September 2016 - University of Sheffielddagda.shef.ac.uk/dispub/dissertations/2015-16/External/Christopher_Painter.pdf · BP Deepwater Horizon oil spill. Like this study, they did

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An hermeneutic interpretation of Volkswagen’s public response to the diesel emissions crisis of late 2015, in terms of attribution, crisis management and

information orientation

A study submitted in partial fulfilment of the requirements for the degree of

Information Systems MSc

at

THE UNIVERSITY OF SHEFFIELD

by

Christopher Andrew Painter

September 2016

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TableofContentsTableofContents..............................................................................................................................2

Abstract...............................................................................................................................................4Background............................................................................................................................................4Aim.........................................................................................................................................................4Methods................................................................................................................................................4Results...................................................................................................................................................4Conclusion.............................................................................................................................................4

Acknowledgement............................................................................................................................6

Tableoffigures..................................................................................................................................7

Chapter1:Introduction....................................................................................................................81.1Background......................................................................................................................................81.2Researchaim...................................................................................................................................81.3Objectives........................................................................................................................................91.4Originalityofresearch.....................................................................................................................91.5Structureofdissertation................................................................................................................10

Chapter2:LiteratureReview.........................................................................................................112.1Attributiontheories.......................................................................................................................11

2.1.1Internalandexternalattribution............................................................................................122.1.2Kelley’scovariationmodel......................................................................................................132.1.3Weiner’sattributiontheoryandAttribution–Responsibility–Actionmodel........................13

2.2Crisismanagement........................................................................................................................142.2.1Coombes’situationalcrisiscommunicationtheory(SCCT).....................................................152.2.2BenoitImageRestorationdiscoursetheory............................................................................152.2.3Crisismanagementandlitigation...........................................................................................16

2.3InformationOrientation................................................................................................................172.3.1Informationtechnologypractices(ITP)...................................................................................172.3.2Informationmanagementpractices(IMP).............................................................................182.3.3Informationbehavioursandvalues(IBV)................................................................................18

2.4Summary........................................................................................................................................18

Chapter3:Researchmethodology...............................................................................................203.1Ontologyofsocialresearch...........................................................................................................20

3.1.1Objectivismversussubjectivism..............................................................................................203.1.2Positivismversusinterpretivism..............................................................................................20

3.2TheHermeneuticsmethod............................................................................................................213.3Hermeneuticsinmyresearch........................................................................................................23

3.3.1Heuristiccoding......................................................................................................................233.3.2Thedataset............................................................................................................................243.3.3Chronologyofdata.................................................................................................................253.3.4Datareferencing.....................................................................................................................25

3.4Ethicalissues..................................................................................................................................25

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Chapter4:ResearchFindings........................................................................................................264.1Introduction...................................................................................................................................264.2Attribution.....................................................................................................................................27

4.2.1Internalandexternalattributions...........................................................................................274.2.2Kelley’scovariationmodel......................................................................................................294.2.3Weiner’sattributiontheoryandAttribution–Responsibility–Actionmodel........................30

4.3Crisismanagementandimagerestoration....................................................................................304.3.1Mortification...........................................................................................................................314.3.2Reductionofoffensiveness.....................................................................................................314.3.3Correction...............................................................................................................................324.3.4Differentiation........................................................................................................................33

4.4Informationorientation.................................................................................................................354.4.1Informationmanagementpractises.......................................................................................364.4.2Informationbehaviourandvalues..........................................................................................37

4.5Summary........................................................................................................................................39

Chapter5:DiscussionofFindings.................................................................................................415.1Attribution.....................................................................................................................................415.2Crisismanagementandimagerestoration....................................................................................425.3Informationorientation.................................................................................................................445.4Summary........................................................................................................................................45

Chapter6:Conclusion.....................................................................................................................46

References........................................................................................................................................48

AppendixA:Datalist......................................................................................................................57

AppendixB:Timelineofsignificantevents.................................................................................59

AppendixC:Codinggrid.................................................................................................................61

AppendixD:Attributionanalysis..................................................................................................62

AppendixE:Crisismanagementstrategiesanalysis..................................................................65

AppendixF:Informationorientationanalysis............................................................................72

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Abstract

BackgroundThediscoveryinSeptember2015ofdieselemissionssoftwarecheattechnologyinVolkswagen

carsinitiatedaprocessofcrisismanagementanddamagelimitationbyVW,reflectedin

contemporaneouspublicstatementsissuedbythecompany.Thesewereexaminedinthe

contextofattribution,crisismanagementandimagerestorationandinformationorientation,

usingspecificframeworksfromtheliteraturetoinformtheanalyticalprocess.

AimTheresearchprojectinvestigatestherelevanceofattributionframeworkstocompany’sown

viewsofattribution,thecrisismanagementstrategieswhichwereemployedandtheinfluence

ofinformationorientationonthecompany’sresponse.

MethodsAninterpretivist,hermeneuticapproachwasusedtocarryoutcontentanalysisonselected

statementsissuedbyVW,usingacodingsystemtorelatespecificwordingtoselected

frameworksfromtheliteraturereview.Allstatementsanalysedwereavailableinthepublic

domain,aspressreleases,statementstoshareholdersandinvestors,ortranscriptsoforal

evidence.

ResultsTherewasaclearassociationbetweentheselectedframeworksandstatementsmadebythe

companyinthethreeareasofattribution,crisismanagementandimagerestorationand

informationorientation.Therewasaconnectionbetweenstatementsrelatingtoattribution

andstatementsrelatingtoinformationorientation,atthetimeofthecrisisandasitwas

envisagedforthefuture.Prioritiesforactionalsoformedpartoftheoverallcrisismanagement

andimagerestorationapproach.Proposedchangesininformationorientationformedakey

partofthecompany’spublicresponsetomitigatetheoffensivenessofthecrisis.

ConclusionItwasdemonstratedthattheoreticalframeworksofattribution,crisismanagementandimage

restorationandinformationorientationhavedirectrelevancetothewayVWresponded

publiclytothecrisis;thattherewasaninter-relationbetweenattributionsandcrisis

managementstrategies;thatattributionsandcrisismanagementandimagerestoration

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strategiesrelatedtoaspectsofinformationorientationasbothcomponentsandconsequences

ofthecrisis.

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Acknowledgement

Mysincerestthanksgotomydissertationtutor,DrJorgeTiagoMartins,forgivinguphisvaluabletimetoinstructme.

Iwouldliketothankmyacademicmentor,JayneTulip,forhelpingmetoplanandorganisemydayssothatIcouldsubmitmydissertationontime.

IwouldliketothanktheInformationSchoolstafffortheirexcellentteaching,andIwouldliketoextendmythankstoeverybodyattheUniversityofSheffieldformakingmytimeheresospecial.

