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Volkswagen
On May 28, 1937, the German government under the powers of Adolf Hitler created an
automobile company. The newfound company (rst operated under the name of “Gesellscha*
zur Vorbereitung des Deutchen Volkswagens mbH.”[ CITATION NA15 \l 1033 ] It wasn’t unfil
later in 1937 that they actually adopted the simple Volkswagen name, which in German, means
“The People’s Car Company.” A Nazi a8liate, known as the German Labor Front stafioned the
headquarters of the company in Wolfsburg, Germany. With the help of Ferdinand Porsche, the
Australian engineer and Hitler (nally had the right blueprint for the (rst German “People’s Car.”
The name of the newly designed automobile was the Beetle and it was the answer to German
transportafion necessifies. In fact, the Beetle is sfill a legend that lives today. Moving into the
present day, Volkswagen currently employs over 572,000 people worldwide. This overwhelming
number of employees produces right around 39,000 automobiles every weekday that sell in
more than 150 countries around the globe. The Beetle is no longer the only car; they now make
SUVs, compact cars, converfibles, and other vehicles as well. Wolfsburg, Germany has kept its
posifion as the company headquarters throughout the years. When you drive down the road no
maAer where you are in the world, you are bound to see a “VW” or in other words, a
Volkswagen.
The Volkswagen Group as a company ranks extremely well when compared to all other
organizafions in the world. As of May 2014, the company had a net worth of 119.05 billion
dollars and sales of 261.55 billion dollars. With these types of numbers it puts them as the 56th
most valuable brand in the world and 19th out of the global 2000. Breaking it down even more
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they rank seventh in sales, 35th in profit, 69th in assets, and 54th in total market value.
Volkswagen Automofive Group looks to maintain a standard of this level for years to come and
only looks to get stronger.
Something people would (nd odd about the Volkswagen automobile company is the fact
that they do not have a mission statement. The closest thing to a mission statement would be
the company’s goal. This goal is expressed by the company as, “The group’s goal is to oEer
aAracfive, safe, and environmentally sound vehicles which can compete in an increasingly tough
market and set world standards in their respecfive class.”[ CITATION Ovi13 \l 1033 ] Volkswagen
would like to measure themselves through a strategy that goes into eEect in 2018. This strategy
goes by the name of “Group Strategy 2018.” Group Strategy 2018 “focuses on posifioning the
Volkswagen Group as a global economic and environmental leader among automobile
manufacturers.”[ CITATION Nea14 \l 1033 ] The intended plan of the strategy is to become the
best and most creafive automobile company in the world by 2018. Becoming the number one
automobile maker can be recognized or realized for them through four major goals. Having high
customer safisfacfion, increasing unit sales to more than ten million annually, having long-term
return on sales, and having the best workers of the industry are the goals that will take them to
the top. In the everyday grind and operafion of the company there are goals as well. These
goals are aAained by those thousands of employees who are on the clock for the company day
in and day out. The (rst operafional goal is top performance. Top performance starts and
(nishes with the employees. For a company to be at its peak, performance-wise employees
must commit 100% and give maximum eEort. Leading by example is another key operafional
goal that can be an important role carried out by mainly management or higher–ranking
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employees. The principle for leading by example has to be “Lead, Demand, and Promote.” The
3rd of the four operafional goals is to have acfive involvement throughout the organizafion. At
Volkswagen, they want their employees to have a voice as well as an opinion. Employees who
feel they have a say in things tend to believe more in the company as well as want to work
harder for it. The last operafional goal is to be socially responsible. They understand the
importance of having corporate social responsibilifies and have set strong rules in place. No
one wants their company looking bad socially, especially with how easy word can spread now.
Every company has a dominant strategy; we discussed two of the best strategies during
this class. Known as the Porter Model and the Miles/Snow Model these two strategies help us
understand how an organizafion really funcfions. When looking at both of them, I would have
to say I see Volkswagen as having a Porter’s Generic Compefifive Strategy Model. Porter’s
model revolves around three main concepts: cost leadership, diEerenfiafion, and focus.
Volkswagen has a strong connecfion with all three of these concepts, which made it the easy
choice. They can relate to cost leadership by how they try to set the prices low for a foreign car
that sfill stacks up well against all compefifion. However, that isn’t the only way they relate,
with the goal of being the best automobile company by 2018 they set a standard for cost for the
rest of the industry. Taking a look at diEerenfiafion, Volkswagen has a lot of it. They plan to
confinue making innovafive automobiles focusing on powertrain, body style, the operafions of
the vehicle, and safety as well. The focus part of the Porter Model can be broken down into two
diEerent sectors being cost focus and diEerenfiafion focus. Taking them both into considerafion,
Volkswagen leans towards the diEerenfiafion focus sector. This is because the company looks to
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set themselves apart from all other automobile companies. They try to do this through newer
technology, innovafive advancements, creafive new car styles, beAer gas mileage, etc…
“Goal Approach is an approach to eEecfiveness that is concerned with an organizafion’s
outputs and how well the organizafion has met its output goals.”[ CITATION Ric13 \l 1033 ]
Everything at Volkswagen from top to boAom is goal-oriented. Through the goal approach
companies are not focused on pro(t or sale levels by the numbers, but are more appreciafive of
aAaining company and industry goals. The main goal at VW is to become the number one
automobile maker by 2018. Having a goal-oriented approach makes the employees of the
company work as a team to aAain their set goals. Goal approach is best for those who don’t
want to look at only numbers as being successful.
With 570 execufives and 66 subsidiaries Volkswagen automofive has an organizafional
chart that goes into much depth. The CEO of the company Marfin Winterkorn gained control on
January 1, 2007, and is currently the chairman of the board as well. He has served on boards
for many companies such as Audi, Porsche, Lamborghini, etc… Under confinuous developments
of outstanding product porPolios they look to expand these porPolios and execute a proli(c
toolkit strategy. Segment and market growth focus on growing larger internafional/foreign sales
as well as producfive prints of foot. These care processes are what have shaped Volkswagen
into the company they are today and the one they plan to become in the future. Fending oE of
the organizafional chart is the organizafional structure. Having three key components,
organizafional structure can be defined as
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“designated formal reporfing relafionships, including the number of levels in the
hierarchy and the span of control of managers and supervisors; idenfi(es the
grouping together of individuals into departments and of departments into the
total organizafion; and include the design of systems to ensure eEecfive
communicafion, coordinafion, and integrafion of eEorts across
departments.”[ CITATION Ric13 \l 1033 ]
Organizafional structures have either verfical linkages or horizontal linkages or somefimes, both.
Volkswagen’s linkage is horizontal, coming from long-term cooperate agreements and
arrangements. The linkage is horizontal because it reduces the cost of transacfions, invents
scaled economies, increases efficiency, and competes at a high level throughout the industry.
