Management Problem Solving: Volkswagen Analysis
Problem Scenario: What went wrong with VW? The key facts
- VW engineers programmed their 2009-generation TDI diesel (EA189) to operate within lab conditions. The sensors would easily recognise the emissions within this condition, however, would be able to when operating in real time. The engine management software (EMS) affected is an easy and permanent fix, as it
- There is much oratory about “defeat devices” and “rigged software” making it confusing to the public and misunderstood by news media. A car’s engine is controlled by algorithmic software. VW’s engineers put in some additional lines of code in that software that would make their diesels perform better in emissions test.
- The engines in question (EA189) are being replaced by a new generation diesel (EA288). The stand-in is being phased-in over numerous model years; however, had the EA189 been introduced, DieselGate would have had less impact VW’s prospective production and earnings.
- VW CEO Martin Winterkorn is the key mover behind VW’s successful globalization strategy and to his credit with the regeneration of the Audi brand. However, he resigns 11 November 2015.
- The €6.5 billion provision VW announced in relation to the recall equates to €590 per engine affected. The remedy–reprogramming the EMS–is not an arduous one. However, the recall process in the S. alone is notoriously expensive. Additionally, the EPA could possibly impose fines of up to $3,750 per affected vehicle. VW will have to pay large fines (i.e., the U.S.) and faces the threat of recalls of EA189 models in other global markets.
- The damage to VW’s brand parity in the S. market alone will be extensive and enduring. The image of the “foreign” company cheating governments around the globe is going to stick with VW.
- Diesel engines consume less fuel per given journey than do gas engines and therefore emit less carbon, because of their greater mechanical efficiency (20% on average). The tests that VW contrived were for the oxides within nitrogen (NOx,) not CO/CO2 emissions. The number 1 issue around the globe with regard to carbon footprint, diesel vehicles are still the more ideal types of engines to run.
- VW shares have been thrashed by more than 35% and there will be more downside in the near-term from the current level of €127/share.
This assignment is a simulated learning experience designed to test your knowledge about what you have learned in your degree so far.
Please remember to navigate to the CSR report
This will help provide context for the problem and linkages between the different bodies of knowledge in your management major or other degree.
- To be submitted as a complete report
- Please check course profile and course website for
- You are to use your management problem solving skills and previous courses for guidance.
- Extra help and guidance will be available help you in this
What do I need to do?
From this case study you determine a management problem in one of four key areas:
- Organisational Behaviour
- Corporate Social Responsibility/Ethics
Once you choose a pathway/lens for the problem you will have to make your judgment and assessments based on that. You cannot go back.We have selected four broad areas for you to tackle (but only utilize one). They are as follows:
- Strategy – The highest level strategy. Strategy is setting the direction for the organisation and asking people in the corporation to come up with a Your report will discuss what problems you solved and what the direction is for the future for Volkswagen.
- Processes – Processes are the structure of the Should you choose this pathway you’ll come across many complicated process problems. You will solve those problems and you will discuss a way forward for Volkswagen.
- Organisational Behaviour – Organisational behaviour rules and processes and psychology of organisational workflow. This organisation may have a people problem. If the organisation has a people problem, your job will be to go through it and to solve that problem and discuss the way forward for the
- CSR/Ethics – Corporate and social responsibility and ethics. Analyse the ethical and CSR issues and look for the root cause. Then present a CSR/ethical strategy moving forward for
The purpose of this learning experience is to give you an overall feeling of what it is like to do problem solving. In this learning experience we want you to get as much feedback as possible so in the lecture time we will be providing feedback to you as we go. Do not be afraid to ask questions; do not be afraid to participate; do not be afraid to join in the discussion around the case through the trimester.
In the following section will discuss what the basic format of the report should look like (see report template for report structure).
- Executive summary
- Problem Identification
- Analysis of the Problem
While the structure of the report appears basic, it’s important to note that you include all the details in the report. Whilst the format of the report is not the most important facet you will need to make a cohesive and constructive way forward. The content of the report is important. What the teaching team is really looking for is your ability to analyse, create an alternative set of solutions and create a recommended set of solutions for the way forward. Marks will be given for the most creative and innovative solutions based on what you should have learnt in your degree up until this point. Please note, this is a capstone course. As we have said from the beginning of the course, you must draw on the established theories and principles of what you are expected to have learnt up till this point. While we have very clear guidelines for you to follow. those being a strategy, process, organisational behaviour or CSR/ethics lens, we expect you to draw on theory to solve this problem. Having said that, you can be as creative and as lateral as you need to be. Remember this is a course about management problem solving. You are being assessed on your ability to apply what you have learned in your degree to management problem. You’re being assessed on your ability to solve a practical problem and offer practical solutions.