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TableoffiguresFigure1:apiecharttoshowthedifferentcrisismanagementstrategiesusedbyVW34

Figure2:agraphtoshowthecrisismanagementstrategiesemployedineachdocument....................................................................................................................35

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Chapter1:Introduction1.1BackgroundOn18thSeptember2015,theGermanautomotivecompanyVolkswagenAG(VW)

receivedanoticeofviolationoftheCleanAirActfromtheUnitedStates

EnvironmentalProtectionAgency.Ithadbeenfoundthatcertaindieselenginesin

carsmanufacturedbyVWcontainedapieceofsoftware(a“defeatdevice”)thatmeant

certainemissioncontrolswereonlyactivatedduringlaboratorytesting("Volkswagen

AG,2016).Theresultofthisisthatinrealworldconditions,someengineswere

exceedingUSemissionlimits“byafactorof15to35”(CenterforAlternativeFuels,

EnginesandEmissions,2014).VWadmittedthat,unbeknowntothegeneralpublic,

about11millioncarsworldwidewerefittedwiththedevice("VolkswagenAG,2015).

Seegeretal(2003)defineorganisationalcrisesas“specific,unexpected,andnon-

routineeventsorseriesofeventsthat[create]highlevelsofuncertaintyandthreator

perceivedthreattoanorganisation’shighprioritygoals”.Coombs(2007)statesthata

crisiscancreatethreethreats:publicsafetyissues;financialloss;andreputationloss.

BoththesedefinitionsshowVWtobeinadeepcrisis.Financiallossisshownasthe

companysetaside€16.2bntodealwiththeemissionscrisis.ThisledtoVWmakingan

annuallossin2015of€4.1bn–itsfirstannuallossinover20years("Volkswagen

GroupVolkswagenReportsRobustOperationsinFiscalYear2015",2016).Reputation

lossisshownas,byDecember2015,salesofVWbrandedcarshaddroppedby20%

(SocietyofMotorManufacturersandTraders,2015).MatthiasMuller,CEOofVW,

describesthesituationas“thegreatestchallengeinthehistoryof[the]Company”

(VolkswagenAG,2016,p.7).

Onthe12thDecember2015,VolkswagencommissionedcommerciallawfirmJones

Daytorunanexternalinvestigationintowhathappenedatthecompanythatledto

thecrisis.Atthetimeofwriting,thisinvestigationisongoing.

1.2ResearchaimThisresearchprojectaimstoexaminetherelevanceofattributionframeworksin

evaluatingcorporateandindividualliabilityandcrisismanagementstrategies,and

determinewhetherthepresenceofinformationorientationcompetencieshasa

significantimpactonthecompany’scrisisresponse.

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1.3ObjectivesInordertoachievetheresearchaims,thefollowingobjectiveswillbeaddressed:

• Exploreattributionsmadebythecompanyusingselectedattribution

frameworks

• Examinethekeyelementsofcrisismanagementanddamagelimitation

strategiesemployedbyrelatingthemtorelevanttheoreticalframeworks

• Investigatewaysinwhichattributionsinformtheprocesscrisismanagement

process

• Investigateaspectsofinformationorientationwithinthecompany,asrevealed

intheirownstatements

• Considerhowtheperceivedlevelofinformationorientationchallengesor

enhancescorporateresponsibilityandthecompany’scrisisresponse

1.4OriginalityofresearchTherehavebeenstudiesevaluatingmultinationalcorporations’crisismanagement

strategiesduringandafterlarge-scalecrises.DeWolf&Mejri(2013)investigatedthe2010

BPDeepwaterHorizonoilspill.Likethisstudy,theydidacontentanalysis,butinsteadused

secondarydatafromsourcesotherthanBP.Thisresultedintheexposureofmultiple

failuresbyBP.ThisstudyusesVWasitsonlysource,whichallowsfordirectinterpretation

ofwhatprioritiesVWwouldlikeitsaudiencetothinkithas.

Thatcheretal.(2015)performedacontentanalysisonfourreportsofthe2011Fukushima

nucleardisaster,lookingattheimpactinformationbehaviourhasoninformationfailure.

Thisdissertationalsotriestoexaminethisrelationship.ButThatcheretal’sstudydoesnot

concernitselfwiththecompany’scrisismanagementstrategy.

Thisdissertationintendstomergetheaimsofbothstudiesbyfocussingonbothcrisis

managementandinformationbehaviour,usingasimilarcontentanalysismethodologyto

bothoftheabovestudies.Itisimportantfororganisationstorecogniseresearchintocrisis

management.Accordingtoa2014surveyof375largeandsmallorganisations,29%of

organisationswaittoexperienceacrisisbeforeconstructingaresponsestrategy

(Steelhenge,2014).Crisismanagementresearchlikethisstudycaninformorganisations’

strategies.

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1.5StructureofdissertationThisdissertationisstructuredintochaptersasfollows:

Chapter1–Introduction:BackgroundtotheVolkswagendieselemissionscaseandareviewoftheproject.

Chapter2–LiteraturereviewReviewofsomeofthekeyliteratureinthefield,includinganexplorationanddiscussionofthedifferentframeworksandtheirrelevanceforthepresentproject.

Chapter3–MethodologyAnoverviewofthechoiceandtypeofsourcematerial.Anexpositionofresearchphilosophytogetherwithanexplanationofthehermeneuticapproachandqualitativeanalyticaltechniquesused.

Chapter4–ResearchfindingApresentationofdetailfromthecontentanalysis,relatingdatatoframeworksofattributionandcrisismanagementandimagerestoration.Detailedanalysisoflinksbetweenattributionandcrisismanagementandinformationorientation.

Chapter5–DiscussionAnevaluationofresearchfindings,todeterminetrends,connectionsandmissinglinks.

Chapter6–ConclusionAsummaryoffindingsandevaluationofsuccessintermsofresearchaimsandobjectives.Recommendationsforfurtherresearch.

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Chapter2:LiteratureReview

Thissectionisaliteraturereviewoftheframeworksandtheoriesthatwillbeusedas

lensestoanalysetheVWcase.Thefirstoftheseisagroupofattributiontheories,

whichareconcernedwithidentifyingthecauseofeventsandderivingresponsibility.

Attributionresearchisimportantforthestudybecauseitshowshowanindividual(or

inthiscase,acompany)arrivesatacausalinferenceandwhattheconsequencesof

suchaninferencemaybe.

Second,crisismanagementtheorieswillbeemployedasalenstoexaminehowVW

conducteditselfinthewakeofthecrisisinordertodealwiththethreeeffectsofa

crisis:publicsafety;financialloss;andreputationloss(Coombes,2007),aswellas

legalconcerns.

Thesetwogroupsarehighlycomplementary.Thisisbecause“peopleinterpret

behaviourintermsofitscausesandtheseinterpretationsplayanimportantrolein

determiningreactionstothebehaviour”(Kelley&Michela,1980,p.458).Ascrisis

managementstrategiesareatypeofreaction(althoughsomemightbepre-emptive)

itfollowsthatoneshouldfirstformattributionsinordertoimplementappropriate

crisismanagementstrategies.Coombesfollowedthislineofreasoningindeveloping

hissituationalcrisiscommunicationtheory,byexplainingtherelationshipbetweena

situationandcommunicationstrategies(CoombesandHolladay,1996).

