Analysis of Crisis Management and Communication: Volkswagen Case

This report delves into the intricacies of crisis management and communication, using the 2015 Volkswagen emissions scandal as a pivotal case study. It begins by defining crisis, its characteristics, and various types, including natural, technological, confrontation, rumor-based, sudden, and smoldering crises. The report then emphasizes the importance of crisis communication, outlining key processes such as engaging with external parties, avoiding personal criticism, encouraging open communication, ensuring information flow, and maintaining confidentiality. Furthermore, it explores proactive crisis management strategies, including a focused approach, gathering accurate information, fostering open discussions, and promoting organizational loyalty. The analysis of the Volkswagen case highlights the impact of the emission scandal, its financial repercussions, and the potential for improved outcomes through proactive measures. The report concludes by underscoring the importance of strategic planning and effective communication in navigating crises and maintaining organizational sustainability.

Crisis Management and
Communication

Table of Contents
Introduction......................................................................................................................................1
Main body........................................................................................................................................1
Conclusions......................................................................................................................................4
References........................................................................................................................................5

Introduction
A crisis is a sudden and a unexpected event which leads to agitation amongst the
stakeholders of the organisation. In other words the crisis is an emergency situation which
disturbs the employees as well as leads to imbalance in the organisation. The given report is
based on the famous case that happened in the Volkswagen group in the year 2015, the scandal
was about the software that they installed in their engines which reduced the emission standards
and enabled the group to pass the test. In this report various types of crisis will be discussed and
the strategies to tackle them will be defined. At last the understanding of crisis management will
to the specific scenario will be given.
Main body
Crisis is the event that leads to an unstable and dangerous condition which affects the
individual, group of people or society as a whole. It is an event of emergency in any organisation
(White, 2016). It is the situation where the organisation is under a huge stress. It is a situation of
complexity that organisation faces. It happens because of some poor decisions taken by the
internal committee of the organisation. Crisis has some characteristics which are specific,
unexpected and non-routine events that occurs in an organisation. Crisis have some
characteristics which are:
 They are the series of sudden troubling events that harms the organisations operations as
a whole.
 It arises without giving the notice.
 It lever a feeling of threat and fear among the stakeholders.
Their are various types of crisis that occurs in an organisation. which causes the disturbance
among the employees and the stakeholders. The different types of crisis are,
 Natural crises: It is the effect of disturbance that occurs because of environmental or
natural events. These are the events which are beyond the control of the human beings.
The examples of these crises are, Tornadoes, earthquakes, hurricanes, landslides, etc.
 Technological crises: It is the crises that occurs as a result of failure in the technology in
the organisation. It happens mainly because of the breakdown of machine, corrupted
software and so on give rise to the technological crises.
1

 Confrontation crisis: It occurs when the employees fight among themselves. Individuals
do not agree with each other and eventually depends on the non productive acts like
strikes for indefinite periods and so on. In this type of crisis, employees disobey their
superiors and makes them to accept their demands. This happens because of internal
disputes and ineffective communication among them.
 Crisis due to rumors: This is the type of crises that occurs because of the spreading of the
false rumor about the organisation in the market. Employees of the organisation must not
spread anything which will hamper the image of the organisation.
 Sudden crisis: As the name suggest such situation arises suddenly. Managers of the
organisation does not get the warning signals and such situation in most cases are beyond
the control of the management.
 Smoldering crisis: This depicts that neglecting the minor issues in the beginning lead to
the smoldering crisis later on. Managers should for see the crises and should ignore the
same. The managers should warn the employees of the organisation to avoid such
situations.
Crisis communication means that the department which deals with the reputation of the
organisation (Utz , Schultz, and Glocka 2013). This is the initiative taken by the organisation to
protect its image. Various factors can tarnish the image of an organisation. The crisis
communication experts are employed to save an organisation reputation against the various
unwanted threats and challenges. The one of the most important function of the crisis
management is to protect the brand identity in the market. Some of the crisis communication
process involves:
 Employees should not ignore any of the external parties and meet them to discuss the
problem with them: The media should not be ignored and should be taken in the positive
way so that they can know what is going in the market.
 Don't criticize individuals: The culture of the organisation should be in a way that it does
not harm the feelings of the individuals and the employee's. As in the case of
Volkswagen happen they hampered the feelings of their customers because of which the
organisations loosed their market share as well as brand image.
2

