Unraveling Volkswagen's emissions scandal: Part 2

How did Volkswagen communicate to each stakeholder group (pre-crisis, crisis event and post-crisis)? 

Stakeholders are, ‘an individual or a group that has one or more of the various kinds of stakes in the organisation’ who can influence the organisation's actions (Carroll and Buchholtz, 2012). Stakeholders can be categorised as primary stakeholders (who’s actions can be harmful or beneficial to the organisation) and secondary stakeholders are those that can affect or be affected by the actions of an organisation (Ledingham and Bruning,2000).

Concerning Volkswagen’s crisis, the primary stakeholders identified are Customers and Employees whilst, secondary stakeholders identified are the US Environmental Protection Agency.

Volkswagen did not communicate with customers pre-crisis regarding the false claims of their ‘emission-free products. However, during the crisis, Volkswagen released a video apology directing stakeholders regarding the issue (Groden,2015) and the plans to put aside £4.8 billion to address the costs of recall and repair to the affected vehicles (Ruddick,2015). However, the awaking of the scandal arose outrange amongst customers as 86% of Volkswagen drivers stated their concern about the environmental impact of their car (Ruddick,2015). In response to customers concerns, Volkswagen communicated to the stakeholder group via social media. It can be said that social media is an asset to organisations as people are motivated to use the platform to gain information (Al-Menayes,2015). By taking control of the framing of the story can act in favour of the organisation as it allows for crisis managers to present their side of the story to various stakeholder groups (Coombs,2007). 

Post-crisis, Volkswagen focused their communication to customers on changing the narrative to the rebranding of the company (Hitti,2019) and the new electric cars soon to be released which is said to be similar to Tesla’s Model 3 (Fortune,2018). The message that the organisation has sent out regarding the rebranding is to mark the ‘start of a new era’. Stakeholders who are familiar with Volkswagens previous scandals may decode this as negational reading (Hall,1973) arguing, that Volkswagen is changing its corporate culture and focusing on transparency. 

The communication that was taken place between employees and the organisation pre-crisis arguably is positive. Volkswagen has been rated to be the best in almost every dimension of work satisfaction unlike direct competitors such as BMW and Mercedes (Strauss,2017). It can be said that Volkswagen is taking the needs of employees seriously however, the information regarding certain Volkswagen products not meeting regulations is not addressed. As highlighted in Fortune (2018) only a small group of engineers were aware of the malpractice Volkswagen undertook. During the crisis, however, employees were made aware of the deception Volkswagen supported in marketing certain of their products and issued 204 staff to be fired from the company and 903 formal warning to employees for misconduct (Rauwalk,2019). Despite this employees were communicated by senior management to express their concerns and were provided with information regarding the progression of the crisis (Strauss,2017). Here it can be said appropriate communication by Volkswagen was adopted as instructional information (which is information to tell people how to react to the crisis) was provided (Sturges,1994). This strategy seemed to have paid off as post-crisis brand ambassadors of Volkswagen were incorporated to communicate from the inside out regarding the positive corporate culture (Sturges,1994).

Communication with the US EPA does not exist pre-crisis, as accounts in 1999 and 2000 regarding customers complaints of defective exhaust parts, causing excess carbon monoxide and nitrous oxide was not reported to regulators (which is a requirement) (Fortune,2018). The crisis peaked when the US EPA issued a Notice of Violation of the Clean Air Act to Volkswagen on the 18th of September (EPA,2019). Followed on June 28th 2016 Volkswagen entered into a multi-billion dollar settlement to partially resolve alleged Clean Air Act violations based on the sale of 2.0-litre diesel engines (EPA,2019). The EPA then approved the emissions modification proposed by Volkswagen for the model year 2009 – 2014 diesel Jetta, Golf, Beetle, and Audi A3 diesel vehicles, which were the products that caused the crisis (EPA,2019). By rebuilding the relationship with the EPA can also have the knock-on effects of rebuilding a positive relationship with Volkswagens customers as reported in October 2016 sale of Volkswagen vehicles leapt 12% (Boudette,2017). The increase in sales may stem from the demonstration the organisation took to prioritise and protect stakeholders from harm as they are abiding by the law. This act of prioritising stakeholders meets Coombs (2007) ethical crisis response strategy.