Volkswagens Ferdinand Piech - Coursework Example

?Individual Reflective Journal Part Individual Case Reflections Please reflect on each of the chosen cases following the structure below: Case Volkswagen’s Ferdinand Piech This case is about the Volkwagen organization, which is one of Europe’s top car makers. The main issues in this case revolve around the theme of leadership and management with the recently retired CEO, Mr. Ferdinand Piech being the central focus of attention. Organizational growth and development comes out very strongly in this case with leadership playing a key part. Volkswagen is a company that that had almost disappeared to obscurity in the early 1990s when Mr. Piech took over as the CEO, however through his leadership and management skills, the company has enjoyed sustained growth and development into the greatest European car manufacturer with expanded markets and a variety of products that respond to the needs of customers. The main issue here is that the former CEO Mr. Piech who has now retired upstairs to chair the supervisory board exhibited an authoritarian and autocratic form of leadership which is not characteristic of most modern organizations; as a result workers have little voice in the strategy and operations of the company. even though a new CEO in the shape of Mr. Bernd Pischetsieder has taken over, the main fear is that the former CEO has sufficient personal power to continue controlling most aspects of Volkwagen’s organization from outside, this raises fears of intransigence in terms of organizational operations. Obviously, most workers would like more space and ideological input in the operations of the company. The greatest fear however is that even though the company performed under Piech’s autocratic leadership, mainly because of his technical understanding of the industry and its management, his style of leadership may have the wrong influence going forward that may harm the prospects of Volkswagen in an increasingly competitive market requiring more flexible decision making and an input of different ideas from various members of the organization. A number of Key management theories have been illustrated by this case study. First, Fayol’s principles of management have come out clearly in the running of this company under the leadership of Mr. Piech. It is clear that the former CEO appreciated discipline, authority, and unity of command with him being the major center of the last two. This indicates a distrust of other people’s leadership and a sense of authoritarianism. Max Weber’s bureaucracy also comes out clearly in the operations of Volkswagen with the former CEO appearing as a leader who ensured that every process and decision followed a clearly set path. This is clear in the fear that decision making will always be pushed upwards. Within the contingency theory, it is clear that Volkswagen under Peuch, was a company largely built around mechanistic structures characterized by centralization, strict division of labor, vertical communication, and low trust (Burns and Stalker, 1961). This is a system that current members of the organization fear will be continued under the new CEO, who has largely been groomed by the former CEO and that it will eventually be detrimental to the organization. There are a number of problems that can be identified in the Volkswagen case. The first and most clear of all is the problem around leadership and motivation. It is clear that although under the autocratic leadership of the former CEO the company flourished, many of the workers especially in the managerial level expected a new style of leadership synonymous with global trends that would afford them more input into the running of the company and its development to new heights. However, with the presence of the former CEO still looming large and the new CEO most likely to work under the guidance of Mr. Piech, distrust and lack of confidence has cropped up. This may affect morale and performance. On the face of it, the problem is intransigence, with organizational members having the feeling that things may not change; certainly they are not enjoying the current environment and feel that things would be much better with a new system of management in place leading to even greater success for the company. However, the underlying cause of anxiety if the desire for transformational leadership that will reflect modern managerial practices and room for self-actualization of the workers as outlined in Maslow’s hierarchy. This anxiety is caused by the fact that although workers believe in the ability of their new CEO to bring this change, they suspect that he may not have the space or ability to do it under Mr. Piech’s close eye. It is quite clear that the main problems facing Volkwagen are not really ‘problems’ as such considering the positions that other carmakers find themselves in currently with some on the brink of bankruptcy. The problem here lies in the internal organizational environment and it emanates from the desire for more space and an opportunity for managers and workers to play a greater role in charting the future of the company. My solution as the new CEO would be to assume an inclusive form of leadership where ideas both from the board and from lower levels would be accommodated but taken through multi-stage analysis for final decision making. This would give every member of the organization a chance for input while ensuring that the views of the board are still given weight. I would also encourage managerial decisions to be made at departmental and line level as long as sufficient consultation is made. From personal experience, as a supervisor I once worked under an authoritarian line manager who had to consult with senior management for almost every decision, this demoralized him and robbed him of respect from line employees. However, after he left the company a supervisor was promoted to this position who demanded more freedom and autonomy in decision making as long as it was consultative. This gave him much more confidence and respect from supervisors and workers apart from making work easy for everyone. The most important lesson for me here is that due to pressure from the external environment, organizational behavior is changing and management has to change with it. Literature maps transformations in management from scientific management (Taylorism), Bureacratic management, hierarchism and the modern human resource management-based principles of humanistic perspective and Maslow’s hierarchy. It is now important to incorporate emotional intelligence and concern for the human needs and aspirations of all members of an organization in management. This case indicates either lack of understanding of this need or their disregard by the former CEO Mr. Peuch which is slowly affecting the motivation of workers. In future the best thing to do is to move with the times and apply emotional intelligence in understanding what the organization as a family desires, autocratic management may be desirable and applicable in some critical situations but in others it is