IntroductionVolkswagenis a global automobile manufacturer, its Europe’s largest automaker and is partof the Volkswagen Group which consists of 12 car brands, including Audi,Volkswagen, Bentley, Bugatti, Porsche,and Lamborghini.
And on September 18, 2015, the U.S. Environmental ProtectionAgency (EPA) announced that Volkswagen was using an illegal “defeatdevice,” that the Volkswagen Car Company had placed in over half-a-million USdiesel-powered cars (Davenport, 2015).This “defeat device,” was used totrick the EPA inspectors on the carbondioxide emissions test, thus, providing false information.
This paperaims at examining the impacts of the Volkswagen emission scandal to thecompany, the consumers, and the imagerepair theory using Mortification strategy. Description of the IssueSeptember 18, 2015, the EnvironmentalProtection Agency found Volkswagen guilty of having a “defeat device,” or illegalsoftware in their diesel vehicles that could detect when they were beingtested, tricking the emissions test toimprove results. According to the EPA, under actual driving conditions,pollutant levels were 50 times higher than reported. The device was placed in several diesel models includingthe Volkswagen Beetle, Jetta, Golf, and Audi A4 (Hotten, 2015).Immediately after theannouncement from the EPA, Volkswagen stockmarket numbers dropped and lost an estimated 17% of its stock value or 19billion dollars. Michael Horn, the CEO of Volkswagen America, gave an honest apology stating, “Our company wasdishonest. We have totally screwed up” (PBSnewshour, 2015). The Volkswagen vehicleswhich had the defeat device installed were said to produce up to over 650,000of harmful carbon dioxide emissions in the U.
S, leading to a fall in their sales.According to the EPA’s report, the car’s emissions controls were turned-onduring emission’s test but then shut-off as soon as the test was concluded, Yet, the vehicles polluted up to 40 times the legallimit after the device was turned off. (PBSnewshour,2015) Impact of the scandalTheVolkswagen scandal led to a sharp decline in the brand equity in the worldmarket.
It also meant a massive financialloss to millions of Volkswagen car owners as well as the company. The scandalnot only had an impact on the company itself as it damaged its image largely. The carbon dioxide emitted into theenvironment caused a lot of health complicationsespecially amongst Americans. Furthermore,the emission scandal led to a federal lawsuitin U.S for installing illegal “defeat devices”in nearly 650,000 diesel vehicles to falsify emissions controls, increasingharmful air pollution. Volkswagen reached a 4.
6billion dollar settlement with the U.S. Justice Department in January 2016, andagreed to spend up to 25 billion dollars for claims from owners and dealers,and said to buy back about 600,000 polluting vehicles (Kennedy, 2017). However, the mostsignificant damage could be felt by Volkswagen’s consumer brand, particularlyin the united states as Volkswagen has been putting a lot of effort intohaving a higher percentage of the U.S. auto market share and, this scandal didn’t help towards that percentage. ImageRepair TheoryImagerepair theory was created by a man named William Benoit, in 1997. Benoit defines histheory in his book Accounts, Excuses, andApologies: A Theory of Image Restoration Strategies (W.
L. Benoit, 2015). Imagerepair theory has five unique strategies that can be used as a guide to repair one’s imagein an event where reputation has been ruined.These five strategies are mortification, reducing offensiveness, evasionof responsibility, corrective action, and denial. Imagerepair theory is applicable in Volkswagen’s response to the emissions crisis. Specifically, in dealing with the mortificationand reduce offensiveness strategies.
Mortification Mortificationis put merely by William Benoit as theaccused simply admits being guilty orresponsible for the wrongful act and asks forgiveness (W. L. Benoit, 2015). Ifthe listeners believe the apology is sincere, they may forgive the unlawful act.
Volkswagenoverwhelmingly expressed mortification, in the form of various apologies. Mostof the apologies come from press releases: “VW deeply regrets the incidents” (Shareholder,2016). “Fullresponsibility” is reiterated, as is the company’s willingness to “accept theconsequences” (Painter, 2017).
ReduceoffensivenessA company like Volkswagen, which is accused ofwrongful actions can also try to reduce the apparent offensiveness of that act.This image repair strategy has six variants (W. L. Benoit, 2015). Bolsteringa positive image; minimizing the damage, distinction from worse instances; placingthe act in a more favorable context; challengingthe accusers; or offering compensation. Volkswagentried to bolster their positive image, by making the problem appear lesssignificant in comparison to other automotive manufacturer scandals.
Volkswagenstressed their ethical values such as stating that they “stand for good andsecure jobs” (AP, 2015) and alleging that their company has not been negativelyaffected, and customers are “returning to buy vehicles” (Painter, 2017). Statementsbolstering positive image are likely to be directed at the employees and shareholders,to restore corporate confidence as well as buyer confidence.Volkswagen also tried to minimize the negativefeelings associated with their unethical act. The most common responsefrom Volkswagen was to reduce perceived offensiveness of their actions bydownplaying the damage.
Volkswagen made constantreferences to how their cars still “comply with legal specifications,” and stating that there is no effect onbusiness and dealers (Painter, 2017). Thesestatements help to minimize the apparent problem.Compensationis another variant of reducing offensiveness. Ifpossible, every company should compensate the victims, because it usuallyresults in improving the image. For example, Volkswagen sold millions of peoplecars that were equipped with software that was used to cheat on the emissions test. Afterthey were caught, Volkswagen announced that they would buy back the affectedcars and offered additional bonus cash for the troubles.
ConclusionTheVolkswagen emission scandal has been one of the worst crises ever to any automobile manufacturer. The scandalaffected more than 11 million cars worldwide, with the so-called “defeatdevice” software equipped with theengines, which polluted up to 40 times above what is permitted in the united states. Causing Volkswagen up to 18billion dollars in fines from the U.S. alone, and its stock dropped roughlythirty percent.Image is essential to businesses as well as individuals and, the imagerepair theory was applied to theVolkswagen emissions sandal.