Finally,itwillbeseenwhetherthesecrisismanagementstrategiesgiveanyindication

astowhataspects(ifany)ofinformationorientationtheoryhavebeenprioritised.

ThetheorywasdevisedbyMarchand,KettingerandRollins(2001)asametricofhow

effectivecompaniesuseandmanageinformation.Itisnotwithintheremitsofthe

researchtodiscoverwhetherVWhadahighlevelofinformationorientationbefore,

duringorafterthecrisis.Rather,itwillexaminewhetherVWseektochangeanyof

theaspectsofinformationorientationasaresultofthecrisis.

2.1AttributiontheoriesDifferentattributiontheoriesareusedtocomplementmymainframeworkof

informationorientation.Attributiontheorieswillallowadifferentperspectiveofthe

VWcrisis.Theystemfromthesocialpsychologicalconceptofattribution,whichis

theprocessbywhichindividualsexplainthecauseofbehaviour.Thishassincebeen

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appliedtothestudyofanorganisation’sbehaviourorevent,asopposedtomerely

thatofanindividual.Attributiontheoriescanhelpexplainwhysomethinghas

happenedinacompanyororganisation.Inmycase,theywillinformmy

understandingofthecrisismanagementstrategiesusedbyVWtomitigatetheeffects

oftheemissionsscandalintermsofcustomerresponseandlegalliability.

Kelleyetal.definetheterm“attribution”asmeaning“inferenceofcause”(Kelleyet

al.,1980,p.458).Attributiontheoriesdescribetheprocessofattributiontomakesense

ofevents.Forexample,ifsomebodywhoisanervousdriverhasacrash,itismore

likelythatwewouldreachoutfortheexplanationthatitwastheirowndriving

conductwhichcausedthecollision,ratherthanconsiderthepossibilitythatthey

weretheinnocentvictimofdangerousdriver,orsimplybadluck.

2.1.1InternalandexternalattributionHeider(1958)saidthattherearetwotypesofattribution.Thefirstisexternal

attribution,wherebehaviourisinterpretedashavingbeencausedbysituational

factors.Forexample,perhapsanemployeegotapromotionbecausetheyarehaving

anaffairwiththemanager.Internalattribution,ontheotherhand,iswherea

behaviourissaidtobecausedbyinternalcharacteristicsordisposition.Forexample,

thesameemployeecouldhavegotapromotionthroughhardworkand

determination.Ineithercase,Heiderdevelopedtheideathatthe“conditionwillbe

heldresponsibleforaneffectwhichispresentwhentheeffectispresentandabsent

whentheeffectisabsent”(Heider,1958,p152).

JonesandNisbett(1971)evolvedtheideaofactor-observerasymmetry,statingthat

whenseekingexplanationsfortheactionsofothers,individualsaremorelikelyto

attributecausetothedispositionoftheactorthantosituationalfactors.Anumberof

frameworkshavebeendevisedwhichfocusontheattributionofdispositionasa

causalfactorforevents,includingKelley’scovariationtheory(seebelow).Inthis

context,dispositionrelatestofactorswhichrelatetotheactor,suchascharacteristics

orinclination.

JonesandNisbett(1971)noticedthatpeopletendtopaymoreattentiontointentional

behaviour.Theyidentifiedthat“strongandconfidentdispositionalinferencesare

drawnaboutapersonwhenweseehimorheractunderconditionsofhighchoice”.

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Attributiontheoriescaneasilybeappliedtothefieldofinformationmanagementto

helpusunderstandthewayorganisationsoperate.Ifmanagersareabletounderstand

thecausesoftheiremployeesbehaviour,theywillhaveagreaterunderstandingof

howtheirbusinessworksandcanemployfuturedecisionsaccordingly.Forinstance,

theywouldgainthecapacitytomanipulateworkingconditionsinsuchawaythat

employeemotivationisincreased,leadingtoahappierworkforceandanincreasein

performance.

Ifanorganisationalunderstandsitsinternalandexternalenvironments,itismore

inclinedtoactpurposefully(Gronhaug&Falkenberg,1994).Itiseasytoseehowthis

fitsthecontextofacrisis.Ifthepeopleinanorganisationhaveaperceptionofcause

ofacrisis,theycanmakemoreaccuratejudgmentsofsuitablecrisismanagement

actions.

2.1.2Kelley’scovariationmodelKelley(1967)developedthecovariationmodelofattribution,identifyingthreedistinct

variableswhichhaveaneffectonattribution.Theseare:distinctiveness,meaningthe

uniquenessofaneventasdistinctfromtheactor’strackrecord;consistency,meaning

thedegreetowhichtheeventdemonstratedtheactorrunningtruetotype;

consensus,meaningthedegreetowhichtheactorbehavedasotherswouldhaveor

havealreadydoneinsimilarcircumstances.

Hefoundthatwhendistinctivenessislowandconsistencyishigh,aneventismore

likelytobeattributedtotheactor’sinternaldisposition.HewstoneandJaspars(2006)

addedtheideaofconsensusasadeterminantofcausalattribution,notingthatwhen

consensusislow,anactismorelikelytobeattributedtotheactor’sdisposition.

ItisnoteworthythatKelley’scovariationtheoryrelatestoattribution,butdoesnot

exploretheconnectionbetweenattributionandresponsibility.Itisusefultherefore

onlyinsofarasitillustrateshowpeoplelookforcausesofeventsbyattributingthem

totheactor’sdispositionandtowhatdegreethatdispositionaccordswiththeactor’s

history.Kelley’stheorydoesnotdiscussanyimplicationsofcausalattribution.

2.1.3Weiner’sattributiontheoryandAttribution–Responsibility–ActionmodelWeiner’sattributiontheory(1995)isusedasanadditionalframeworkbecause,as

YumandJeong(2014)found,itisusefulinexaminingwhyacrisishashappenedafter

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ithashappened.Itisalsousefulindecidingwhetheritisacrisisthatislikelyto

happenagain.

Weiner’sattributiontheoryassumesthatindividualstryanddeterminethecausesof

otherpeople’sbehaviours.Apersonmightattributeanumberofcausestoanother

one’saction.

Weinerthoughttheprocessofattributioncouldbebrokendownintothreestages.

First,abehaviourmustbeobservedbyaperson.Second,thepersonmustbelievethat

thatthebehaviourwasperformedintentionally.Last,thepersonmustdecidewhether

thebehaviourwasaresultofcoercion,inwhichcaseonewouldassumeanexternal

cause,orfreewill,inwhichonewouldassumeaninternalcauseintheindividual.

("AttributionTheory",2016).

Inthe“attribution–responsibility–action”model,Weinersuggestedthatpeople’s

attributionsofcauseguidetheirfutureactionssuchaspunishmentorpreventative

measures.Weineridentifiedthetwomotivationsforpunishmentasutilityand

retribution.Retributionisthebalancingoutofthewrongorjustice,andutilityrelates

tothepreventionoftheevent’srecurrence.Itisthoughtthatretributionisincreased

wherecausesofthefailureareperceivedtobecontrollable.Incorporatecases,

punitiveoptionsmaybecarriedoutbyindividualsandhaveabehaviouralnature,

suchasboycottingofconsumerproducts;punitiveoptionsmayalsobelegalin

nature,suchasprosecutionbythestateorregulatoryauthority.Weinerdoesnot

explorerestorativejustice:thisiswherethepunishmentservestorestorethedebt

causedbythewrongdoing.

