The Diesel Emission Scandal
Question:
Discuss about the Public Relations Responses and Flubs.
Volkwagon in 2011 pledged to become an environmental friendly company by launching “Think Blue” campaign in The United States of America, for nurturing the nature by promoting Eco friendly driving. The company made a public statement that by the year 2018; it will be the world’s most ecologically sustainable manufacture of the car, at the same time by inspiring the number of people for living in a sustainable manner. But soon after making this statement, the diesel emission scandal came into limelight (Garcia, 2015).
It was made public by The Environmental Protection Agency in the month of September that in the diesel cars, defeated devices are installed by Volkswagen, which make such cars to qualify for emission tests according to American standards, despite releasing 15-45 times the emission legal amount.
This news was disclosed by the regulators after a few days and not by the company itself. Volkswagen is under investigation for not disclosing about the defect to the Environmental Protection Agency. The company management came to know about the defects through the media when Volkswagen engineers made statements about the devices which were defected. In short, there has been a big communication gap and problem between the company management and its employees (Barth et al., 2017).
There have been a number of missteps in the Volkswagen Corporate Communication as it tarnished the reputation and image in the eyes of the public as well as its value in the market was crushed.
The company issued many confusing and faltering public statements for a few days, thus by making the situation worse. Below mentioned is the detail how the whole situation was worsened by Company trying to protect its public image and relations:
As mentioned earlier, it was the U.S. Environmental Protection Agency who made it public about the cheating done by the company in diesel parts, which the company should have done by itself. Rather the board of management came to know about the scandal when their engineers interacted and made a statement to few media people. The management did not comment immediately on the scandal. It was later, through a videotaped apology; the EX Chief Executive Officer Martin Winterkorn apologized by acknowledging about the dishonest behavior, but said very less about the cheating done by the company (Joshi & Hakim, 2016).
After a few days, America’s Volkswagen Chief Executive Michael Horn, accepted that the company has cheated, its stakeholders, in his own words “totally screwed up”.
Missteps in Volkswagen’s Corporate Communication
The speed with which the company was handling its public relations and the scandal made the situation worse, with every new revelation, the company’s reputation was damaging and it made the crisis to spin out of control (Communications, 2017).
One of the statements given by the top management was “It would be wrong to cast suspicion on the honest hard work of so many because of the mistakes of only a few. Our team doesn’t deserve that. That’s why… I’m personally asking for your trust as we move forward.”
This statement makes the whole situation looks like not taking the ownership of the responsibility and also the severity of the Volkswagen problem.
The response to the public by Volkswagen was not at all sufficient in providing any cure to the situation. Since the beginning, a number of mistakes were being made, thus hurting sentiment of the public and destroying the public image of Volkswagen (Jung & Park, 2017).
Nobody from the top management was ready to take the accountability of the mistakes. While releasing the public apology in media, entire blame was put on a bunch of managers from the middle order. In a statement released by the company, the matter of dishonesty was addressed but nothing was said about the illegal actions done by the company.
“I am resigning in the interests of the company even though I am not aware of any wrongdoings on my part”, it was the statement given by the ex Chief Executive Officer of the company Michael Winterkorn after the scandal came into highlight, making it worse for the company.
Volkswagen should have taken out some time before going public and defining its PR objectives, which would have informed the public about its strategy of handling the situation. Based on it, a plan should have been created to handle the crisis.
A good PR policy of the Volkswagen would have helped in avoiding PR mistakes which in turn were costly, and had delivered company’s message consistently
If the company, could have handled the situation more gracefully by providing information to its stakeholders timely and in detail, the damaged controlled could have been done. In a situation where a company is in public eyes for scrutiny and millions of questions from the public to be answered, every Chief Executive Officer of the company should foremost address the situation in an organized way by providing all kinds of information to its stakeholders.
PR Errors Made by Volkswagen
Even the media of its own home country, Germany, was calling Volkwagon fraud and cheat. The accusation was made and the German press wrote “call everything wrong, which is and was done by the company”. It was a worst case scenario for any company where the questions are being raised about its own existence, dignity and ethics. Volkswagen should have initiated a campaign for the brand makeover. The tagline of the company should be changed, focussing more on its ethics and simplicity. In a situation like this, after making public apologies through various media platforms, Volkswagen should have kept a very low profile (Ruddick, 2015). Other than that, the website of the company should have provided every information to the stakeholders.
