Scope
The Volkswagen Emission Scandal started on 18th September 2015 when the United States Environmental Protection Agency (EPA) questioned the credibility of the German automaker for emitting pollution. The authority issued a notice of violation of the Clean Air Act to Volkswagen Group. The scandal raised concern among the governing authorities putting the credibility of the German automaker under scrutiny. The outrage had a long term impact on the German automaker as the company was deceiving government regulators regarding compliance with pollution emission standards. There were questions related to the organizational culture, how could such a scandal happen for so long? The overall corporate culture at Volkswagen was under scrutiny. The scandal shows the deceptiveness tolerance for fraud, and rule-breaking at the end of the company. Culture is an authoritative force helps in making decisions in organizations best interests (Barrett, et al 2015.). The status quo doesn’t permit sincere internal communication causing an end up of business. While considering the case of the Volkswagen it is clear that the organizational culture has a long term impact on the organization status. From the case it is clear that the organization discouraged open dialogue and limit the check internally. This has led to failure of a high standard business atmosphere in Volkswagen. The breakdown was due to the gap in communication and loopholes in overall mechanism. In this overall company scenario it is clearly visible that there is a necessity to manage efficiency by developing examples of leadership (The Volkswagen emissions scandal explained, 2016). From the case study it is clear that system failed due to fraudulent people in the company. Ethical leadership is under scrutiny due decisions to fraudulent behavior of the top level executive to make high profit margin. In such a condition leadership plays an important role in dealing with the competitive pressure. Volkswagen dealt with the situation in an unethical way in order to make surplus profit that made the situation most horrible.
The report primarily focuses on the role of Culture, Leadership, Personality/Motivation, Power & politics and Changes on the Volkswagen. It precisely defines the consequences of the scandal on the organizational culture.
In today’s rapid changing business atmosphere the widening market opportunities and a wide variety of needs has become a prevalent reason behind strong customer’s collaboration. Scrutiny of stakeholders has become a prominent part for the organization in order to avoid illegal actions. The ability of manager changes while managing the stakeholders in order to gain a competitive advantage. With the changing work scenario the organizational change has become important for the organization to enhance the performance in order to make long-term profit. The purpose of organizational change is to enhance the productivity (Aaker and Joachimsthaler, 2012).
Perspectives on Change Management and/or Organizational Development
It has to be noticed that the recent scandal has created a consciousness amongst people and various governing bodies. In the recent time there has been a development of the organizational culture. The Volkswagen emission scandal has created awareness among the organization. The changes inside the organization are necessary for the development of the organizational goal. As per the case study there were certain changes that were required to manage the issues occurring in the organization during the whole process. In the process of change management it is required to adopt the changes taking place in the business atmosphere. There were speculation post incident regarding the credibility of the company (Crête, 2016). It is important to find out the most appropriate ways through which the damage can be controlled for the long term perspective. At Volkswagen the main issue was that the top level management was not informed and in order to make exaggerated profit they used the damaged equipments. One can understand that ethics and behavioral are important for managing the reputation of the brand in the market and can consequently be managed by forming effective training and development forces (Schein, 2010).
Leadership is one of the most important aspects in gaining competitiveness inn the industry. This is managed in order to understand the different aspects attached with the organization on a long run. The traditional leader is more or less focused on developing authority of an organization by professing tradition or custom. The main motive for the specified condition of affairs is that it ‘has always been done in that way’. Volkswagen scandal has clearly point out to the deep-seated cultural problems in how VW is managed. During the hearing it was stated by the CEO – Michael Horn that the matter arose due to the negligence of some of the engineers who installed the software for some unknown reason. The reason was due to the engineering teams who failed to meet emission regulations. Further he stated that it was not a corporate decision and that the board never approved the installation. It is very well stated by Peter Drucker that culture eats strategy for breakfast. For a company the internal culture is important and senior leadership is accountable for development of culture that will help in imbibing ethical and legal decisions (Carroll, Levy and Richmond, 2008). These are important for any business entity. This not only help in making profit but helps in developing a better image in front of the customer’s. It is important to profess the organizational culture in order to nurture long term goodness in the organization. Employees only behave in the way they are asked by the management. Leadership is important for the organization in order to manage cultural values. The leadership needs to support the importance of honest communication. The leader has a duty to manage the organization in a positive way by upholding the positive attitude and skills (Northouse, 2015).
