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Assess The Impact Of Corporate Governace In Building The Corporate Image: A Case Study Of Audi AG,

ABSTRACT

In the current global market scenario, the corporate governance practises has materialized as the integral ingredient for the business success. The efficient corporate governance is necessary to organizations to maintain the sustainable growth in competitive market and also develop strong corporate image. However, many organizations have failed to manage the corporate governance practices effectively, but one company that has managed corporate governance practices effectively is Audi AG. So it is of academic interest to understand the impact of corporate governance in building corporate image of Audi AG. In this specific context, the researcher has taken Audi AG as the subject matter and conducted the analysis on current corporate governance practices of Audi and its impact on the corporate image. The researcher collected data for the study through interview with 4 managers and survey with 40 staffs of Audi AG respectively. Both qualitative and quantitative research methods were used for analysing the collected data. The researcher also used inductive reasoning while analysing the collected data. By the analysing the relevant data from the data collection methods, the researcher was able to analyse the current corporate governance practices in Audi AG and also understand the various factors that affected the effectiveness of corporate governance practices in Audi. Apart from these, the researcher was able to understand the impact on corporate governance practices on corporate image. After accomplishing the objective of the specific research, the researcher was able to conclude that the corporate governance practices have direct impact on the corporate image of the company. With reference to the research findings, the researcher has also provided some recommendation to enhance the effectiveness of the corporate governance practices of Audi AG.  


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CHAPTER 1: INTRODUCTION

1.1 Introduction

Corporate governance plays vital role in eliminating the conflicts arising out of unfavourable selection and moral threats. In short corporate governance functions as a supportive role in enhancing the corporate reputation of companies through efficient management practices states, Weiss (2014).

Hence this chapter will analyse the role played by corporate governance in building the corporate image of the firms. The prime intention of this study is to analyse the functions performed by corporate governance in building the corporate image and reputation of the German automobile manufacturer Audi AG, UK. This chapter will provide an insight in to the background of the research and company background. This chapter also includes research aims, objectives, questions and purpose of the research which will provide deep insight in to the subject matter of the research. 

1.2 Background of the research

Article from Economic Times (2009) underpins that corporate governance plays vital role in employing qualified and professionalized employees, good stakeholders in the company and attracts customer loyalty which are essential for building corporate image. Corporate image is defined as the positive image of the company created among in the public through excellent performances and unique practices states (Li, 2011).

While analysing the current scenario of automotive industry, it is evident that support from public and stakeholders are necessary for the development of final products, and therefore adhering with the principles of corporate governance for protecting the interest of stakeholders and  environment etc through carrying out ethical practices would benefit the firms to build good brand image among the public. In the automobile industry where high competition exists, the general performances of the company like Audi which exhibits excellent corporate image and reputation is necessary to survive in the international market. Weiss (2014) points out that a simple spark in the corporate governance can eventually leads the company in to the creation of negative image. Some issues with respect to the corporate governance of Audi are discussed in the above section.

1.3 Problem statement

Corporate governance functions as a supportive role in enhancing the corporate reputation of companies through efficient management practices states, Tricker (2013). And hence failing to adhere with the corporate affairs leads to negative publicity of the company and finally creates great impact on its brand image. According to Solomon (2010) the success of the company always vests in the hands of investors, management, public and other stakeholders of the company. And therefore the company will lack support when it carries out business operations without protecting the interest of the stakeholders. With this research the author attempts to analyse the effectiveness of corporate governance in automobile industry to build brand image by taking Audi AG as the case study.

Audi AG is a German based auto mobile manufactures which designs, markets and distributes the premium cars across the boundaries. Tricker and Tricker (2012) states that, the practices and policies of corporate governance of Audi is closely allied with the international values and principles and aims at enduring value creation through responsible and transparent supervision and management of the company. Solomon (2010) observes that maintaining interests of the company along with fair and sustainable development has become an extreme challenge for Audi to reduce the future failures.

Tricker (2013) reports critical and potential competitive conflicts between Audi and its competitor Porsche with respect to their prioritization on the preferences of architecture of luxury cars. Porsche, being a potential competitor and stakeholder of Audi attempts to develop luxury car along with Audi through burning $4 billion for the manufacturing process. The preference of Porsche towards modular standard platform which is against the preference of Audi created corporate disputes over selection of architecture of the luxury car. Since many multinational companies have been under the pressure of Chinese technological industries, many firms were suspected under the practices of corruption. Apart from this Chinese authorities have fined $40.5 million against Audi for the violation of antitrust laws.  The unethical practice conducted by Audi to sustain against the challenging pressure of Chinese technological companies created damage on the reputation of Audi. Solomon (2010) mention that failing to adhere with the corporate affairs of the company will leads to adverse outcomes such as financial loss, negative public opinions, diminished growth and market share etc that in turn affects the corporate image of the company. Hence the researcher attempts to study the importance of corporate governance in enhancing the corporate image of the company. This research will thus investigate the role of corporate governance in building and improving the corporate image of Audi AG, UK for sustaining in the competitive environment

1.4 Rationale

What is the research issue?

Bhagat and Bolton (2009) mention that projection of transparency and consistency is adequate for an organization to build corporate image. Krafft et al. (2013) observes that as a result of highly competitive pressure in the international market, many of the firms fail to manage the policies of corporate governance in balance ethics of the business operations. Therefore firms attempts to practice unethical practice for their survival in the global market which in turn leads to negative publicity of the company. Therefore this research will thus assess the impact of corporate governance on building the corporate image of Audi AG.

Why is it an issue for the Audi?

According to Krafft et al. (2013) due to the increased competition the company at many times deviated from its ethical practices and the bribery case of Audi against the Chinese authority is the major evidence for this statement. Therefore being a reputed automobile group, a single crash over the corporate governance could eventually leads to the negative image of the company among the public. This statement in turn navigated the need for understanding the importance of corporate governance in building corporate image.

Why is it an issue for Audi now?

This study is principally motivating while considering corporate governance, as it is the challenging part of the business management. Buckley (2014) reports that Audi is suspected under the misconduct for their participation in spare part pricing offence which is against the ethics of the business operations. Being an innovative automotive group, the offences against the practices of corporate governance of Audi in turn will adversely affect the corporate image of the company.  Thus it is essential to study the factors that affect the building of corporate image of Audi AG, UK.

What could this research shed light on?

This study will identify the outcomes of corporate governance, and evaluate it with the corporate image and ethical performances of organization.  Apart from analyzing the impact of corporate governance in building corporate image, this research will shed light on the generally accepted best practices in the corporate governance and its involvement in building corporate image.

1.5 Aim of the research

The prime aim of the research is to assess the impact of corporate governance in building corporate image of the company by considering Audi, AG UK as the case study.

1.6 Research objectives

·         To identify the factors affecting the determination of corporate governance policies.

·         To identify the factors affecting the corporate image development.

·         To assess the impact of corporate governance on corporate image.

·         To make suitable recommendations for  Audi AG to improve corporate performance for long term success.

1.7 Research questions

  1. How does the corporate governance help in building corporate image?
  2. What are the major factors that affect the corporate governance of Audi?
  3. Why corporate governance is important for Audi AG to build corporate image?

1.8 Summary

Corporate governance plays pivotal role in building good corporate image among the public. Especially in automobile industry the professional services offered by company’s in terms of quality and reliability add the customer satisfaction and thereby the public image of the company. This chapter covers detailed review of issues found against the corporate governance of Audi AG. The rationale for this study is explained briefly under the four divisions such as what is the research issues, why is it an issue, why is it an issue now and what could this research shed light on. This chapter also covers research aim, objectives and questions which guide the research in to subject matter of the study.

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction to literature review

This chapter covers various dimensions of corporate governance with supportive facts and evidences and also make analysis on the role performed by corporate governance in building good corporate image of the company.

The researcher develops an idea about the research study with the help of the literature review. Literature review is extracted from the discoveries of various previous studies conducted on the same topic of the present research.The chapter literature review deals with the topic of interest and helps in accomplishing authorised results for the research study.

2.2 Corporate governance

In the view of Solomon (2010) corporate governance is a set of relationship existing between the management of the company and its board members and other stakeholders. Monks and Minow (2011) states that the corporate governance provides a structured path for the companies to achieve corporate reputation and public image for long term benefit. As stated by Tricker (2012) it is impossible for the organization to attain good reputation without internal support and ethical practices. Therefore corporate image and corporate reputation are the valuable outcomes of good corporate governance, mentions Macey (2009). Therefore it has been observed that corporate governance builds up a strong relationship between the company’s internal customers and external customers for attaining a corporate image.

