Volkswagen AG: Organizational Performance Analysis

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ORGANISATIONAL PERFORMANCE
VOLKSWAGEN AG
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Contents
1.0 THE CURRENT INTERNAL ORGANISATIONAL CONTEXT.......................................3
1.1 ORGANISATION TYPE..................................................................................................3
1.2 ORGANISATION ELEMENTS.......................................................................................4
1.3 EXTERNAL INFLUENCES.............................................................................................5
2.0 THE HISTORICAL AND THEORETICAL PERSPECTIVES OF ORGANISATION
DESIGN AND EXPLAINING AND COMPARING ORGANISATION DESIGN MODELS.6
3.0 SELECTING AND USING TWO ORGANISATIONAL DESIGN MODELS AS A
FRAMEWORK TO CRITICALLY ANALYSE THE STRUCTURE AND MANAGEMENT
OF THE VOLKSWAGEN..........................................................................................................8
4.0 EVALUATING THE RELATIONSHIP BETWEEN THE VARIOUS ASPECTS OF
ORGANISATION.......................................................................................................................9
4.1 DESIGN AND WORK PROCESSES...............................................................................9
4.2 PRODUCTIVITY AND THE WORKFORCE.................................................................9
4.3 RECOMMENDATIONS FOR HR STRATEGY AND PRACTICES TO SUPPORT
AND IMPROVE STRATEGIC ALIGNMENT....................................................................10
5.0 THE LINK BETWEEN ORGANISATION DESIGN AND PEOPLE MANAGEMENT
AND DEVELOPMENT STRATEGIES...................................................................................10
6.0 CONCLUSIONS.................................................................................................................11
7.0 TRANSFERRING THE NEW KNOWLEDGE AND SKILLS GAINED INTO
WORKING PRACTICES.........................................................................................................11
REFERENCES..............................................................................................................................12
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Figure 1: Brand under Volkswagen AG..........................................................................................3
Figure 2: Our Vision – The Volkswagen Group of the future.........................................................4
Figure 3: McKinsey’s 7s Model......................................................................................................7
Figure 4: Burke-Litwin Model.........................................................................................................8
Table 1: Steeple Analysis Volkswagen............................................................................................7
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PART B
1.0 THE CURRENT INTERNAL ORGANISATIONAL CONTEXT
1.1 ORGANISATION TYPE
Volkswagen is German Automaker established in 1937 by German Labour Front under Hitler
(Volkswagen, 2019). The group now consists of several successful brands under its umbrella and
is the largest automaker worldwide. The company is the leading multiband group on the globe
with sales revenue of €230,682 million after delivering 10 million+ vehicles (Annual Report,
2017). Volkswagen AG has 12 brands working for a common goal of mobility and serving
millions around the world.
Figure 1: Brand under Volkswagen AG
Source: [Volkswagen, 2019]
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1.2 ORGANISATION ELEMENTS
1.2.1 KEY INFLUENCES ON BUSINESS STRATEGY
The group is proceeding towards its Strategy 2025 which involves the sustainable tailor-made
mobility servings through a diverse portfolio with assuming the corporate and social
responsibilities for the people and environment and attain a sustainable growth (Volkswagen
AG, 2019). The strategy of the company will definitely facilitate several advantages but there are
also some aspects that foster as well as hinder the operations. These influences involve the
factors like risks from the diesel issues, microeconomics and sector-specific risks as per the
company’s report (Annual Report, 2017). But in order to overcome several challenges like them,
the company has designed ‘Group initiatives – Driver of change’ technique which will help them
in making the regular tasks more effective and successful.
Figure 2: Our Vision – The Volkswagen Group of the future
Source: [Volkswagen AG, 2019]
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1.2.2 MEASURES OF ORGANISATIONAL PERFORMANCE
The group‘s management system involves some core KPI’s in their ‘Together Strategy 2025’
named below:
 Deliveries to consumers
 Operating return on sales
 Sales income
 Operating results and performance management
 Research and development ratio (R&D) in the Automotive Division
 Sales revenue, Net cash flow, Net liquidity and Return on investment (ROI) in the
Automotive Division
1.2.3 STRUCTURES
The overall structure and corporate governance in Volkswagen AG (parent company) keeps
direct or indirect interests for all the member brands. It is a vertically integrated energy Supply
Company under section 3 no. 38. All the brands are under the automotive division except the
Volkswagen passenger cars and commercial vehicles which have their separate legal entity.
