Mismanagement of the Crisis of Volkswagen Group - Case Study Example

TITLE By Name Course Professor University City/State Date Mismanagement of the crisis Volkswagen group is an automobile German company that operates in 153 countries globally and the largest car manufacturer in Europe. Recently it suffered a major crisis that saw it losing its market share and tarnish its reputation; Volkswagen emission scandal. This was as a result of the violation of the Clean Air Act, which was brought by intentionally falsifying the results of nitrogen oxide content being produced by the diesel engines. Their idea was to overlook this issue with the aim of improving the vehicles performance or the vehicles fuel mileage. The effect of this scandal was fast fuelled by the manner this crisis was handled that is the communications to the public on what was going on. The release of information was withheld to try and save their skins but the pressure was too intense for them to ignore. It seemed that it would be better for them to them if they would report this issue in detailed form; it wouldn’t have grown to such a devastating magnitude. This scandal saw to it that the affected vehicles were recalled to try and resolve the emission issues. Some of the communication issues, such as complicating the responses across borders. They argued that their home country restricted them from fully liaising with the American investigators. If the regulators never disclosed this news the general public would never learn of this error made. This was followed by a confession that they intentionally falsified the emission test results, later on, blame shifted as top management argued that they were unaware of the deed; giving misleading and insufficient information. Various French-based newspapers were threatened by Mediacom agency if they were to cover Volkswagen’s emission violation. These served as a series of communication errors that saw this scandal spin out of control. Communication Communication is the process of comprehending and sharing meaning. It involves an interaction between two or more participants. In the case of this highlighted scandal, Volkswagen group never took into consideration the power of communication and by neglecting this series of errors occurred. To communication, there are eight essential components of communication i.e. Source – describes whatever or whoever creates and sends the message e.g. person giving a speech. Message – defines the meaning that is conveyed to the receiver. Channel – describes the medium via which the message reaches the receiver or feedback to the source. Receiver – whoever receives the message conveyed from the source Feedback – describes a response to the source. Environment – defines the atmosphere where the communication is taking place. Context – explains the circumstances that tend to form a setting of an idea Interference - any disturbance to communication. Importance of effective communication Effective communication is essential to most businesses in this modern era where companies conduct various operations at different locations trying to satisfy their objectives making this a very complex activity, the main challenge being how they manage to maintain a constant communication to facilitate smooth operations. Lack of this will surely fail the entire system. The main aim for this is to promote and build strong internal partnerships as well as with the customers (Tailor, 2017) and for this to be accomplished two or more parties are required to involve in a cycle of feedbacks. According to the book “Effective Business Communication” by Asha Kaul, businesses can determine if communications around them is effective by measuring results. For effective communication to occur, three things are most crucial not to overlook and they are: preparation, persistence and practice. Effective communication in the corporate world promotes a certain level of motivation; this provides a level of clarity in communication in the organizational structure, employees getting delegated duties and also correction from the top to bottom levels on how to do the tasks in order to improve performance. Communication serves as a source of communication, this describes the basis of decision making in the organization and also assessing other relevant courses of actions to a particular situation. Communication plays a crucial role in team building or socializing in the work areas, this provides a conducive working environment and a feeling of togetherness. Communication helps shape the controlling process in organizations, delineating clear and formal ways to behave and also understand the various policies that act as guidelines to acting in the company’s greatest interest. Essentially businesses cannot thrive under isolation, sharing ideas and having an exchange is paramount therefore communication acts as the tool. Communications greatly facilitate in the smooth running of activities in the work areas, such as managers to perform their responsibilities in guiding and delegating duties to the junior staff in order to satisfy the company’s objectives. Communication also plays a huge role in shaping an employee’s attitude; an exposure to the organizational forms of communication defines the overall attitude and behavior of an employee. The figure below shows the cycle of communication in an organization. Some of the most important qualities that are suited for a corporate environment are as follows: Analytical skills- this describes the skill to visualize and solve both complex and uncomplicated difficulties by coming up with decisions practical to a given topic. Strong work ethics- defines the decent benefits and importance indulging in some sort of work Communication skills- describe the qualities portrayed to facilitate an efficient communication. Initiative- describes a strategy to solve a difficult situation. Teamwork skills- described qualities obtained by working together in harmony to accomplishing a certain goal. As for the case of Volkswagen group, there was disconnecting between the management in terms of teamwork, communication skills and work ethics. This was depicted by the installation of cheating devices on to the automobiles regardless of the underlying consequences to the environment. Theories used for the problem solving