2.3 Corporate reputation

According to Arroyo (2012) corporate reputation is a relational concept which is acquired through combined efforts of management for creating competitive advantage and efficiency in corporate performance. As stated by Macey (2009) financial performance, leadership, company ethics, employees, customer treatments, quality, reliability, emotional appeal and community dominates the contents of corporate reputation. Weiss (2014) observe corporate reputation as relevant to this study as it prescribes the importance of image and quality as the basic components of corporate governance.

2.4 Role of corporate governance in achieving organizational objectives

The research conducted by Arroyo (2012) explains that the corporate governance is about ensuring sustainable value creation through effective management and is viewed as relationship which determines the corporate direction and performance. Macey (2009) reports that important role of corporate governance is to protect the interest of stakeholders and to enhance shareholders value for improving corporate accountability and performance. And hence this phenomenon exhibits the need for maintaining balance at all times with the stakeholders for the long term benefits of the companies. The study of Carroll (2014) reveals that a company is able to achieve their objectives, when it is success in implementing good corporate governance within the organization. Effective corporate governance enables the stakeholders to understand their responsibility and accountability towards the benefits of organization and helps to commit on the values and ethical conduct of the business genuinely. Hence it has been understood that corporate governance has a significant role in achieving the organizational goals.

2.5 Role of corporate governance in building corporate reputation

As stated by Carroll (2014) credibility, responsibility, reliability and trust worthiness are the important characteristics present in corporate reputation. In the view of Egwuonwu (2011) corporate reputation is the image which is created and presented by the organization in its environment and it is highly determined on the basis of organization culture, nature of products and services, members of organization etc. Perez (2013) points out the two components of corporate reputation as the social responsibility and healthy relation with employees. It is possible for the companies to preserve their competitive advantage through employing their resources for determining solutions for social problems. Since transparency is a necessary tool for corporate governance, it is mainly gets affected due to ownership structure and board of directors of the company.

In the view of Doorley and Garcia (2010) the main factors which facilitates for the effectiveness of corporate governance includes ethics, employees, financial performance, leadership, quality, social responsibility, customer focus, reliability etc.  The company must be ethically admirable and need to exhibit respect and credibility towards internal as well as external business environment (Roper and Fill, 2012). Hence it can be inferred that corporate governance consists of various supportive factors that must be implemented by company to create positives image on business environment so as to enhance corporate reputation of the company.

It has been understood that corporate governance has a significant role in creating corporate reputation.

2.6 Link between the existing literature and researcher’s work

The study of Oso and Semiu (2012) on Nigerian banking industry, Perez (2013) on   health care industry reveals that the compliance of company on the corporate governance effectively enhance its corporate image among the public but the assumptions from all the previous studies failed to cover the discussions on the negative effects of non compliance of corporate governance and also failed to point out the net outcomes of inefficient corporate governance on corporate image of the firm. Therefore the current research goes through various aspects of corporate governance and highlights current issues as well as its impact on the corporate image of the company. The following section discuses the importance of corporate governance in automobile industry.

2.7 Importance of corporate governance in automobile industry

Studies conducted by Carroll (2013) reveals that effective corporate governance is essential in the management of automobile industry to make healthy relation with external participants on the basis of trust and therefore it will aid the companies to enhance their reputation among the public. Even though the manufacturing of automobiles involves the strong coordination from the stakeholders it is necessary for the firms to follow ethical business practices internally as well as externally (Lippert and Huzzard, 2014).

The research conducted by Lippert and Huzzard (2014) observes that the automobile industries holds potential participants altogether to deliver excellent service through involving the hands of technical expertise from various stakeholders. Even though this study is related to analysing the impact of corporate governance in building corporate governance, the findings of the Lippert and Huzzard (2014) i.e. effective corporate governance can build corporate image could not be considered as absolutely accurate in the light of emerging conflicts from automobile industry, e.g., Porsche’s ongoing dispute with its stakeholder Mercedes Benz with respect to resolution of advertising is the supportive fact for the above stated assumption. Even the company with efficient corporate governance too can create corporate disputes with the external environment of the company at certain circumstances. Therefore a gap is emerged in literature review and in order to state the assumption as true Audi AG case study is carried out as even though the corporate governance of Audi AG is transparent and efficient enough to create excellent public image, but certain complaints were filed over the misconduct done by the company against the competitive pressure from Chinese technologies.

2.8 Audi AG, UK as the case study

Audi is a German automobile manufacturer which holds participation from giant companies to provide excellent services to customers (Audi AG, 2013-b).  Audi provides excellent working environment to their employees and facilitates them for utilizing wide range opportunities for development with high pay and high level of job security.  The work force of Audi during the year 2013 accounts for 7,31,751 and the volume of production of cars as on 2013 was recorded as 15,70,480, (Audi AG, 2013-b). As per the annual report of Audi AG (2011) the company posses wide network of production websites which comprises of high quality standards, efficiency and environmental acceptability.

The legislation of corporate governance of Audi AG lies under the regulation of German corporate governance code. As stated by Preuss, Gold and Rees (2014) effective corporate governance is the core element of the corporate culture of Audi. Corporate governance report of Audi (2013) points out that, fair relation and open communication with investors, management and staff facilitated the company to create transparency in corporate communication.

The corporate governance of Audi AG is absolutely complied with relevant rules, laws and fundamental values of German corporate governance code. The main goal of corporate governance of Audi is to lower the risks and to safeguard the interests of stakeholders efficiently for enhancing the public image of the company.  As per the annual report of Audi (2013) the corporate affairs of Audi is closely associated with the Global Anti corruption system of Volkswagen and therefore the policies and practices aligned with this system creates a structural framework for detecting and preventing the corruption taking part within the organization culture of Audi AG.

Neues (2013) reports the clash between Audi and its stakeholder Porsche with respect to architecture and designing of the luxury car. Weiss (2014) reported that Audi has bribed Chinese authorities of spare parts for surviving against the technological pressure which is completely against the ethical practices of business. Even though the corporate governance of Audi is enriched with transparency and international value of standards, the clashes have not much effected the reputation of the company.

Corporate responsibility reports of Audi (2013).  Reports that Audi focuses on the five dimensions of responsibility such as, environment, employees, products, society and business operations. With an aim to create sustainable approach toward natural resources, Audi introduced e-gas project for attaining complete CO2 balanced mobility (Volkswagen, 2013) and thereby the attempt of the company to safeguard the environmental resources, increased public acceptance and reputation.

Company’s commitments on the business ethics, employees, quality products and customers have improved the corporate performance of the company and hence the efficiency of corporate governance of Audi is clearly reflected in its sales and revenue figures (Neues, 2013).  The sale revenue of the Audi AG, UK during the year 2012 accounts for €48.8 billion, which is 10.6% higher while comparing with previous year (Annual report of Audi AG, 2012).

2.9 Conceptual framework for Audi AG

Fig 2.1: Conceptual framework

Source: Created by author

The conceptual framework is formed on the basis of discussions carried out on this chapter with respect to impact of corporate governance on the corporate image of the company. The factors of corporate governance are further classified as ethics, social responsibility, customer focus, employees, and quality. As per the corporate governance report of Audi (2013) the corporate governance of the company is absolutely aligned with the principles of safeguarding the interests of employees, governing bodies and other stakeholders. According to the CSR report of Audi (2013) the company supplies high quality cars which are aligned with the factors such as environmental friendliness, safety, quality, comfort etc to satisfy the needs and requirements of customers.

The effective coordination of all the factors of corporate governance leads to reduced risks and enhances public image and transparency and leadership of the company which in turns leads to improved business performance and thereby to building of good corporate image.

2.10 Factors involved in the application of corporate governance in Audi AG

Ethics

According to Forbes (2014) ethics is the core element of corporate governance. The ethics of the business is derived from the laws and rules that prevail in the country where the business operations takes place. The ethical standards of Audi AG paved the company to supply high quality cars that satisfy customer needs in terms of safety, friendliness, quality and comfort respectively. The sense of responsibility in the minds of employees is frequently encouraged by Audi, to yield desired outcomes that match up with the environmental policy (Neues, 2013).

Environmental responsibility

As a part of commitment towards environment, Audi AG, UK initiated great challenge to reduce CO2 emissions and thereby to improve fuel economy for developing new technologies. The reports from Audi (2014) states that the company exhibits great commitment towards environment, society and operations by the way of offering high and fair pay to employees, undertaking environment protection activities and societal protection activities etc which in turn results to the creation of strong foundation for the corporate governance and thereby to enhance the corporate image of the company (Forbes, 2014).

