Over the past 15 years, Volkswagen Group (VW) acquired several fiefdoms- Audi, Lamborghini, Bentley, Bugatti, Skoda, SEAT - that jealously guarded their brand and continuously rebelled against sharing knowledge. One member of VW's supervisory board (the German equivalent of a board of directors) commented that managing the company is "like trying to ride a chariot with four or five horses, each of which pulls in a different direction."

Then Porsche AG e ntered the fray. The luxury sports car company, which relies on VW for some of its production work, began acquiring stock in VW and eventually achieved a controlling interest. Porsche CEO Wendel in Wiedeking was aware of VW's internal rivalries. "If you mix the Porsche guys with the Audi guys and the VW guys you will have trouble," says Wiedeking. "Each is proud to belong to his own company." 

Yet Wiedeking stirred up a different type of conflict as Porsche tightened its grip over VW's supervisory board. Through an unswerving drive for efficient production and astute marketing, Wiedeking and his executive team had transformed Porsche into the world's most profitable and prestigious car company. Wiedeking wanted to apply those practices at VW by closing down inefficient operations and money-losing car lines............

Discussion Questions

1. Identify and discuss the sources of conflict between Porsche and Volkswagen executives.

2. Describe the conflict handling styles used by Wendel in Wiedeking and Ferdinand Piech. Were they appropriate in this situation?