Public speaking is the act of structuring and delivering messages to the audience effectively to promote a high level of understanding. On the other hand messages conveyed by the speaker should be ethical in nature. Looking at the case of Volkswagen, ethics was not one of their qualities so after the damage was already done, they opted to seek forgiveness from its stakeholders and employees for putting them in such a situation. It will not be a simple thing since it will need to regain its lost trust and organizational culture. The only strong card for them to play after paying all the heavy fines is persuasions to the public as well as their employees. Persuasion is the process of trying to convince a person to behave in a manner that will result in either the change of values, beliefs or attitude, generally their behavior. This will be greatly influenced by the fact that we reside in a world where the several sources of information are continuously fighting for attention. This is a great tool but there are several other deterministic factors that will make it a struggle for the automobile group to regain its previous stature. The related theories are as follows: 1. Dialogical theory (public speaking) This theory describes communication even in public speaking to be dialogues. This is emphasized by these three points: Dialogues to be more normal than monologs Dialogue defines the exchange of messages that goes on during that communication. Volkswagen has seen it best to open channels for them to talk and make them understand of the next steps to take. Face to face conversations is also paramount to rebuilding the lost human trust. Meanings are in individuals rather than words This section describes the different ways communication is understood by the audiences. For this to be successful, the speaker ought to understand the audience so as to make appropriate communication choices that will be appropriate for the context in question. Contexts and social situations During approaching people, whatever is said, the words chosen all depend on the situation on the ground at that time as well as the context. This aspect is divided into several sub-points such as: physical, cultural, temporal and social-psychological 2. Social penetration theory This describes how people shift from superficial talk to intimacy and later revealing talk. The main aim of Volkswagen is to portray an image of total remorse, after the insufficient communications of the scandal, it became clearer to them that they needed to come clean. This saw a shift in their communication pattern as they tried to connect with their stakeholders at a personal level for them to regain the shattered trust. This theory can as well be applied to them opening focus groups to help employees air out their grievances. 3. Social judgment theory This theory defines the different types of conditions under which these messages will result in a change in the beliefs, attitudes and values of the recipient. This theory has three components namely: latitude of rejection, latitude of acceptance and latitude of non-commitment. This theory looks at the various options to an idea that they can either be accepted, rejected or not influence the listener. The Volkswagen group through their campaigns has to some extent used this theory to help regain their lost customers and trust. The company also initiated other measures to deal with this issue such as the following: 1. The company resulted to recalling the affected vehicles, this was a mandatory action made by the company as an act of good faith as well as it being their duty to deliver to their customers. 2. Some of the top management was sacked since they were responsible either directly or indirectly to the source of this scandal. 3. Giving ambassadors the platform to communicate, this will act as a tool by the internal influencers in order to recover the companies brand and turn things back around. 4. Informing to try and eliminate uncertainty, this is to recover from the way they gave out information regarding the scandal at hand. The aim of this was to bring everyone to light and do away with uncertainty and mistrust by its customers and employers. Group problem-solving Problem occurrence is quite a normal thing for both individuals and groups, what counts is the way you solve the problem. This is a series of steps that if implemented in most scandals such as the Volkswagen emissions scandal would help control the whole crisis. Generally there are seven steps and they are: Define the problem It is best to first define the boundaries of the problem, to check the extent of the challenge. This may differentiate between broadly and narrowly defined problems. Analyze the problem This generally defines how the groups understand the problem at hand by gathering necessary information. Establish criteria Various group members share their different perspectives to help arrive at a suitable solution. Consider possible solutions After having a brainstorming session from all group members, necessary resources are focused on ideas that seem to bear results. Decide on a solution The most likely solution to be chosen will be the one to likely solve the problem at hand with optimal resources. Implement the solution At this stage execution of the solution is done. Follow upon the solution this is to ensure that the selected solution is not becoming a problem in itself. References Garcia, T. (2017). Volkswagen’s PR response made problems worse, experts say. [online] MarketWatch. Available at: http://www.marketwatch.com/story/volkswagens-pr-response-made-problems-worse-experts-say-2015-09-25 [Accessed 25 Sep. 2015]. Hakim, D. (2017). VW’s Crisis Strategy: Forward, Reverse, U-Turn. [online] Nytimes.com. Available at: https://www.nytimes.com/2016/02/28/business/international/vws-crisis-strategy-forward-reverse-u-turn.html [Accessed 26 Feb. 2016]. Milne, R. (2017). [online] Available at: http://file:///C:/Users/robah/Downloads/positivo/Volkswagen%20blunders%20through%20communications%20over%20emissions%20scandal.html [Accessed 2 Dec. 2015]. Taylor, J. (2017). Importance of Effective Communication in Business. [online] Smallbusiness.chron.com. Available at: http://smallbusiness.chron.com/importance-effective-communication-business-2879.html [Accessed 10 May 2017]. Read More