Essays on Destructive Leadership at Volkswagen Company Case Study

Download full paperFile format: .doc, available for editing

The paper 'Destructive Leadership at Volkswagen Company" is a perfect example of a business case study.   Before diesel scandal in 2015, there was a chain of mistakes that occurred in the Volkswagen Company. From the use of Toxic triangle technique, the C. E.O was using authoritarian management style that made the employees have feared that might have discouraged the engineering team to fix the problem. Also, there were personalized powers as there was a family that assumed that the company belongs to their family and should not be led by the outsiders which caused instability.

The problem was also caused by the ambitions to export triple the previous number of vehicles to the U. S by 2018 which made the company cheat to overcome the emission tests and also to defeat Toyota Company which was the largest automaker worldwide. Further, there was the insufficient flow of communication in the organization due to inappropriate cultural values that did not allow the subordinates to have comments on the outputs and there are perceived threats such as fines and settlements that would have a significant impact on the financial position of the company.

The company also has ideological hate in the market that is being propagated by its competitors and would great effects on its brand image. The words such as “ hoax” and “ Big Bad Wolf of Wolfsburg” would tarnish the brand of the company. Moreover, the company had bad values that compromised their integrity and pushed them to deceive the consumers and the governments of various countries to an extent of being awarded tax incentives that they are making the air cleaner. A toxic triangle is instruments that can be used to gain a clear understanding of the real factors that can cause a business corporation to fail in particular the market.

The triangle is composing of the components such as Destructive Leaders, Conducive Environment and the Susceptible Followers. Volkswagen is a company that is based in Wolfsburg, Germany. The company deals with the manufacture of cars, and it has subsidiaries in different parts of the world especially in the United States (U. S). In 2015, it was reported that the company was involved in fraud by cheating in the emission tastings in the U. S according to the Environmental Protection Agency (EPA) (Bovens, 2016).

Therefore, using the toxic triangle model, this paper would discuss the causes of the failure of the company. Destructive Leadership Charisma The leaders of the company did not consider the mechanism of failure to foster dialogue. For instance, the professional engineers in the Volkswagen Company have vast experience in solving the issue of carbon emissions, but they were denied the opportunity to tackle the problem (Mesch, 2016). It happened due to the destructive management style that was being practised by the C. EO, Mr.

WinterKorn. It is believed that Mr. WinterKorn might have discouraged the technical team from fixing the issue by asking them to intensify it further through designing software that would deceive the emission tests. The top leadership of the Volkswagen Company crafted myths about its diesel engine to deceive the members of the public. The management cheated about the qualities of the engine such as the ability to cover massive mileage, efficiency performance and the environmentally friendly which was not true (Nemeth and Carvalho, 2017). The leadership of the company went further to explain how their over 11 million vehicles have software that able to detect pollution.

All this charm from the management has made the company to face multiple court cases across different nations in the world. Personalized Powers In the Volkswagen Company, the shareholders were being controlled. The families of Piech and Porsche decided to replace Winterkorn with Potsch for the position of the chairman of the board. It was a clear mission of the company to focus on the recovery rather than investigating the source of the scandal (Fracarolli Nunes et al. , 2016).

The whistleblower from the company was also fired after warning the staffs from the Information Technology (IT) department not to discard the evidence. The action of sacking the informer further tarnishes the image of the company as it shows that the corporation is based on dishonesty. Further, the report of the investigation was supposed to be represented before the sub-committee of the board was later canceled despite that the shareholders were promised that they would be informed of the preliminary reports (Fracarolli Nunes et al. , 2016).

The two families ensured that Mr. Potsch would chair the committee that was concerned with the investigations so that to prevent the shareholders from being aware of what transpired in the scandal. Therefore, all these events of manipulations of the Volkswagen management created an unethical leadership in the company. Moreover, the administration of the business was for a long time is under the control of one clan that gives the chance of personal ownership. After the scandal was relapsed to the public, Peich whose family has owned the company since its inception by his great grandfather, he created a series of attempts to remove the C. E.O Winterkorn from the helm of the enterprise.

Peich had a belief that the company belongs to their family and an outsider should not lead it (Cue, 2015). The analyst is stating that the leadership struggle within the Company might have motivated the C. E.O to conceal the defects in the diesel engine to have more sales that can make the earnings of the shareholders to grow. It was a strategy of retaining the leadership of the company by having a good performance that was fabricated. Ideology of hate The diesel gate scandal has made the image of Volkswagen to rebrand as “ Big Bad Wolf of Wolfsburg” in the market.

The competitors of the company have taken advantage of the situation to discredit the image of the company in the mind of the consumers so that to attract them into their brands (Franco, 2016). The competitors are stating that Volkswagen Company cheated the EPA in the emission test so that they can boost their total sales in various part of the world.