Customer focus

The development and production of Audi is mainly depends up on the factors such as quality and customer satisfaction. Before launching the product in international automotive market, the Audi carries out many test trials across the countries to assure safety and fitness of the Audi series.  According to Neues (2013) the Audi is successful in building good corporate image through offering quality products and services to customers with respect to their needs. 

Transparent and open leader ship

Pacces (2012) states that transparency and open leader ship form basic part of the corporate governance. Audi AG promotes responsible leadership activities among employees and provides them with complete freedom for disclosing all the economic and technological operations related to the corporation. The corporate social responsibility report of Audi AG (2012) states that employees are the valuable assets of Audi and the company considers the skills and commitments of human assets as the key factor for the sustaining in the automotive industry, through enhanced reputation and corporate image.

Responsibility for society

According to Audi AG (2014-b) it is an obligation for the companies to contribute for the well fare of the society and by keeping this in mind Audi undertakes social and cultural projects for supporting the growth of schools, communities and university networks especially for the regions located around the business environment.  The work force of Audi demonstrates shared commitment on social welfare through providing international aid for the victims of various disasters and implements a donations committee to grant donations for them (Audi  CSR report, 2013).

2.11 Importance of corporate governance in Audi AG for enhancing corporate image

As stated by Ghosh (2011) corporate governance plays pivotal role in the decision making process of the company and the main goal is to clearly define the duties and responsibilities of shareholder and stakeholders within the organization.  According to Bebchuk and Weisbach (2009) through clear understanding about the roles and responsibilities, the stakeholders of the company will have very good knowledge about their accountability and this will enable the company to yield good outcomes from the business operations. According to Naciri (2009) following are the factors which identify the need for corporate governance in a company.

Risk lowering

According to Egwuonwu (2011) the probability of threats, fraud, scandals, misrepresentation, coercion etc can be prevented with the approach of excellent corporate governance. As per the Management report of Audi AG (2011) the risk management system in the company clearly defines the roles and responsibilities of staffs and employees towards the business process and functional activities respectively. Audi AG uses Group-wide risks and compliance management systems to safeguard the operative corporate goals of the company up to a great extend. By aligning with the German corporate governance code, Audi fulfils minimum statutory requirements falls under stock corporation law (Audi AG, 2014-a).

The respective officials in the Audi undertake practical measures for overseeing and routing the potential risks on the basis of predefined aspects of corporate governance.

Public Acceptance

In the view of Egwuonwu (2011) the idea of disclosure and transparency that developed from corporate governance is widely accepted by the public and stakeholders. Audi AG (2014-b) specifies that, all right were reserved for the employees to get information from the company, and flexible working hours and equal opportunities were offered to them.

Public image

According to Egwuonwu (2011) all the public wants, level of awareness, ethical conduct and mutual understanding were completely encompassed in the concept of corporate governance. The high level of profit is not sufficient for the company to achieve competitive advantage; a good reputation and corporate image are essential elements for the success of the company. The corporate strategy report of Audi AG (2013-c) reports that brand logo of Audi is success in creating emotional bond with the customers.

Investor relations

The concept of investor relations in Audi gives emphasis on shareholders’ value. At bad times Audi suffered competitive challenges with respect to high wage costs in German factories and has been seeking for wage reduction from many of its German unions so as to gain back the competitiveness and profitability of the company. And hence this situation paved way for the emergence of strategic conflicts with its distinct competitor Porsche (Lassa, 2014). With respect to drastic changes Porsche was expected to drop the introduction of new models from Audi brand (Hawranek, 2009). This created adverse conflicts between Porsche and Audi. Even though such situations effected the efficiency of corporate governance of Audi, the company still works with Porsche and both the companies maintains healthy relations with each

other to manage the luxury brands more efficiently (Edelstein, 2014).

Economic stability

As per the CSR report of Audi AG (2012) the long term earning performance of the company is set as a base for measuring the financial strength of Audi and the report also mentions that it is the value oriented corporate governance which keeps the company to meets the premium quality standards of Audi brands. According to annual report of Audi AG (2013-a) the primary corporate goal of Audi is differentiated as the capability of the company to lead long term increase in the qualitative growth. Company high earning power is reflected in its operating profit ratios and therefore the operating profit of Audi AG during the year 2012 accounts for € 5.380 million which is 0.6% higher than that of previous year (CSR report of Audi, 2012).

Hence it can be inferred that Audi gives high priority to the importance of corporate governance and takes great attempt to relate it with the responsible and transparent management of the company for ensuring sustainable value and good reputation among the public.

2.12 Summary

Basically this chapter deals with the review of literature of the study. Since this study involves detailed discussion on the impact of corporate governance on corporate image of the company, various key terms associated with the study was analysed and carried out in this chapter. Major issues emerged against the corporate governance of Audi was discussed in this chapter. The basis factors of corporate governance and its effect on the performance of the company was included in this section. The discussions on the role of corporate governance on corporate image led to the formulation of conceptual framework, which discusses about the factors of corporate governance and its effect on corporate image. With an aim to understand the positive and its counter effects of corporate governance, both the pros and cons of corporate governance of Audi were discussed with supportive evidences and facts.

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction

The research methodology summarises the methods or the process for the accomplishment of research objectives. The selection of a research method has a vital role in the research work (Bryman, 2012). This chapter will convey the research purpose, research paradigm, research approach, research strategy, sample selection, data collection, data analysis plan, research ethics, research limitations and accessibility issues.

3.2 Research purpose

The research purpose is the understanding and processing of the research problem and the fruitfulness of the research study. Bryman (2012) points out the most prominent and the common purposes of the research are exploratory, explanatory and analytical.

3.2.1 Exploratory research

According to Blackstone (2012) exploratory research explores and does the initial investigations of the study. Based on this research purpose conducted in an unstructured manner, it is very difficult for the author to come to a conclusion.

Blackstone (2012) explains the exploratory studies are handled when the research problem has ambiguities. The exploratory research will collect the prior information for the future research studies. According to Bordens (2010) the exploratory studies are informal and unstructured research approach to gain the extensive knowledge about the research. Hence the exploratory approach will give the initial information for the research.

3.2.2 Explanatory research

Blackstone (2012) points out the explanatory study illustrate the participants in an authentic manner. Explanatory research investigates the reasons and outcomes of the different parameters of the research study. It is quantitative in nature and applied to statistical testing to draw the conclusions. By three categories the explanatory studies are carried out, and they are observational, case study and the survey.

3.2.3 Analytical Research

This research works on already explored informations for the detailed study of the research parameters. In this research the author makes the interpretations and the conclusions from the existing data (Blackstone, 2012).

Justification: Based on the Audi’s (UK) market report sustainability has the prime importance because of the emerging brands in the competitive market. Hence the author adopted the explanatory research approach.

This firm is already established in UK for the past 10 years. While assessing the impacts of the corporate governance in building the corporate image the explanatory research helped the author to build the interpretations and the conclusions.  

The adopted method enabled the author to gain in-depth knowledge on the research background and will help to remove various pre determined judgments associated with the research. 

3.3 Research paradigm

Blackstone (2012) outlines the research paradigm as a philosophy to gather the knowledge towards the scientific the research study. It is a logical approach to the research. Bordens (2010) categorize the research paradigm as positivism and interpretivism.

3.3.1 Positivism

In positivism philosophy the legitimate knowledge is gained through the observations (Bordens, 2010). Here all the research findings are based on the quantitative data. In this philosophy the human interests are avoided. The positivism philosophy is adhered to the objectivity while collecting the data (Black et al., 2011)

3.3.2 Interpretivism

The interpretivism is related to the subjectivity interpretations. This philosophy is more related to reality as integrated with the human interest (Bordens, 2010). While adopting the interpretivism the findings are related with the qualitative data.

Justification: In this research the author adopted interpretivism philosophy for analyzing the impact of corporate governance in building the corporate image of Audi AG. The interpretivism depicts the study and the inner feelings of the participants. Here all the research methods are employed in the real social world with the usage of small samples. While employing the interpretivism, a rich subjective qualitative data is developed that helped more to assess the corporate image of Audi. Here the effectiveness is relied on subjectivity, so interpretivism is suitable for the study of the impact of corporate governance in building the corporate image of Audi AG.

