Hi All,
This is a small video on what we learnt in Principles of Organization and Management course. Please do go through it.

Happy Learning !!!

Volkswagen - A Chronicle

1^st August, 2012 was a big day for world automobile industry, when European Automobile Giant Volkswagen AG took over Porsche, another Sports Car Group one of its kind. After long speculations and several attempts of Porsche to swallow the much larger Volkswagen, the takeover finally came off. For those who are not aware, here is a link from Sydney Morning Herald. You can also check this.

So our today’s topic is, I don’t think it needs an intelligent guess J, Volkswagen AG.

Volkswagen, translated to 'People's Car', is one of the leading car manufacturers in the world. The group owns a huge array of prestigious marque brands including Audi, Bentley, Bugatti, Ducati, Lamborghini, SEAT, Porsche, Giugiaro, 19.9% of Suzuki and Škoda marques and the truck manufacturer Scania. In this post, we shall look back in its history, have glimpses of its journey and will also talk about its present structure and position. Welcome to the ride !

History:

28 May, 1937 - the company was founded by the Nazi trade union, the German Labour Front. The purpose of the company was to manufacture the Volkswagen car, originally referred to as the Porsche Type 60, and later better known as the Volkswagen Beetle. During World War II the Volkswagen plant near Fallersleben primarily manufactured the military vehicles. Only a small number of Type 60 Volkswagens were made during this time period. The plant also manufactured the V-1 flying bomb, also known as the "Buzz Bomb" or "Doodlebug", making the plant a major bombing target for the Allied forces. Much of the workforce at the plant was slave labor, primarily from eastern Europe.

After the war in Europe, the British took charge of the bomb-shattered company. In 1948, the British Government handed the company back over to the German state, where it was managed by former-Opel chief Heinrich Nordhoff. 

Production of the Type 60 Volkswagen (re-designated Type 1) started slowly after the war due to the need to rebuild the plant and because of the lack of raw materials, but production grew rapidly in the 1950s and 1960s. The company began introducing new models based on the Type 1, all with the same basic air-cooled, rear-engine, rear-drive platform. These included the Volkswagen Type 2 in 1950, the Volkswagen Karmann Ghia in 1955, the Volkswagen Type 3 in 1961, the Volkswagen Type 4 in 1968, and the Volkswagen Type 181 in 1969.

On 1 January 1965, Volkswagenwerk acquired Auto Union GmbH from its parent company Daimler-Benz. The new subsidiary went on to produce the Audi models, the Audi F103 series, shortly afterwards. From the late 1970s to 1992, the acronym V.A.G was used by Volkswagen AG as a brand for group-wide activities, such as distribution and leasing.

On 30 September 1982, Volkswagenwerk made its first step expanding outside of Germany by signing a co-operation agreement with the Spanish car manufacturer SEAT and gradually went on to increase its stake it the latter. 4 July 1985, the company name was changed to Volkswagen AG to indicate its increasingly global nature. 

In 1991 another step to the expansion of the group's activities was made through the signing of a joint venture partnership agreement with Škoda automobilová a.s. of Czechoslovakia. In 1998, three prestige automotive marques were added to the Volkswagen portfolio: Bentley, Lamborghini and Bugatti.

Porsche and Volkswagen shared an old relation. In December 2009, Volkswagen AG bought a 49.9% stake in the former. through a long tug-of-war between the two parties, Volkswagen finally managed to hold the upper hand.

Another significant feat includes purchasing 19.9% of Suzuki Motor Corporation's issued shares on 15 January 2010.

Vision and Mission Statement:

Volkswagen brand vision is to become a most innovative high volume manufacturer offering the best quality in the respective class.

The internal mission statement of the group is not available to the public. However, on November 25, 2010 – the Group agreed to a "mission statement for responsible actions in business. It serves as a national mission for the group and focuses the Volkswagen leaders on the benefits of responsible business to consumers.

The six principles of this shared mission statement are:

• Business must serve the good of the people.
• Business that serves the good of the people requires competition.
• Business that serves the good of the people is based on merit.
• Business that serves the good of the people takes place globally.
• Business that serves the good of the people must be sustainable.
• Business that serves the good of the people demands responsible.

