Volkswagens Shareholders Case Analysis

Situation of Volkswagens Shareholders

Volkswagen used to run the company of different automobiles and he was a well-known person at that time but all of a sudden company was caught cheating on the air pollution tests of the USA (Guillén, 2016). To make the name of his company more popular he started installing some of the sophisticated software termed as "defeat devices" in electronic modules of different vehicles that were issued between the years of 2008-2015. After knowing this, he was asked to find $37,500 per vehicle. This news was not only shocking for the people living in the USA but it grabbed the attention of other people living around the globe as well. 11 million vehicles around the world are equipped with the defeat device software.

Profile of Organization/ Crisis of Volkswagens Shareholders

Volkswagen was accused of wrongdoing, as there has always been a debate about who the organization should give more preference to the employees or the shareholders. The case of Volkswagen is a prime case study to learn from this.  Employees work day and night to give maximum profit to the company and the shareholders and many argue that they do not get their due share of appreciation in terms of expression and policymaking in the organization (Bergmann, 1994). Shareholders or investors are the capital providers of the company in which the organization values and puts priority in. Losing a shareholder is bad for reputation too. Volkswagen is a business leader who values employees more than the shareholders because he truly believes in the hard work and efforts of the employees (Di Tella, 2001).

There are multiple companies which rely totally on the shareholders to buy their different kind of stocks to raise the amount of money for the research, development, marketing, and growth process. The importance of the shareholders to any business causes some of the managers to cater to the desires and wishes of shareholders without even considering once that how can they affect the employees (Heilbron, 2014).  There are some cases in which shareholders can pressurize the firm directors by refusing to endorse them without even thinking once about the rights of employees. Shareholders who show their power and pressure are mostly institutional shareholders having a large part of financial interest in the company (Camarero, 2018).

Importance of Employees of Volkswagens Shareholders

Employees are the most important people to the business as they affect the business directly through profitability as well as productivity. Company or companies who sacrifices the morale of an employee just to cater to shareholders have chances to find themselves with an unmotivated kind of workforce (Anderson, 2004). Volkswagen used to motivate employees to work for an organization and achieve the goal for the benefit of a company. Those employees who lack motivation are considered zero for a company and they do not benefit an organization in any way but Volkswagen was a leader who used to have small meetings with the employees to know about their interests. Employers should take interest in satisfying their employees (Oldenkamp, 2016). There is no doubt in it that only when employees are happy then an organizations experience an increase in productivity and profit as well. For all this to work out properly, the management and leadership skills of a company play an important role in the satisfaction and happiness of the employees.

Contributing Factors of Volkswagens Shareholders

Risks of losing shareholders

·         As shareholders play a great role in the growth of the company so there are multiple risks of losing a shareholder which are:

·         The bad reputation of the company

·         Prices of different shares will start declining

·         There will be fewer people in the future for investment (Roe, 2000)

·         More people will likely to sell out the shares till the company regain the reputation

·         Company will start facing the loses

Risks of losing Employee of Volkswagens Shareholders

As shareholders play an important role in making a company successful, the same is the case with employees, if there would be no employees then no company would be able to become successful. Teamwork makes everything successful. So as losing shareholders is not good for a company the same is the case with employees. Risks of losing employees are:

·         Operations start getting disturbed

·         Important information can be leaked when an employee leaves the company and start working for another one.

·         Current employees also get effected and they become dishearten and hopeless for future

·         Efficiency will be decreased

·         The team will be affected as well (Blackwelder, 2016)

Key Actors in Crisis of Volkswagens Shareholders

Employees often get tired, they are also human beings and they should be treated properly and equally. They work for a company just to give it a name and success. So they must be treated in the right way and there are some of the points which can be helpful enough to retain them in a company for a long period (Barrett, 2015).

·         Volkswagen shows his employees that they are being trusted by assigning them different responsibilities that will enable them to grow.

·         Every person in this world has a complete right to get respect. The same is the case with employees. Volkswagen made this sure that they are being respected and appreciated as well.

·         They work day and night to do something different to make them happy. Give them small rewards and treats occasionally. This brings happiness to them to work more actively (Mansouri, 2016).

·         Everyone deserves to get some relaxation time. In free time Volkswagen made this sure not to give them extra work. Let them relax and enjoy or else they will be annoyed and won’t be able to work in a better way (Ind, 2003).

All business owners need capable and hardworking employees because they are the ones behind the success of any company but along with this, they should also know how to treat the employees as Volkswagen treat his employees (Sjöström, 2018). All the business leaders in the world need to know and understand the key benefits of the performance of different employees for the developing of consistent and objective methods for the evaluation of employees. This enables the leader to know about the weakness as well as the strengths of different employees (De Vos, 2009). Well, employees do play an important role in the development and success of any company and they are also considered to be the backbone of the company so they must be treated according to the hard work they do. They should be encouraged by appreciating them because everyone in this world likes to be appreciated and this gives them confidence for the future time. Sadly, employees in different countries are not being treated as they deserve to be (Krall, 2015).

