Get instant access to this case solution for only $15

Dieselgate Heavy Fumes Exhausting the Volkswagen Group

Solution Id Length Case Author Case Publisher
2827 1686 Words (7 Pages) Marcus Schuetz, Claudia H. L. Woo University of Hong Kong : HK1089
This solution includes: A Word File A Word File

The scandal emerged back in 2015 in the automotive industry when the truth regarding how Volkswagen had installed software in their diesel cars was revealed, which allowed them to escape the emissions tests. This escape came at the cost of financial losses, vehicle paybacks as well as legal settlements. This “Dieselgate” scandal also tarnished their image in the eyes of their customer base. This case study talks about the incidents that led to the big scandal in detail and then talks about the aftereffects of the scandal and how Volkswagen approached this challenge. The case study also talks about the scandal in the broader context of the automotive industry. It emphasizes the need for transparency, ethicality, and eco-friendly practices. The case study also talks about corporate governance and how the companies should assess their risk and mitigate it, while taking into consideration their impact on society and the environment.

Following questions are answered in this case study solution:

  1. How well did VW respond to the Dieselgate scandal with reference to the three-phases model of crisis management?

  2. Briefly discuss the differences between German and Anglo-American corporate governance structures. Comment on the corporate governance structure of the VW Group.

  3. What were the causes of corporate misbehavior on such a large scale? What could be done to prevent a similar crisis in the future?

  4. What should corporate social responsibility (CSR) truly mean? How can the VW Group integrate CSR throughout the company?

Case Study Questions Answers

1. How well did VW respond to the Dieselgate scandal with reference to the three-phases model of crisis management?

The Dieselgate scandal revealed the truth of Volkswagen regarding the installation of software in their cars, which enabled them to escape the emission tests. In order to evaluate the Volkswagen response to the crisis of 2015, we can use the three-phases model of crisis management. The first phase of the model is the pre-crisis phase. During this part of the crisis management, the organizations should predict the crisis on its way and start working to formulate a strategy to address it. The software installation leading to the escaped emission test was within the knowledge of decision-makers at Volkswagen, but they did not take noteworthy measures against it, which shows that they were unable to predict it. The second phase is the crisis response phase, organizations are required to take effective actions to minimize the losses. Volkswagen did not respond adequately during this time. Despite being aware of their own wrongdoing, they decided to dodge the blame and completely deny it and then change its direction towards other external factors. Later, Volkswagen decided to confess to their actions by accepting that they had, in fact, intentionally installed software within their cars. Post-confession, Volkswagen did not recollect the affected vehicles efficiently and could not compensate the consumers with an appropriate reimbursement. All these actions during the crisis response phase severely damaged their brand image and led them to a huge financial loss. During the post-crisis phase, which is the third phase of the crisis management model, organizations should take away the insight from the crisis and take measures to inhibit such a crisis from damaging the organization in the future. Although Volkswagen did take some appropriate measures during the post-crisis phase, including the change in their leadership and organizational culture, and enhancing their focus on electric vehicles, the company operations still remained questionable regarding their ethical as well as sustainable practices. I believe that Volkswagen was unable to respond effectively because it was initially unable to predict the crisis and also took several bad decisions during the crisis-response phase. Hence, despite their efforts during the post-crisis phase, the question mark regarding the ethical and sustainable practices still remains as a proof of its poor crisis management.

2. Briefly discuss the differences between German and Anglo-American corporate governance structures. Comment on the corporate governance structure of the VW Group.

There are some clear differences between the corporate governance structures of German and Anglo-American corporate structures. The two-tier system, which has a management board separate from the supervisory board, is generally used in Germany.

Get instant access to this case solution for only $15

Get Instant Access to This Case Solution for Only $15

Standard Price

$25

Save $10 on your purchase

-$10

Amount to Pay

$15

Different Requirements? Order a Custom Solution

Calculate the Price

Approximately ~ 1 page(s)

Total Price

$0

Get More Out of This

Our essay writing services are the best in the world. If you are in search of a professional essay writer, place your order on our website.

Essay Writing Service
whatsapp chat icon

Hi there !

We are here to help. Chat with us on WhatsApp for any queries.

close icon