Volkswagen's crisis approach

Corporations can experience a wide range of crisis emerging from reasons of economic, cultural, environmental, technological struggle, or conflict with internal & external stakeholders. A crisis may result in a range of negative effects, but mostly of reputational and financial nature. As corporate have an acknowledge life cycle (Sung & Hwang, 2014), it is imperative for a successful crisis response strategy (CRS) to tackle the different stages of a crisis (from breakout to resolving) with the appropriate communication strategies. PR professionals, as much as research, has had an impressive focus on what makes a successful CRS. In the following I will briefly discuss the Volkswagen case in the light of Painter & Martin's (2017) hermeneutic analysis of Volkswagen's public statements.

A global crisis

In September 2015 the Volkswagen AG was publicly noticed for violating the Clean Air Act by manipulating some of their diesel vehicles’ software to activate emission controls while in the emission laboratory. In the following, VW conceded that more than 11 million vehicles worldwide are subject to the software manipulation. To put this into perspective, just recently the costs have been estimated to reach about 30$ billion.

The crisis communication of Volkswagen is an interesting case, as opposed to classical CRS research suggesting completeness and assurance to be connected with effective crisis management (Reilly, 1993), we find a ‘rather reactive, defensive approach in information flow’ by denying and downplaying the crisis throughout all their stakeholder communication (Painter & Martins, 2017, p. 216).

Volkswagen's crisis management & image restoration

Furthermore, in their analysis of Volkswagen’s crisis communication Painter & Martins find patterns of downplaying the issue, using euphemistic language, with a strong focus on looking forward to future investments, employed to reduce the significance of the crisis. The overarching tone was that once the technical issues are resolved, Volkswagen and its stakeholders can return to ‘business as usual’. In terms of attribution, Volkswagen mostly relies on internal attribution of the crisis, making certain individuals (i.e. former CEO Martin Winterkorn) and certain departments or processes responsible for what has happened.
As a corporation Volkswagen has only taken limited degrees of responsibility (ibid), while it has focused its communication on ‘streamlining’ work processes in the respective departments (i.e. software development), and admitting to major deficits in their overall communications and transparency and promised to improve on these issues through policy changes.

In the case of Volkswagen, we have seen that they take a rather reactive and defensive approach, waiting for court decisions to be made, before acting on their CRS. This is in contrast to previous research (Reilly, 1993) suggesting a more preemptive and transparent approach to CSR. However, the case of Volkswagen is indeed a special one, as it represents a case of a global crisis and hence normative CRS approaches might not apply. Currently, the financial penalties are starting to hammer down on the corporation, and with their defensive approach it is yet to see if Volkswagen manages to slip out of such unprecedented crisis. Additionally, the current research is based on all of Volkswagen’s own communication. Future research could address if these communication efforts have been fruitful, and if the image restoration and crisis management strategies employed have indeed reached the public opinion.

References

Painter, C., & Martins, J. (2017). Organisational communication management during the Volkswagen diesel emissions scandal: A hermeneutic study in attribution, crisis management, and information orientation. Knowledge and Process Management, 24(3), 204-218.

Reilly, A. H. (1993). Preparing for the worst: The process of effective crisis management. Industrial & Environmental Crisis Quarterly, 7(2), 115-143.

Sung, M., & Hwang, J.-S. (2014). Who drives a crisis? The diffusion of an issue through social networks. Computers in Human Behavior, 36, 246–257. https://doi.org/10.1016/j.chb.2014.03.063