3.4 Research approach

Black et al. (2011) outlines the research approach is the procedure for the research to collect the informations. There are two types of research approach, deductive approach and inductive approach.

3.4.1 Deductive approach

According to Creswell (2009) in deductive approach the researcher works on the generalised theory and deduces to the testable hypothesis. Hence it is called as top-bottom approach. Here it moves from general to specific. The formal logic like laws, theories etc are applied in deductive approach.

3.4.2 Inductive approach

Black et al. (2011) points out that in inductive approach the researcher moves from the specific observations to the generalised theories. So it is known as the bottom-up approach. In this the critical thinking with observations are applied.

Justification: For the formation of explanations and theories based on the observations of the impact of corporate governance the author adopted deductive approach as the logical approach. This helped the author to bring down more explanations about the impact of corporate image of Audi. The sustainability is the main motto of Audi UK, For this the top-down analysis has a significant role . While the Audi at UK is  a milestone for the entire Audi brand. Hence it is necessary for the author to do channelized analysis and come to a conclusion. For this the deductive approach is the suitable one.

3.5 Research strategy

Badke (2014) points out research strategy is the tool to determine the findings and the interpretations of the research conducted  in a systematic way .The tools of research strategies are case study, interview and survey.

3.5.1 Case study

Case study is the application of knowledge and skills in the real life context to draw the conclusions. According to Black et al. (2011) case study is based on the qualitative analysis and reduces the complexities of the research work. The secondary sources will provide the informations for the case study. For the case study the researcher should have the proper informations to carry out the correct interpretations of the research.

3.5.2 Interview

In interview, direct interaction between the researcher and the respondent will take place. Black et al. (2011) points out the researcher can collect the spontaneous answers from the respondent with the help of a series of questions. The questions can be open ended or close ended. For the preparation of the questions the researcher should collect informations from the secondary sources. In this strategy, the face to face interview is the most appropriate one to collect the meticulous data.

3.5.3 Survey

Survey is the method of data collection from a large number of respondents from a stipulated time period (Badke, 2014). It is the most effective and the efficient method for data collection. From this the researcher can directly inference the attitudes and opinion of the participants. In survey, the researcher usually uses the open ended questions.

Justification: To do the effective data collection of the assessment of impacts of the corporate governance in building the corporate image of Audi AG, the author adopted the interview and survey questionnaire method. The author has conducted face to face interview of 4 managers and the survey of 40 staffs.

3.6 Sample selection

According to Creswell (2009) if the size of population is large and wide spread, the researcher will not be able to collect required information by covering the entire population and therefore it is essential to apply sampling method in drawing subset of samples from the population. The selection of a sample of participants from the large population is very significant to gather the appropriate information for the research under study. Blaikie (2009) opines that each element in the sample depicts the characteristics of the whole population.  

3.6.1 Population

Blaikie (2009) point out that a population is the entire group of people anticipated for the research study. From the population the sample is selected.

3.6.2 Sample size

Based on Creswell (2009) opinion, it is very laborious to the researcher to analyze the entire population when the population is very large. So a group of distinct individual/objects which show the similar characteristics are selected. And this small group is called sample. The sample size is important for the research study to make the interpretations.

3.6.3 Sampling techniques

Sampling technique is the statistical analysis of the elements drawn from the large population which characterizes as a whole. Mainly there are two types of sampling techniques, probability sampling and non-probability sampling. Blaikie (2009) classifies sampling methods into probability and non-probability sampling methods.

Probability sampling techniques: Every element of a population has the same priority to be selected in the sample. Badke (2014) argues that because of each element has the equal priority to be selected in the sample this technique is considered as unbiased.

Non probability sampling techniques: A particular segment of a population is selected as a sample in non probability sampling technique, so each element of the population does not have the equal priority and the sample selection will be limited. According to Badke (2014), based on the above stated reason for the research this technique is considered as biased sample.

Justification: The German automobile manufacturer, Audi AG consists of large number of managers and staffs and it is essential for the author to carry out sampling method for drawing samples required for the implementation of the study.  For this research the author selected 4 managers and 40 staffs of Audi AG using probability sampling method in random manner. Here the adopted research purpose was descriptive, so it was suitable to use the probability sampling method in simple random manner. Because in probability sampling each element in the population has equal chance to select as a sample. As probability sampling method is more accurate, this study benefitted with accurate, valid and unbiased results from the population. 

3.7 Data collection method

According to Bryman and Burgess (2011) data collection methods are the fundamental areas of research. The progress of the research entirely depends up on the methods used for data collection. It is the systematic way of collecting informations for the research study. All this informations helps to draw the interpretations and the findings of the research. Badke (2014) classifies data collection methods into primary and secondary.

3.7.1 Primary data collection

In the view of Badke (2014) primary data are original in character and are collected by researcher for the first time directly from respondents and varied reliable sources. The primary data are collected by the researcher while conducting the research. Primary data collection method is further classified in to observation research, survey, interview and focus group.

Observation research: As stated by Badke (2014) observation research is about collecting data from the people, object and organization associated with the study, through systematic observation. The observations are carried out in participant and non-participant way i.e. the researcher as a part of the group or without making the presence.

Interview: According to Bryman and Burgess (2011) interview method is the data collection method in which series of questions are asked by the interviewer to the respondent for retrieving responses related to the research topic. The author can conduct the interview by preparing the closed ended questions. From this the author collected the spontaneous answers from the respondent. The interview can be conducted by different ways i.e. face-to-face, telephonic and group interview

Survey: Bryman and Burgess (2011) opines that survey is a cost efficient approach for collecting required data from large number of respondents by covering large geographical area.

3.7.2 Secondary data collection

Bryman and Burgess (2011) points out the data accessed from different sources that is already published for the purpose are called the secondary data. The secondary data collection methods are internet, magazines, books and journals. It is the responsibility of the researcher to collect suitable informations form these sources.

Justification: In this research, for collecting primary data  the author carried out face to face interview and questionnaire survey from managers and staffs of Audi AG respectively. For both methods the author prepared the close ended questions, this helped the author to collect the factual informations in the stipulated time from the respondents.

In face to face interview there was a direct interaction between the author and the managers of Audi occurred and this helped to employ the accurate screening of the managers and the collection of significant informations. Hence the face to face interview with the managers of Audi felicitated the author to explore the company’s perception regarding corporate governance and its role in building corporate image in the competitive market.

In questionnaire survey the author collected more information with short span of time. For this the author selected a group of experienced persons to collect the accurate information. Hence the questionnaire survey helped the author to obtain quantitative information from the staffs of Audi AG regarding the basic principles of corporate governance followed by the company and their impact on the corporate image of Audi AG. 

3.8 Data analysis plan

Creswell (2009) points out data analysing plan is the adoption of different methods suitable for the accurate data collection which helps the proper findings and the conclusions from the research study. Quantitative and qualitative data are required for the research study.

Justification: In this research study both primary and secondary data are employed. As explained before, interview and the questionnaire survey methods are the data collection methods adopted in this research study. From the interview method the qualitative data and from survey method the quantitative data are collected for the research study. And therefore the mixed approaches are applied in this research.

The quantitative data focused on numbers and statistical analysis done on that. For the analysis the pictorial representation tools such as pie chart and tables are used.

The qualitative data are non-numbers and helped the researcher for validating the market context of the firm.

The similarity of qualitative data with respect of quantitative data will be critically scrutinized by the researcher.

3.9 Accessibility issues

It has been mentioned by Anderson (2010) that accessibility issues are common in the stage of development and organization of research paper. Mainly the accessibility issues are related to the data collection. The availability and the accuracy of informations in internet, magazines and journals are the great challenges for the significant data collection.

Here in this research, the adopted data collection methods were face to face interview and questionnaire survey. The face to face interview is a time consuming method, because of this it was very difficult to coordinate and arrange the managers for the interview at a prescribed time to collect the data.  Therefore it would be beneficial for the researcher to inform the managers of Audi AG about the intention of conducting interview before hand.

Apart from this, in Audi all the staffs are not permanently employed, the willingness of respondents and the regulated terms and conditions of employment contract may deprive the participants to openly state the accurate responses for the questions of researcher. In such cases, the quality of the research paper will be reduced; therefore the researcher would depend up on secondary sources for clarifying the reliability and validity of the responses received.

3.10 Ethical issues

Anderson (2010) states that it is essential for the researcher to stick on with the rules and principles of the research throughout the study. Ethics are the rules and guidelines abide by the research. While conducting a research it should be necessary to protect the rights of the respondent and the researcher.

