The paper 'The Volkswagen Recall Scandal" is a good example of a management case study. Volkswagen is a public traded company established in 1937 with the fast brand of cars that were affordable to all German families (Mays, 2015). Over the years, Volkswagen has grown and expanded in operation. In 2014, the company was among the largest automobile companies in the world with about 13% market share. In the same years, the company produced almost 41,000 vehicles a week and sold about 10 million vehicles (Mays, 2015). For the 65 years, it has been in operation, Volkswagen has been adding new vehicles to its portfolio and incorporates innovation in its operations.
For several years, the company has focussed its attention on social and environmental sustainability which has enabled it to achieve competitive advantage (Mays, 2015). In order to emphasize on its environmental sustainability concept, Volkswagen has produced an environmentally friendly range of vehicles and has also aired commercials that establish its cars to be less greenhouse-gas emitter. This has enhanced its brand image and has increased its market share over the years (Plungis and Hull, 2015).
However, in 2015, the Environmental Protection Agency gave a notice that the Volkswagen “ environmentally-friendly” vehicles violated the Clean Air Act ((Biesecker, 2015)). This was one of the largest scandals that faced the company and resulted in a huge amount of losses and affected its brand reputation. This paper will describe the Volkswagen Company recall scandal that had some negative impacts on the company. In addition, the paper will provide an analysis of the methods the company used to handle the situation in context to some relevant communication theories and frameworks. Recall Incident at Volkswagen In 2015, the Environmental Protection Agency in the United States issues a notice to Volkswagen for claims that the company has violated the Clean Air Act (CNN Money Staff, 2015).
It was discovered that the company had intentionally pre-set its turbocharged direct injection diesel engines that we're able to activate some emissions controls only in an instance at the laboratory emission testing (Biesecker, 2015). As a result of the intentional pre-set program, the vehicles’ nitrogen oxide output showed to have met with the United States standards during control and regulatory testing.
In a real sense, the vehicles emitted 15-40 times more nitrogen oxide when driven. For instance, Jetta exceeded the emission standards by about 20-35 times, Passat was at 5 to 20 times higher than the standard limit while the BMW X5 was found to have met the set standard limit (Plungis and Hull, 2015). The program was placed in approximately 11 million vehicles across the world and about 500,000 vehicles in the United States. These vehicles were manufactured between 2009 and 2015 model year. The findings of the Volkswagen vehicle defects originated from the study commissioned by the International Council on Clean Transportation on the emission discrepancies on vehicle models (Biesecker, 2015).
The research group discovered additional emissions of Volkswagen vehicle models during road testing. The company thereafter was the target of several regulatory investigations that were conducted in different countries (Biesecker, 2015). Volkswagen’ s stock prices fell a few days after the announcement of the regulatory investigations. This led to the CEO of the company to resign voluntarily and other heads such as research and development and brand development managers were suspended (CNN Money Staff, 2015).
This scandal raised awareness across nations over the increasing pollution levels due to vehicle emissions by brands built by different carmakers. Initially, Volkswagen disclaimed any wrongdoing with regard to the emission issues of its vehicles.
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