Awards and recognitions:

Volkswagen Group have won 3 World car of the year awards: 

2009 - Volkswagen Golf

2011 - Volkswagen Polo

2012 - Volkswagen Up!

The Group have also produced four European Car of the Year winners:

1973 – Audi 80

1983 – Audi 100

1992 – Volkswagen Golf

2010 – Volkswagen Polo 

Products:

The Products can be subdivided into three categories:

Original Marque - Volkswagen Passenger Cars

Major subsidiaries – Audi,Bentley, Bugatti, Lamborghini,Porsche, SEAT and Škoda

Volkswagen Commercial Vehicles – Swedish truck, Scania AB, MAN SE

From 2002 up to 2007, the Volkswagen Group's automotive division was restructured so that two major Brand Groups with differentiated profile would be formed, 

- Audi Brand Group focused on more sporty values – consisted of Audi, SEAT and Lamborghini 

- Volkswagen Brand Group on the field of classic values – consisted of Volkswagen, Skoda, Bentley and Bugatti – with each Brand Group's product vehicles and performance being respectively under the higher responsibility of Audi and Volkswagen brands.

Plants:

The group has 94 production plants in 18 European countries and a further eight countries in the Americas, Asia and Africa. It is the third largest automaker in the world. It produces 34,500 vehicles per day on an average. The group has a workforce of 501,956 employees as of 31 December, 2011.

Distribution of Plants:

Europe – 58

Asia – 11 (in India, Pune and Aurangabad)

North America – 3

South America – 9

Africa - 3

Organizational Structure:

Volkswagen AG and the Volkswagen Group are managed by the Volkswagen AG Board of Management in accordance with the Volkswagen AG Articles of Association and the rules of procedure for the Volkswagen AG Board of Management issued by the Supervisory Board. Within the framework laid down by law, the Group Board of Management ensures that Group interests are taken into account in decisions relating to the Group’s brands and companies. This body consists of Board members and selected top managers with Group management functions. 

Each brand in the Volkswagen Group is managed by a senior brand manager. The Group targets and requirements laid down by the Board of Management of Volkswagen AG or the Group Board of Management must be complied with in accordance with the applicable legal framework. Matters that are of importance to the Group as a whole are submitted to the Group Board of Management for approval. The rights and obligations of the statutory supervisory bodies of the relevant brand companies remain unaffected.

The companies of the Volkswagen Group are managed separately by their respective managements. In addition to the interests of their own companies, each individual company management takes into account the interests of the Group and of individual brands in accordance with the framework laid down by law.

The Board of Management of Volkswagen AG comprises of eight members

Chairman – Dr. Martin Winterkorn

Other Members – 

Dr. Francisco Javier Garcia Sanz

Prof. Jochem Heizmann

Christian Klingler

Dr. Michael Macht

Prof. Horst Neumann

Hans Dieter Pötsch

Rupert Stadler

The Supervisory Board headed by Chairman Dr. Ferdinand K. Piëch has 20 members. 

You can follow this link to get a better view of the management structure.

Financial position:

Highlights:

• gross cash flow in the reporting period amounted to €18.9 billion, €3.3 billion more than in the previous year
• Cash flows from operating activities declined to €8.5 billion from €11.5 billion

Net Assets:

At €253.6 billion, 27.2% higher than in the previous year, driven by organic growth in the Automotive Division, the acquisition of Porsche Holding Salzburg and the consolidation of MAN.

Sales and market share:

• 1st in Europe as per unit production
• 3rd in the world

Social Initiatives:

Social involvement constitutes a key element of the Group’s entrepreneurial activities

Following are some of the activities conducted all over the world:

• Volkswagen Community Trust
• A Chance to Play
• Rally to Road
• Vocational Programmes
• Green Future Environment
• A Seventh Sense
• Green City, Green Life
• Project Nature etc.

You can find more about it from this link.

