VOLKSWAGEN OF AMERICA:
MANAGING IT PRIORITIES
Volkswagen or “The people’s car” was initially produced with an intention to make it a family
friendly vehicle within an affordable cost, where all people can afford as well as feel the luxury
of having a car within their financial reach. Many Automobile franchise in the modern era are
subsidiary of Volkswagen Group (VWAG) like Audi, Lamborghini, Bentley, Bugatti and
SEAT which is itself a huge milestone for the company to build the organization to this level.
Volkswagen is the only company that has produced the world’s bestselling car of all time which
is the “Beetle” that hurtled the company’s production to new heights for more than 20 years
due to its rounded style body design and air-cooled engine. In past, the company has seen its
fair share of ups and down right from the beginning due to following a cyclical pattern of
producing a new model at every interval of time to recover from the loss the company was
gradually encountering, which led to high concerns within the firm to take a constructive action
to rebuild a proper system for the overall business of Volkswagen. The company required an
action plan to recover from the losses and be consistent in its production in future as well as
attain a better position within the Automobile industry globally.
Volkswagen of America (VWoA), embarked upon investing in enterprises that were prioritized
according to the 3 phases procedure followed in determining the final list. 5 enterprises
prioritized according to rankings which were Customer Loyalty, New Vehicle Value, Stable
Business Infrastructure, Pre-owned Vehicle Business and Optimizing the Supply Flow. The
agenda for project funding on these enterprises were not accepted at will by business units,
furthermore, Volkswagen Group (VWAG, parent company of VWoA) cut down the funding
demands from $ 210 million to $ 60 million which raised more concern within the Executive
Leadership Team (ELT) members. The CIO of VWoA, Dr. Uwe Matulovic founded himself
in the middle of this hassle as he was the head of management to proceed with the projects.
The CEO of Volkswagen America (VWoA), Gerd Klauss saw that an implication of product-
diversification strategy would be necessary to further organize a business plan that would
rectify the progression of the company, thus implementing the New Round Growth (NRG)
program that focused on specific aspects such as goals, functions and organizational changes
required by the company to reflect in its business. Furthermore, in order to turn the VW market
to United States, Volkswagen signed a 10-year contract with Perot Systems to reduce IT cost
and took a dramatic decision to reduce IT staff that resulted in compromising IT knowledge
within the organization, this argues the overall system’s decision-making process on how
ambiguous it can be to understand its core issue and working towards with an effective plan.
Such mishap by the company delayed the...