Volkswagon’s Comeback: Aligning Strategy and Structure

  • Which organizational structure described in chapter 9 does Volkswagen’s “customer oriented” structure most closely resemble?

The definition of a global product division fits to the organizational structure of Volkswagen’s customer oriented structure. In a global product division, the domestic divisions are responsible for the multinational product groups (Melin, 1992). In such kind of structural arrangements these domestic divisions act as profit centers.  The global division act independently from each other as they have different sets of activities to carry out in different countries or regions. Different operations of Volkswagon are divided according to different geographical locations but the domestic division have a control over all of them and acts like headquarters.

  • How might such a structure help or hinder entry into new markets?

The new customer centric structure would help the company make new customers and retain its existing customers. Organizations make customers centric strategies to minimize the gap between the customer expectations and the quality that is offered to them. Research has suggested that customer centrism is one of the most efficient ways to do sustainable business (Sheth, Sethia & Srinivas, 2011). This strategy would also prove to be useful in getting in to new global markets as businesses in international competitions cannot leave any lose end when it comes to taking care of their customers.

The customers would have a direct line of communication with the production units via the area managers and their feedback would be valued more as compared to previous when they felt left alone. The ongoing needs of the customers would be met with this strategy as their needs would be more efficiently listened to and addressed. One of the drawback that might still exist is the fact that the regional differences among customers might be overlooked due to a global strategy. It is important to address the norm differences of the customers to better understand their unique needs.

  • Does a matrix or customer-oriented structure lend itself better to forming joint ventures and alliances?

Primarily, it would depend on what kind of a joint venture is formed with any other big or small business. A matrix structure is going to add complexity to the formation of joint ventures. Research suggests that matrix structures may prove to be inefficient when it comes to their interaction with joint ventures in the multinational environment (Goerzen, 2005). In the case of joint ventures being formed on a unit basis instead of an organization basis, the complexity may be a little less which could contribute to making the customer-oriented structure efficient.