Skoda Auto – International Business

The story of Skoda is one of struggle and success. Skoda enjoys a century-long history of motor vehicle manufacturing in a small town in the Czech Republic, about sixty kilometers outside the cultural and tourist center of Prague. Despite early achievements, times became much harder during the former socialist era. The physical plant fell into disrepair and quality declined. However, this tale in one of transformation, and Skoda has once again become very successful in a joint venture partnership with the large German manufacturer Volkswagen (Mendenhall and Oddou, 379). At the beginning of 1895 mechanic Václav Laurin and bookseller Václav Klement began producing bicycles “Slavia” in Mlada Boleslav.In the next few years, 1899, the firm Laurin & Klement decided to manufacture also motorcycles, which led to success in many international competitions. After first attempt at the turn of the century the firm started to manufacture cars. In 1905, Laurin & Klement introduced their first car, Voiturette A, which became very successful between Czech classical veteran cars. Its production grew so fast that soon L & K overstepped the scope of the family business. Skoda 420 Popular

In 1907 the founders implemented the business transaction to joint-stock company. In 1920s, the need for merge with stronger industrial partners was expressed that, in 1925, Laurin and Klement merged with Skoda Plzen (Pilsner). In the following years the modernize manufacturing did not only include cars, but also trucks, buses, air engines, and agriculture machinery. In 1930 the car production in the scope of concern was earned many credits. Creation of Joint Company for Automobile Industry (JCAI) after the world industrial crisis led for the success on the international market with new models of Skoda, Skoda 422 and 420 Popular. The World War II had broken this development, which damage the civil program and oriented the production of the war equipment. The JCIA Skoda became the part of German concern Hermann-Goring-Werke and fully did have to orient to the war equipment. Besides the preparation of the various parts of guns, Skoda manufactured also different kinds of terrain vehicles, such as heavy tractors and towing vehicles, tanks, etc. Skoda 1101

After World War II the JCIA was changed to Automobile Factory/National Company (AFNC) Skoda. Skoda started to manufacture new models, Skoda 1101/1102 Tudor, which had got along with the technical success of the prewar years. During the 1950s and 1960s, Skoda again introduced new models, Skoda 1200, Spartak, Octavia, Felicia, as well as Skoda 1000MB. New increase of production, more than million of vehicles, was made by introducing Skoda 782 Favorit to the market in 1987 together with Forman 785 and Pickup 787. After the political changes of 1989 in the Czech Republic, Skoda in Mlada Boleslav began seeking in the new condition of market economy strong international partner that could guarantee with its experience and investments long-term international competitiveness of the company. In December of 1990 Czech government decided for the cooperation with German concern Volkswagen. On April 16, 1991, Skoda, joint-venture, began its forth brand concern with among such well-known companies as VW, AUDI and Seat. (Web Skoda) The goal of the venture was to transfer knowledge and expertise to locals from German expatriates on temporary assignment. “Czech and German managers were paired as part of a “tandem system” for the purpose of exchanging “know-how” (Mendenhall and Oddou, 380).” According to a Czech manager, the phase of the know-how transfer is finished sot he number of expatriates is decreasing, and before 1999 should be small group of foreign managers here who are focused on strategic issues. Both Czechs and Germans agree that the effectiveness of the tandem system is related to the personalities of individual managers, and to the level of knowledge possessed by the German expatriate

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