Well, it is a long post indeed :) But hope you enjoyed it. Do share your feedback. and, of course I would like to acknowledge the contribution of the following sites in providing me with adequate information regarding the post:

• http://en.wikipedia.org/wiki/Volkswagen
• http://en.wikipedia.org/wiki/Volkswagen_Group
• http://hem.passagen.se/vwnetz/vwdata.htm
• http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Volkswagen-Group-Mission-Statement.htm
• http://annualreport2011.volkswagenag.com/managementreport.html
• http://www.volkswagenag.com/content/vwcorp/content/en/the_group/production_plants.html
• http://www.euronews.com/2012/08/01/porsche-volkswagen-tie-up-completed/

You can refer to them as well for more information. 

So have a great time. Happy learning !!!

Three Monks: Lessons Learnt

Hello friends, it’s raining cats and dogs outside and I am back with a gust of Chinese monsoon.  Here follows a short piece of beauty from the great old land. Let’s first have a look at it and then we’ll move forward.

A great piece, indeed! Released in 1980 and directed by A Da, the video is a beautiful creation of Shanghai Animation Film Studio. This time around, we revisited this and tried to learn a lesson or two about teamwork and organization skills.

Self-explanatory as it is, the video highlights various natures of team dynamics, problem solving and in turn, pointers to making a team work.

1.      Individuals v/s Team: A team is supposed to achieve what an individual is incapable of. With a conscious observation, we can figure it out in the video.

Load remains to be a vital factor to measure team performance. The video has 3 solutions with one, two and three team members respectively. Let’s try to analyze their respective loads:

·         1^st solution: The first monk carries a load of two buckets on his own:

the load of each bucket is, say, b, and that of his own weight is w. Now considering that his load efficiency is inversely proportional to his load, load efficiency per person, P₁ = k₁/(b+b)w [k1 = constant]= 0.5 k₁/bw

·         2^nd solution: Two monks share the load of one bucket:

Now by the same logic, load efficiency per person, P₂ = k₂/(b/2)w [b/2 as they share the load] = 2 k₂/bw

Moreover, although not shown in the video, we might speculate another option (Would like to have your view on this), which might reduce individual load, but enhances productivity:

·         3^rd solution: Three monks devise a pulley like structure, that almost eliminates w. So load efficiency increases manifolds.

A team, thus, signifies exponential growth in possibilities as it grows.

2.      Make It Simple:

Experts point out, there are 4 possibilities while providing any solution:

Problems Solutions	Simple	Complex
Simple	Area 1	Area 2
Complex	Area 3	Area4

We want simple solutions, irrespective of whether the Problem is complex or simple. They say, there is no complex solution – it’s just the lack of creativity.

While watching the video in the classroom, we paused it 3 times to suggest 3 solutions to the conflicts caused, and we all came up with complex solutions.

On the contrary, the monks succeeded to make the team work when they sorted their problems out in simple creative manner.

3.      With great power comes…:

Teams empower us, true. However, it’s equally important to take care of the integrity of the team members. The monks got involved in a number of conflicts, apparently because of trifle reasons. They eventually overcame them with ingenuity. However, the same might not be true always.


In fact, at the very beginning of the video, of the columns of text in Chinese that appear at the beginning: the first column reads, "one monk fetches water to drink", the second column reads, "two monks carry water to drink", and the third one merely says, "three monks". The unfinished sentence reflects the film's central question, which is whether the three main characters will learn to work together so that they can all have water to drink. [courtesy: Youtube].
So let’s make the team work at the very outset. After all, the best teams are not big in volume, but in integrity.

 Other Observations:

The video, apart from the above pointers, have many other intriguing angles to it. It actually shows some interesting characteristics of team dynamics.

For example, the first two monks (chronologically as they were shown), at first shared a good relationship. However, after the load-sharing conflict, they didn’t share the same cordiality. But interestingly, as the third monk arrived and they found that they have a common interest to rebuke the third monk, they united.

The video also highlights the need of maintain composure in times of crisis (the fire). Another interesting observation is the portrait of Lord Buddha, His reactions at different situations and the plant before His portrait.

I believe there are many other cues we can learn from in this video. I’ll definitely look for them. I’d like you also to look for them. I’d be happy to have your comments and views on this.

