Volkswagen Scandal

Volkswagen Scandal

Introduction

In September 2015, Volkswagen appointed Matthias Müller as the new CEO after Martin Winterkorn resigned from this position. His resignation came after Volkswagen found itself involved in a disastrous emission testing scandal. This scandal erupted from the September EPA probe that found that millions of its vehicles contained illegal software aimed to deceive environmental inspectors in the U.S. and Europe.

Müller’s daunting task will be to restore Volkswagen brand image, consumer confidence and comply with industry standards. He will do this as the company undergoes an organizational restructure.

Evaluation

Volkswagen Strategy

According to the official Volkswagen Group’s website, its strategy focused on becoming a global economic and environmental leader among automobile manufactures. Volkswagen sought to become the market leader in China, Europe and the US by increasing sales in these markets. To achieve this, specifically targeting the US market, Volkswagen needed to lean on the development and implementation of “clean-diesel” technology for its motors, which coupled with its goal of high customer satisfaction would help it achieve market differentiation through their brand.

Although the emissions scandal has affected their strategy and vision, it does not make it unattainable. However, it will require the reenergizing of its strategy with emphasis on restoring their brand and costumer trust, which form part of the before mentioned strategy.

Organization

Müller’s difficult task will not necessarily be the development of a new strategy or vision. I think that his major hurdle will be to rally the company through this major setback and reestablish its brand within. Part of this endeavor will have to include the analysis of the company’s structural organization and culture to understand how this violation came to be. It seems that Volkswagen Group’s critical tasks and formal structure facilitated the goal set out by its former CEO to increase sales within the US automobile market, as the sales figures from 2008 to 2015 showed and the development and introduction of vehicles with environment friendly engines. However, the question is what underlying culture and informal structure that facilitated the implementation of this deceitful software. Although Volkswagen Group engineers attempted to develop a “clean-diesel” engine, news articles hint that these engineers did not believe their technology was capable of meeting the goal of cleaner emissions. An alternative option was presented to Winterkon, but this idea was dismissed since another company developed this engine. It is obvious that the organization understood the CEO’s goal to capture a bigger picture

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