 Communication must be encouraged during the crisis period: Employee's should have the
access to superiors so that they can discuss the critical issues with them and reach the
solutions that are mutually accepted.
 Information must flow across all the department: The employee's of the organisation mus
not rely on the guess works or assumptions during the crisis. Make sure that the
information that the employee's have are accurate and are in the desired form so that it
does not lead to rumors.
 Information should be kept confidential: It is to made sure by the managers that the
information must be kept confidential (Terpstra, et. al., 2012). Serious action must be
taken on the employee's who share the information and data to the external parties. These
things are considered as highly unprofessional and unethical and can also spoil the
reputation of the organisation.
In an organisation the crisis can be depleted if proper steps are taken before and the futuristic
approach is planned. The various ways to overcome crises are:
 Adopt focused approach: the managers should take the initiative and find out the things
which went wrong. Identify the problem areas and make the appropriate strategies to
overcome the same.
 Gather correct and relevant information: The manager should made a policy that derives
the employees to not depend on the mere guess work and assumptions during the crisis
time (Roche, Propeck-Zimmermann, and Mericskay 2013). They should double check the
information before submitting the report.
 Discussion of the problems: The managers of the organisation should sit with the workers
and discuss the issues amongst them to reach the mutually accepted solution which
would work best at the time of crisis.
 Loyalty towards the organisation: The organisation should be loyal towards the
organisation even at the time of crisis. They should stick to the organisations goals and
listen to the organisation management not the outsiders.
The case of Volkswagen
the case was popularly known as the emission gate scandal. Where the Volkswagen
group used the software in their vehicles (Palttala, and Vos, 2012). This software was installed in
the vehicles that were produced in the year 2008 to year 2015. the software was used to cheat the
3

air control board so that their engine could pass the desired emission test. The reason behind
using this software was that company wanted to sell the product to the consumers while reducing
their cost on product innovation and development of new product. This diesel engine of the
company exhausts associates with the lung cancer (Latonero, and Shklovski, 2013). The Nox is
then released to the environment that can hamper the breathing ability of the people. This had
impacted around 25000 people in UK according to the world health organisation. As the result of
excess Nox produced by the VW between 2008 and 2015 59 premature deaths are estimated in
the united states.
The impact of the Volkswagen diesel scandal on the economy
Before this scandal the Volkswagen group was the second largest automobile producer in
the world. When this scandal came in front of the population then this effected the financial
prospect of the group (Johansen, Aggerholm, and Frandsen, 2012). The company was fined with
the amount that was galloping. The total settlements for all the courts and the customers
repayments estimated around to be 15bn dollars.
The company could have saved themselves from this crisis if the managers of the
company had taken the steps that involves the innovation and the development of the new diesel
engine. If the organisation had been upfront and honest then they could have fared better through
this crisis. The company should have reimbursed all the affected customer the same amount and
the loan on the cars should be taken back.
Conclusions
The organisation which has the ability to manage the crisis and is able to communicate
accordingly sustains in the market for the longer time. The organisation should create the
strategies that will help them in winning the problems that are made by the crisis. The company
should have the far-sightedness so that they can develop their plan accordingly and can evaluate
the implications of the future problems.
4

References
Books and authors
Coombs, W.T., 2014. Ongoing crisis communication: Planning, managing, and responding.
Sage Publications.
Johansen, W., Aggerholm, H.K. and Frandsen, F., 2012. Entering new territory: A study of
internal crisis management and crisis communication in organizations. Public Relations
Review. 38(2). pp.270-279.
Latonero, M. and Shklovski, I., 2013. Emergency management, Twitter, and social media
evangelism. In Using Social and Information Technologies for Disaster and Crisis
Management (pp. 196-212). IGI Global.
Palttala, P. and Vos, M., 2012. Quality indicators for crisis communication to support
emergency management by public authorities. Journal of Contingencies and Crisis
Management. 20(1). pp.39-51.
Roche, S., Propeck-Zimmermann, E. and Mericskay, B., 2013. GeoWeb and crisis management:
Issues and perspectives of volunteered geographic information. GeoJournal. 78(1).
pp.21-40.
Terpstra, et. al., 2012. Towards a realtime Twitter analysis during crises for operational crisis
management (pp. 1-9). Burnaby: Simon Fraser University.
Utz, S., Schultz, F. and Glocka, S., 2013. Crisis communication online: How medium, crisis
type and emotions affected public reactions in the Fukushima Daiichi nuclear
disaster. Public Relations Review. 39(1). pp.40-46.
White, C.M., 2016. Social media, crisis communication, and emergency management:
Leveraging Web 2.0 technologies. CRC press.
5