While in the automotive division, passenger cars, commercial vehicles and power engineering
business cars and all are managed by their separate respective managements.
1.2.4 PROCESSES AND SYSTEMS
The group majorly involves the process of production and manufacturing with the collaborative
work of the other departments like finance, purchase, sales, marketing, HR, R&D etc. with the
high tech systems for all the operations.
1.3 EXTERNAL INFLUENCES
1.3.1 STEEPLE FACTORS
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Table 1: Steeple Analysis Volkswagen
FACTOR INFLUENCE/POTENTIAL DESCRIPTION
Socio-cultural Moderately high Group has a well-defined set of CSR activities
for this element
Technological Low Involvement of the latest and high tech systems
for all the processes
Economical Low Deep pockets with the most successful brand
names in the industry
Ecological Very high Pollution and carbon footprint concerns
Political Moderately high Diverse political scenarios hence diverse legal
compliance techniques
Legal High Well-developed legal structure within the
functions
Ethical High To conduct a well set of ethical activities
2.0 THE HISTORICAL AND THEORETICAL PERSPECTIVES OF
ORGANISATION DESIGN AND EXPLAINING AND COMPARING
ORGANISATION DESIGN MODELS
Organisations are the combined entities of the several essential aspects that make its working and
gaining some benefits in the direction of desired mission and vision. The history and traditional
dynamics of the organisational design depict the major role of the sales and production functions
so as to gain a significant amount of benefits from these practices (Daft, et al., 2010). With this
perspective of the organisations, they are facing challenges in struggling with violence, even-
temperedness, restraint en regulation, early capitalism and increasing discipline, waste and
idleness, supervision and regulations and many more (Mastenbroek, 2018). Hence, their need to
have a systematic change in the functions of these historic organisations and make them more
profitable also in many other areas of business. While the theoretical perspective of organisations
sees them as the ideal functional flowing units which can attain several unique heights and
results. The theoretical modern perspectives nowadays give a high priority to the CSR activities,
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energy consumption, waste management, customer satisfaction, quality management and
numerous other areas like in Volkswagen AG. There are several types of organisational design
methods and models available on which the present companies operate like:
McKinsey 7’s Model – this model of organisational design focuses on the seven aspects that are
necessary to make a business successful in all the competent areas like strategy for future,
systems, operational structure, style, staff members, skills within and shared values in the whole
organisations but since these aspects are part of the internal environment, this model lacks in
influences of external business aspects which may be available in other models or concepts. The
model can be easily implemented to all the sections of organisations as it does not require initial
collaboration but can result tremendously positive.
Figure 3: McKinsey’s 7s Model
Source: [Jurevicius, 2018]
Burke-Litwin Model – the model provided by Burke and Litwin defines several aspects of
organisational design and has presented all of them and their link with each other. This model is
very useful in maintaining synchronisation between the different aspects and work
collaboratively in order to attain some exceptional results. While in comparison to other models
it can be said that the model has some advantages that can be kept at priority for any
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organisations success while in contrast to this, maintaining this successfully in all the dimensions
of the business is quite complex and challenging at the present dynamics of the markets.
Figure 4: Burke-Litwin Model
Source: [Theron and Spangenberg, 2013]
3.0 SELECTING AND USING TWO ORGANISATIONAL DESIGN MODELS AS
A FRAMEWORK TO CRITICALLY ANALYSE THE STRUCTURE AND
MANAGEMENT OF THE VOLKSWAGEN
McKinsey 7s in Volkswagen – the model has imposed a great focus on the soft and hard sets of
an organisation which can be easily utilised in the market giants like Volkswagen. The model
emphasises on the strategy, structure and systems for which they have decided a well-planned
strategy of working together till 2025 which involves the sustainability, removal of the carbon
footprints, management of the organisational structures and systems. This implementation of the
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model in Volkswagen can help in enhancing all these areas of the business through a dynamic
model base and concept. In addition to this, the model also involves the soft sets of staff, their
skills and working styles which will help in determining the future needs and maintaining the
standards required. Managing the skills and knowledge base of the staff members and enhancing
the performance management is a necessary aspect of the organisation's dynamics which will be
helpful for the Volkswagen AG and its brands.
Burke Litwin Model in Volkswagen – The implementation of the Burke and Litwin’s model can
facilitate several strategic competitive advantages and benefits as it helps in overcoming from the
concerns related with the collaboration and synchronisation of all the variables inclusive of
external factors and influences. The model will help Volkswagen in making a positive impact in
the markets as well as create a healthy working culture within the organisation of all its brands
which are working collaboratively for mobility. In addition to this, it can be said that the model
will also be helpful in making an ethical brand presence in the diverse markets and hence will be
a sustainable decision for the growth of the business.
