Volvos Organization Structure

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Volvo’s Organizational Structure
Volvo effectively changed its organizational structure from M&As and JVs to organic growth. The reasons for this significant change include; there was an increasing need for more transportation infrastructure due to high population growth in the future and increased urbanization leading to an extension of the middle-class population. Next was climatic changes which necessitated a shift from fossil fuels and restrictions on carbon dioxide emissions. Other reasons included the safety of the drivers, their passengers, vehicles being used and goods in transit demanded organic usage. The complexity of Volvo group’s organization structure attracted huge costs thus faced a challenge from other competitors who offered lower prices.
The old organization’s structure product divisions were group trucks (which consisted of the sales and marketing department, operational and technological departments), Volvo construction organization and business sectors which included Volvo Aero parts, Volvo bus services, and government procurement. Under the new organization, the following changes took place; sales and marketing departments of all truck companies were organized into three physical regions namely Am EMEA (European countries, the Middle East and Africa and the Asia Pacific who all directly report to the Volvo CEO.
Previously the branded truck companies operated as independent units, but later the product development, planning, and manufacturing were centralized.

The construction equipment unit remained unchanged, but a new group called business areas unit was developed to comprise of Volvo buses, Volvo Penta and Volvo aero who would now report directly to the CEO rather than having each unit’s head report to the executive Office which helped to cut on costs. The finance and business support unit was initiated to comprise of Volvo business services, financial services, Information Technology unit and real estate. The last unit Volvo group truck operations consisted of Volvo logistics and production.
Work Cited
Jain, Vinod K. Global Strategy: Competing in the Connected Economy. Routledge, 2017.