Post the scandal, on a daily basis, Volkswagen could have published press releases related to issues like providing information about the settlements, court documents, notices, new vehicles, partnership, increase in sales, FAQs, etc. Other than the main websites, a website specially dedicated for the stakeholders, who was affected by that scandal, could have been developed (Root, 2016).
There was also a dire need in the change of the Public Relations team of the company. Other than the main Public relations company, few other companies should have been hired to tackle issues related to the scandal effectively (Hakim, 2016).
Public relations practice means principles which are very basic in nature should be followed for developing a positive and clean image and reputation of the company in the market. These 10 basic principles which Volkswagen Public Relations team should have kept in mind while handling the situation and controlling it are:
- Deceit: Facts should be presented in a manner which works in a positive manner for the company. No false information or fake promises should be released in any form of medium, because once the lie is detected, it will make the current situation uncontrollable by damaging the company’s reputation.
- Contact Information: The materials provided by the company for its public relations should have the information about the person to be contacted. Public and media should be provided a chance to follow up on the information provided and making up their mindsets.
- Target Information: Before the release of the information, those audiences who have more interest in the company press release should be targeted.
- Photographs: The public can understand the company’s point of view by providing a well written press release with photographs. The public can get clarity on the issues and can redeveloped confidence (Bhasin, 2011).
- Media relations: Journalists are a company’s public relations best allies. They can help in building or destroying a company’s image in the eyes of public. Personal interviews, articles in favour of company’s can help in gaining exposure.
- Tools: All the tools of Public relations should be available for use and the company should know how to use them. A public relation professional to reach its target audience should use tools like: press releases, speeches, personal interviews, web broadcasts etc.
- Timing: A public relations professional should be able to handle any situation well in advance before much damage is done to the company.
- Availability: A public relations department and its professionals should be always available at the time of providing information and statements regarding the company to the media as well as to the public. It is a very critical principle for public relations professional.
- Stay Active: Public relations and the company should be active in providing information to the stakeholders by finding new ways of delivering the information.
- Fact Checking: Those information and statements should be released which a company or its public relation professional has checked and confirmed about its authenticity and accuracy. A fact-checking system should be developed for releasing information in the press and the information in the public relation docket should be double checked and sign off before releasing it to its stakeholders.
In the case of Volkswagen, most of the above mentioned principles were missing and the company and its public relations department made hasty and unclear statements in the media.
Any kind of news becomes viral within few hours. The Company should have been ready to respond to any kind of disaster in a precise and swift manner by utilizing each and every kind of platform available to communicate with the public. Any company, including Volkswagen, if had committed a mistake must take the onus of it and should be responsible without distancing itself from the mistake (Beule, 2015). To remedy company cries, there is no cure-all method, but only to learn lessons from past experiences.
Conclusion
In the case of PR errors made by the Volkswagen it was seen that in between the public relations and the organization culture, an understanding of the relationship must be made. To make any Public relations campaign successful, they must go hand in hand. Because of the cultural approach of the Volkswagen, it became difficult to develop a PR plan which can be for long term and can be successful.
Basic Principles of Public Relations
It was also learned that it is very beneficial as well as challenging at the same time, determining who the most important audience of Volkswagen is. To handle this situation, audiences are divided on the basis of knowledge level. Such division helps in guiding to move forward and also provides a better understanding of the challenges faced in the case. It was also learned that how the management crisis should be handled and formulation of long PR plans.
In case of Volkwagon diesel emission defective parts scandal, the company should have tried to make situation little better by taking corrective measures in its public relations department. In any worst case scenario, if a company is struck, before going legal it should take advice from its public relation or PR department. In such situation, a company should have a clear view about the aftereffects of any kind of crisis, and a company should have a strong leader as the face of the company, who will provide all kinds of assurance to its stakeholders in their delivery, in their crisis response and in their presence (Maclean-Bristol, 2015).
Volkswagen should be quick and confident in its response as well as it should take the onus of the responsibilities. Many companies have lost the valuable trust of their consumer by acting in denial and not taking the responsibilities of the situation (Shadbolt, 2016).
There are many platforms which are available for handling and managing a company’s public relations, out of which social media and digital platform is playing the main role in making or damaging a company’s image. These mediums reach directly to the consumers.
The Volkswagen home page should be filled with what the company thinks about its consumers, share its story ideas, blog posts by employees and consumers, photo gallery, announcement of some monthly contest and winners etc..