good to give lower managers and workers some space for decision making as a CEO. Case 2: How Apple got everything right by doing everything wrong This case focuses on the vertical integration style of organizational management employed at Apple under the leadership of Steve Jobs which emphasizes secrecy and a propensity to work alone in all aspects of producing the company’s products. Basically, the case is built around Steve Jobs as the CEO of Apple and his management style that is largely condescending, patronizing and largely authoritative. The case portrays Apple as a company shrouded in secret about its product development, operations and management largely under the influence of its arrogant and protective CEO. The most important issue that comes out of the case however is that irrespective of this kind of working environment and the seemingly outdated leadership and way of doing things for a technological company in a highly modernized area like Silicon Valley, the company has continued expanding its market and making profits on an unprecedented level since Steve Jobs retook over as the CEO in 1997. The underlying problems highlighted by this case include the fact that the company is always in danger of being outdone by its more liberal and ‘modern’ competitors unless it keeps on turning out revolutionary innovations. Another underlying problem is that although most workers at Apple admire their CEO and try to impress him, many may not be happy with their lack of transparency and free flow of information in the company. In fact not many employees in the modern environment would appreciate such strong control over their work that extends to not having to discuss their work even with family. It is evident that the CEO has inculcated his persona on the company and all in it; this attitude leadership also seems to be causing conflict with various players in the industry including media and competitors. Steve Jobs applies charismatic leadership as well as a path-goal approach in his management of Apple as the CEO demonstrated in this case. It is clear that he is a very demanding and autocratic leader when it comes to product development and the direction he would like the company to assume and therefore to win over the loyalty and approval of his workers, he applies charisma and charm to produce the best out of them. This has won him love and loyalty from workers where instead there would have been dissatisfaction and grumbling. It is also rather cleat that Steve Jobs has instilled a bureaucratic type of organization in Apple where rational authority is held largely by him as the CEO and a few select individuals at the managerial level. All decision-making follows a strict and secretive chain with everything that eventually happens in the company having to be scrutinized and approved by him. This gives the CEO a lot of personal power. It is worth observing that most of the personal power that Steve Jobs enjoys in this case originates with his technical expertise as well as his ability to turn around a company that was headed towards bankruptcy to highly performing tech giant. This case highlights a number of notable problems with the style of management exhibited at Apple; the first problem is that lack of transparency within the company itself frustrates many workers. Human beings are curious in nature and it is only fair that workers understand what the project they are undertaking aims to achieve rather than being kept in the dark about the outcome until the last minute; the risk here is that the company can lose expertise to competitors with better working environments. The other problem is that curiosity will always lead to speculation about the product, so far the outcome has been very beneficial to Apple as it raises the market value of their products and attracts greater sales. However, such speculation secrecy is also leading to unnecessary squabbles with people like Nicholas Ciarelli. The attitude and management styles of Apple also portray it as a company with rather outdated modes of operation, a factor that does not augur well with the contemporary Silicon Valley philosophy of ‘doing good’ and friendliness. The final and greatest problem with Apples management style is that it loses a lot of its potential market share by insisting on producing almost everything on its own in a world that collaboration in technology is now the trend. By opening up a bit and allowing compatibility of its software with that of other companies, Apple might be able to make greater profits. In my opinion all such problems result from too much secrecy which in some cases is unnecessary, the company would do with opening up a little bit to give out just enough information about its operations and products without compromising its business strategy. If I had an opportunity to solve the problems identified above, I would first of all make an evaluation of the overall situation and weigh between the benefits and disadvantages of the current situation. This can be accomplished by constituting a team including members from all areas of the company to come up with a good evaluation. The next step would be to strategically change the company policy to accommodate desirable elements that would ensure that only enough interaction with the external environment is achieved to do away with the ‘secrecy’ tag. One way would be to open up a bit to the media. On the business part it would be necessary to work with select strategic partners in software-hardware compatibility that would expand our market. All this can be described in a way as transformational leadership to try and bring the company as close as possible to contemporary ‘humanity-based’ management practices without harming profits. Finally, it would be worth opening up the internal environment of the company a bit to create a sense of transparency without slackening the demand for absolute quality workmanship. In the same line it would pay to let workers toy about with their innovativeness a bit so as to bring in new ideas rather than strictly sticking to the specifications desired by the CEO, it would not harm to ‘borrow’ tactics from Google and give workers some leeway to develop their own software. I have been worked in a processing company where the workers were heavily drilled on what was expected in terms of procedure and outcomes while also being warned with dire consequences for leaking out processing ‘secrets’. The main disadvantage of this as it turned out is that most brilliant ideas from workers went unnoticed while competitors developed even better processes than our company. Eventually the plant was outcompeted, struggled and was then taken over by new management who brought in better processes than the ‘secrets’ we were keeping. In the new set-up some workers introduced better ideas that turned out more effective than what we were doing before. My greatest lesson from this case is that some styles of management although appearing to be outdated and archaic in the contemporary world, can still work if well applied. Steve Jobs clearly applies