Assumptions of Leadership – Traditional and Post-Heroic Perspectives
Leadership development is important for expanding the capacity of individual to perform in order to manage the leadership roles. These roles help in facilitating company strategy through developing alignment, mindshare and capabilities. There is lack of engagement in the expansion processes by senior management. The New product development is important for the business process. It is clear that VW management statement related to the issue has very well stated decisions concerning development of engines. It was the case of sheer mistake. The manager is concerned with the majority of “real business” by making the quarterly numbers and satisfying the investors. The company requires the choice about the new products that can only be created while engaging the whole organization. In the given case it is very well visible that the senior manager was involved in the whole scandal and they were lying. The incidence reflects the case of failure of leadership due to the ignorance of the management (Kotter, 2008).
It is important for the organization to develop effective measures by engaging the employees in training and develop program. It is however important that VW has to involve the employees in the decision making program and should make participation in designing the authority. It is important to develop the skills and development in the employees so that it allows the organization in managing the challenges. . Ethical leadership is under scrutiny due decisions to fraudulent behavior of the top level executive to make high profit margin. In such a condition leadership plays an important role in dealing with the competitive pressure. In this case it has become evident at the part of the company to manage the organization in an effective way by developing skills in the employees. This will evidently help in organizing in the appropriate way (Spillane, 2012).
Power and politics is important for a business by governing decision making by how employees interact with each other. The business depends upon the positive or negative power at the workplace. Politics play a direct role in the organization productivity. Positive politics help in involving employees in a better way that help in increasing the overall productivity. It therefore looks for rewarding those employees who works in a well-efficient way. It helps in gaining high level of efficiency and to motivate the employees in attaining high level of performance. The employees have a higher retention rate in managing the organization. The negative politics adversely affects the organization productivity. It challenges the organization in creating the differences in managing the work. In the case of VW it is clear that there were internal issues related to conflict management and politics that resulted in the emission. At Volkswagen the main issue was that the top level management was not informed and in order to make exaggerated profit they used the damaged equipments. The top management directly disowns the emission scandal by blaming on the senior manager for the decision making. They stated that they didn’t participate in the decision making and the fault was from the side of the senior manager who initiated without any approval from the management. All together this incident reflects the disparities in the organizational cultural values and the role of employees. The employees are said to behave in the way they are asked by the management. Leadership is important for the organization in order to manage cultural values. There were loopholes in the decision making that resulted in occurrence of the incidence (Gates et al 2017).
Leadership Development – Traits and Skills/Competences
The organizational design is the step by step methodology that identifies the dysfunction in the organization. The process is focusing on the changes taking place in the organization. There are certain issues in the organization that states the necessity of an effective organizational design that allows in improving the profitability, customer service, internal operations. The overall process of the organizational design is to understand all the aspect related to the organization and to achieve them in a holistic approach (Avolio, Walumbwa and Weber, 2009; Schein, 2010). The goal of an organizational design is to achieve the desired result by following certain measures:
Through an excellent customer service
- By increasing profitability
- all the way through Reducing operating costs
- enhanced competence and cycle time
- by promoting effective culture of committed and engaged employees
- An obvious strategy for managing the business
The organizational design at VW is effective in managing the differences. The 2015 Scandal has questioned the organizational design. This shows that there were problems in the organizational design. There was no proper flow of information in the organization that led to the conflict. . It is important to profess the organizational culture in order to nurture long term goodness in the organization. Employees only behave in the way they are asked by the management (Smith and Parloff, 2016). The organization integrity is under question as it affected the organization in many forms. For a company the internal culture is important and senior leadership is accountable for development of culture that will help in imbibing ethical and legal decisions. The organizational design need to be managed in an effective way by organizing the resources in a well organized way. VW has lost a significant amount of stakeholder interest in the market.