OneofthecrucialdifferencesbetweentheconceptofWeiner’soriginalattribution

theoryandmyapplicationofit,willbethefactthatorganisationsconsistof

individuals,alloperatingwiththeirownattributionmodels,andasasumoftheir

parts,operatingasone.WillWeiner’sattributiontheorywillbeabletoaccountforan

actionthathasbeenperformedbyacollective,ratherthananindividual?

2.2CrisismanagementAttributiontheoriescaninformcrisismanagementtheory,becauseresponse

strategiestendtobebasedonthenatureofthecauseofthecrisis.Aprimeexampleof

thisisCoombs’situationalcrisiscommunicationtheory(SCCT).

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2.2.1Coombes’situationalcrisiscommunicationtheory(SCCT)Situationalcrisiscommunicationtheory(SCCT)wasdevelopedbyCoombes(2006)as

anapplicationofKelley’scovariationattributionmodeltocorporatecrisis

communication.Itfocusesonconsistencyanddistinctivenessasdimensionsof

attributionandlooksattheseintermsofcrisishistoryandrelationshiphistory.Crisis

historyreferstowhethertheactorhasanyhistoryofsimilarinstancesinthepast;

relationshiphistoryreferstohowtheactorhasperformedwithrespecttoother

stakeholdersinothercontexts.Bothfactorsaresignificantininfluencingpublic

opinionafteracorporatecrisis.SCCTdoesnot,however,examinetheconsensus

dimensionofattribution.

CoombesandHolladay(2002)saidthatdifferentcriseswouldnecessitatedifferent

communicationstrategiesinordertomanagethemeffectively.Theydiscussedthree

significanttypesofcrisis.In“humanbreakdownproductrecall”,aproductisrecalled

becauseofhumanerror.TheexampleisusedofahamburgerrecallbyHudsonFoods

afterthebeefwascontaminatedwithEcoliasaresultofplantemployeesmistakenly

puttingcontaminatedbeefbackintotheprocessingmachinery.Thesecondtypeof

crisisidentifiedis“organisationalmisdeedswithnoinjuries”Inthiscase,stakeholders

areknowinglydeceivedbymanagement,withoutcausingactualharm.Theexample

isusedwhereChryslerknowinglymanipulatedmileageclocksonnewcarstoobscure

thefactthattheyhadbeendrivenformilesduringtests.Thethirdtypeofcrisisis

“organisationalmisdeedmanagementmisconduct”,whereinfringementsoflawsor

regulationsareknowinglymadebymanagement.Anexampleofthiswouldbefailing

toadheretoequalopportunitiesstatutoryrequirements.

2.2.2BenoitImageRestorationdiscoursetheoryInordertoevaluateacorporation’scourseofactiontomanageacrisis,itisnecessary

topayattentiontothewayitmanagesriskasitpertainstoitscorporateimage.The

preservationofcorporateimage,orrestorationofadamagedimage,iscentraltoan

organisation’sresponsetothreat.

WilliamLBenoit(1997)developedatheoryofimagerestorationdiscourse,lookingat

waysinwhichcorporatebodiesusecommunicationstrategiestominimisedamage

andrestoreconfidenceinthecorporateimage.Itisassumedthattheactor

(corporation)isheldresponsibleforanactionandthattheactionisconsidered

offensive.Theresponsibilityorfaultmayberealoronlyperceived,butwhereitexists,

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thecompany’simageisatrisk.Itisessentialforcompaniestoidentifytherelevant

audience(audiences)whenusingcommunicationstrategiestorestoretheirimage.

Benoitidentifiesfiveimagerestorationtechniqueswhichare:denialorshiftingof

blame;evasionofresponsibility(duetoprovocation,lackofinformation,accidentor

misplacedgoodintentions);reductionofoffensiveness(bybolsteringapositive

image,downplayingthenatureofthedamage,differentiationfromworseinstances;

underminingtheaccusers,offeringcompensation,ortranscendenceofmotive);

correctiveactiontorestoreoriginalconditionandpreventrecurrence;mortification,

offeringapologiesandremorse.

Thesetechniqueshavebeenappliedtocasestudiesofcrisesbefore.Benoitand

Czerwinski(1997)appliedthetheorytoUSAir'sresponsetomediacoverageafterits

aircraftcrashedin1994.IthasalsobeenusedtoshowthatExxon’sheavily

downplayeddamageafterthe1989oilspill(BenoitandCzerwinski,1997);andthat

bothcorrectiveactionandmortificationwereheavilyusedbyAT&Tafteroneoftheir

majortelephonelinesfailedin1973(BenoitandCzerwinski,1997).

Itshouldbenotedthattherecouldbeaconflictofinterestsbetweenimage

restorationstrategiesandtheneedtoavoidfuturelawsuits.Benoitalsoobservesthat

makingassertionsthatarelaterfoundouttobefalsewouldbecounterproductivein

anyimagerepairstrategy.

2.2.3CrisismanagementandlitigationIntheframeworksdescribedabove,itwillbeseenhowthereisalinkbetween

attributionmodelsandcrisismanagementstrategy,whichisinturnlinkedtoimage

restorationstrategy.Ithasalsobeennotedthatsomecrisismanagementstrategies,

particularlyimagerestorationstrategies,mayconflictwiththeneedtoavoidor

minimizelegalconsequences,whetherthesebecivillawsuitsorprosecutionsbrought

inrespectofoffencesagainstthestateorotherregulatorybodies.Unlikecivilsuits,

corporatefailuresorviolationswhichattractprosecutionbythestatecannotbe

writtenoffbycompensatoryaction,althoughcompensatoryactionandcontrition

couldbeheldasmitigatingfactors.

Thereislimitedliteratureontherelationshipbetweencrisismanagementand

litigationandthewaycorporationsaddressthesepotentiallyconflictingareas.In“A

Litigator’sLookatCrisisManagement”(2000),ShomperandSooydiscusstheneed

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forcarefulrecordsmanagementandcommunicationstrategieswhenfacedwiththe

riskoflitigation.Theyalsodiscusstheimplicationsoflegalprivilegeasitrelatesto

differentcategoriesofinformationandcommunications.Itisnotedthatall

communications,otherthanthosebetweenthecorporationandcounsel,maybe

takenintoconsiderationincourtandthismayimpactonwhatstatementsthe

corporationchoosestoissueandtowhom.Inher1997paper”liabilitymeansnever

beingabletosayyou’resorry”,LisaTylersays,“concernsaboutliabilityconstrain

corporateexecutivesfromapologizingforcrisesforwhichthecorporationitselfbears

someresponsibility”.

