Introduction
Volkswagen Company is facing a great challenge in its operations and so is the entire car manufacturing industry. According to the article, the company is subject to a scandal in the U.S. market for its ethical misconduct of cheating about nitrogen oxide emission by its diesel vehicles. The ethical misconduct has landed the company in serious problems. Despite the cost, the company will face in fixing the affected cars; the company is also fined for the misconduct. Various world governments have tightened the environmental regulations concerning the issue of pollution.
The same issue has extended to the other car manufacturing firms in the world. Volkswagen competitors are now suffering increased cost for repairing their vehicles to comply with the environmental regulations put in place. Meeting the current standards regarding the environmental provisions is posing a great challenge to the entire industry.
It is double trouble for the car manufacturers since they are also facing harsh economic conditions in the markets they trade. For instance, the article articulates that recently the market is facing slow down. An outstanding example is China, which happens to be one of the largest car markets in the world. Other markets that are still experiencing the same conditions were Brazil and Russia.
Furthermore, the cost of manufacturing cars with fewer emissions and conducting research and development by the car manufacturers are very high. Despite the advancement in technology, that allow the manufacture of cleaner engines such as driverless cars faces a lot of challenge due to the high capital resource required. The companies feel that entering into a merger may not solve the underlying problem. The issue remains unsolved with the companies looking for better strategies to cut cost and comply with the environmental provisions.
Analysis
The corporate social responsibility concept of strategic management play a significant role in bringing into attention the issues discussed in the article that affects business. According to this concept, it is important for the companies to offer products and services that meet the needs community without hurting them. Under these concepts, complying with environmental regulations is a subject of concern to Volkswagen. The scandal facing the company is due to it’s the regulations prohibiting it from producing cars that emit high nitrogen oxides to the atmosphere. The company worsens the situation by cheating about its situation. It is becoming very hard for the company to come out of the mess due to increased costs of repair and manufacturing new models. However, the regulations are still tightening to enhance efficiency in the sector.
Also, strategic planning is another area that concept that is applicable in the case discussed in this article. Poor strategic planning is the key reason as to why the car manufacturing companies are in a mess of failing to meet the cost of producing new cars. The concept calls companies to evaluate their businesses and identify the problems leading to inefficiency. For instance, the article clearly indicates that the car manufacturers have over the past failed to comply with the environmental regulations that condemn pollution. As a matter of fact, the companies have failed to come up with proper strategies for overcoming the issue. An outstanding solution to the problem calls the company to plan and use the available resources in meeting the plans.
The resources available to some of the car manufacturing companies need priorities. It is important for Volkswagen to make priorities in its planning. For instance, the company needs to focus on developing new models that meet the required standards as a way of reducing its costs. Developing strategies that will ensure compliance with the regulations and reduction of the cost of production is important for the companies in the industry. Such a move paves a way for strategic formulation concept that requires businesses to determine actions that would help them to meet their goals. The implementation of the actions also requires good measures that will ensure that the goals prevail.
Finally, control and evaluation concepts of strategic management are also applicable in the case presented in the article. Strategic control requires the companies to monitor the strategies as they take a course to identify whether their implementation is in line with the strategies. Corrective measures are thus important in putting things in order. For instance, Volkswagen needs to implement strategies such as developing new models that do not emit too much of nitrogen oxides. The implementation of the action should look whether the car models manufactured meet such standard and if not corrections are necessary. The process should end by evaluating the strategies to determine the level of attainment.
Conclusion
The success of any businesses in the world is subject to its focus on social responsibility. It is important to comply with the regulations governing business operations to enhance efficiency. Although the issue of oxide emission by cars in the world persists, meeting the standards is important for Volkswagen as a way of reducing costs associated with non-compliance. The future of the car manufacturing industry will depend on the need to meet standards and address the needs and preferences of the customers.