The author in this research will comply with the rules and standards of research ethics and avoid the activities that harm people, property and objects engaged in the various stages of the study.

There are some ethical issues while conducting the interview mainly the time and the availability of the respondent. Before conducting the interview the author got the consent from the respondents involved in the study. The researcher should ensure the confidentiality and the privacy of the responses received from participants. The researcher selected the participants of hands on experience without any compulsion. The researcher should not commit any fraud or the scientific malpractices for the benefit of the research.

3.11 Research limitations

Anderson (2010) points out the research limitations are those which influence the interpretations of the research findings. 

According to Bryman and Burgess (2011) time and cost acts as major barrier for every researcher. In this research the probability sampling has some limitations, the sample size of the research was reduced by the author in to 4 managers and 40 staffs.

It was a great challenge for the author to approach the selected managers and the staffs of Audi AG to obtain pool of data required for the study. Also the sample size for the study was very small. Hence the interpretations of this research study will not depict the whole of Audi AG.

3.12 Conclusions

For this research the author used the inductive approach for the explanations and interpretations of the research study. To depict the inner feelings of the Audi employees’ author utilizes the interpretivism as a logical philosophy. For the meticulous data collection primary as well as secondary data collection methods were employed. Author follows all the ethical parameters throughout the research study.

CHAPTER 4: DATA PRESENTATION AND ANALYSIS

4.1 Introduction

According to Anderson (2010), data collection, analysis and interpretation are the main part of any research. In this chapter, the researcher has collected qualitative data from 4 managers of Audi AG by conducting interview and quantitative data from 40 staffs of Audi AG through questionnaire survey.

For conducting the interview and survey the researcher visited the main office of Audi in UK. The researcher conducted face-to-face interview with the managers of Audi. Before conducting questionnaire survey with Audi staffs, the researcher created questionnaire and pilot tested. The copies of questionnaires were handed over to staffs to gather data.

The researcher discussed the research objectives and scope of the research with the managers and staffs. The 4 managers of Audi were visited personally by the researcher to conduct interview, while survey was conducted through providing questionnaire among the staffs of Audi. The response rate of survey was 40% as only 40 staffs provided responses instead of approaching 100 staffs by the researcher for the survey.

The researcher has also cross checked the relevant data collected from the primary method with the secondary data. The researcher has tried to find the similarities and the contracts between the theoretical data and the data collected through the interview and survey, which are discussed in the following section.

4.2 Qualitative analysis

The researcher interviewed 4 managers of Audi. The questionnaire and the responses received from managers are discussed below along with the analysis of the responses.

1.    How did Audi establish appropriate communication with public?

Managers 1, 2, 3 and 4:

“We have succeeded in establishing proper communication with public through the policy of transparency and open fair communication. It has enhanced the employees to develop their innovations for the growth of our company and the right to get information from the company along with flexible working hours and equal opportunities.”

Researcher’s interpretation:

This question was posed to understand the corporate governenance practises of Audi. From the replies of the managers the researcher identified that Audi established communication with the public through the policy of transparency and open fair communication which enhanced the retrieval of information to the public. From the analysis of the responses it can be inferred that the policy of transparency and open fair communication followed by Audi played important role in the company’s communication with the public.

2.       Does Audi have a corporate governance code and what are the actions    adopted by the company for managing compliance with these?

Managers 2 and 3:

“Our company is aligned with German corporate governance code and with the rules, laws and values of German corporate code. So all our activities comply with these codes. This ensures that our processes are effective, efficient and trustworthy.”

Managers 1 and 4:

“In addition to it the corporate affairs of Audi is closely associated with the Global Anti corruption system of Volkswagen for detecting and preventing the corruption taking part within the organization and  for following transparency all the data with respect to group publication dates and the dates of annual general meeting of Audi AG are listed in the financial calendar.”

Researcher’s interpretation:

This question was also included to collect information regarding the corporate governenance practises in Audi. It is clear from the answers of the managers that Audi is aligned with German corporate governance code and corporate affairs of Audi is closely associated with the Global Anti corruption system of Volkswagen to detect and prevent the corruption and all the data with respect to group publication dates and the dates of annual general meeting of Audi AG are listed in the financial calendar for observing the policy of transparency. So it can be understood that corporate governance practises of Audi are designed with respect German corporate governance code and Global Anti corruption system.

3.    Can you brief the factors involved in Audi’s corporate governance?

Managers 1, 2, 3 and 4:

“We are proud to say that the factors of ethics, environmental responsibility, customer focus, transparent and open leadership, responsibility for society are included in Audi’s corporate governance.”

 Researcher’s interpretation:

The researcher included this question in order to understand more about the different factors involved in corporate governance in Audi. The researcher understood that ethics, environmental responsibility, customer focus, transparent and open leadership, responsibility for society are included in Audi’s corporate governance.

According to Doorley and Garcia (2010), the main factors that facilitate the effectiveness of the corporate governance involve ethics, employees, financial performance, leadership, quality, social responsibility, customer focus and reliability. It was clear from the interview that the company Audi assures the corporate governance through maintaining ethics, environmental responsibility, customer focus, transparent and open leadership and responsibility for society. Hence the primary data contradict the statement provided by Doorley and Garcia (2010).

4.    Has the corporate governance policy followed by Audi helped the organisation to build corporate image?

Manager 2 and 3:

“Yes, our company has succeeded in building the corporate image by following the corporate governance policy adopted by our firm. We have supplied high quality cars that pleased the customer needs and initiated a challenge to minimize CO2   emissions.”

Manager 1, 2 and 4:

“Audi has also carried out test trials to ensure the safety and fitness of Audi series and employees are given the freedom to disclose the economic and technological operations related to the corporation.”

Manager 2 and 3:

“Moreover our company undertake projects for supporting the growth of schools, communities and university networks. By providing international aid for the victims of various disasters Audi has proven its social commitment.”

Researcher’s interpretation:

The above question was posed to get the perspective of managers on the impact of corporate governance on corporate image of Audi. The researcher was enlightened with the information that corporate governance policy followed by Audi helped the organisation to build corporate image and it was evident from actions like thesupply of high quality cars that pleased the customer needs, initiated challenge to minimize CO2   emissions, test trials to ensure fitness and security, freedom of employees to disclose economic and technological operations related to the corporation, projects for supporting the growth of schools, communities and university networks andproviding international aid for the victims of various disasters. So it can be inferred that the corporate governance policy followed by Audi helped the organisation to building its corporate image.

Krafft et al. (2013) mentioned that many companies failed to manage the policies of the corporate governance accordance with the interest of stakeholders and that lead to the loss of the corporate image. However, the above analysis revealed that the corporate governance of the Audi AG was transparent and was effective enough to create an admirable public image. It shows that primary data contradicts with the secondary data.

5.    Does the present corporate governance policy in Audi meet the stakeholder’s expectations?

Managers 1, 2, 3 and 4:

“In our opinion the idea of disclosure and transparency factor of the corporate government policy has enabled our company to meet stakeholder’s expectations. Our stakeholders are granted every right to get information from the company.”

Researcher’s interpretation:

Through this question the researcher intended to understand about the effectiveness of corporate governance policy in achieving organizational objectives of the company. The researcher identified that the corporate governance policy of Audi meets the stakeholder’s expectations by implementing the idea of disclosure and transparency. So it can be understood that corporate governance policy of Audi helped in meeting the expectation of stakeholders and thus in attainment of organizational objectives. 

6.    In your view, what are the driving factors for corporate governance in Audi?

Managers 1, 2, 3 and 4:

“We have found that the risk lowering, public acceptance, investor relations and economic stability are the driving factors which identify the need for corporate governance in Audi.”

Researcher’s interpretation:

The researcher included this question in order to understand more about the factors impacting corporate governance in Audi. From the managers’ disclosure the researcher inferred that risk lowering, public acceptance, investor relations and economic stability factors had driven for corporate governance in Audi.

7.    How does the management of Audi mitigate potential corporate risks?

Managers 1 and 4:

“The risk management system of our company has clearly defined the responsibilities of staffs and employees towards the functional activities. Our company makes use of Group-wide risks and compliance management systems to safeguard the operative corporate goals of the company.”

Managers 2 and 3:

“It is to be praised that our company has aligned with the German corporate governance code to fulfil minimum statutory requirements falls under stock corporation law and the respective officials in Audi undertake practical measures for overseeing and routing the potential risks on the basis of predefined aspects of corporate governance.”