2.3InformationOrientationThefirstoftheseframeworksis“informationorientation”(IO).Thiswasan

organisationalframeworkdevisedbyMarchandetal(2000).Thetheorywasbuilt

afterMarchandetalsurveyed1009seniormanagersfrom169businessteams;their

samplecontainedmanagersfromnumerousdifferentcompanies,nationsand

industries.Theobjectivewastounderstandhowtheinteractionofpeopleand

information,throughtheuseoftechnology,canaffectbusinessperformance,and

theyfoundinformationorientationtobetheoptimum“metricofinformationuse”

(Ke,2011).

Themetricconsistsofthreedifferentinformationcapabilities:information

technologypractices(ITP),informationmanagementpractices(IMP),and

informationbehavioursandvalues(IBV).Thesethreecapabilitiescontainfifteen

differentcompetencies.

2.3.1Informationtechnologypractices(ITP)ITPreferstothemannerinwhichacompanymanagestheirITapplicationsand

infrastructureinsupportoftheirbusinessdecisions.Forexample,acompanymay

decidetoupgradetheirclientdatabasesystemtosomethingmorecomplex.Ifthe

companygrowsfast,thiscouldbeagooddecisionsinceitcouldadequatelysuita

growingclientlistandanincreaseinoperationsforyearstocome.Ifthecompany

doesnotexpand,itmayprovetobeunnecessary,expensiveanddifficultforstaffto

trainforanduse.Acompanycanimprovetheirinformationorientationbyusinga

technologyinfrastructurethatsuitstheircurrentandfutureneeds.

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2.3.2Informationmanagementpractices(IMP)IMPreferstothecapabilitiesthatmanageinformationsuccessfullyintermsof

informationcollection,processingandorganisation.Forexample,iftheinformationa

companycollectsispoorquality,duplicatedoroutofdate,errorsarelikelytobe

made.Repairingsucherrorsisacostlyandinefficientprocess.Acompanycan

increasetheirinformationorientationbyimprovingtheirmanagementof

information.

2.3.3Informationbehavioursandvalues(IBV)IBVdescribescapabilitiesthatencouragebehavioursandpromotevaluesinstafffor

successfulinformationuse.Forexample,staffcanbetrainedtounderstandthe

benefitsthateffectiveinformationmanagementhasontheircompany(efficiencyand

thereforefastergrowth)andtheirownwork-lives(makingtheirjobeasier).A

workforcethatunderstandsissuessurroundingprivacyandconfidentialityisless

likelytomakeerrorsthatcouldincurcostlylegalconsequences.

Informationorientationisa“people-centricviewofinformationuse”(Marchand&

Kettinger,n.d.).Itisconcernedwithhowpeoplecanadapttheirtechnologypractises,

managementpractisesandvaluestoincreaseperformance.Itsfocusonpeople,rather

thantechnology,meansitcanbeappliedtoanyorganisation,notjustIT-based

organisations.However,areviewofthecurrentliteraturesuggestsithasnotbeen

usedinthefieldofcrisismanagementbefore.

ItisnotmypurposetodetermineaquantitativemeasureofinformationuseforVW,

asthiswouldnotbepossiblewithoutaccesstoverifiableinformationaboutthe

informationorientationofthebusinessbefore,duringandafterthecrisis.Thisisnot

inthepublicdomain.However,asinformationorientationhelpsacompanyto

improvebusinessperformancebyexamininghowtheorganisationprocesses

informationacrossthethreecompetencies,itwillbeusefultolookforevidenceabout

certaindimensionsofinformationorientationaspartofmyanalysisoftheemissions

crisis.InlookingatVW,Iwillhavetodecidewhetherornotthecompanydisplayed

characteristicsofinformationorientationandhowtheseareprioritisedinitsstrategic

responsetothecrisis.

2.4SummaryThestatementsmadebyVWregardingtheemissionscrisiswillbeexaminedfor

evidenceofHeider’s(1958)internalandexternalattribution.Thedimensionsof

19

distinctiveness,consensusandconsistency,fromKelley’scovariationmodel(1967),

willbeusedtoexplorethecompany’sresponsesintermsofattribution.Weiner’s

“attribution-responsibility-actionmodel”(1995)isalsousefulbecauseitprovidesa

bridgebetweenstatementsaboutattributionandtheoutcomesfromit.Although

someoftheoutcomesareobviouslyimposedastheresultoflegalorregulatory

proceedings,thecompanysubsumesalloutcomesintoitscrisismanagementand

imagerestorationstrategies.Coombs’SCCTcanlinktwoofKelley’scovariation

componentstoacompany’scrisishistory,andBenoit’simagerestorationand

discoursetheory(1997)willbeusedtoanalysedifferentfacetsofthecompany’scrisis

managementandimagerestorationstrategies.

Statementsaboutinformationorientationwillthenbelookedfor,whichwillreveal

eitherdirectlyorbyimplicationthecompany’sself-evaluationofthewayituses

informationandtheprioritiesitidentifiesforthefuture.Giventhattheamountof

technicalinformationavailablefromthedocumentsinmydatasetissmall,thefocus

willbeontwoofthecompetenciesidentifiedbyMarchandetal(2001),namelythe

aspectsofinformationmanagementpracticesandinformationbehaviourandvalues.

ReferencestobothIMPandIBVwillprovidealinktobothstatementsofattribution

andstatementsregardingcrisismanagementandimagerestoration.

20

Chapter3:Researchmethodology3.1OntologyofsocialresearchTheresearchisconcernedwithVolkswagen’smanagementofinformationinthewake

oftheemissionscrisis:itconcernshowtheyusedinformationintheprocessof

attribution;howtheyhavehandledinformationtosuittheircorporateinterestsand

publicdutiesinthewakeofthecrisis;howtheyhavemanipulatedtheoutflowof

informationfromthecompanytorestoretheircompanyimage;andwhetherthese

actionsgiveanycluesastotheircompany’sinformationmanagementstrategyprior

tothecrisis.

Theseobjectivesconcernhumanbehaviour,andthisputsmystudyinthefieldof

socialresearch.Consequently,inunderstandingmychosenmethodology,weshould

remindourselvesoftwodebatesinsocialscientificresearch,andtheimplicationsof

researchinsuchafield.

3.1.1ObjectivismversussubjectivismThereisasignificantontologicaldebatebetweenobjectivistandsubjectivist

approachestosocialresearch.Objectivistsinsistthatrealityexistsindependentof

consciousness.Accordingtotheobjectivist,scientificresearchrequires“publicly

observable,replicablefacts”thatareavailable“onlyintheareaofovertbehaviour”

(Diesing,1966,p.1).Ontheotherhand,subjectivistswouldsaythatanysciencethat

ignoreshumanbehaviour’s“subjectivemeaningfulness”isnotasocialscience

(Diesing,1966,p.1).

Thispieceofresearch,giventheaboveobjectives’concernwithhumanbehaviour,is

clearlysubjectivist.Itaimstostresstheuniquenessofhumanbeings,andisnot

subjecttoany“impartialpublicverification”(Diesing,1966,p.1).

