Using a search engine of your own choosing, investigate Volkswagen’s performance

Question

Using a search engine of your own choosing, investigate Volkswagen’s performance over the past two years. Write a brief summary of their fortunes and misfortunes.

Visit the Volkswagen Investor Relations Web site, then use the search box on the right and search for “organizational structure”. In particular be sure to look at the Corporate Governance Report. Alternately, you can perform an internet search for “Volkswagen organizational structure.” From information supplied, characterize the company’s existing structure.

Based on what you have observed in “1” and “2” above; suggest a new organizational structure for the company. Cite any assumptions that you made when you developed your structure.

Explanation / Answer

Volkswagen (VW) is one of the major automobile firms in the world. It has a unique group of 12 globally renowned brands. In 2015, VW has delivered over 10 million vehicles to its customer all over the world. The sales revenue in 2015 grew by more than 5 per cent amounting to 213.3 billion Euros. In 2015, VW had a loss of nearly 4.1 billion Euros since it had to face an unprecedented situation that put the firm in controversy over the irregularities related to its diesel engines. Across the global markets, VW has shown a growth in North American and European markets while it has shown a negative growth in South American and Asia-Pacific markets. VW considers 2016 as a year of transition to re-group itself and reach the performance levels of the earlier years.

VW group is broadly divided into two divisions – Automobiles Division and Financial Services Division. The automobile division consists of the passenger cars and commercial vehicle businesses. The financial services division deals with dealer and customer financing, leasing, banking and insurance and fleet management businesses.

In terms of organisational structure, the Board of Management at VW consists of nine members. Mathias Muller is the current Chairman of VW. He is supported by the other eight members of the Board of Management. Each members is responsible for a specific activity of the corporate responsibilities. The eight responsibilities include:

1) Volkswagen Passenger Cars Responsibility

2) Human Resources and Organisation Responsibility

3) Procurement Responsibility

4) China Market Responsibility

5) Commercial Vehicles Responsibility

6) Integrity and Legal Affairs Responsibility

7) Audi Cars Responsibility &

8) Finance and Controlling Responsibility

While the current structure has served well for VW, the following suggestions may be considered by VW for an organizational restructuring:

a) It may consider following a geographic markets structure with a member responsible for the major global markets (For example: North America; South America; Europe and Asia Pacific)

b) Each of the geographical markets may be divided into various SBUs depending on the relative importance of the business in that specific geographical market.

This is likely to achieve more transparency and control over the entire operations.

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