Nov 14, 2020 in Analysis

Unit 5 Individual Project
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Abstract

The following research focuses on the analysis of the Volkswagen Groups branch in the United States through the use of quantitative and qualitative methods. The particular methods used in the work (case study and statistical method) were selected as a result of the assessment of their feasibility and applicability to the case of the company.

 

Unit 5 Individual Project

Introduction

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The comprehensive analysis of any organization involves the use of both quantitative and qualitative methods. However, their choice depends on the particular situation. The following work focuses on the analysis of the case of the Volkswagen Group, using the appropriate methods of quantitative and qualitative research.

Organization Background

The Volkswagen Group with its headquarters in Wolfsburg (Germany) is one of the worlds leading automakers. The lineup of the organization group covers a wide range of vehicles from motorcycles and fuel-efficient small cars to luxury ones. The Volkswagen Group is also actively involved in other business areas, such as the production of diesel engines for marine and stationary applications, turbo compressors, and gas turbines. It also produces automotive transmissions, special gearboxes for wind turbines, bearings, and couplings. It should be noted that Volkswagen was among the first foreign automakers to set foot in the United States. Currently, the company has a branch in the in the country, offering a wide array of vehicle models, primarily diesel ones (Wimmer & Muni, 2012). However, in 2015, the Volkswagen Group has become a center of public attention as its cars did not comply with the American standards of environmental protection. Moreover, the company resorted to cheating to hide this fact (Davidson & MacLellan, n.d.).

Research on Qualitative Research Methods

Qualitative research methods are reviewed by various authors, including Sarah J. Tracy. In her book of the same name, she discusses a wide array of these techniques. The first method is action research. It involves a planned intervention into the affair of the company that is carried out on the basis of collaboration. In other words, the researcher participates in the life of the organization directly, obtaining and analyzing the necessary data on the go. He or she comes into direct contact with the executives and employees of the enterprise to define and propose the course of actions that will improve its performance (Tracy, 2012).

Delphi study is another research method, which is designed to take into account an independent opinion of all participants of the group of experts on the subject under discussion by a successive association of ideas, conclusions, and proposals. It is based on multiple anonymous group interviews where each expert provides the results of the personal analysis of the organization, which are to be summarized and reviewed so the members of the group can reach an agreement (Tracy, 2012).

The final research method is the case study, which is focused on using the description of various economic, social, and business situations. The researcher must analyze them to understand the essence of the problem as well as its possible solutions and choose the best of them. The case can be based on factual material or be modeled to resemble a real situation (Tracy, 2012).

Research on Quantitative Research Methods

Quantitative research methods have been reviewed by many authors, including W. Paul Vogt. In his book titled Quantitative Research Methods for Professionals, he provides comprehensive information on these techniques. The first of them is experiment a method of investigating the object under the controlled conditions, which features active interaction with it. It allows changing the course of various processes related to the object and excluding certain conditions in order to establish natural connections. The data obtained during the experiment is subject to mathematical processing (Vogt, 2007).

Simulation is among the most common quantitative research methods. It focuses on the study of the objects of knowledge by using their models as well as construction and investigation of such models. Its goal is to gather comprehensive data from the analyzed object and predict its possible states in the future. The use of models allows manipulating the data freely, meaning that simulation helps to obtain the results that are unachievable in real life (Vogt, 2007).

Finally, there is a statistical method, which is based on the comparison of the obtained data. In other words, it focuses on tracking the dynamics of different variables over time. As a result, it allows determining trends in the development of the studied objects and processes (Vogt, 2007).

Qualitative Research Method Selected for the Organizational Analysis

Out of the presented qualitative research methods, the case study is the most feasible one. The primary reason for that is the fact that it does not require the presence of the group of experts as well as the direct contacts with the representatives of the analyzed organization, which can be difficult to arrange. At the same time, the Volkswagen Group as well as various authors has provided feedback regarding the diesel scandal, which can be analyzed singlehandedly. Consequently, the use of the case study method will allow providing an assessment of the internal affairs of the organization on the basis of the description of the event that is provided by the company itself and the other entities.

 
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Quantitative Research Method Selected for the Organizational Analysis

Out of the presented quantitative research methods, the statistical method is the most feasible one. The reason for that is the fact that the data on the organization cannot be controlled or manipulated, which excludes the use of such methods as an experiment or a simulation. At the same time, the comparison of the variables will allow assessing the current situation in the company and provide a forecast regarding its performance in the future.

Qualitative Analysis of the Organization

The case on the diesel scandal around the Volkswagen Group demonstrated that the decision on cheating (i.e. using illegal software to bypass the safety tests) was taken due to stringent regulations and low fuel prices, which could have made the process of vehicle modernization quite expensive (Davidson & MacLellan, n.d.). However, considering that the prices for the companys products are far from being low, one may assume that its specific corporate culture could have triggered the mentioned event. Considering the history of Volkswagen (the finding by the Nazis as well as the control from the side of some oligarchs), there is a possibility that law-breaking practices are quite common there (Russell et al., 2016). At the same time, it seems that the leadership of the organization has learned from their mistakes. In particular, it seems that the company tries to distance itself from the scandal by making major changes in the ranks of its top managers and board of directors (Davidson & MacLellan, n.d.), which can be a sign of a shift in its overall policy and organizational culture.

Quantitative Analysis of the Organization

The primary data for the following analysis includes the number of cars sold in the U.S. during the first months of the years 2015 and 2016 as well as its stock price and overall value. In particular, the sales of vehicles have decreased significantly, with only 20,079 cars being sold (at least 3,000 units or 15% less than the year before). The fact that two vehicle models (e-Golf and Tiguan) have demonstrated steady growth in terms of sales (by 81% and 71% respectively) did not improve the situation (Volkswagen of America Reports January 2016 Sales Results, 2016). At the same time, the stock price of the company has demonstrated a rapid downfall, decreasing from 38 to 28 dollars. Naturally, the value of the company for its shareholders has decreased as they have lost at least 25% of the money they invested in it. The problem is exacerbated by the fact that the company has to remodel each of the flawed vehicles, which will cost about 7 billion dollars, and pay fines for breaking the law (Russell et al., 2016). These costs are likely to be subtracted from the assets and reserves of the firm, thus lowering its value even more.

Findings of the Analysis

The quantitative and qualitative analysis of the Volkswagen Group has demonstrated that currently the organization is facing financial difficulties. The primary reason for that is the companys decision to cut its costs and exploit the bottlenecks in the safety tests instead of remodeling vehicles that did not comply with the U.S. standards. However, this decision has backfired, resulting in lawsuits, fines, and increased expenditures, ultimately lowering the value of the enterprise. The scandal went public, meaning that the reputation of Volkswagen has suffered significant damage. In particular, the lowered sales in the U.S. at the beginning of 2016 (several months after the scandal) can be perceived as a sign of credibility loss. Considering that out of all the products the organization offers in the country (14 vehicle models) only two have demonstrated growth in comparison to the year 2015, it is possible to assume that the revenues of the group have been reduced by at least 15% (Volkswagen of America Reports January 2016 Sales Results, 2016). Despite the fact that the top management of the Volkswagen Group has been changed, resulting in the revision of the companys environmental policy, its reputation has been soiled significantly. As a result, it is clear that the recovery from losses will take at least several years, with the financial results of previous years being out of reach for a long time.

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Conclusion

It is possible to say that the Volkswagen Group undergoes hard times due to the policy of its top managers who have made unethical decisions. Correspondingly, both reputation and financial state of the company have sustained significant damage.

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