Researcher’s interpretation:

The researcher included this question in order to understand the role of corporate governance in ataiining oragnizational objectives. The researcher understood that the risk management system of Audi enhanced safeguarding the operative corporate goals of the company and officials in Audi have taken measures for overseeing and routing the potential risks. So this revealed that Audi employed a risk management system to mitigate  potential risks and thereby help the company in attaining its objectives.

8.    Do you find any emerging risks that could affect the corporate governance of Audi?

Managers1, 2, 3 and 4:

“Even though Audi haven’t identified any risks at present misrepresentation, fraud, scandals, coercion, threats etc. are risks that could affect the corporate governance of our company.”

Researcher’s interpretation:

This question was included in the interview for identifying the possible shortcoming and threats faced by corporate governance in Audi. The replies of the managers conveyed that misrepresentation, fraud, scandals, coercion, threats etc. could be risks that would affect the corporate governance of Audi.

9.    What is the nature of compliance retained by Audi with respect to its corporate governance policy?

Managers 1, 2, 3 and 4:

“The corporate governance of Audi is absolutely complied with relevant rules, laws and fundamental values of German corporate governance code.”

Researcher’s interpretation:

The researcher was provided with the information that the corporate governance of Audi is absolutely complied with relevant rules, laws and fundamental values of German corporate governance code. So it can be understood that corporate governance practises of Audi complied with the German corporate governance code.

10. Is the corporate governance at Audi effective? Are there any suggestions from your view for improving the corporate performance of Audi?

Managers 1, 2, 3 and 4:

“We have experienced that the effective corporate governance at Audi. It would contribute much to the advancement of our company if we concentrate to work hard on the factors involved in the corporate governance of Audi such as ethics, environmental responsibility, customer focus, transparent and open leadership and responsibility for society.”

Researcher’s interpretation:

This question was included in order to understand effectiveness of corporate governance in Audi. The managers’ answers helped the author to find that the corporate governance at Audi was effective and improving the factors involved in the corporate governance such as ethics, environmental responsibility, customer focus, transparent and open leadership and responsibility for society would improve the corporate performance of Audi. So the researcher identified that corporate governance in Audi was very effective. However, it was also understood that further improvement was required in aspects such as ethics, environmental responsibility, customer focus etc. to improve corporate performance further.

4.3 Quantitative analysis

The researcher conducted survey analysis on 40 staffs of Audi AG to collect quantitative data required for the present study.  These staffs were supplied with questionnaires which were collected back after they had filled in the relevant answers. Below are the questions asked to the staffs of Audi AG while conducting the survey analysis.

1. Please mention your gender.

Pie Chart: 1- Gender of the participants

Source: Created by the author

This question was included in the survey for understanding the gnder diversity among staffs of Audi. From the above pie chart the researcher observed that majority of the staffs who participated in the survey were males with 80% and the rest 20% of the staffs were females. So it can be inferred that majority of staffs in Audi are males.

2. Please mention your age.

Pie Chart: 2- Age of the participants

Source: Created by the author

This question was included to understand the age group of staffs of Audi. Majority of the staffs (50%) who involved in the survey were aged between 35-45 years and the next 30% of the staffs constituted from the age group of 25-35 years. The rest 20% of them are between the age group of 45-55 years. So it can be understood that the majority of staffs of Audi are between the ages 35-45 years.

3. How long have you been working with Audi, UK?

Pie Chart: 3- Work experience of the participants at Audi

Source: Created by the author

The researcher intended to understand the experience levels of staffs of Audi through this question. It was known by the researcher that 40% of the staffs had 10-15 years of work experience whereas 30% of them had 5-10 years of work experience. The other 20% were below 5 years and the rest 10% had above 15 years of work experience. So it can be understood that majority of staffs had 10-15 years of work experience with Audi.

4.    How is your working atmosphere at Audi?

Pie Chart: 4- Working atmosphere provided to the participants at Audi

Source: Created by the author

The researcher observed from the survey that 50% of the staffs said they were provided with excellent working atmosphere at Audi. The next 30% felt a pleasant working atmosphere at Audi while the rest 20% had a normal atmosphere.  So it can be understood that the working atmosphere of Audi was perceived positively by majority of staffs.

5.    In your opinion, what factors led Audi to emphasize on corporate governance practices?

Pie Chart: 5- Factors involved in the corporate governance at Audi

Source: Created by the author

The researcher observed from the survey that certain factors played significant role in the corporate governance practises adopted at Audi. 30% of the staffs of Audi opined ethics as the main factor that influenced the corporate governance. The rest 20% the staffs considered customer focus as the factor that influenced corporate governance whereas transparent and open relationships were opted by the next 20% of the staffs. Environmental responsibility was also suggested by 20% of the staffs. The rest 10% of the staffs said responsibility for the society as the factor that led Audi to emphasize on the corporate governance. So it can be inferred that the main factor influencing corporate governance in Audi is ethics.

In the view of Perez (2013) one of the main components of corporate governance was the healthy relation with employees. It was inferred from the survey that only 20% of staffs of Audi maintained that transparent and open relationship with the employees impacted corporate governance in the company. This indicates that the primary data contradicts the observation in the secondary data.

6.    What are the major benefits obtained from the transparent and open leadership practices adopted by Audi?

Pie Chart: 6- Benefits of transparent and open leadership practises

Source: Created by the author

It was evident from the above pie chart that the staffs of Audi were benefitted by the transparent and open leadership followed at Audi. For each 30% transparent and open leadership practises enabled them to develop their own ideas and innovations which helped in the success of the company. But for the next 20% it provided a good working atmosphere while freedom was the benefit attained by the 20% of the other staffs from the transparent and open leadership practises adopted by Audi. Hence, it can be understood that the major benefits of transparent and open leadership practises of Audi were improvement in ideas and innovation among staffs.

7.    According to you, what are the major needs in setting up of improved corporate governance practices at Audi, UK?

Pie Chart: 7- Needs for an improved corporate governance at Audi

Source: Created by the author

Through this question the researcher identified details about the apparent need for improvement in corporate governance of Audi. The researcher identified that certain needs had to be set up for the purpose of improved corporate governance. From the above pie chart it is visible that majority of the staffs (30%) opined risk lowering as the major need to improve the corporate governance. But for the rest 20% each public acceptance and public image were considered as the major need. The rest considered investor relations as the need and the last 15% mentioned economic stability as the major need for the improvement of corporate governance practises at Audi. So it is found that lowering risk related to corporate governance was crucial for improving corporate governance practises in Audi.

According to Naciri (2009), the companies can fulfill the corporate governance through risk lowering, public acceptance, public image, investor relations and economic stability. Through the survey, it was identified that Audi has maintained the corporate governance through risk lowering, public image, public acceptance, investor relations and economic stability.  So it can be inferred that primary data concurs with the secondary data. 

8.    How has the corporate governance practices in your company impacted the corporate image and reputation of the company?

Pie Chart: 8- Impact of corporate governance of Audi

Source: Created by the author

This question was incorporated so as to evaluate the viewpoint of staffs with respect to the impact of corporate governance practices on corporate image and reputation of Audi. The researcher understood through the above chart that 70% of the staffs opined that corporate governance practises positively affected the corporate image and reputation of the company. The rest 15% of the staffs responded that corporate governance showed no significant impact on corporate image and reputation of the company whereas 15% of the staffs opined it affected negatively. Hence, it can be inferred that corporate governance practices have definite positive impact on corporate image and reputation of Audi.

Tricker (2012), mentioned that the efficient corporate governance has helped Audi to attain good reputation. It was evident from the survey that the corporate governance has positively impacted on the reputation of the company and the corporate image. This reveals that the primary data confirms the secondary data.

9.    Please mention the extent to which you are satisfied with the corporate governance practices at Audi?

Pie Chart: 9- Satisfaction with corporate governance practises at Audi

Source: Created by the author

The purpose of this question was to know if the company need to improve the corporate governance practises. The majority of the staffs (70%) collectively responded that they were highly satisfied with the corporate governance followed at Audi. The remaining 15% expressed that they were just satisfied and the last 15% were not much satisfied with the corporate governance practised at Audi AG.

4.4 Compilation of results

4.4.2 Compilation of the results of interview

The researcher has compiled the qualitative data collected from the managers of Audi AG, UK in this section for further discussions.