3.1.2PositivismversusinterpretivismThereisanothersignificantdiscussionwithinsocialresearchthatshouldbe

considered.Positivism,ontheonehand,istheapproachholdingthatknowledgecan

onlybeobtainedthroughsensoryexperience.Theseexperiences,orobservations,

lendthemselvestobeingquantifiedandstatisticallyanalysed.Fromapositivistview,

socialresearchisapproachednodifferentlytothenaturalsciences:explanationsare

madethroughexposingcausalrelationships.Thereisnohumaninvolvement,because

theobserverisindependentfromwhatisbeingobserved.Thisrendersthehuman

21

interestsoftheobservationirrelevant(Ramanathan,2009).Forpositivism,theaimof

researchistodescribeandexplainwhatisbeingobserved.Positivistscanmakestrong

predictionsbygeneralisingpatterns.However,criticswillsaythatthiscomesatthe

priceofdepthofunderstanding(Collins,2010).

Thecontrastingstanceofinterpretivismholdsthathumaninterestsshouldnotbe

ignored.Itismorethansimplyobserving,becauseinterpretivistsrejecttheideathat

meaningisindependentofconsciousness.Theydonotthinkitexistssolelyinthe

externalworld,butratherthemindoftheinterpreterisanecessaryfeatureof

meaningitself.Interpretivistsaimforunderstanding,ratherthansimplyexplanation.

Bothapproacheshaveadvantagesanddisadvantages.Interpretivistscanobtainwhat

theythinkisgreatdepthofunderstandingbecausetheirargumentsaccurately

describethebroadnessandrichnessofthephenomenaandbecausetheycan

“accuratelyaccountforarangeofbehavioursandbeliefs”(Lin,1998,p.163).However,

anycausalrelationshipsidentifiedtendtobeweak.

Thisresearchisinterpretivist,becausethedataisnot“value-free”.Rather,the

preconceptionsoftheresearcher“guidetheprocessofenquiry”(Walsham,1995).The

documentsarereadwiththeintentionoffindingmeaningsthatmaynotbeexplicit.

3.2TheHermeneuticsmethodThemethodologythatwillbeusedtoanalysethedataistheinterpretiveapproachof

“philosophicalhermeneutics”,definedasa“theoryoftheinterpretationofmeaning”

(Karppinen,2014).Thisdatasetlendsitselftohermeneuticinterpretationasamethod

ofanalysis,becauseoftherichnessofthematerial:itconsistsoflong,qualitative

accountsofbothfactandopinion.Inordertofindmeaningwithinthem,adetailed

andthoroughinterpretationofthetextisnecessary,“alternatingbetweenpartand

whole”ofthetext,andbringingabouta“progressivelydeeperunderstandingofboth”

(AlvessonandSkoldberg,2000,p.53).

Themainobjectiveofthehermeneuticmethodologyistogainanunderstandingof

whyVWmanagedtheirinformationinthemannerthattheydid.Aswithall

hermeneuticstudy,theinterpretationwillbeginwithmypre-understandingofthe

dataset,andtheprejudicesoftheresearcherwillformthe“foundationoftheresearch

process”(Karppinen,2014).Thestudywillreflect“thedialecticbetweenthe

understandingofthetextasawholeandtheinterpretationofitsparts”(Mingers&

Willcocks,2004).

22

Thetranscriptsoforalsubmissionsaredatasourcesthatmovefromthespeakerinto

thepublicdomainandfromoraltowrittenmediaand,assuch,acquirealifeand

purposebeyondtheirorigination.Onceinthepublicdomain,thetexttakesona

“fixed,finiteandexternalrepresentation”(Mingers&Willcocks,2004).Allthesources

inmydatasetaretextswheretheauthor(s)areaware,atthetimeoftheircreation

thattheywouldbegointothepublicdomain.Inthecaseofpressreleases,texthas

beengeneratedwiththeexpressintentionofbeingpubliclypublished.This

distanciation,evidencedbyallthesourcesinthedataset,meansthatthesequential

andpersonalisedmethodofhermeneuticanalysisisparticularlyappropriatein

helpingtogetbehindthepublicfaceofthetexttodiscovermeaningandpurpose.

HermeneuticanalysisinthefieldofISandISmanagementhasbeencarriedoutby

theUniversityofOulo(Karppinen,2014).Inthisstudy,open-endedresponsesfrom

participantswereanalysed.Ithinkthisisastrongindicatorthatsuchamethodology

canoperateinabroadlysimilarfield.Thereare,however,somecrucialdifferences

betweenKarppinen’sstudymodelandthisone.Intheformer,analyseswere

performedonopen-endedresponsestospecificquestions.Inthisstudy,noquestions

havebeenpositedandthereforethesearchforrelevantmeaningwillbeguidedonly

bytheanalysisoftextualcontent.Therewillnotbelookingforanswerstospecific

questions,althoughitisannecessaryandorganicpartoftheanalysisthatthe

researcherhasapointofviewwhichwillbecontinuallyrefinedaspartoftheanalytic

process.

Hermeneuticspermitsawiderangeofstrategiesforconductingactualtextual

analysis,whichcanincludediscourseanalysis,taxonomiesoropencodingusing

groundedtheory.Acontentanalysiscodingmethodhasbeenadoptedbasedon

criteriafromtheframeworksofinformationorientation(Marchandetal,2001),

attributionandcrisismanagementinordertoinvestigatetheinformationand

communicationstrategiesbeingdeployedbythecompanyinresponsetothe

emissionsviolationscrisis.Thisapproachisbothinductiveandsubjective,whichsuits

thehermeneuticalapproachinthatitinvolvestheresearcherasacomponentof

understanding.Hermeneuticshasbeensuccessfullyappliedinavarietyofsocial

researchcontextsand,giventhatthisinvestigationconcernsthefront-facing

communicationsofacorporateorganisation,thenitisappropriatetoincludethe

researcher’sresponseasavaliddimension.

23

3.3HermeneuticsinmyresearchAcontentanalysishasbeencarriedoutonselectedtextsproducedbyVW,usingpre-

knowledgebasedonareadingandanalysisofkeyframeworksinthefieldsof

attribution(Kelley1996,Coombs2006,Weiner1967),Benoit’scrisismanagementand

imagerestorationtheory(1997),andinformationorientation(Marchandetal,2001).

Aninitialreadingofallthetextrevealedtosomeaspectsofeachoftheframeworks

and,fromthis,anunderstandingofthedatasourceswasdevelopedthroughre-

readingandidentifyingkeypassagestoevidencetheframeworks.Inthisway,a

hermeneuticcycleofsequentialreadingswasbeingfollowed,withanalysisbeing

content-ledandinterpretedbytheresearcher.

Thefindingsgeneratedarebasedonmyinterpretationofeachofthetexts.However,

theresearcherhadnoinfluenceonthecontentofthetextsatthetimetheywere

generated.Thecontentanalysisischeckedandcorroboratedbyre-reading,butisnot

externallytriangulated.Becauseofthenatureofthistypeofanalysis,itisnotpossible

toverifyfactexternallyand,forthisreason,pointsoffacthavebeendeliberately

avoidedrelatingtothecircumstanceswithinthecompany,thetechnicaldebateand

thefindingsoftheJonesDayinternalinvestigation.Myresearchmethodis

appropriatetoanexaminationofhowthecompanywishedtobeseentorespondand

theissuestheychosetoaddressinthepublicdomain.