4.0 EVALUATING THE RELATIONSHIP BETWEEN THE VARIOUS ASPECTS
OF ORGANISATION
4.1 DESIGN AND WORK PROCESSES
Organisational design and the work processes are the two aspects of the business which have a
strategic and operational link with each other. Since the organisational design decides the ease of
the operations, information flow and the efficiency of the relationships within an organisation,
developing a sustainable organisation design is a necessary characteristic of an organisation like
Volkswagen. The organisational design depicts the rate of involvement of the support systems
like leadership and management, financial and resource availability and many more (Muijs,
2011).
4.2 PRODUCTIVITY AND THE WORKFORCE
The operational productivity and the performance are the phenomenon’s in the organisation
which have a direct relationship with each other. If the workforce of the organisation is dedicated
and motivated for conducting the complex tasks, the overall productivity and performance level
will be significantly enhanced and hence is helpful in making the best possible results. It can be
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said that, in any organisation or business unit, the workforces is the major working pillars or
operational bodies who make the tasks completed as per the management's decisions. If the
management facilitates them the with their required needs related with working conditions and
personal development, there will be a high probability that they will work positively towards the
attainment of the common organisational goals which will eventually enhance the productivity
(Truss, et al. 2013). The workforce is the primary aspect in Volkswagen who accountable to
enhance the productivity and overcome from the several challenges the company is facing.
4.3 RECOMMENDATIONS FOR HR STRATEGY AND PRACTICES TO SUPPORT
AND IMPROVE STRATEGIC ALIGNMENT
The human resource management is the main responsible body for making the staff members
aligned towards their tasks and make them more competitive with the increasing days in their
working through training and development sessions, special rewards for their working, imposing
them with the motivation and leadership and facilitating them the healthy working environment,
engaging them in the decisions of the business are some effective ways to make the staff more
loyal to a business (Armstrong and Taylor, 2014). Some effective HR management strategies
that can support the strategic alignment of the business of Volkswagen are:
Effective reward management systems for employees – makes people more loyal towards the
business and hence reduces the employee turnover
Sharing clear information regarding the company’s future perceptions and decisions with all –
this will make people feel their value in the organisation that will force them to perform their
tasks more effectively (Armstrong and Taylor, 2014)
Providing several personal as well as professional development programs – people feel more
competent with the on-going processes so that the staff can become more loyal and
knowledgeable with the latest technologies and dynamics.
5.0 THE LINK BETWEEN ORGANISATION DESIGN AND PEOPLE
MANAGEMENT AND DEVELOPMENT STRATEGIES
In an organisation like Volkswagen, the relationship between these entities can be illustrated
with the benefits they have after having an effective linkage with each other in the attainment of
the results of the business. Since the organisational design also decides the tendency of the
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people to work effectively and make the best results from the tasks provided to them. In addition
to this, the link between the people management and development strategies and organisational
design is also necessary as it will be a substantial direction for any business in the global
markets. Since Volkswagen is a multiband group maintaining the effective organisational design
to enhance the performance level of the staff members and the benefits to the company is
necessary which are strategically managed by them.
6.0 CONCLUSIONS
The aforementioned report has been a transitory view of what an organisation can be with the
effective and strategic plans for future like Volkswagen and this has illustrated several aspects
and areas of business. The major highlight of the report is the link or relationship between the
organisational design and several other aspects of the business like culture, performance, systems
and processes which creates a successful path for delivering the present and future business
objectives to the customers. In addition to this, it can be said that the Volkswagen group is one of
the leaders among all the industries and businesses and with their effective approaches they can
continue their dominance and success in future.
7.0 TRANSFERRING THE NEW KNOWLEDGE AND SKILLS GAINED INTO
WORKING PRACTICES
Practising the gained knowledge and skills after a learning process or development of the
assessments like above will be a necessary aspect of the complete learning process and
development for future. The Above gained knowledge can be shared with the actions like:
 Involving the skills in practical work and processes
 Engaging in the activities that can use this knowledge as a primary base and hence
attain better results
 Practising and gaining additional knowledge in order to contradict each other and
develop a better understanding of the working practices
 Designing a proper plan to implement this learning’s will also be an effective way to
transfer and share knowledge with others
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