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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

-Divisional structure

  • 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)

Lee Bun Meng B1201896

Liew Jun Ming B1202864

Ho Hong Pin B1400317

Chai Yew Wei B1400319

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.

Conclusion

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 ?

Example

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

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