3.3.1HeuristiccodingThedatasetfortheresearchreportedinthisdissertationisnotquantitativebutitis

sometimesusefultoviewfromquantitativeperspectiveinformofstatistics.Inorder

togetmeaningfulanalysisoutofthedocuments,thecontentswerecoded.Codes

wereused“asaheuristic”(Saltana,2009):theyareusedasan“initialstep”(Saltana,

2009)thatactsasthefoundationforfurtheranalysis.Crucially,codingallowstolink

betweenideasthatareprevalentthroughoutthedataset.Itisimportantthatpatterns

canbeidentifiedsothathermeneuticanalysiscanbeusedtoextractmeaningfrom

thepatterns.

Techniquesfromattributionalcoding(Cassell&Symon,2016,p.228)areusedtoanalyse

andrecordattributionsinthedocumentsduringthehermeneuticcycle.Asimple

systemwasdevelopedsothat,onfurtherreading,referencesinthetextscouldbe

linkeddirectlytospecificframeworksandelementswithintheframeworks.Each

frameworkwasassignedaletter,andpartsofeachframeworkfurtherbrokendown

24

intonumbers.Instancesofcertainattributiveprocesses,crisismanagementstrategies

orinformationorientationcompetencieswerethenlabelledwiththecorresponding

code.ThissystemisshowninAppendixC.

3.3.2ThedatasetAppendixAisatableofthedifferentsourcesofqualitativedatathatwillbeanalysed.

Thedatasetincludesarangeofsourcesthathighlightdifferentperspectivesofthe

distributionofinformationregardingthediscoveryandinvestigationof‘defeat

devices’inVWcars.

Theitemshavebeenchosenfromthelargenumberofwrittentextsgeneratedbythe

companysincetheonsetoftheemission’scrisisinSeptember2015.Theuseof

historicaldocuments,ratherthangeneratingdataspecificallyforthisproject,gives

accesstoamuchwiderdatasetbutdoesrequiretheresearchertobeselective

(Cassell&Symon,2016,p.301).

Thedatacomesfromthreesources:

• Pressreleases,issuedbyVWanddesignedforconsumptionbythegeneral

public;

• Statementstoshareholdersandinvestors;

• TranscriptsofevidencepresentedtotheUKParliamentTransportSelect

Committee.

Havingarangeofsourcesiscrucialinordertogainanaccurateunderstandingofthe

wayinformationregardingthe‘defeatdevice’washandledatthecompany,andhow

informationwaspresentedtodifferentaudiences.

Theframeworksofcrisiscommunicationsmanagementemphasisetheimportanceof

organisationsidentifyingthesalientaudienceswhenpublishingpublicstatements.

Ontheotherhand,informationreleaseddirectlytotheUKHouseofCommons

TransportSelectcommitteecanreasonablybeexpectedtohaveadifferentagenda

andwillbothbemostlikelytobeconcernedwithcopingwiththecommittee’s

questions,whowillwishtoestablishfactsaboutwhathappenedandhowmuchwas

knownatseniormanagementlevelatVW("Role-TransportCommittee",2016).

25

3.3.3ChronologyofdataPleaserefertoAppendixBforatimelineofsignificantevents.Atthetimeofwriting,

theVWcaseisongoing,withnewinformationbeingreleasedintothepublicsphere

everyday.Itwasthereforenecessarytoestablishastartpointandendpointforthe

dataset.

Itbeginson18thSeptember2015,withapressreleaseadmittingthatthe

EnvironmentalProtectionAgencyhadfoundevidenceofemissionmanipulations.

TheoriginalintentionswerefortoendonthedaythattheJonesDayinvestigation’s

findingswerepublished,inlateApril2016.VWcommissionedthelawfirmJonesDay

toprovideanindependent,externalinvestigation.However,thepublicationofthe

findingswasdelayed.Inlightofthefactthat,atthetimeofwriting,theinvestigation

isstillongoing,Ihavechosentoendmydatasetatthistimenonetheless.

3.3.4DatareferencingInordertoidentifythesourceofquotationstakenfromthesourcedocuments,each

documentinthedatasetwasassignedanumberinchronologicalorder,from1to26

(seeAppendixA).Withineachdocument,eachoftheselectedstatementswas

numberedintheorderinofappearancewithinthetext.Hence,thereference[1:1]

referstothefirstquotedstatementfromthefirstdocumentinthelist.

3.4EthicalissuesTheInformationSchool’sResearchEthicsCommitteeconsideredtheprojectas

having“norisk”.Ihaveuseddatathatalreadyexists,bygatheringinformation

availableonpublicdatabases,suchastheUKParliamentwebsiteandVW’sown

website.Noneoftheinformationisconfidential.Ihavenotconductedanyinterviews

orsurveys,whichwouldrequireconsent.

26

Chapter4:ResearchFindings4.1IntroductionThepreviouschapteroffersanexplanationofhowthehermeneuticmethodcanbe

usedtoextracttruthandmeaningdatafromthedataset.Theheuristiccoding

mechanism(seeAppendixC)actsasausefultoolinsystematicallylabellingpartsof

datashowinginstancesofhighorlowlevelsofinformationorientation,attribution,

crisismanagement,andimagerestoration.Thesecodedinstanceswerethen

aggregatedintothreetablescorrespondingtoeachframework.Thetablesin

AppendixD,EandFshowdistributionsoftheseinstances.Thischapterpresentsthe

findingsdiscovereduponexaminationofthetables.

Thematerialanalysediseithertextwrittenbythecompanyforreleasetothemedia,

orstatementsfromcompanyrepresentativesinresponsetoquestionsfromregulators

ortheirrepresentatives.Acommonfeatureofvoluntarystatementsisthattheyare

nottriangulatedbyoutsideinvestigation.Thismakesthemthemostusefulin

showingwhattheyrevealaboutthatthecompany’spriorities,andhowitwishestobe

seen,ratherthanthefactsofthecase.However,itisimportanttorecognisethe

potentialtobemisledbysuchinformation.Volkswagen’sstatementsintendedfora

publicaudiencewillhavebeenmanipulatedforapublicaudience;theprioritiesthat

Volkswagenisshowntohave(implicitlyorexplicitly)intheirstatementsmaynot

necessarilybetheirtruepriorities.ThisdatasetcontainsonlyVolkswagen’sword.

Mostofthecontentofthedatasetconcentratesoncrisismanagementandimage

restorationstrategies.Thisisparticularlythefocusofallstatementsvolunteeredfor

publicconsumption,suchaspressreleases.Itisimportantformetoestablishthatthe

factsofhowandwhythesoftwaredeceitwasallowedarenotpartofthisdebate.They

wereeithernotknownatthepointthestatementswereissuedordeliberately

withheldbecauseoftheongoinginvestigation.

