Introduction
Volkswagen is one of the pioneering companies in the automobile industry. It was founded on May 28, 1973 by Ferdinand Porsche. Its headquarters are in Wolfsburg, Germany. Volkswagen manufactures a range of cars to suit the preferences of customers around the world. This wide variety of cars as well as the reliability with solid manufacturing process makes these cars one of the best in the world today. However, for its success Volkswagen has to conduct effective planning, controlling and organizing so as to enable it provide best services to its clients while at the same time operating optimally.
SWOT Analysis
SWOT stands for strength, weaknesses, opportunities and threats that are within the business environment.
Strengths
• Its Brand Name Volkswagen is one of the most popular car brands in the world today with various types of automobiles.
• Global Presence: It operates in 153 countries around the world with plants in many countries in Europe, North America, Asia, South America and Africa.
Weaknesses
• Lack of Presence in the US Market: The biggest weakness of Volkswagen is its conspicuous lack of presence in the US market. It therefore does not sale much in US.
• At this era when global awareness is becoming a major issue, still most of its products are not Environment-friendly.
Opportunities
• Increasing Demand in Asia and Africa: The opportunities are enormous for Volkswagen with respect to the growing markets. As Asia and Africa come out of poverty, the demand for transportation is only going to increase.
• Demand for Buses: Another key opportunity is the demand for buses. As traffic increases, there is likely to be a higher demand for mass transportation like buses.
Threats
• Legislation that the European Union and other countries are seeking to implement to reduce the emissions of carbon dioxide is a major threat to the company.
• Fluctuating Fuel Prices and Rising Cost of Raw Materials
Functions of the Management
Planning
Planning is the course of determining what is to be done, how and who will do it. Effective planning enables a business to achieve its objective or goal. Volkswagen has to set objectives of what they intend to achieve. However, the objective must be smart (specific, manageable, attainable, reliable and time bound). Volkswagen sets an objective of selling ten million vehicles and making a before tax profit margin of 8% in between within January 2012 and December 2012. Its goal is not only topping Toyota and GM fiscally but also to make the company the most attractive and lucrative by 2018 (Graham 2006). For the objectives to be achieved raw materials, human resource, capital and personnel are needed. The top management source for these resources then distributes them to the lower level manager who then ensures that the resources are used in the most prudent way. Capital resource and raw materials are bought while personnel and human resource is employed by the staffing department. These resources are then distributed to various departments for effective planning. The process of planning involves several steps. The objectives to be achieved are set by the management of Volkswagen and other members of the company. Then the possible premises are developed since a plan is usually uncertain and may not be achieved wholly. Then the management identifies the alternative courses of action to be taken. After that the cons and pros of each alternative are evaluated to determine the best alternative. The alternative with fewer cons and more pros is then selected. The final step is to put the plan into action and follow up actions starts so as to monitor the performance of the plans with time so that if there is any deviation it is identified as soon as possible and the corrective action taken to ensure that objectives are achieved (Shuler 1997).
Organizing
Organizing is the process of bringing together the resources required in order to achieve the goal of an organization. These resources include human, physical and financial resources. Volkswagen has to identify the activities that it has to undertake, classify them into groups, assign duties, delegate and coordinate authority and responsibilities effectively to ensure that raw materials, human resource, capital and personnel are used in the most productive way.
Related tasks are put together under one department and then a departmental manager is given the responsibility to control the activities. For instance all their staff related issues are under the staffing department. Specialization is whereby individuals are allocated duties which they best skilled and comfortable in. This boosts the morale of the workers thereby increasing their productivity.
Integration and coordination
The ability of mangers to lead others in attaining the set goals is an important factor in management of Volkswagen. Integration and coordination in Volkswagen has made the company take great strides in the automotive sector by enhancing efficiency in performance due to cooperation between departments. Various departments in Volkswagen group are linked thus proper coordination ensures that every department participates in enforcing the strategies of the company by integrating all the employees in the common plan (Wagner 1998).
Supply department and the production department are integrated to ensure that raw materials are available on time to aid in timely production of cars. In addition, marketing department is linked to production to ensure that all marketing plans are ready by the time production is complete. Another coordination function entails looking for partnerships and acquisitions to increase its market share in different countries. The company’s mangers can also negotiate with the local governments to reduce the cost of production.
