Case Study On Skoda
Case Study On Skoda
Case Study On Skoda
The merger of Škoda Auto and Volkswagen AG in 1991 compelled the tradition-
bound Czech company for the first time to face the challenges of
internationalization. Today Škoda is the largest industrial undertaking in the Czech
Republic as the company sells its products in 100 countries worldwide. The Joint
Venture with VW is regarded by the company as a successful marriage between the
systematic, methodical and dependable approach of the Germans and the creative,
improvising and proficient disposition of the Czechs.
After the fall of the Berlin Wall and the dissolution of the Soviet Union the Czech
government looked for a strategic partner so as to secure for Škoda a short and medium-
term expansion of its automobile market in Central and Eastern Europe. The decision to
establish a Joint Venture with Volkswagen in 1991 is regarded by insiders as a very
successful match between the two parties.
The 100 percent ownership of Škoda Auto by VW AG since 2000 notwithstanding, the
company’s management continues to uphold its tradition of more than 100 years, which
in fact has a positive influence both on the Czech customers and on the Czech workers’
motivation.
Since 1991 Škoda Auto has transformed itself from a “brand with tradition without
future“ into a ”brand of the future with tradition”.
The annual vehicle production has increased steadily from 172,000 p.a. in 1991 to
630,000 p.a. in 2007. In 2007 the products were sold in 100 markets – as opposed to a
mere 30 in 1991. In 2007 the export share of Škoda Auto accounted for 7.5 per cent of
the national total.
The company is not only a prestigious forerunner of the Czech industry but it is regarded
as the role model in the socio-cultural arena as well. The international product portfolio is
fittingly complemented by the company’s policy of Corporate Social Responsibility &
Corporate Governance.
Following the successful implementation of the Tandem Management and due to the
introduction of a strong endorsement program for a younger generation management as
well as talent management the number of the German experts was cut down gradually to
52 in 2007.
Since 1991 these experts included a team of human resources specialists who had a track
record of international experience, modern know-how in the field of human resources, a
visionary outlook and a distinct performance and target orientation. Thanks to a
methodical approach and an exemplary and humane dimension of all members of the
team, the team had a favorable effect on the Czechs. Thus, it was able to impart
enthusiasm, vision and knowledge to the Czech workers.
A valuable initiative came also from the involvement of Czech emigrants living in
Germany. During the first few years of the Joint Venture it was these people in particular
who helped to develop suitable and feasible concepts and to build a well-balanced bridge
between the German experts and the Czech managers and workers.
The team had the necessary instruments which often proved to be truly ground-breaking
and their beneficial effects are still deeply felt today.
First of all, the Czech likes improvisation: he is mostly averse to universal rules,
formalized procedures and standards; he wants to have free space for creativity to let out
his inventive abilities. And yet, or just for that very reason, he is capable of adjusting to
circumstances, willing to learn, is broadminded and considerate – which may sometimes
make him appear phlegmatic or disorganized. Maximum risk prevention and
organization, systematic approach, detailed thinking and acceptance of hierarchy
motivate him only when he understands their meaning and purpose, which he then
internalizes.
Today talent management is employed in the international facilities of Škoda Auto. This
time the Czech unit assumes the role of an expert. The success of its local partner
depends on its aptness and, consequently, also on Škoda Auto abroad.
Today's challenges
Internationalization in foreign plants
Today Škoda Auto is an example of the successful transformation and consolidation of a
brand from a local manufacturer to an international player, which, in the course of its
growth, expanded its vehicle assemblies to international facilities in China, India, Russia,
Ukraine, Kazakhstan and Bosnia & Herzegovina.
The local managerial and technical personnel are hired, motivated and trained at Škoda
Auto for short and medium-term tenures. Currently 30 managers assigned to plants in
India and Russia receive training at Škoda Auto.
Škoda Auto is, therefore, happy whenever foreign workers show interest in working in
Czech industries.
For Škoda Auto itself, internationalization has enormous influence on the sentiment and
lifestyle of people in the small town of Mlada Boleslav, as almost half of its population is
working for Škoda Auto and the foreign workers too are expected to be integrated into
the society there.
Concluding remark
The complexity of intercultural awareness is steadily increasing. It is not only about
awareness of other nationalities but also of genders, religions, industrial segments,
departments, teams and finally of the individual. At Škoda Auto the steady
internationalization process is endorsed with a simple formula: “Any ignorance about the
foreign mentality can be counterbalanced with acceptance, respect and responsiveness
while continuing to learn something new“.
back to top