Performance management is a process through which manager and employees work together by planning, monitoring and reviewing the work. Other than just an annual performance review the continuous process of performance management helps in providing efficiency. It provides the clear feedback to ensure the career goals. The fundamental goal of performance management is to ensure the goals by stating the objectives in a clear way. Fair pay is an appropriate aspect in attaining efficiency. It allows the organization in meeting the objectives by creating a competitive advantage (Ismail Al-Alawi et al 2007). The success of VW group is based on the performance appraisal packages. They have a systematic process through which they provide a good amount of appraisal. The scandal reflects the limitation of the performance appraisal mechanism where the organization failed to meet the requirement and emission occurred creating a worldwide fury (Oldenkamp, van Zelm and Huijbregts, 2016). It is very well stated that the employees who were involved in the scandal were involved in it. They want to make profit through the unfair mean causing the disturbance and questioning the integrity of the employees and the overall process through which they were rewarded by the employer. It was due to the ignorance of the high authority and greediness to make unethical profits that the organization failed to meet the standards. The brand lost the faith in customers across the globe. Most importantly it is necessary to understand that it will take time to get back to a positive situation. Six executives were charged for the scandal. The high authority misused their position and created the whole situation (Linnenluecke and Griffiths, 2010). The performance management process should be effective so that the employees do not switch on to an unethical mean to make profits. The case reflects the problems at each level causing disparities (Toor and Ofor, 2009).
Power, Politics and Organizational Culture
For an organization it is important to manage learning and development to engage the employees in a productive activity. There is a necessity to manage the organization by introducing efficiency through training and development. The employees should be given proper training and development so that they know how to perform under pressure. The emission was due to ineffective training process. Emission scandal has highlighted the issue related to Organizational learning and development (Keyton, 2011). There were issues in the organization due to ineffective training. It is necessary to look into the matter cautiously so that these incidences can be controlled in future. Such incidences show that the big brand name needs to be vigilant in order to manage the ongoing issues. The problems related to the organization development and learning is necessary to initiate the activities in an effective way. The purpose is to develop learning and development in order to reduce the ill-effects taking place At VW. It is therefore necessary to initiate the process by developing effective learning mechanism to reduce the impact (Jones, 2010).
The most suspicious element in the whole process is the need for effective personal liability for individuals. There is a necessity through which the organization can develop liability on each individual participating in the ineffective practice. The employees were intentionally engaging in misconduct failing to make certain the completion of enough risk management. It is important to develop learning and development process for the employees so that they understand the corporate culture and does not get involved into the suspicious activities (Alvesson and Sveningsson, 2015). The overall corporate culture at Volkswagen was under scrutiny. The scandal shows the deceptiveness tolerance for fraud, and rule-breaking at the end of the company (Lane, 2016).
Ethical leadership is directly related with the ethical beliefs and values and rights of others. It is important for a leader to manage the organization by fostering trust, honesty, consideration, charisma and fairness. In the recent time, ethical leadership has developed as an important concept that needs to be given equal attention. An ethical leader is always able to manage the organization in a better way by allowing the employees to work in a better way. His duty is to keep a check over the significant events taking place in the organization. Ethical leaders for all the time discern how to do the right thing no matter how difficult to describe precisely what “right” is. He is not frightened to do what he truly believes in and imbibe the similar values in the employees (Jung and Park, 2017; Baumgartner, 2009).
