The change program in Volkswagen has been a great success to the company. For example, after the reduction in the cost of the operation by reducing the corporate committees, there has been a notable rise in the profitability of the firm (Tidwell 65). Additionally, the firm is pushing to new technologies than any of its rival firms. Although the firm was at risk of collapse after the diesel gate scandal, Volkswagen managed to remain profitable. Through the reforms, the corporation has managed to pay two-thirds of its fines and compensations in connection to the diesel gate incident (Tovey 34). There is increase in efficiency within the firm, and their shares have shot by 38 % after the first launch of its electric car (Tovey 34). Contrary to the public expectation that the company would lose investors, it is attracting more investors and building brand confidence to the public. There is also success in decentralized decision making, which promoted fast resolutions and encouraged innovations across all the company’s offices. Delegation of functions also builds employee confidence and improve the diversity of the organization’s products. Individual subsidiaries in various geographical locations can develop their own vehicles to suit their specific market needs.
However, in spite of the successes above, they failed to change their management. The firm still makes use of the old people who have been in the company for a long time (Tovey 38). This is a problem because the firm misses out on the fresh talent and innovative ideas in the dynamic auto industry. Additionally, the organization portrays itself as one that disallows change and has little room for career growth to senior levels. Contrastingly, the constant management may also portray the firm as stable and a good employer that retains its employees.
Recommendations
Based on the success and failure of the change process in Volkswagen, the following recommendations will advise the future company leadership on organization change. There is a need to identify the key areas that require reforms to bring a visible difference (Cummings, Todd Bridgman & Kenneth 43). For example, the firm should overhaul the supervisory and management teams because they were part of the problem. Disbanding the administration will give trust to the Volkswagen clients. Additionally, proper communication is essential in the entire change process. Adequate communication involves the conveyance of the right information to the relevant people on time. Communication will help to eliminate a feeling of suspicion and rumors. Proper communication about the change and its benefits is fundamental in the refreezing stage of organization change (Cummings et al., 56).
Employee involvement in the entire change process is indispensable. The employees have motivation and show readiness to embrace any given change if they are part of the progression. Employee involvement is achievable through proper communication, a collection of their opinions, feelings, and attitudes concerning the change. Celebration of every success focuses and motivates everyone to proceed with change (Cummings, Todd Bridgman & Kenneth 48). Furthermore, the firm ought to establish a feedback system. Feedback is critical in evaluating the success level of a firm’s change process and its benefits. Leadership support and adaptation of organizational structures for change is also necessary for effective transformation. Finally, there is a need to provide support and training as a way of implementing and sustaining the change (Cummings et al., 35). Such support creates awareness and capacity among stakeholders to participate in the change process.
Conclusion
In conclusion, change is inevitable in any given business organization. However what matters is how successful the entire organizational change process is in a firm. The diesel gate incident prompted the firm to come up with several reforms that geared towards alleviating the company from the crisis. It was a crisis that involved the Volkswagen procuring cars that emitted nitrogen oxide above the standard levels, yet the cars were able to conceal this malfunction. Some of the reforms include the decentralization of power, raising managers’ remunerations, production of electric vehicles, recall and putting on hold the launch all of the defective cars. From the discussion above, it was apparent that the change process in Volkswagen after the Diesel gate incident is incomplete because some reforms are still undergoing implementation.
Works Cited
Abuhajaj, Ayham, and George Lampis. “Strategy Formulation Process in Crisis Management: Volkswagen Case Study.” (2017).
Ater, Itai. “The Impact of Product Recalls on the Secondary Market: Evidence from Dieselgate.” (2018).
Burnes, Bernard. “Kurt Lewin and the planned approach to change: a re‐appraisal.” Journal of Management studies 41.6 (2014): 977-1002.
Casasola, Andrea. Dieselgate: Managerial insights into the Volkswagen scandal. BS thesis. Università Ca’Foscari Venezia, 2016.