When Ferdinand Porsche designed the first Volkswagen during the 1930s, he most likely could not imagine what major impact that simple drawing would have on what one calls today the great German Auto-Industry. First, targeting the mass market, Volkswagen's intention was to provide energy-efficient automobile, being able to transport families at moderate speed, which would still be affordable. During the 1940s Volkswagen, commonly known as VW, created its signature product, the VW-Beetle, known to be the trigger for exploding sales. VW's North-American subsidiary was one of the many, which suffered from the sudden decline in success of the car. Furthermore, the subsidiary suffered among the declining sales, from an uncoordinated IT structure, which evolved from lacking knowledge.
In 1992, the company first closed a contract with an external IT provider in order to saved costs, but acknowledged soon after that there were not enough specialists within the firm that could govern that contract. Then in 1999, a VW Group wholly owned subsidiary, was assigned to solve the issue, though rather worsen the situation. By 2002, Dr. Uwe Matulovic was transferred from Wolfsburg to VWoA, the newly established CIO decided to finally achieve a stable organizational solution, by creating a new internal IT-Department, called the Business Process, Technology and Organization (BPTO).
When a group of new products arrived at the beginning of 2001, called the Next Round of Growth (NRG), the VWoA subsidiary was confronted with increased complexity within the organization. The main function of the BPTO was to organize the Programme Management Office (PMO), which in turn was responsible for all IT-Projects, as for example the NRG. The overall goal from then on was, on-schedule and on-budget projects.
[...] During the 1940s Volkswagen, commonly known as created its signature product, the VW-Beetle, known to be the trigger for exploding sales. VW's North-American subsidiary was one of the many, which suffered from the sudden decline in success of the car. Furthermore, the subsidiary suffered among the declining sales, from an uncoordinated IT structure, which evolved from lacking knowledge. In 1992, the company first closed a contract with an external IT provider in order to saved costs, but acknowledged soon after that there were not enough specialists within the firm that could govern that contract. [...]
[...] As a consequence, Chief Information Officer Dr. Uwe Matulovic has to supervise and decide on IT projects and investments, which influence all different kinds of operations and employees inside the organization. Not to a surprise the new prioritization process gives rise to dissatisfied employees, because a budget constraint of $60 million makes it impossible to carry out all proposed projects. The large amount of complaints by colleagues, whose projects cannot be funded, show that Matulovic should not underestimate resistance when he imposes changes in the way people work (Andrew McAffee, 2006) but in turn has to think of possible solutions how to deal with the complaints. [...]
[...] Moreover, business unit executives whose projects are granted to receive money will resist the new process. Another important aspect is that highly prioritized projects which are important for VWoA's strategic goals could be abandoned. Consequently VWoA will suffer major throwbacks to reach strategic goals in the long run. Option Leave the funding to the Supply Flow Area of VWoA This option will cause major problems because the SFP is critical to the VW's global supply chain management strategy and would result in major delay of the globalization strategy of the parent company. [...]
[...] How Matulovic should deal with the complaints of his colleagues Armed with the knowledge how the new prioritization and project selection process works, we will try to look how the resulting complaints about the process may influence the company, when rejecting or accepting these complaints. Volkswagen Group is made up of 8 different brands operating worldwide and employs 368,500 people around the globe (Corporate Website, retrieved on 27th September 2011). The outcome of this is a highly interconnected company culture and strong interdependencies between brands and subsidiaries. [...]
[...] In addition employees may be less dedicated to future projects just because they do not believe that the executive managers will implement their ideas. Additionally, communication between subsidiaries, business units and headquarters possibly will be less honest (e.g. in terms of required budget) simply to make projects climb up the prioritization schedule. Another possibility might be that Matulovic and the Digital Business Council rejects projects which are of strategic importance to the whole company. As a result the entire VW Company will have problem in their long-term strategic position to face upcoming challenges. [...]
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