Question

Volkswagen’s annual report explains that, “The Volkswagen Group consists of two divisions: the Automotive Division and the Financial Ser- vices Division. The Automotive Division com- prises the Passenger Cars, Commercial Vehicles, and Power Engineering Business Areas.” Does this description sound more like a functional, product, geographic, or customer structure, or some combination of these? Powerpoint Notes: Below Functional structure= Groups personnel and other resources according to the types of work they carry out. Well-suited to centralized decision-making and efficiency through economies of scale and specialization Not well-suited for dynamic environments where decisions must be made quickly and products or services customized Product structure= Work and resources are assigned to departments responsible for activities related to producing and delivering a particular good or service Geographic structure- Departmentalizes the organization according to the location of the customers served or the goods or services produced Customer structure= Departmentalizes the organization according to the type of customer served Combinations=Organizations often combine the basic forms of structures

Answer 1

In my opinion, the two divisons of the Volkswagen Group, namely the automotive divison and the financial services division sound more like a combination of product and functional organizational structure. Since Volkswagen has divided it's automotive division into the Passenger Cars, Commercial Vehicles, and Power Engineering Business Areas, hence it streamlines with the product centric thought process of the company and is committed towards increasing sales of passenger cars and commercial vehicles and make strategies to implement policies towards exceeding customer expectations when it comes to these vehicles. Also the presence of financial services division shows that Volkswagen Group is focussed on functional division as well and thereby has made separate functional services department to take care of the expenses and revenue generated out of the sales of these vehicles and maintain records and allocate financial resources to these individual vehicle segments.