Introduction A4 (Hotten, 2015). Immediately after the announcement from

Introduction

Volkswagen
is a global automobile manufacturer, its Europe’s largest automaker and is part
of 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 Protection
Agency (EPA) announced that Volkswagen was using an illegal “defeat
device,” that the Volkswagen Car Company had placed in over half-a-million US
diesel-powered cars (Davenport, 2015).
This “defeat device,” was used to
trick the EPA inspectors on the carbon
dioxide emissions test, thus, providing false information. This paper
aims at examining the impacts of the Volkswagen emission scandal to the
company, the consumers, and the image
repair theory using Mortification strategy.

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Description of the Issue

September 18, 2015, the Environmental
Protection Agency found Volkswagen guilty of having a “defeat device,” or illegal
software in their diesel vehicles that could detect when they were being
tested, tricking the emissions test to
improve 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 including
the Volkswagen Beetle, Jetta, Golf, and Audi A4 (Hotten, 2015).

Immediately after the
announcement from the EPA, Volkswagen stock
market numbers dropped and lost an estimated 17% of its stock value or 19
billion dollars. Michael Horn, the CEO of Volkswagen America, gave an honest apology stating, “Our company was
dishonest. We have totally screwed up” (PBSnewshour, 2015). The Volkswagen vehicles
which had the defeat device installed were said to produce up to over 650,000
of 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-on
during emission’s test but then shut-off as soon as the test was concluded, Yet, the vehicles polluted up to 40 times the legal
limit after the device was turned off. (PBSnewshour,
2015)

 

Impact of the scandal

The
Volkswagen scandal led to a sharp decline in the brand equity in the world
market. It also meant a massive financial
loss to millions of Volkswagen car owners as well as the company. The scandal
not only had an impact on the company itself as it damaged its image largely. The carbon dioxide emitted into the
environment caused a lot of health complications
especially amongst Americans.

Furthermore,
the emission scandal led to a federal lawsuit
in U.S for installing illegal “defeat devices”
in nearly 650,000 diesel vehicles to falsify emissions controls, increasing
harmful air pollution. Volkswagen reached a 4.6
billion dollar settlement with the U.S. Justice Department in January 2016, and
agreed 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 most
significant damage could be felt by Volkswagen’s consumer brand, particularly
in the united states as Volkswagen has been putting a lot of effort into
having a higher percentage of the U.S. auto market share and, this scandal didn’t help towards that percentage.

 

Image
Repair Theory

Image
repair theory was created by a man named William Benoit, in 1997. Benoit defines his
theory in his book Accounts, Excuses, and
Apologies: A Theory of Image Restoration Strategies (W. L. Benoit, 2015). Image
repair theory has five unique strategies that can be used as a guide to repair one’s image
in an event where reputation has been ruined.
These five strategies are mortification, reducing offensiveness, evasion
of responsibility, corrective action, and denial.

Image
repair theory is applicable in Volkswagen’s response to the emissions crisis. Specifically, in dealing with the mortification
and reduce offensiveness strategies.

Mortification

Mortification
is put merely by William Benoit as the
accused simply admits being guilty or
responsible for the wrongful act and asks forgiveness (W. L. Benoit, 2015). If
the listeners believe the apology is sincere, they may forgive the unlawful act.

Volkswagen
overwhelmingly expressed mortification, in the form of various apologies. Most
of the apologies come from press releases: “VW deeply regrets the incidents” (Shareholder,
2016). “Full
responsibility” is reiterated, as is the company’s willingness to “accept the
consequences” (Painter, 2017).

Reduce
offensiveness

A company like Volkswagen, which is accused of
wrongful actions can also try to reduce the apparent offensiveness of that act.
This image repair strategy has six variants (W. L. Benoit, 2015). Bolstering
a positive image; minimizing the damage, distinction from worse instances; placing
the act in a more favorable context; challenging
the accusers; or offering compensation.

Volkswagen
tried to bolster their positive image, by making the problem appear less
significant in comparison to other automotive manufacturer scandals. Volkswagen
stressed their ethical values such as stating that they “stand for good and
secure jobs” (AP, 2015) and alleging that their company has not been negatively
affected, and customers are “returning to buy vehicles” (Painter, 2017). Statements
bolstering 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 negative
feelings associated with their unethical act. The most common response
from Volkswagen was to reduce perceived offensiveness of their actions by
downplaying the damage. Volkswagen made constant
references to how their cars still “comply with legal specifications,” and stating that there is no effect on
business and dealers (Painter, 2017). These
statements help to minimize the apparent problem.

Compensation
is another variant of reducing offensiveness. If
possible, every company should compensate the victims, because it usually
results in improving the image. For example, Volkswagen sold millions of people
cars that were equipped with software that was used to cheat on the emissions test. After
they were caught, Volkswagen announced that they would buy back the affected
cars and offered additional bonus cash for the troubles.

 

Conclusion

The
Volkswagen emission scandal has been one of the worst crises ever to any automobile manufacturer. The scandal
affected more than 11 million cars worldwide, with the so-called “defeat
device” software equipped with the
engines, which polluted up to 40 times above what is permitted in the united states. Causing Volkswagen up to 18
billion dollars in fines from the U.S. alone, and its stock dropped roughly
thirty percent.

Image is essential to businesses as well as individuals and, the image
repair theory was applied to the
Volkswagen emissions sandal.