On that note, I'll take a pause. Happy Learning !!!

On that note

Crossing the Valley Exercise

 “The bridges that you cross before you come to them are over rivers that aren't there.”

-          Gene Brown

The above quote roughly means:  barriers that are physical are reflections of the mental ones. There is an important organizational lesson to be learnt in this. Organizations are meant to facilitate the impossible, unachievable. The recipe is simple: Believe that it can be achieved, plan and deliver.

In one of my previous blogs, I made a mention of the Crossing the Valley exercise, in which three individuals wanted to cross a valley wider than the individuals. While they achieve their target, we shall try to learn a concept or two from what they did.

Let us try to define the problem first:

No of people: 3

Valley gap: 2 footsteps

The three individuals plan to cross it. The only prop they have got is a firm rod-like structure, sufficiency long.

Solution:

They hold the rod together with the gap between each two of them is one footstep and they simply walk by.  The picture below demonstrates it. Surprised? Does going get this easy? Well, I shall take you through a small dry run to answer that:

 

L1     L2     L3_______                                         Step 1: All safe

R1     R2    R3

         L1     L2     L3                                              Step 2: Person 3 half safe

R1    R2     R3

         L1     L2     L3                                              Step 3: Person 3 full unsafe

         R1     R2     R3

                   L1     L2    L3                                     Step 4: Person 2 and 3 partially safe

         R1     R2     R3

                   L1     L2    L3                                     Step 5: Person 2 fully unsafe

                   R1     R2    R3

                             L1    L2    L3                            Step 6: Person 1 and 2 partially safe

                   R1     R2    R3

                             L1    L2    L3                            Step 7: Person 1 fully unsafe

                             R1    R2   R3

                                      L1    L2    L3                   Step 8: Person 1 partially safe

                             R1    R2    R3

                                      L1    L2    L3                   Step 9: Everyone is safe

                                      R1    R2   R3

The '_______' like structure indicates the valley and Li and Ri denotes the left and right foot of the ith person.
Last year we conducted a simulation of this process in NITIE. Here are the glimpses of how it was conducted:

The steps, no matter how simple they seem, do contain a number of valuable lessons to be learnt:

1. Load Distribution: the load of each person is reasonably reduced as they organized and devised the mechanism together. Organizations are actually meant to reduce loads. What might seem as a cumbersome task for individuals, organizations are supposed to do them with ease. The system above is a perfect specimen.
2. Simple Design: The beauty of the system lies in its simple design.
3. Uniformity of roles: Similar roles for all 3 individuals. There is no differentiation among person 1, 2 and 3. In fact their tasks are designed to be easier, lighter, clearer and more systematic. The members of the group are equally responsible for their contribution to the overall task completion. The amount of risk is also equally distributed among them.
4. Need of Communication: For the successful completion of the task, it is very important to have proper communication and feedback mechanism among th 3 members. In fact,  the feedback mechanism is instantaneous and hence of paramount importance.
5. Training: There has to be a proper synchronization among the members. Moreover, they need to interact methodically. This requirement leads us to the importance of one very important aspect - training. Organizations even with exceptionally well design will fail if its members are not trained properly. We did a dry run of this system in our classroom. At that time, we felt the need of proper communication training and thus, establishment of synchronization among the 3 persons.
6. Interdependent Roles: The roles are assigned ina  way that every individual is dependent on everyone else for the successful completion of the task. An organization must have such a well-built system that no individual can loaf around. It is often because of weakly designed systems that employees get infected by negative work culture.
7. Well-specified problem statement: A very important observation is that the problem has been defined properly so that it can be acted upon likewise. The gap, the length of the rod and the gap between each two person are all well specified.
8. Neo-classical Tool of Management: This simple demonstration actually leads us to some wonderful concepts of neo-classical management. Unlike classical theory of management, wherein the roles are delegated in a pyramid-like manner as to ensure unity of command, neo-classical theory speaks about empowerment of the employees. Here underlies the concept of matrix structures of organizations, where the groups are self-managed and everyone is capable of making decisions. To explain this, I would give an example of a circus, wherein every performer is actually making commands, taking ad-hoc feedbacks and still managing to create a coordinated excellent show. So this simple experiment opens up a far wider dimension to ponder upon.   

