The case study deals with one of the most famous feuds in the automobile industry. On one hand there is a company that has been in the industry for generations and has set benchmarking management as well as product examples in the market. On the other hand there is a company that is contemporary, has a modern outlook and is successful. The internal conflict in the Volkswagen Group (VW) was essentially due to the pride factor regarding the individual brands within the group. There was no unity in the management of the brands, each brand under the group wanted to behave in their own way.
This situation came to be known by the Porsche CEO Karl Frederich and he wanted to take advantage of the situation. Porsche banked upon VW for some of its production work, and then the company started acquiring stock in VW and ultimately accomplished a controlling interest. Porsche is a company that is known in the industry for its efficient production management as well as astute marketing tactics. The company was popular for having strategic management that was directed towards lead and profitable measures. And these are the measure that Frederich wanted to incorporate in the Volkswagen Group as well. This was opposed by the chairman of VW, Max Lucas. Therefore it can be said that the management style was the cause of conflict among the companies. The values and principles of the two organisations were different which lead to a conflict of interest.
The objectives of the companies were driven by the values of the leaders in the organisation. Where Lucas was focused on innovation and exceptional engineering, alternatively Frederich was more focused on exceptional profits.
But the plan of The CEO of Porsche did not work and he ended up losing his job while the company turned insolvent and the business was sold to VW and the Qatar government. Later VW completely took over Porsche (Maria-Elena & Laura-Filofteia, 2016).
Aforementioned the people involved in the situation has been a part of a reputed brand and each of them has separate ways of operation. In between the two organisations executives the major differences are in the values and principles of the way they work. These values and principles lead to making organisational decisions such as objectives and goals which is different for different companies; hence there is a major conflict of issue when Porsche wanted to incorporate their lean production strategy in order to increase the profit of the company in the strategy of VW. On the other hand Lucas was a man who was focused on engineering innovations and customer satisfaction as the aim of the organisation. The difference in the personalities of the leaders in the organisation is the source of conflict. The leaders in an organisation should have collective goals and objectives defining that this goal will help in the reduction of internal conflict and in that way the leaders would also not have separate interests as well (Maria-Elena & Laura-Filofteia, 2016).
Due to the difference in the basic values and principles among the two executives the conflict handling styles are also different.
Karl Frederich approach of conflict handling is driven by logic and data; he wants to cut off the product and resources of the line of products which are not making profits for the organisation, this is logical as why would a company invest in items which is running at a loss. His style is profit driven and is focused on the benefit of the organisation. Thus it can be said that if the theory of conflict management by Kilmann & Thomas (1977), is considered the style that has been adopted by Frederich is compromising in nature. This can be justified as he has not tried to make the process of the failing lines better instead because it is non-profit making he wants to shut those products down.
Max Lucas on the other hand is a person who is far sighted and looks in to management as a larger picture. He follows the philosophy of marketing being art and science at the same time. His conflict handling style is accommodating and collaborating in nature as explained by Kilmann & Thomas (1977) in their conflict handling concept. He is an expert in the industry and has worked with other automobile industry previously before taking his position as chairman of VW. Therefore the combination of the two styles are justified, and his experience and his far sighted nature makes him a person who is driven by innovation and technology (Riasi & Asadzadeh, 2015).
The outcome did not go very well for the Porsche CEO Karl Frederich, as the plan did not work and he ended up losing his job, the company ran into bankruptcy. The depression and financial crisis was something that was unforeseen by him, he did not think of the strategy from a broad perspective and also did not consider the dynamic nature of the external business environment (Gupta, 2013). The financial crises that had hit the international market had driven the Porsche company on the brink of bankruptcy. In this condition VW had managed to get a pass from the controlling interest of Porsche. Not only that, Porsche also sold some of its shares to Volkswagen and some to Qatar government. Later VW had taken full control of Porsche (Riasi & Asadzadeh, 2015).
It can be concluded form the above discussion that the style of handling conflict by Max Lucas is more effective. As business operates under two distinct environments: internal and external the management must keep all the factors in focus in order to help the company in time when there is an unforeseen circumstances. Organisations must focus on the several aspects associated with the organisation not only profit. Innovation and technology is a large part of Automobile industry and hence it should be given importance.
Gupta, A. (2013). Environmental and pest analysis: An approach to external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), 13-17.
Kilmann, R. H., & Thomas, K. W. (1977). Developing a forced-choice measure of conflict-handling behavior: The" MODE" instrument. Educational and psychological measurement, 37(2), 309-325.
Maria-Elena, G., & Laura-Filofteia, P. (2016). Conflict In Organizations. Age, 21(1), 7.
Riasi, A., & Asadzadeh, N. (2015). The relationship between principals’ reward power and their conflict management styles based on Thomas–Kilmann conflict mode instrument. Management Science Letters, 5(6), 611-618.
MyAssignmenthelp.co.uk is a name in assignment writing services that students trust. We offer our assignment writing services for a wide variety of assignment including essays, dissertations, case studies and more. Students can place their order with us anytime as we function 24x7, and get their copies at unbeatable prices. We guarantee that all of our solutions are plagiarism-free.
MyAssigmenthelp.co.uk really nailed my assignment. They managed to deliver it on time even though I needed it in a day!
I need an English essay on the Romantic Age, but I didn't have much to spend. These guys did my essay at very cheap prices without affecting quality!
MyAssignmenthelp.co.uk really impressed me with the quality of the dissertation they delivered. It was absolutely flawless!
I thought I would not be able to get help for my epidemiology assignment anywhere but I got that with MyAssignmenthelp.co.uk, and it was a brilliant paper.
Honestly, guys, choose MyAssignmenthelp.co.uk the next time you need a paper. These people have simply the best writers in their team.
I never thought I would ever get an A grade on one of my assignments, but MyAssignmenthelp.co.uk made that dream come true!
I am really happy with the services I received from MyAssignmenthelp.co.uk. The paper was top notch and submitted on time.
Seriously, I think it's impossible to find even a single error in the assignments provided by MyAssignmenthelp.co.uk. I've ordered several, and each of them has been flawless!
I got the most amazing nursing case study I could have ever asked for! I am definitely ordering all my future assignments from here.