Examples of product structure
Q3- Is Volkswagen Group more centralized or decentralized?
Disadvantages of centralized organizational structure
Centralized organizational structures
- organizational structure is the outline of a company’s framework and guidelines for managing business operations
- centralized and decentralized
Q4- Identify and describe Volkswagen Group’s organization structure
- rely on one individual to make decisions and provide direction for the company and all the subsidiaries
- can suffer from the negative effects of several layers of bureaucracy.
- These businesses often have multiple management layers stretching from the owner down to frontline operations.
- Business owners responsible for making every decision in the company may require more time to accomplish these tasks, which can result in sluggish business operations
Organization structure
- refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. (BusinessDictionary.com , 2015)
- When a work group is very small
- formal structure may be unnecessary
- Larger organization
- decisions have to be made about the delegation of various tasks
- 12 brands from 7 countries: Volkswagen Passenger Car, Audi, SEAT, SKODA, Bently, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicle, Scania and MAN
- These products cater for different market based on their quality and affordability
Volkswagen
- German automobile manufacture
- Biggest automaker in Germany and Europe
- One quarter of western Europe
Q1. Where is the Volkswagen Group on the mechanistic and organic continuum?
Q2- What are the important organizational principles guiding the Volkswagen Group in achieving its goal of becoming the world’s largest automaker?
Decentralized organizational structures
Organic continuum
Volkswagen Group’s organization structure
- decentralized with fewer rules and procedures
- open divisions of labour
- wide spans of control
- more personal coordination
- organizational configuration that groups together those employees who are responsible for a particular product type or market service according to workflow. (Boundless.com , 2014)
- to increase flexibility
- This will create multi-divisional structure.
- The multi-divisional structure breaks down according to product, market or geographic considerations
Organic continuum
- flexible
- with minimal focus on the rules and procedures
- decisions will be made by low level managers
- organizing process of management can be done efficiently if the managers have certain guidelines so that they can make decisions and act (Management Study Guide, 2013).
- principles of organization are the methods by which the organization maintains its organizational structure and the processes it uses to keep the structure efficient (George, 2015)
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Liew Jun Ming B1202864
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Volkswagen’s organic continuum
- Principle of span of control
- refers to a span of supervision which represents the number of employees that can be handled and controlled effectively by a single manager Management Study Guide, 2013).
- requires that the number of employees that a manager is able to handle under him should be decided
- decision can be made from two choices which are either a wide or narrow span of control
- International trend scouting and technology scouting from part of its strategic orientation
- it also operates from research bases in the U.S., Japanese, and China markets. Volkswagen Group Research has done researches for all Volkswagen Group brands.
- Volkswagen Group has doing research, design, and marketing for their own. This model used more in dynamic situation.
Mechanistic continuum
- often have several individuals responsible for making business decisions and running the business
- organizations rely on a team environment at different levels in the business.
Volkswagen Group have chosen a wide span of control.
in charge of 12 different brands, which is a wide variety
allows for less overhead cost of supervision and better communication, supervision and co-ordination
- very bureaucratic
- focusing on following procedures and rules through tight controls
- having specialized jobs
- the decisions are made by top managers
organizational principles used by Volkswagen Group
Volkswagen’s mechanistic continuum
Conclusion
- Focus on automobile
- Wide variety of mobility-related services
- manufacturing the Volkswagen’s car
- used in more stable situation
Examples of geographical structure
Mechanistic continuum
- operates research bases in the U.S., Japanese and China markets
- centralized with many rules and procedures
- a clear-cut division of labour
- narrow spans of control
- formal coordination
- principle of unity of command
- refers to a one subordinate-one superior relationship where every subordinate is answerable and accountable to only one superior at one time
- helps in avoiding communication gaps while feedback and response is prompt
- helps in effective arrangement of resources, such as physical and financial resources which leads to easy co-ordination and, therefore, effective organization
Conclusion
Question ?
Volkswagen Group is in charge of 12 different brands under the leadership of Martin Winterkorn
Volkswagen
Decentralized organizational structures
Disadvantages of decentralized organization structure
Multi-divisional structure
- Individuals at each level in the business may have some autonomy to make business decisions.
- Decentralized organizations can struggle with multiple individuals having different opinions on a particular business decision.
- These businesses can face difficulties trying to get everyone on the same page when making decisions.
- Geographic structure
- to focus on worldwide management with strong units in each geographic region
- product structure
- multiple types of cars or home products
- market structure
- each division serves a different market, or type of customer
Conclusion