In 2015, the German car manufacturer Volkswagen was accused by the American Environmental Protection Agency of using special devices to detect when the car was being tested for emissions. If they were activated, the car’s performance would be throttled to reduce the amount of harmful chemicals the vehicle produced. In ordinary buyers’ hands, the limiter would be disabled, allowing Volkswagen to effectively cheat emissions standards and offer buyers inexpensive, high-performing, and supposedly environmentally-friendly vehicles. The realization that the firm was violating the law and deceiving its consumers became a massive crisis of both costs and confidence. The company’s CEO resigned, and it had to recall millions of cars that had the deceptive system installed while also sustaining massive fines from environmental regulatory agencies. With that said, it has been able to execute an excellent crisis management strategy and restore much of its reputation.
Volkswagen took an active approach to resolve the problem, aiming to become a global leader in environmentally-friendly cars. Per Kell (2020), it created a Sustainability Council that featured prominent experts in the field and launched a large-scale electrification campaign, as electric vehicles are generally considered far less harmful to the environment than their gasoline- and diesel-powered counterparts. Volkswagen also hired marketing specialists to ensure that its message would reach its target audience. It has also started promoting environmentally friendly regulations that support the transition away from fossil fuels to cleaner, more sustainable alternatives. Altogether, the company has been able to use the opportunity provided by the discovery of its issues to improve rapidly and dramatically on that front. As such, it is quickly recovering consumer goodwill and will likely become an environmental leader in the future as electric car adoption grows.
Reference
Kell, G. (2020). From crisis management to change management. Forbes. Web.