There are people out there, who are very passionate about the cars and if a company has done something to disappoint them, the first approach should be to respond quickly and positively and by taking feedback, corrective measures should be taken (Garcia, 2011).
Below mentioned are few tips, which Public Relation Departments of Volkswagen and other companies should keep in mind while dealing with media and public:
- Phrases like “no comments” need to be avoided. It makes the company looks like a culprit and guilty (Coombs, 2014).
- If there is a lack of clarity in communication of a company, the public will feel mislead and that the company is trying to conceal something by making confusing statements. There should be clear delivery of message and communication, without any much jargon (Ritson, 2015).
- The company’s spokesperson should be a strong leader or a person, with strong eye contact and confident body language else people will think it as a deception.
- It’s preferable that only 1 or 2 spokesperson should be used during the crisis. But if necessary, all the spokespersons should be provided with the latest updates about the crisis and key messages should be informed to them, so that they all deliver one uniform message or answers to queries of stakeholders.
- Pre-draft messages should be used during such situations.
- Creation of a separate website for tackling such situation.
- For responding to any such situation, the Public relations team should utilize the existing social media channels (Lindstorm, 2015).
If a company’s PR follows these measures and take the above mentioned recommendation in its consideration, then there will be no or less errors made by them in future.
References
Barth, M. et al., 2017. Volkswagen Public Relations Plan, Available at: https://www.uwgb.edu/clampitp/phils%20site/internet_broadcast/documents/Volkswagen-Cases-Case.pdf
Beule, S., 2015. Social Strategy for Scandal: Lessons from Volkswagen, Available at: https://www.aberdeenessentials.com/cmo-essentials/social-strategy-for-scandal-lessons-from-volkswagen/
Bhasin, K., 2011. 9 PR Fiascos That Were Handled Brilliantly By Management, Available at: https://www.businessinsider.com/pr-disasters-crisis-management-2011-5?IR=T
Communications, S., 2017. Crisis communications: the volkswagen emission scandal, Available at: https://www.sprocketcommunications.com/blog/crisis-communications-volkswagen-emission-scandal/
Coombs, W., 2014. Crisis Management and Communications, Available at: https://www.instituteforpr.org/crisis-management-communications/
Garcia, T., 2011. Auto Industry Using PR to Boost Sales and Loyalty, Available at: https://www.adweek.com/digital/auto-industry-using-pr-to-boost-sales-and-loyalty/
Garcia, T., 2015. Volkswagen’s PR response made problems worse, experts say, Available at: https://www.marketwatch.com/story/volkswagens-pr-response-made-problems-worse-experts-say-2015-09-25
Hakim, D., 2016. VW’s Crisis Strategy: Forward, Reverse, U-Turn, Available at: https://www.nytimes.com/2016/02/28/business/international/vws-crisis-strategy-forward-reverse-u-turn.html
Joshi, P. & Hakim, D., 2016. VW’s Public Relations Responses and Flubs, Available at: https://www.nytimes.com/interactive/2016/02/26/business/volkswagen-public-relations-flubs.html
Jung, J. & Park, S., 2017. Case Study: Volkswagen’s Diesel Emissions Scandal. Thunderbird International Business Review, 59(1), pp.127–37.
Lindstorm, M., 2015. 5 Steps To Regain Trust After A PR Disaster, Available at: https://www.fastcompany.com/3051481/5-steps-to-regaining-trust-after-a-pr-disaster
Maclean-Bristol, C., 2015. Five crisis management lessons from the Volkswagen incident, Available at: https://www.continuitycentral.com/index.php/news/business-continuity-news/563-five-crisis-management-lessons-from-the-volkswagen-incident
Ritson, M., 2015. Volkswagen scandal: Even textbook crisis management can’t save VW, Available at: https://www.smh.com.au/business/media-and-marketing/volkswagen-scandal-even-textbook-crisis-management-cant-save-vw-20150923-gjtizf.html
Root, G., 2016. 10 Principles of Public Relations, Available at: https://smallbusiness.chron.com/10-principles-public-relations-10661.html
Ruddick, G., 2015. VW admits emissions scandal was caused by ‘whole chain’ of failures, Available at: https://www.theguardian.com/business/2015/dec/10/volkswagen-emissions-scandal-systematic-failures-hans-dieter-potsch
Shadbolt, P., 2016. How can a company repair a damaged reputation?, Available at: https://www.bbc.com/news/business-37630983
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