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The purpose of a healthy company’s culture: The Volkswagen example

Ana-Sabina Ciceala (mmsabina.ciceala@student.ie.edu) is Compliance Officer at Angels Den Funding UK in Bucharest, Romania, and studying for a Legal Law Masters in Global Corporate Compliance at IE University.

Nowadays there is more and more emphasis on the importance of a company’s culture and the role organizational culture plays in overall business conduct. Through time, different types of companies appeared and developed based on the decision-making process, such as autocratic/centralized, technical-leveled structure, egalitarian/flat based, or auto-managed structure. Nevertheless, all these can be one by one combined, which leads us to a large variety of organizational typologies.

We need to be able to use the shifting approach perspective while analyzing each type of cultural behavior, because from one company to another, both processes and interests can be different. One must consider that there is no unique solution, because this variety of organizations reaches an even broader range if we take into account yet more factors than the ones from above, such as impact on the market, purpose of activity, complexity, legal implications, labor structure, resources required, geographical area, stage of development, etc. Therefore, at all times, we must consider that for a culture to effectively exist and be implemented, it has to sustain and enhance the business and its goals, at the same time creating value for the company’s stakeholders. Over time, many organizations either improved or changed their culture due to different stages in the company’s development and/or the level of maturity of the organization.

A company that offers a relevant example on the importance of culture is Volkswagen (VW), which was incorporated 81 years ago in 1937 in Germany. No description or motto was required for the company, its name being self-explanatory: Volkswagen translates as “people’s car,” a car made by people, for people.

VW was incorporated and developed mainly in Germany; therefore, it embraced and absorbed the national business culture, which was based on laws and strictly regulated. However, one of the pillars of any company is its responsibility toward society. As VW’s name declares, companies are made by people for people. The main instrument of addressing this responsibility is the code of conduct (CoC), which is made up of policies, procedures, and education.

What follows is a comparative analysis of two examples of CoC implemented by VW at different critical moments in its history. This analysis gauges the impact these two CoCs had on the company and considers the larger social context that inadvertently influenced their content.

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