Managing Culture and Change Complexity of Leadership

Question: Discuss about the Managing Culture and Change for Complexity of Leadership. Answer: Introduction: The importance of change management at workplace cannot be overemphasized. In order to survive in the market, and to retain its position, and regain the faith and loyalty of consumers, Volkswagen had to adopt the effective change management strategy. However, at the same time, in order to monitor the changes, the adoption of Mckinseys 7S Model was also highly important for the organization. When a huge organization like Volkswagen intends to change a single aspect of the organization, it is left with no option but to change the other aspect as well (Rhodes 2016). The diesel emission scandal has created much trouble for Volkswagen, as the organization lost its goodwill in the consumer market. Hence, it became absolutely imperative to change the senior managers, as removing them could only restore transparency to the organization. However, according to Mckinseys 7S Model, a single change is always associated with multiple factors that if overlooked, may lead to complete chaos and organizational failure. Mckinseys 7S Model states that there are seven major elements that determine the success of an organization, and a change in one will resultantly influence the other element, if the same is not re-aligned. Figure : Mckinseys 7S Model Source: (Alsheher 2013 ) The above factors form an important part of an organization, and there exists a relation of inter-dependence among each of the factors. Consequently, the change in the senior staffs of the organization must be followed by the change in the strategy, skills, style, structure as well as systems and shared values of Volkswagen (Roth and DiBella 2016). A huge crisis emerged for Volkswagen, when charges of fraudulence and violation of environmental rules were being brought against the management authority of the organization. Being accused of having cheated the emission tests, the German car giant organization started encountering unforeseen challenges in conducting business further, and hence the adoption of the change management strategy became absolutely imperative (Rudzinski and Uerz 2014). Starting with the chief executive, the head of group services, the sales head, and almost each employee holding high and managerial designation in the organization was changed. As and when the organization discovered the inefficiency and professional incompetency of the employees, it immediately changed the staffs, as there were competency gaps that were harming the reputation of the organization (Jurevicius 2013). However, the change in staff had to be followed by the change in the other six factors as well. With the change in the staff, there was also a change in the management, and as such the entire structure of the organization also underwent change (Kapferer 2012). The administrative procedure of the organization consequently changed. One of the major external factors that influenced the change in organizational structure was the recent diesel emission scandal. It should be remembered that apart from the legal complications, and the loss of consumer goodwill, the organization also suffered from a huge loss as its market share also went down remarkably (Elson et al. 2015). Hence, the organization had to re-structure its business activities. Volkswagen was primarily known for developing and selling passenger cars as well as commercial vehicles, and yet at present the organization has focused more on the production of fuel-efficient small cars and luxury vehicles (Singh 2013). Again, as a result of the scandal, the organization had already incurred a huge expense, and as such it had to align its strategy to meet the goal and objectives, as well as to enhance its revenue. The strategy of the organization so far was to enhance its revenue with the help of the sale of a huge number of vehicles; however, the strategy has been recently revised to incorporate the issue of sustainability in it (Klein et al. 2015). As a result, the organization at present is not only focused on the production of the vehicles, but on the production of fuel and energy efficient vehicles . Hence, as per the new strategy of the organization, Volkswagen will be producing more of electric cars. Matthias Muller, the current Chief Executive Official of the organization has explained the new strategy which claims that the organization will be delivering thirty new electric cars by the year of 2025 (Klein 2015). The skills of the employees also need to be changed, and the employee skills play an important role in the change management of an organization. As soon as the management of the organization was changed, Volkswagen also needed to improve and develop the employee skill of the existent employees, so that their skills comply with the vision as well as the strategy of the organization. It was being observed that the senior management of Volkswagen was dominated chiefly by male German engineers, and had the workforce been a more diverse one, such moral lapses might have been avoided. Hence, the organization resolved to hire a more diverse workforce, as well as to enhance the skills of the employees, so that the corporate culture and leadership can also be changed (Grant 2016). The administrative system of the organization was such that the former chairman, Ferdinand Piech would take a decision by discussing an issue with the works council only. However, the organization recently has proposed a change in the system as well, as the chairman from now on, would be required to consult the shareholder, whereby if it is agreed, it would be brought forward to the work council (Musso and Cusano 2015). Consequently, the leadership style of the organization was changed. The former CEO, Winterkorn introduced a dictatorial working culture, creating a sense of fear, as a result of which the employees could not rise up, and speak against the wrong issues (Fernando 2016). However, a more lenient yet flexible leadership style was introduced with the appointment of new leaders, as a result of which focused more on capability and insight solutions. Finally, Volkswagen has also revised and re-introduced the shared value of the organization, as its new vision is Sustainable Mo bility. The organization is now aimed at achieving its environmental responsibility through the implementation of sustainability programs, such as Think Blue Nature. 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