Volkswagen: A Case Study on Management Communication

RUNNING HEAD: Management Communication 0
Volkswagen
Management Communication

Management Communication
1
The communication is an important aspect of an organization. The effective communication
is prerequisite for the implementation of organizational strategies. The communication has a
great role in the effectiveness of managers. Volkswagen is a German automotive
manufacturing company having headquartered in Germany. The company designs passenger
vehicles, engines, and machinery. Volkswagen sells passenger cars to Audi, Bugatti, Bentley,
Skoda and more.
Volkswagen confessed that 11 million vehicles were fitted with the software which was used
to cheat on emissions tests. The chief executive Martin Winetrkorn was accused of
misleading regulators about the German maker’s effort to cheat the emission test of it’s
diesel-fuelled vehicles. Volkswagen is the parent company of Audi. Audi has discovered
emission related issues with it’s 60,000 cars. The company stopped delivery of A6 and A7
models due to finding an unidentified problem with the emission software. The 60,000 cars
were called back for the software update. The company revealed that it faced irregularities in
the emissions controls of A6 and A7 models. While carrying out the internal investigation,
the authority was found guilty that is Volkswagen. The authority is under surveillance from
US regulators (Ziek & Anderson, 2015). The concerns arose because of wrongdoing by
Volkswagen. Audi faced irregularities in the emission controls of A6 and A7 models while
carrying out internal investigations. The vehicles with the Audi engines were recalled over
diesel-gate emissions scandal to more than 900,000. Volkswagen recalled millions of
vehicles and paid huge fines since 2015 because of using illegal defeat service software
which disguised the level of pollution released by it’s diesel engines. Audi informed the U.S.
monitor for overseeing Volkswagen’s post-diesel-gate reforms of the latest problem by
adding no more cars in the U.S. affected by it. After the wrongdoing by Volkswagen the
defeat device software was installed I the cars fitted with it’s larger engines. Audi faced the
significantly higher costs to resolve the emission issues (Ali, Nguyen, Vien & Shah, 2015).
The engine control software was completely revised, tested and submitted to KBA for
consent. The company was said to find the solution for the affected models. Audi suffered
from the diesel-gate emission scandal which consequently suffered poor performance and
worst fuel consumption of company. The problem required a simple software upgrade. The
Volkswagen was asked to offer a compensation package to the UK consumers. This
technology permitted cars to release up to 40 times the accepted levels of detrimental
nitrogen oxide at the time of driving (Dybus & Lemmen, 2017).

Management Communication
2
The diesel-gate emission coasted Volkswagen about $30 billion in fines, reimbursements, and
remediation. It was the biggest crisis ever faced by the company in it’s history. As per diesel-
gate the company had cars with setback devices software which could perceive test
conditions and cut discharges to mend results. The diesel-gate technology permitted cars to
release up to forty times of the tolerable points of harmful nitrogen oxide during driving. The
company self-proclaimed that eleven million cars were fixed with the obstacle device
comprising eight million cars in Europe and 6,00,000 in the U.S. The excess of nitrogen
oxide from the diesel vehicles contributed to almost 38,000 premature deaths (SBS News,
2018). Schmidt was charged to oblige fraud and violated the clean air act and was sentenced
to 7 years in prison in 2017.
Volkswagen made use of social responsibility theory as an approach of the classical theory of
communication to handle the diesel-gate issue. This theory helped the company to guide
actions taken by it such as responsibility towards the environment, society, culture, and
economy. This theory promotes environmental and socio-cultural aspects. As per this theory,
the company encourages freedom to press and regulates according to the social
responsibilities. Volkswagen presented it’s facts with interpretation by making use of this
theory. It is based on the reality and affects the social order. The social responsibility theory
provides the interpreted and analyzed facts so that the public gets the true information and
comprehensible news. It helped the company to maintain social harmony by revealing it’s
bad conducts that is setback device software. The vehicles used more fuel and failed in
pollution tests (Wuthishuwong, Traechtler &Bruns, 2015). The company commenced
contacting owners of the models fitted with the illegal software and ask them to bring their
vehicle for the rectifications and set the technical malfunctions. There were around 11 million
units affected by the illegal software. Audi confirmed 2.1 million units affected whereas
Sakoda confirmed 1.2 million units and 7 lac units from Seat. Out of the 11 million cars, 5
million were with the Volkswagen device. The company paid $25 billion for the emission
scandal in the U.S.
The board of management at Volkswagen conversant to the supervisory board about the
situation regarding possible cartel law issues. These issues occurred in 2017. The company
did not make any comments on the present time regarding these issues or on speculation.
Volkswagen works very closely on the general principle which discusses the feasibility and
standardization of technical issues and safety standards where the regulatory approaches are