  • The researcher has identified that Audi has established appropriate communication with the public by implementing the policy of transparency and open fair communication which enabled the process of retrieving information to the public together with flexible working hours and equal opportunities. It has also facilitated the development of employees’ innovations for the growth of the organization.
  • The researcher also found theAudi was aligned with the German corporate governance code and complied with the rules, laws and values of German corporate code. Moreover, corporate affairs of Audi were closely associated with the Global Anti corruption system of Volkswagen for detecting and preventing the corruption within the organization and all the data with respect to group publication dates and the dates of annual general meeting of Audi AG were listed in the financial calendar as a part of observing the policy of transparency.
  • The researcher figured out thatethics, environmental responsibility, customer focus, transparent and open leadership, responsibility for societywere the factors involved in the corporate governance of Audi.
  • The researcher realised that the corporate governance at Audi has created corporate image by observing the factors involved in the corporate governance. Audi has satisfied the customers by supplying high quality cars, it has initiated a challenge to reduce CO2 emissions, it has carried out test drives to ensure safety, it has bestowed freedom on employees to disclose economic and technological operations related to the corporation, it has undertaken projects for supporting the growth of schools, communities and university networks and have provided aid for the victims of various disasters.
  • It has been analyzed by the researcher that theidea of disclosure and transparency of the corporate government policy which grant the freedom to retrieve information has enabled the company to meet stakeholder’s expectations.
  • The researcher has comprehended that risk lowering, public acceptance, investor relations and economic stability were the factors which identified the need for corporate governance in Audi.
  • It has been recognized by the researcher that the risk management system of Audi and the Group-wide risks and compliance management works together to safeguard the operative corporate goals of the company in addition to the practical measures undertaken by the officials for overseeing and routing the potential risks on the basis of predefined aspects of corporate governance.
  • The researcher apprehended that misrepresentation, fraud, scandals, coercion, threats etc. were the risk factors identified by the managers which would affect the corporate governance of Audi.
  • It was grasped by the researcher that the corporate governance of Audi  absolutely complied with relevant rules, laws and fundamental values of German corporate governance code.
  • The researcher understood that the corporate governance at Audi was very effective and improving the factors involved in the corporate governance such asethics, environmental responsibility, customer focus, transparency and open leadership and responsibility for society would improve the corporate performance of Audi.

4.2.3 Compilation of the results of survey

The researcher surveyed 40 staffs of Audi AG to obtain their opinion to assess the impact of corporate governance in building the corporate image.

 The detailed discussions of the results obtained from the survey are given below.

  • From the survey conducted the researcher understood that the majority of the staffs (80%) were males and the remaining 20% were females. In this 50% of the staffs belonged to the age category of 35-45 years and the next 30% and 20% each of the staffs belonged to the age group of 25-35 years and 45-55 years respectively.
  • The researcher understood from the survey that majority of the staffs (40%) had 10-15 years of work experience whereas 30% of them had only 5-10 years of work experience. 10% of the staffs had above 15 years of work experience whereas the rest 20% were below 5 years of experience.
  • It was very clearly understood by the researcher that Audi provided an excellent working atmosphere as 50% of the staffs supported it. The rest 30% and 20% each opined that pleasant and normal working atmosphere was provided to them respectively.
  • The researcher identified that the staffs mentioned that certain factors influenced the corporate governance provided at Audi. 30% of the staffs opined that ethics must be strictly followed by a firm to yield desired results whereas 20% each of the staffs considered customer focus, transparent and open relationships, and environmental responsibility of the firm as the factors that involved in corporate governance. 10% of the staffs also pointed society responsibility.
  • Transparent and open relationships were introduced at Audi mainly for the welfare of the employees. It was inferred that each 30% of the staffs were able to create ideas and innovations whereas good working atmosphere and freedom were chosen by the rest 20% staffs respectively.
  • Corporate governance is inevitable in the functioning of a company.  Many needs have to be fulfilled in order to improve corporate governance. 30% of the staffs choose risk lowering as the main need whereas the rest 20% each choose public image and public acceptance. Each 15% of the staffs opined investor relations and economic stability as the major need for improving corporate governance.
  • From the survey the researcher emphasized that the corporate governance practices at Audi positively impacted the corporate image and reputation of the company as 70% of the staffs supported it. 15% of the staffs said it had no significant impact whereas the rest 15% opined that it showed negative impact.
  • The researcher highlighted that Audi was successful in its corporate governance as 70% of the staffs opined that they were satisfied with the corporate governance followed at Audi. The next 15% of the staffs expressed that they were satisfied and the last 15% responded that they were not much satisfied.

4.5 Gaps identified

In this specific research, the author has assessed the impact of corporate governance in building the corporate image by considering Audi AG as the subject matter.

According to Krafft et al. (2013), many companies in the automobile industry have failed to manage the efficient corporate governance along with ethical practices, which finally leads to hammering the corporate image. Nevertheless, it was evident from research specific research work that the specific company was very successful in managing the corporate governance that enough to create a remarkable public image. Hence it can be understood that a gap is existed between the findings of the present research and that of the study of Krafft et al. (2013).

Doorley and Garcia (2010), recognized the important factors assist the effectiveness of the corporate governance that includes ethics, employees, financial performance, leadership, quality, social responsibility, customer focus, reliability. But it was clear from the specific research that Audi manage the corporate governance through maintaining ethics, environmental responsibility, customer focus, transparent and open leadership and responsibility for society. Hence it was observed that a gap was existed between the findings of the present research and that of study of Doorley and Garcia (2010).

Tricker (2012), observed that an efficient corporate governance helped the organization to achieve the good reputation. However, it was understood from the specific research that the corporate governance directly impact on the reputation of the company as well as the corporate image. So the present research has added to existing work of Tricker (2012).

4.6 Summary

This chapter deals with the presentation and analysis of the data collected by the researcher through interview and survey. Qualitative data was obtained by interviewing 4 managers of Audi and quantitative data was obtained by surveying 40 staffs of Audi AG. The researcher has analysed and presented the quantitative data with the help of pie charts and line charts. In this chapter, the author has also compared and contrasted the existing literature and the specific study. Moreover the researcher has identified the gaps within the existed literature and that explored in this chapter.

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

The purpose of this chapter is to convey the conclusions regarding the research study which was formed after detailed analysis and discussions. This chapter also presents the evaluation of the results along with the limitations of this study. It also provides recommendations for Audi AG, UK to improve the corporate governance policy for building up the corporate image. The researcher also suggests recommendations for future researchers who intend to research on corporate governance or related topics.

5.2 Conclusions

Objective 1: To identify the factors affecting the determination of corporate governance policies.

One of the main objectives of this research was to investigate the functions of corporate governance in achieving organizational objectives. The researcher identified from the discussions of the results that the functions of corporate governance in Audi played crucial role in reducing risks, enhancing reputation and image of the company, promoted transparent and open leadership which in turn led to good employee relationship. So by taking these into account it can be argued that the functions of corporate governance in Audi AG have contributed to the achievement of organizational objectives. Hence, it can be concluded based the above discussed research findings that the specific research objective under consideration has been effectively achieved in this research. So it can be concluded that corporate governance in Audi impacted risks, reputation, corporate image and thus in turn impacted attainment of organizational objectives.

Objective 2: To identify the factors affecting the corporate image development

One of the other objectives of this research was to examine the factors involved in the corporate governance of a company. From the results of the data analysis it was comprehended that ethics, environmental responsibility, customer focus, transparent and open leadership, responsibility for society were the factors involved in the corporate governance of Audi AG, UK. So by taking these research findings into account, it can be concluded that the research objective under discussion has been effectively tackled by the present research.

Objective 3: To assess the impact of corporate governance on corporate image

One of the other objectives of this research was to identify the important role played by corporate governance in building the corporate image of company. The researcher identified from the analysis of survey and interview that Audi AG has successfully built the corporate image by observing all the factors involved in the corporate governance of a company. It was found that the company supplied high quality cars, initiated CO2 emission reduction projects, offered test trials, offered freedom to employees, supported schools, communities and university networks, helped victims of disasters etc. which represent the fulfilment of the factors governing corporate governance. Moreover, it was also understood that corporate governance positively impacted innovation and idea of employees which in turn led to improvement in performance of employees and thus improved the corporate image of the company.

It was also understood from the analysis of interview and survey that corporate governance in Audi AG was significant as it contributed to the risk lowering, public acceptance, investor relations and economic stability factors in the company. Moreover, it was also understood that corporate governance had positive impact on corporate image. Hence, it can be concluded that corporate governance played important role in building corporate image of Audi AG.

