforce. Volkswagen has to consider failure as methods to motivate more
communication internally and debate on the problems. The right as well as smart way here is to
work at Volkswagen with the passion to solve the issues. 18However issues like emission issue
17 Nottensteiner, L., 2017. The influence of CSR on employer attractiveness and application for
the millennial generation: a case study on BMW (Doctoral dissertation).
18 Vyas Tippabhotla, V.K., 2016. Corporate and social responsibility. The case of Volkswagen.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 13
were stymied by the autocratic style of the CEO who constantly discouraged highlighting the
defect.
Part C
As chief executive of the organisation, how to engage with the dilemmas and paradoxes
As a CEO, it is important to embrace the learning on continuous basis with high level of
constructive destruction which allows the workforce to gain some confidence to at least try new
opportunities as well as experiences. This further permit them to evaluate the failures,
adjustment and moving forward. It is also critical to keep philosophy into action with right focus
on the internal talent into leadership designation by giving formal kind of training and also
mentoring to assist employees to improve the overall skills.19
The critical generic factors any senior executive team would have to consider
There is part of the reason here which covers problems and claims them to be basic issues of
leadership. It is important to ensure here that the management is aware of everything and
accordingly make better decisions and also motivate a debate along with challenges that do not
need any bad attitude to happen along with the outcome for the natural level of group dynamics.
Data flow and debate can further be stifled because of instinctive aim of the people around
leader to change and bring more bad news along with questioning the challenges. However,
there are still some proofs that suggest that working culture are constantly evolving in a manner
in which such issues become more and more crucial. Volkswagen needs to work on building the
reputation of the company with the good value to work on the legal, moral and the social
responsible manner. The consumers need to focus on the products with the lost trust. The
company has been found to be damaged with the strategic functions that lead to the long-term
perspective to achieve the organisation goals and meeting the interest of the stakeholder.
Volkswagen need to focus on working over the practical and the legal issues where the
demonstrations are about the deceptive conduct. With this, one need to make sure of the
government regulators with the emission of the exhaust systems, with the state-of-the-art, and
the environmental technology.
19 Fabbio, P., 2017. “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal
in Italy. Journal of European Consumer and Market Law, 6(2), pp.94-96.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 14
Conclusion
It is important to focus on any of the unethical scandal with the setup of the business culture.
The compliance is based on working over the different approaches where there is a need to
improve the moral rules with the value based practices. In other words, it is crucial to cultivate
the culture that motivates more and more learning. This happens to include the will to motivate
failure in the name of development also support the employees in their career development. The
emissions and the pollution is a significant concern and need to be dealt with providing an
offering of better technology and development programs. Therefore, it further stays relatively
forgotten and rarely mentions in capability framework of leadership.

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 15
Reference
AVOLIO, B.J. and YAMMARINO, F.J. eds. Introduction to, and overview of, transformational
and charismatic leadership. In Transformational and Charismatic Leadership: The Road Ahead
10th Anniversary Edition (pp. xxvii-xxxiii). (Emerald Group Publishing Limited. 2013)
BIRKLAND, T.A.. An introduction to the policy process: Theories, concepts and models of public
policy making. (Routledge. 2014)
BOLOS, M.A.G. Equity research of Volkswagen: valuation amidst of an emissions
scandal (Doctoral dissertation, Instituto Superior de Economia e Gestão). 2016)
BUSH, T. and GLOVER, D., School leadership models: What do we know?. School Leadership
& Management, 34(5), (pp.553-571. 2014)
DINH, J.E., LORD, R.G., Gardner, W.L., MEUSER, J.D., LIDEN, R.C. and Hu, J.,Leadership
theory and research in the new millennium: Current theoretical trends and changing
perspectives. (The Leadership Quarterly, 25(1), pp.36-62. 2014)
FABBIO, P. “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal in
Italy. (Journal of European Consumer and Market Law, 6(2), pp.94-96. 2017)
HAUGH, T. Cadillac Compliance Breakdown. (Stan. L. Rev. Online, 69, p.198. 2016)
LEBBON, V. Without Proper Regulation, is Corporate Social Responsibility just a Public
Relations Tool?. (Journal of Promotional Communications, 5(1). 2017)
NAHAVANDI, A. The Art and Science of Leadership -Global Edition. (Pearson. 2016)
NILSEN, P.. Making sense of implementation theories, models and frameworks.
(Implementation Science, 10(1), p.53. 2015)
NOTTENSTEINER, L. The influence of CSR on employer attractiveness and application for the
millennial generation: (a case study on BMW (Doctoral dissertation). 2017)
PARKAY, F.W., ANTCIL, E.J. and HASS, G. Curriculum leadership: Readings for developing
quality educational programs. (Prentice Hall 2016)

LEADERSHIP FRAMEWORK OF VOLKSWAGEN 16
SHAPIRO, J.P. and STEFKOVICH, J.A., Ethical leadership and decision making in education:
Applying theoretical perspectives to complex dilemmas. (Routledge. 2013)
VAUHKONEN, P.. The relationship between corporate social responsibility (CSR) and financial
performance in European companies. 2017)
VYAS TIPPABHOTLA, V.K. Corporate and social responsibility. (The case of Volkswagen.
2016)