authoritative and autocratic leadership in this case with the organization operating in secrecy and obscurity associated with old companies, however he balances this with great innovativeness, charisma and personal power to motivate. This produces results for the company. The underlying lesson for me is that it is not the leadership style that exclusively determines the success of a leader rather it is the intelligence of the leader and ability to utilize a particular style to the company’s benefit. Most contemporary organizations are more open and embrace democratic management but they do not attain better results than Apple. Part 2: Summative assessment Over the semester my understanding and approach to critical perspectives in global management has greatly evolved and grown towards a more mature level. I have learned some of the most critical contemporary aspects of management that assume central importance in organizations today. This new knowledge has greatly expanded my understanding in conjunction with real work experiences and examination of various cases like the two above. First, in my work experience one of the things I have observed is that different companies have empowered their employees to different levels according to the organizational cultures and the type of leadership in place. I have also witnesses in many companies strive towards greater employee empowerment as a strategy towards greater profitability. This module has really helped understand what employee empowerment is all about and its benefits to an organization. Basically, I have also learned from practical cases that employee empowerment is a process that has failed in some organizations due to poor implementation while greatly benefitting others and contributing to effective leadership and management. Transactional leadership is a model of leadership that is in place in almost all organizations but which most workers or even managers do not understand properly. Personally before taking this module, even though I have experienced the workings of transactional leadership in all my previous positions, I did not know that what I saw was transactional leadership although I experienced issues like contingent reward and management by exception. Now my thinking about contemporary global management has greatly evolved with an understanding of different views of modern leadership like situational leadership, the path-goal approach, charismatic leadership, and other factors that impact on leadership globally like gender issues and international affairs. My study of various cases has also awakened my mind to the fact that many organizations, some of them very successful continue to utilize leadership models considered outdated but it is the way in which the leaders balance the models with contemporary styles like virtual leadership and charismatic leadership that matters. A case in example is the case of Steve Jobs and Apple. Some of the key points for me from this module include the following; Management can be approached from a wide variety of perspectives but it is incumbent upon the person in leadership to assume an appropriate mix of leadership styles and utilize models that will provide results for that particular organization at that time. This may be termed as situational leadership. The contingency theory of leadership is applicable in this case. I have also learned that in any position of leadership and management, the leader may or may not succeed depending on the power they wield in relation to the type of leadership they assume. For example one would need considerable power to assume autocratic or authoritarian leadership. This is well illustrated in the case of Ferdinand Piech at Volkswagen as well as Steve Jobs at Apple to some extent. The two had a considerable amount of personal power resulting from their expertise and management prowess thus enabling to single-handedly control very powerful organizations. My next learning point is that days have changed and with the changes, more management theories and models have come up to respond to new management needs. While in the old days when industry started, theories such as industrial management were relevant, now we have Maslow’s hierarchy of needs and other leadership models that put humanity on the forefront. Managers are more affected by the external environment to a larger extent and have to respond to dynamic societal changes in dealing with the needs of the workers. Today workers have greater input in organizations and even in some where they do not have, external pressure is making them to demand for this as a ‘right’. The result is that managers too have to be transformative in their leadership or risk destroying their organizations. Finally, I have learned from the module that the interaction of needs is now an important factor in determining the king of leadership expected of managers. Transformational leadership comes out as the favorite model that can be assumed by any manager wishing to be successful as today the best results for an organization can only be achieve from a good balance between team needs, individual needs and the task that the team is charged with. In all this, a leader will have to possess emotional intelligence to succeed in achieving transformational leadership while pursuing the goals of the organization. After going through this module, I have gathered great managerial knowledge to enable me put into practice some of the principles I have learnt in this model. Some areas of the module have been of particular interest to me and I would like to pursue then and learn more for my benefit in future. One of these areas is application of old management styles to contemporary organizations. Particularly I am interested in cases where an organization is threatened with collapse, for example when a company faces closure due to poor performance and a new manager or CEO has to come in and deal with many great challenges. I have noted that in such circumstances autocratic approaches to leadership and authoritarianism has tended to work well particularly when the new leader has immense understanding of the industry and the working of the organization. This indicates that in such circumstances leadership styles considered a bit outdated turn out to be very effective. This is an area I would love to pursue further and study using various different cases particularly to understand at which point a manager in that situation should now turn to more contemporary transformational and motivational forms of leadership. What I have learnt in this module is very important towards achieving my career goals and improving my job activities. Basically, I intend to try balancing out various leadership styles and models with respect to different situations that I find myself in so as to match various situations with appropriate approaches. I may also apply my knowledge to advice colleagues and friends in management and leadership positions. Bibliography Burns, Thomas, George Stalker (1961). “The management of innovation.” London: Tavistock Publications. Read More