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Volkswagen's Case Study: Volkswagen Senior Management

1239 Words5 Pages

The Issue: The foremost issue for Volkswagen Senior management currently is to: • Understand how the deception happened and who all are involved in it • Immediately decide the ways to solve the issue and get back the lost customer trust • Make sure this doesn’t repeat Understand how the deception happened and who all are involved in it Volkswagen has admitted the manipulation and the use of cheat device in their cars. The first concern of senior management is to immediately figure out the guilty and take punitive actions. Immediately decide the ways to solve the issue and get back the lost customer trust Volkswagen has done the first thing right i.e. accepting the cheating rather than denying it. Now is to gain back the stakeholder’s trust by making some radical changes in their system. The Main Issue: Corporate Governance Corporate Governance experts argue the cheating was predictable because of VW 's lax boardroom controls and peculiar corporate culture. "The scandal clearly also has to do with structural issues at Volkswagen. There have been warnings about VW 's corporate governance for years, but they didn 't take it to heart and now you see the result," says Alexander Juschus, director at IVOX, the German proxy adviser. Even before the diesel scandal, VW 's shares traded at a discount to other carmakers partly because of governance concerns. A former chairman of a large German industrial company says "Germany has corporate governance problems but VW has long been

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