Many more concepts might be realized from this demonstration. I tried to summarize my observations. I'll be interested in knowing your thoughts also.

Before concluding, I would like to pose an intriguing angle to this experiment. 

What exactly is the scope of this experiment? Is it limited to a gap only 2 steps wide? Can we cross any length of a gap by following the same mechanism? What modifications do we need to do, if it is at all possible?

Well, keep on thinking. On this curious note, I'll take a break. Happy learning !!!

Khan Academy: A different way to learn

Education – as they say, should be for everyone and all. However, there seems to be an endless debate on how it can be achieved and more importantly, how effectively so.

At a time when teachers are struggling to stand at the board, trying to get 50 odd students to learn the same stuff at the same pace, Salman Khan from Bangladesh seems to have a different view altogether of his own.

Salman runs a non-profit educational organization called the ‘Khan Academy’ since 2006 in attempt to make education fun and interesting to students who otherwise find it a daunting job to keep pace with their ‘smarter’ counterparts.

What is it?

It is a non-profit educational organization started by created in 2006 by Bangladeshi American educator Salman Khan, a graduate of MIT and Harvard Business School. With the stated mission of "providing a high quality education to anyone, anywhere", the website supplies a free online collection of more than 3,200 micro lectures via video tutorials stored on YouTube teaching mathematics, history, healthcare andmedicine, finance, physics, chemistry, biology, astronomy, economics, cosmology,organic chemistry, American civics, art history, macroeconomics and microeconomics, and computer science.

Quite interestingly, Salman used to work in a hedge fund and even in his own words, it is actually surprising for him to pursue something of such a social motive.

Inception:

It all started when Khan was remotely tutoring one of his cousins using Yahoo Doodle images. He found that his cousin actually found it more interesting to learn from him over the internet rather than in person. Based on feedback from his cousin, additional cousins also began to take advantage of the interactive, remote tutorial. In order to make better use of his and their time, Khan transitioned to making YouTube video tutorials. Along the same line, it occurred to him that this might actually be a better solution to the numerous educational problems students and teachers face across the world.

Relevance:

The question that might be bugging you is, why Khan? We are discussing principles of management and organization here. Well, simply because one can hardly get a better example of managerial skills merged together.

Vision: To start with, Khan has adapted a wonderful vision for his academy: a vision of providing free education anywhere for anyone. The beauty of the vision is that it reaches beyond normal achievable limits of any pre-existing educational system.

Innovation: It is a simple but a very novel idea. Teaching students in a iterative and interactive fashion. Khan provides education through free videos. The advantages are very clear. As Khan explains:

·         It makes the same topic interesting (as Khan’s cousins found their uncle more interesting in the videos)

·         Students can pause, rewind or move forward the video lessons

·         It makes education graphical and physical rather than abstract

·         Each student gets time as per his/her convenience

And the list goes on

Training: Effective training is essential for the health of any organization. Khan academy deals with the same idea for its students. They make the students go through problems repeatedly, unless every concept is actually absorbed. Students thus prepared are expected to be adept in the subject.

Theory X and Y: We discussed the theory X and Y in a previous post. This time I get another chance to explain the value if the same. Khan believes each student is equally capable of learning. Every student has his/her forte. So he provided a wide degree of freedom for the student as far as time, complexity and procedure are concerned.

                In everyday classroom scenario, we often find teachers picking out ‘brilliant’ students from the lot and focus on them while teaching. As a result, many students don’t get enough attention just because they lost out on the ‘initial edge’ opportunity. Khan’s method ensures that there is no such discrimination in students. Equal education and attention is provided for everyone. So, it is theory Y – “There is no bad student, might only be bad teacher”.

Electronic Entrepreneurship: Khan has used electronic medium to full use to implement his idea. He realized the growing importance of internet in every field of our life. Implementing his idea on the web world widened the reach of the idea manifolds.

With the hope that Khan’s example enabled us to learn something, I would like to conclude this post. Happy Learning !!!