So based on these findings it can be argued that corporate governance does play an important role in building the corporate image of the company. Moreover, it can also be concluded that the research successfully attained the research objective under discussion.

Objective 4: To make suitable recommendations for  Audi AG to improve corporate performance for long term success

The final objective of this research was to provide suitable recommendations for  Audi AG to improve corporate performance for long term success. From the analysis of survey and interview results, it was understood that corporate governance in Audi AG needed improvement with respect to improving social responsibility and avoiding the chances of misrepresentation, fraud, scandals, coercion, threats etc. So based on these findings the researcher has provided recommendations to Audi AG in the later part of this chapter. Hence, it can be concluded that the present research has successfully attained this objective.

5.3 Evaluation of results

The primary focus of this research study was toassess the impact of corporate governance in building the corporate image with regard to Audi AG, UK as the case study. For the accomplishment of this research process the researcher had conducted an interview for 4 managers and a survey for 40 staffs of Audi AG and has collected the significant qualitative and quantitative data. The researcher had analyzed the primary data and has briefed it as the evaluation of results.

It was recognized that the corporate governance of Audi is absolutely complied with relevant rules, laws and fundamental values of German corporate governance code and ethics, environmental responsibility, customer focus, transparent and open leadership, responsibility for society were the factors involved in the corporate governance of Audi. It was discovered thatAudi satisfied the customers by supplying high quality cars, initiated a challenge to reduce CO2 emissions, carried out test drives to ensure safety, granted freedom on employees to disclose economic and technological operations related to the corporation, undertook projects for supporting the growth of schools, communities and university networks and provided aid for the victims of various disasters as the part and parcel of obeying the factors of corporate governance. In addition to it the results showed thatAudi has successfully established appropriate communication with the public by implementing the policy of transparency and open fair communication which enabled the process of retrieving information to the public together with flexible working hours and equal opportunities. It has also facilitated the development of employees’ innovations for the growth of the organization.

It was understood that the risk management system of Audi and the Group-wide risks and compliance management worked together to safeguard the operative corporate goals of the company in addition to the practical measures undertaken by the officials for overseeing and routing the potential risks on the basis of predefined aspects of corporate governance andit was found that corporate affairs of Audi was closely associated with the Global Anti corruption system of Volkswagen for detecting and preventing the corruption within the organization and all the data with respect to group publication dates and the dates of annual general meeting of Audi AG were listed in the financial calendar as a part of observing the policy of transparency. The corporate governance policy of Audi has enhanced progress of the factors of risk lowering, public acceptance, investor relations and economic stability. It was understood thatmisrepresentation, fraud, scandals, coercion, threats etc. were the risk factors which would affect the corporate governance of Audi.

It was also deduced that Audi presented excellent working atmosphere and that there were no much deficiencies in the corporate governance of Audi as per the experience of the staffs. It was acknowledged that the corporate governance of Audi was effective and it positively elevated the corporate image of Audi according to the experience of Audi staffs.

5.4 Recommendations

The recommendations suggested by the researcher for Audi AG, UK are:

  • The researcher identified that social responsibility aspect of corporate governance was weak in Audi AG. So it is recommended that Audi take measures to improve this aspect of corporate governance. Audi can achieve this by implementing a new corporate social responsibility framework within the organization. This will allow the organization to measure and control the different aspects of  social responsibility efficiently leading to improvement in corporate governance. Implemeting a new corporate social responsibility framework will also ensure that employees and managers understand the need of corporate social responsibility and adhere to the standards set by the framework. 
  • The findings of the research revealed that there are certain risk factors such as misrepresentation, fraud, scandals, coercion, threats etc. which could affect the corporate governance policy of Audi. Hecne, it is recommended by the researcher that Audi tacke this issue. Some of the recommended solutions to tackle these risks are seeting up internal financial regulatory bodies, educating staffs and managers about fraudulent practises and their consequences, conducting regular audits, conducting thorough background chaeck of employess, settong up data protection and data usage laws etc. By taking these measures Audi will be able to reduce the risk of fraudulent activities in the firm.  

5.5 Limitations

One of the limitations regarding this research study is the lack of previous studies to refer on the topic of assessing the impact of corporate governance in building the corporate image. The lack of previous researches have limited the researchers ability to cross refence the research findings with secondary data and thus understabd the scope of the research findings. This inturn has limited the ability to infer conclusions.

Another major limitation is related to sample size and organization under conidreation. This research exhibits the limitation of both the case study and sample selection as the researcher had taken only the organization of Audi AG, UK as the case study and 60 staffs and 4 managers as the sample for survey and interview respectively. So the results could not comprehend the views of all the managers and staffs. The researcher also concentrated mainly on the case of Audi. So the research findings might note ne applicable to other organization in the industry.

The research also is bound to the limitations of time. The researcher lacked ample time to get more details and improve the case study of Audi. So the time constraints directly impoacted the quality of secondary data used by the researcher. Also due to time limitation the researcher was not able to utilise a well drawn out questionnaire to collect information. So the researcher was forced to collect information using a smaller questionnaire which might have reduced the quality of primary information collected for the study.

Another limitation of this study is related to the accessibility issues faced by the researcher. The researcher faced accessibility issues both in conducting survey and interview. Both staffs and managers were not willing to provide information on the fear of disclosing confidential information. However, the researcher was at;ast able to get access after convincing managers and staffs about the scope and objectives of the research.   

5.6 Recommendations for future works

As the previous studies on the topic of assessing the impact of corporate governance in building the corporate image are not available in large number there occurs a splendid scope for research on this topic in future. It is evident from the research results that corporate governance is significant in building corporate image and changes in corporate governance policy should be adopted by organizations in the approaching future. This also creates a scope for researchers who would like to research on the topic of corporate governance. It is advocated by the researcher to include more firms and larger samples in future researches for acquiring more data. The researcher also faced accessibility issues while conducting this research. This aspect is more critical in this research as it deals with corporate governance which is a subject of confidential nature in many organizations. So it is recommended that future researchers take necessary measures to tackle accessibility issues related to the research.

REFERENCES

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APPENDIX-1

Interview Questionnaire for Managers

1.    How did Audi establish appropriate communication with public?

2.    Does Audi have a corporate governance code and what are the actions    adopted by the company for managing compliance with these?

3.    Can you brief the factors involved in Audi’s corporate governance?

4.    Has the corporate governance policy followed by Audi helped the organisation to build corporate image?

5.    Does the present corporate governance policy in Audi meet the stakeholder’s expectations?

6.    How does the management of Audi mitigate potential corporate risks?

7.    In your view, what are the driving factors for corporate governance in Audi?

8.    Do you find any emerging risks that could affect the corporate governance of Audi?

9.    What is the nature of compliance retained by Audi with respect to its corporate governance policy?

10. Is the corporate governance at Audi effective? Are there any suggestions from your view for improving the corporate performance of Audi?

APPENDIX-2

Survey Questionnaire for staffs of Audi

The purpose of this questionnaire is to assess your view on the impact of coroporate governace in building the corporate image od Audi. Please cooperate with this study by filling out the survey. It will only take up less than 10 minutes of your time.

All the information collected through frm you through this survey is protected and managed as per the Data Protection Act and all the information will be placed in a secure server.

*Please circle the appropriate answer.

1.    Please mention your gender

·         Male

·         Female

2.    Please mention your age

·         25-35 years

·         35-45 years

·         45-55 years

3.    How long have you been working with Audi, UK?

·         Below 5 years

·         5-10 years

·         10-15 years

·         Above 15 years

4.    How is your working atmosphere at Audi?

·         Excellent

·         Pleasant

·         Normal

5.    In your opinion, what factors led Audi to emphasize on corporate governance practices?

·         Ethics

·         Customer focus

·         Transparent and open relationship

·         Environmental responsibility

·         Responsibility for society

6.    What are the major benefits obtained from the transparent and open leadership practices adopted by Audi?

·         Ideas

·         Innovations

·         Good working atmosphere

·         Freedom

7.    According to you, what are the major needs in setting up of improved corporate governance practices at Audi, UK?

·         Risk lowering

·         Public acceptance

·         Public image

·         Investor relations

·         Economic stability

8.    How has the corporate governance practices in your company impacted the corporate image and reputation of the company?

·         Positively

·         Negatively

·         No significant impact

9.    Please mention the extent to which you are satisfied with the corporate governance practices at Audi?

·         Highly satisfied

·         Satisfied

·         Not much satisfied

Thank you for taking part in the survey,

 

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