Vw of America Case Study

1. What is your assessment of the new process for managing priorities at Volkswagen of America? Are the criticisms justified? Is it an improvement over the old process? Yes, the new process introduces a democratic element to the process of budgeting that most definitely is an improvement over a single person determining the budget disbursement, which allows for favoritism, bribing, and other selective means of budget allocation.

2. Who controls the budget from which IT projects are funded at Volkswagen of America? Who should control these budgets? Do you think the IT department should have its own budget? Why or why not? The budget for IT projects is controlled by VW Global, and allocated $60M for the VWoA branch of the company to budget as it sees fit. I believe that the budget should stay within the VW corporate control, and allocated as it is currently allocated to each division for budgeting and funding of projects. Yes, I feel that the IT department should have its own budget, as it currently does, and should distribute that budget in a structured, unbiased, formalized and auditable process. Looking at how it currently budgets and funds projects, I do see some room for improvement that could eliminate unnecessary steps which would decrease the time of the process while also ensuring the necessary and proper projects are funded. A few of these improvements would include having Phase 1 be the culmination of business unit participation which would include the formal proposal and classification of the projects that is currently in Phase 2. The next step would involve the DBC reviewing these proposals and doing some ranking of their own, ensuring proper alignment of projects and VWoA business initiatives and goals. This would reduce the need to have the business units do this and try to posture themselves for approval while misaligning projects and growth initiatives. Also, this step would allow the DBC to ensure that global initiatives like the SAP implementation would not fall through the cracks simply because the local benefits don’t align with company goals.

3. How should Matulovic respond to his fellow executives who are calling to ask him for special treatment outside the new priority management system? In the context of Matulovic’s background and position, justify your stance.