There are gaps in the ethical leadership in the whole scandal. It is very well visible that nobody is ready to take responsibility of the incidence. It is due to the inefficiency in the leadership that led to the whole scenario. From the case it is clear that the organization discouraged open dialogue and limit the check internally. This has led to failure of a high standard business atmosphere in Volkswagen. It is important for a leader to foster effective leadership practice so that the employees do work in an ethical way. The current issue reflects the necessity of ethics and principles in the organization to attain long term sustainability. Volkswagen scandal has clearly point out to the deep-seated cultural problems in how VW is managed (Cue, 2015).
Team work is crucial for the organization in a well-behave manner. It is often essential for contemporaries to work well together in a well-organized way. Teamwork is a way through which people try to cooperate by their skills and provide positive feedback, in spite of any personal conflict. The current issue reflects the problems in team building and management. There were critical problems in managing the organization in an effective way. There were problems in relation to development of team. A team is made of a bond among the team members. In this case none is ready to take responsibility of the incidence. The CEO – Michael has stated that the matter arose due to the negligence of some of the engineers who installed the software for some unknown reason. The reason was due to the engineering teams who failed to meet emission regulations (Boodoo, 2016).
It is however important for an organization to develop an effective team in order to create better understanding among the team members so that such incidences can be reduced in future date. There is a necessity to look into the matter by creating an effective environment simulating conversation. It is visible that there is lack of proper understanding among the employees creating gap. It is important to find out the most appropriate ways through which the damage can be controlled for the long term perspective. At Volkswagen the main issue was that the top level management was not informed and in order to make exaggerated profit they used the damaged equipments. There is lack of coordination creating issues in the organization. It is important to find out effective tools that allow in managing the conflicts in an effective as well (Armour, 2011).
It is important for an organization to motivate employees in a positive direction. The employee motivation is a level of commitment and creativity that is necessary to manage the activities in an appropriate way. Competing theories related to employees motivation and involvement is necessary in order to manage the business. It is necessary to discuss the inefficiencies in the organization and to motivate employees in a positive way so that one can achieve the results. There is necessity to reward those employees who are accomplishing the goals. The tangible and non-tangible motivational incentives are important for attaining the effective results. In such a situation it is required to adopt the changes taking place in the business atmosphere. There were speculation post incident regarding the credibility of the company. The emission arose the issue in the current business environment scenario is able to manage the work (The Volkswagen emissions scandal explained, 2016).
The changing and competitive business scenario is creating a change in the leadership style. The incident specifically point out to the leadership. Leadership is important for any business entity. This not only help in making profit but helps in developing a better image in front of the customer’s. It is important to profess the organizational culture in order to nurture long term integrity in the organization. It is necessary to manage the leadership by organizing the resources in an appropriate way so as to reduce such cases at the international level in the era of globalization the whole world is seeing occurrence of such incidence. At global platform it is important to develop effective equipments to reduce the issues. Such issues bring the problem that occurs and question the leadership style. This incident states that there were problems related to leadership.
Conclusion
To conclude, this report states the overall impact of the scandal on Volkswagen. This has a long lasting deep impact on the company. In order to make profit companies are choosing the wrong way to break alongside a variety of competitors by putting burden on the consumer. The latest emission issue has affected the image of the company and reflects the mean through which they are unethically practicing in the industry. At present there is a necessity to develop a better indulgent atmosphere at workplace. Along with the workforce there is a necessity to prioritize the quality. Volkswagen scandal has clearly point out to the deep-seated cultural problems in how VW is managed. The German Giant has admitted the accusation made against them due emission. They also got to admit the issues effective provisions that help in managing the activities. Employees only behave in the way they are asked by the management. Leadership is important for the organization in order to manage cultural values. Competitive environment creates pressure on the employees to choose wrongful activities. VW deployed programme calling off 11 million cars crosswise the world from 2009- 2015. However certain findings focus on managing better understanding among the employees in order to prioritize the cost over quality. Another concern is related with being dishonest with the consumer that has affected the brand image on a long run. Lastly, there is a necessity of involving all the senior members and to make them aware about the changes taking place in the organization. This might help in reducing the incidence of such event.
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