Leading
Effective leadership is the source of success for any firms. Volkswagen aims to increase the market share by tapping into markets that had been ignored for long. Currently, the management is working on expanding its customer base in the US after almost ignoring this market for two decades. It is making the right moves by designing cars that will suit the tastes of the American people. Also, Volkswagen is increasing local production to offer a competitive price. Its current plan is to sell 800,000 Volkswagens and 20000 Audis by 2018. The company is currently expanding its Tennessee plant to fulfill this goal. (Taylor III, 2012). Expanding the plant would mean that more vehicles will be manufactured in the US.
Volkswagen in the US has resorted to manufacturing carts that suit the tastes of the Americans. In general terms, Americans like Sports Utility Vehicles and sports cars. The company has developed models such as then VW Toureg, Audi A8 and the Porsche that are supposed to entice the Americans. Recently, company launched the Crossblue for a test before it can engage on mass production.
Management control
Set performance objective and standards
The management of Volkswagen has standards that re to be met by all departments. The company has done this to influence productivity and quality in its products. Setting standards ensures that the employees are well organized and are taken to task for their actions. This means that the employees with continually struggle to deliver the highest standards.
Measuring actual performance
This enables them to identify and deviations and design a solution. Each department is taken to task to explain about its progress in the achievement of the common plan. The management of Volkswagen expect that all departments to work together since they are interdependent.
Comparing performance against standard
The management measures actual performance of the departments against what is supposed to be done. The actions can be to prune the workforce or undergo staff development program. A good example is that the employees are regularly updated on the incoming technological trends in the automobiles sector (Terry1997). This is important since technology is constantly changing and the employees might not adapt or may take a lot of time adapting to new changes. The managers of Volkswagen are thus on their toes trying to ensure that their staff stay competitive in the sector.
Reinforce successor taking corrective action
Volkswagen had previously been on the downward trend due to poor management. The new management has tried to work on the shortcomings of the previous one by diversifying the production line, Volkswagen group has started bus manufacturing to tap into the increasing demand of the Asian and African markets. This increases the market share and the influence of the company in the emerging markets.
Conclusion
In short, Volkswagen is a large automaker that is led by an efficient CEO at the top. The management has made many strategic decisions that are helping the company to counter its threats and weaknesses and to capitalize on the opportunities. The management team of the company are working day in day out to ensure that the company is well managed and recording an overwhelming performance. This has also brought about a lot of success for the company in terms of a positive brand image and higher profits. However, there have to consider their stance on carbon emission as this can have an impact on their operations in the future.
References
No author. (2013). SWOT Analysis of Volkswagen. Strategic Management. Retrieved from: http://www.strategicmanagementinsight.com/swot-analyses/volkswagen-swot-analysis.html
Taylor III, Alex. (2012, July 10). Volkswagen: Das Auto Giant. CNN Money. Retrieved from: http://management.fortune.cnn.com/2012/07/10/global-500-volkswagen/
Shuler, Terry. (1997). Volkswagen: Then, Now and Forever. New York: TPR Incorporated.
Volkswagenwerk, Marcus Lupa. (2003). Volkswagen Chronicle. Wolfsburg: Volkswagen AG
Tweed, Alex. (2011). Having the Blues Comes with a Greener Future. Border Mail. Retrieved from: http://search.ebscohost.com/login.aspx?direct=true&db=n5h&AN=apn.L6RC1R2&site=srck5-live
Graham, Stephen. (2006, April 19). Volkswagen Board Debates Strategy, Dodges Debate on CEO's Future. Canadian Press. Retrieved from: http://search.ebscohost.com/login.aspx?direct=true&db=n5h&AN=MYO428458819406&site=srck5-live
Wagner, Max. (1998). Volkswagen. Boston: New Line Books.
No author. (2008, July 24). Driving Volkswagen's Future: Website Offers Insight into the World of Tomorrow with 'One', 'Ego' and 'Room.' Hamilton Spectator. Retrieved from: http://search.ebscohost.com/login.aspx?direct=true&db=n5h&AN=Q4K120531892608&site=src-live