They modified their engine system a manner that emission testing gadget cannot be able to detect any pollution to conceal the fraud. Susceptible Followers Bad Values There were great desires to have vehicles that have better fuel economy and environmentally friendly to tackle the problem of climate change. It made the Volkswagen Company introduce a diesel engine in late 2008 that meets various requirements in its principal markets such as in the U. S (Lang, 2015). The diesel engine made the brand of the company to earn a good image in the market because of its fuel efficiency, good performance, and the affordable price.

References

Barth, M., Bauer, A., Hughes, E., King, A., & Koerner, H. (2017). Volkswagen Public Relations Plan. Retrieved from http://www.uwgb.edu/clampitp/phils%20site/internet_broadcast/documents/Volkswagen-Cases-Case.pdf

Boretti, A. (2017). The future of the internal combustion engine after “diesel-gate” (No. 2017-28-1933). SAE Technical Paper. Available at: http://papers.sae.org/2017-28-1933/ [Accessed 31 May 2017].

Bovens, L. (2016). The Ethics of Dieselgate. Midwest Studies in Philosophy, 40(1), 262-283.

Cârstea, V. (2016). The Dieselgate Scandal and Its Implications on the Labor Market. Romanian Economic and Business Review, 11(2), 242.

Cavallone, M., Freidank, J., Bowen, M., & Ubiali, E. (2016, December). An Italian perspective of “Dieselgate” related to Volkswagen’s brand image. In Toulon-Verona Conference" Excellence in Services". Available at: http://www.toulonveronaconf.eu/papers/index.php/tvc/article/view/406 [Accessed 31 May 2017]

Colli, F. (2017). Why it's so hard for Europeans to get compensation after Dieselgate. [online] The Conversation. Available at: http://theconversation.com/why-its-so-hard-for-europeans-to-get-compensation-after-dieselgate-68958 [Accessed 31 May 2017].

Cue, A. (2015). Volkswagen’s Diesel Emission Scandal “Dieselgate”. Retrieved from http://www.ashleighcue.com/PDF/CueDieselgate.pdf

Dee, S. (2015). Dieselgate Scandal Could Cost Volkswagen Up To $35 Billion. [online] Forbes.com. Available at: https://www.forbes.com/sites/greatspeculations/2015/09/24/dieselgate-scandal-could-cost-volkswagen-up-to-35-billion/#290eafe62e8d [Accessed 31 May 2017].

Fabbio, P. (2017). “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal in Italy. Journal of European Consumer and Market Law, 6(2), 94-96.

Fracarolli Nunes, M., & Lee Park, C. (2016). Caught red-handed: the cost of the Volkswagen Dieselgate. Journal of Global Responsibility, 7(2), 288-302.

Franco, N. G. (2016). Bad reputation, customer attrition and marketing of the future: can the management of a company save it from a scandal? Available at: http://tesi.eprints.luiss.it/17344/1/186081_NICOLAI_FRANCO%20GABRIELE.pdf

Gu, B., Luo, Z., & Wang, X. (2016, December). Who Will Tweet More? Finding Information Feeders in Twitter. In International Conference on Computer Processing of Oriental Languages (pp. 437-448). Springer International Publishing.

Koplin, J., Seuring, S., & Mesterharm, M. (2007). Incorporating sustainability into supply management in the automotive industry–the case of the Volkswagen AG. Journal of Cleaner Production, 15(11), 1053-1062.

Krachler, C., & Rzehorska, M. (2017). “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal in Austria. Journal of European Consumer and Market Law, 6(1), 36-39.

Lang, G. F. (2015). VW’s Dieselgate–Loss of Engineering Integrity; A Poor Excuse for Economic Insanity. Retrieved from http://www.sandv.com/downloads/1510lang.pdf

Mesch, S. (2016). The Volkswagen Scandal: Let’s clear the air.

Nemeth, K., & Carvalho, J. M. (2017). “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal in the European Union. Journal of European Consumer and Market Law, 6(1), 35.

POLICY, E., POLITICS, C., & EPILOGUE, N. D. (2016). Fuel for Thought mid-August–October 2016. Energy & Environment, 27(8), 942-1044.

Riehm, T., & Lindner, L. (2017). “Dieselgate” and Consumer Law: Repercussions of the Volkswagen scandal in Germany. Journal of European Consumer and Market Law, 6(1), 39-41.

Terry-Armstrong, N. (2016). The Volkswagen Scandal-The high cost of corporate deceit. Busidate, 24(1), 9.

Van Someren, T. C., & van Someren-Wang, S. (2016). Strategic Innovation in Russia: Towards a Sustainable and Profitable National Innovation System. Springer.

Download full paperFile format: .doc, available for editing
Contact Us