Making companies and organizations become successful, every business leader is working day and night. Volkswagen may have seen the dip but that doesn't change the fact that it was successfully running a large organization. Instead of finding shareholders and bearing their tantrums, business leaders should take out some time for the employees of his or her company as well they appreciate the employees (Lazonick, 2000). Tell them about their hard work or else everything can be vanished without their efforts. Shares and investments will have no longer important. Volkswagen had seen a terrible time back in his life, all the reputation was lost for his company in the eyes of common people but still he valued his employees, different shareholders left him all alone but his employees were with him due to which he has again made his company stand in the society (Kupperschmidt, 2000).

Recommendations of Volkswagens Shareholders

·         Different policies should be made for employees to empower them.

·         Employees also deserve the same respect and reputation as shareholders are being given.

·         There is no doubt in it that shareholder's investments play a vital role in making the company successful but employees work on the operational system. If shareholders are 50% important to the company then the remaining 50% are being fulfilled by the effort of employees to make a company successful enough (Lee, 2003).

·         They should be treated equally.

·         Different small meetings should be arranged with the business leader fortnightly to know about the progress, problems, and solutions which are being faced by the employees. Through this bonding between the staff will also be improved and business leaders will also know about the efforts of employees.

·         They should be owned up in front of the people as shareholders are being done.

·         Different rewards should be given to keep them motivated enough.

·         Holidays can also be arranged for them for a relaxing time (Chen, 2003).

Lesson Learned of Volkswagens Shareholders

As discussed above those employees are not being treated the way they should be. Through this, they don’t only lose hope but also its effects on the performance of the company in one way or the other. Give your employees trust as Volkswagen gave them by assigning different responsibilities that will enable them to grow. Every person in this world has a complete right to get respect. The same is the case with employees. Make them sure that they are being respected and appreciated as Volkswagen is the one who never fails to appreciate his employees because he truly believes in this that whatever he has today is due to his employee's efforts. They work day and night to do something different to make them happy. Give them small rewards and treats occasionally. This brings happiness to them to work more actively. Everyone deserves to get some relaxation time. In free time make sure to not give them extra work. Let them relax and enjoy or else they will be annoyed and won’t be able to work in a better way.

Sadly, employees in different countries are not being treated as they deserve to be. All business owners need capable and hardworking employees because they are the ones behind the success of any company. All the business leaders in the world need to know from Volkswagen and understand the key benefits of the performance of different employees for the developing of consistent and objective methods for the evaluation of employees (Lehmann, 2006). This enables the leader to know about the weakness as well as the strengths of different employees. Well, employees do play an important role in the development and success of any company and they are also considered to be the backbone of the company so they must be treated according to the hard work they do. They should be encouraged by appreciating them because everyone in this world likes to be appreciated and this gives them confidence for the future time.

At the end I just want to conclude this by:

“Employees are the real backbone for any of the organization and it has been said that happy employees are more productive, committed and motivated enough.”

Bibliography of Volkswagens Shareholders

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Camarero (2018) The mixed effects of organization’s and manager’s social capital: Evidence from the case of museums. Journal of Management & Organization 15, pages 1-24

Blackwelder, Britt, Katerine Coleman, Sara Colunga-Santoyo, Jeffrey S. Harrison, and Danielle Wozniak. "The Volkswagen Scandal." (2016).

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Mansouri, Nazanin. "A case study of Volkswagen unethical practice in diesel emission test." International Journal of Science and Engineering Applications 5, no. 4 (2016): 211-216.

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Bergmann, Thomas J., Marilyn A. Bergmann, and Joyce L. Grahn. "How important are employee benefits to public sector employees." Public personnel management 23, no. 3 (1994): 397-406.

Sjöström, Emma. "Shareholder activism for corporate social responsibility: what do we know?." Sustainable Development 16, no. 3 (2008): 141-154.

Guillén, Mauro F., and Laurence Capron. "State capacity, minority shareholder protections, and stock market development." Administrative Science Quarterly 61, no. 1 (2016): 125-160.

Heilbron, Johan, JochemVerheul, and Sander Quak. "The origins and early diffusion of “shareholder value” in the United States." Theory and Society 43, no. 1 (2014): 1-22.

Anderson, Eugene W., ClaesFornell, and Sanal K. Mazvancheryl. "Customer satisfaction and shareholder value." Journal of Marketing 68, no. 4 (2004): 172-185.

Lazonick, William, and Mary O'Sullivan. "Maximizing shareholder value: a new ideology for corporate governance." Economy and Society 29, no. 1 (2000): 13-35.

De Vos, Ans, and AnneliesMeganck. "What HR managers do versus what employees value." Personnel Review (2009).

Lee, ChayHoon, and Norman T. Bruvold. "Creating value for employees: investment in employee development." The International Journal of Human Resource Management 14, no. 6 (2003): 981-1000.

Ind, Nicholas. "Inside out: How employees build value." Journal of Brand Management 10, no. 6 (2003): 393-402.

Lehmann, Erik E. "Does venture capital syndication spur employment growth and shareholder value? Evidence from German IPO data." Small Business Economics 26, no. 5 (2006): 455-464.

Roe, Mark J. "The shareholder wealth maximization norm and industrial organization." U. Pa. L. Rev. 149 (2000): 2063.