Volkswagen Case

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In the Fall of 2015, Volkswagen was accused and found guilty of cheating on emissions tests that were put in place by the United States government in order to regulate the amount of harmful gases released when driving vehicles. In the aftermath of the scandal, their CEO Martin Winterkorn was replaced by Matthias Muller who found himself in need of drastically changing the corporate culture in order for VW to once again be a reputable automobile manufacturer. In order to understand why the scandal occurred in the first place an analysis of the historical culture that had dominated the company until recently. Volkswagen was established by the Nazi’s with help from Ferdinand Porsche and the majority of the company continues to be held by his descendants. Nazi Germany is infamously known to have been extremely authoritarian with orders being strictly followed coupled with a unparalleled sense of self-righteousness. This culture inevitably influenced how VW operated and led to it’s CEOs demanding perfection, setting …show more content…

Volkswagen used to be “burdened by bureaucracy” with Winterkorn being obsessive about making all of the decisions all the way down to the angle of the windshield. Alternatively, Muller only focuses on the “big picture” decisions and those leaves concerning individual products to those who are in charge of that particular product line. This shift to a decentralized firm contrasts with the strategy implemented by John Chambers at Cisco Systems who wanted to add bureaucracy; he accomplished this by establishing “councils and boards” that accounted for making 70% of the decisions. The reasoning behind the strategy offers an explanation to why each CEO chose the path they did: Cisco was attempting to break into many new markets and did not want to miss any opportunity whereas Volkswagen had to empower employees to act in the “right” way to remove the tarnish from their

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