International Business: Volkswagen
The foundation of Volkswagen dates back to the Third Reich. For the opening of the international automobile show in Berlin 1934, Adolf Hitler demanded the development of a car which should be priced at a maximum price of 1000 Reichsmark and thus remain affordable for the average citizen. This car should be named ‘Car of the people’ (Volkswagen) and offer space for a family of four members. The first model was designed by Ferdinand Porsche in 1934 and in May 1937, the “Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH” (a company for the preparation of the German Volkswagen Ltd.) was established in Berlin (Volkswagen AG 2013). One year later, the company changed its name into “Volkswagenwerk Gmbh”: The beginning of today’s popular German car manufacturer.
Over the last decades, Volkswagen turned from being the owner of a single production plant in Wolfsburg into Europe’s largest automobile producer and the third largest of the world with a yearly turnover of about € 192,676 million. The company sells, directs and produces twelve automobile brands all over world. 550,000 employees work together to produce 37,700 cars per day which can be purchased in 153 countries (Volkswagen Company 2013). The following report focuses on the automotive division, excluding the financial services division and other subsidiaries.
1a) The design of a multinational enterprise’s (MNE) strategy is primordially determined by the institutions and the prevailing culture of its home country. Volkswagen’s (VW) economic origin is found in central Germany, a town called Wolfsburg, where one of its largest production sites is still in place. Often described as Europe’s economic engine (Iwulska et. al 2013), Germany possesses a culture favoring individualism and refusing power distance (Hofstede 2013, appendix 1.1.). With a score of 67 on Hofstede’s individualism scale, Germany joins those Northern European countries prioritizing self-actualization, which often leads German workers
Over the last decades, Volkswagen turned from being the owner of a single production plant in Wolfsburg into Europe’s largest automobile producer and the third largest of the world with a yearly turnover of about € 192,676 million. The company sells, directs and produces twelve automobile brands all over world. 550,000 employees work together to produce 37,700 cars per day which can be purchased in 153 countries (Volkswagen Company 2013). The following report focuses on the automotive division, excluding the financial services division and other subsidiaries.
1a) The design of a multinational enterprise’s (MNE) strategy is primordially determined by the institutions and the prevailing culture of its home country. Volkswagen’s (VW) economic origin is found in central Germany, a town called Wolfsburg, where one of its largest production sites is still in place. Often described as Europe’s economic engine (Iwulska et. al 2013), Germany possesses a culture favoring individualism and refusing power distance (Hofstede 2013, appendix 1.1.). With a score of 67 on Hofstede’s individualism scale, Germany joins those Northern European countries prioritizing self-actualization, which often leads German workers