Forthegreaterpartthetextsseemtoavoidmakingattributions.Thereasonsforthis

arelikelytobetwofold:first,Volkswagenwasseekingtoavoidadmissionsofliability.

Second,theyneededtobecarefulnottoprejudgetheresultsoftheinvestigationby

JonesDay.Nevertheless,therearesomeattributionsmadeorimpliedinthe

Volkswagenmaterialthatgiveaninterestingperspectiveontheirapproachtothe

crisis.

27

TheinterimresultsoftheGroupAuditinvestigation("VolkswagenGroupVolkswagen

makinggoodprogresswithitsinvestigation,technicalsolutions,andGroup

realignment",2015)togetherwithevidencegiventotheUKTransportSelect

Committee,givesomebackgroundabouttheinformationorientationand

managementpracticesthatcontributedtothecrisis,andwaysinwhichtheycouldbe

improved.

Thelinkingfactoristhewaythecompanyseekstopreserveits“reputationalassets”

(Coombs,2006)throughout.

4.2AttributionThecompany’sfirstpublicresponsewastoissuestatementsrelatingtocrisis

managementanddamagelimitation.Nevertheless,theattributionsmadeorimplied

inthematerialanalysesclearlyunderlietheircrisisresponsestrategyandthisiswhy

attributionisexaminedfirst.Thetextsgivesomeinsightintotheattributionsmade

bythecompany.Inadditiontothis,someofthetextsindicateattributionswhichthe

companywouldliketobemade.Thesearenotnecessarilythesamething.Tosome

extenttheyareseekingtomanipulatetheexternalattributionsofdispositionwhich

areorwillbemadeaboutthescandalandthecompany’sresponsibilityforit.

InthedialoguewithTransportCommittee,someoftheattributionsaresuggestedby

thecommitteemembersandthenevaluatedbythecompanyrepresentatives.Thus,

PaulWillisreplies“Yes”tothequestion“DoyouthinkthatVolkswagenisanethical

company?”[20:48]andagain,whenasked“Doyouthinkitknowsthedifference

betweenrightandwrong?”

Fromsomeoftheearlieststatements,itissuggestedthedevelopmentand

implementationofdefeatsoftwareisattributedtoasmallnumberofindividualsora

groupratherthanthecompanyasacorporateentity.Itisassertedthat“responsible

partieswillbeidentifiedandheldaccountable”[7:15]andthereisreferencetothe

“misconductsandshortcomingsofindividuals”[18:10].Thisisaconsistenttheme

eitherexplicitlyorimplicitlythroughoutthematerialandwouldseemtoconstitute

partofVWscorporatedefence.

4.2.1InternalandexternalattributionsTherepeatedphrase“tworogueengineers”[8:23]becomesshorthandforattribution

toalimitednumberofindividualsandisborneoutasnineemployeesaresuspended.

28

Heider’stheory(1958)identifyingexternalandinternalattributionscanbeclearly

relatedtotheseattributionstatements.Theattributionsareinternalwhenconsidered

fromtheperspectiveofthecompanyasawhole.Forinstance,theattributionismade

to“agroupofengineers”[8:28].However,fortheindividualsconcerned(whomever

theyare),thecompanycultureitselfbecomesaformofexternalattribution.Itis

speculatedthatthemotivationwouldbeto“keepcostsdown”[20:40]orfindawayof

meetingthemorechallengingUSemissionsregulationswithinthetimeandbudget

constrainsplacedonthem,ratherthananinternaldispositionofthepersons

involved.

TheemphasisthatitisthesamegroupofengineerswhoworkedonsolutionsforEU

andUSandalsoonsoftwareupdates[20:37,20:38]seemstopresentafurtherexample

ofthecompanyattemptingtotetherresponsibilitytoindividualsratherthanthe

organisation.

TheformerCEOofVW,MartinWinterkorn,whoresignedattheendofSeptember

2015,istheonlyindividualnamedinthedocumentdataset.Thejuxtapositionofthe

statementthathewasinformedabouttheemissionscrisisandthenresignedsuggests

thatsomeresponsibilityisattributedtohim[21:15].

Someinternalattributionsdonotrelatetoindividualsbutarecorporate.Thereisstill

aninternalattributionofdisposition,ratherthanexternalsituationalfactorswhich

causedthecrisis.Thelackofqualityassuranceforthedevelopedsoftwareisadmitted

[20:13]andtherebyattributesresponsibilityforallowingdefeatdevicestogoforward.

Companyattitudessuchaspressuretomeetdeadlinesorkeepcostsdown[20:40]and

someacknowledged“deficiencies…inthereportingandmonitoringsystems”[18:18]

whichallowedthedeceittobedevelopedmayalsobeconsideredexternal,inthat

theyaresituationalfactorsaffectingthebehaviourofindividualemployees.

InthetextsoftheTransportSelectCommitteehearings,theVWrepresentativesdraw

onexternalattributionsrelatingtheeffectivenessofthetestingregimes.Forexample,

therearefrequentreferencestotheemissionsregime[inEU]being“outofdate”

[8:29]andthewiderregulationsrelatingtoairqualitywhich“needstochange”[sic]

[8:40].

Volkswagenrepeatedlyhighlightsthefactthatexistingtestingprotocolsdotestreal-

timedrivingconditions:theinevitablediscrepancybetweentestingsituationsand

29

“whathappensintherealworld”[8:39]isofferedasevidenceofthepresenttesting

regimefailure.

Costsarefurthermentionedasareasonforthedevelopmentofdefeatsoftware.These

maybeseenasanexternaloraninternalfactor,sincetheyrelatebothtocompany

cultureandtothewiderpressuresofbusinessandcompetition.

4.2.2Kelley’scovariationmodelManystatementsvalidateKelley’sco-variationprincipleandexaminethethree

aspectsofdistinctiveness,consistencyandconsensustohelpdetermineattribution.A

numberofstatementsemphasisethedistinctivenessoftheeventsofthescandalboth

intermsofitscontrarinesstothevalueshistoryofthecompanyanditsactions

history.Thescandalispresentedas“contrarytoVWcoreprinciples”[7:21].Theseare

describedinkeywordssuchas“solidity,reliability,credibility”[5:8].Thecompanysees

itselfas“ethical”[20:48]and“upstanding[20:31]”.Frequentreferencestothe“VW

brand”[5:8]actasremindersaboutenduringcoreprinciples,asdetailedabove,and

helptogivehistoricalcontext.

ThereisemphasisonVolkswagen’shistoryofpositiveenvironmentalactions

includingpreviousgreeninitiativesandreferencetothecompany“thathasinvested

inenvironmentalefforts”[7:24]andspent“billionsondevelopingpluginhybrid

vehicles”20:54].Unsurprisingly,thecompanyvolunteersnoinstancesoftheeventsof

theemissionsscandalbeingconsistentwithpreviousactions.Theassertionthatthis

is“notaone-timeactionbutaseriesoferrors”[18:31]ispresumedtorelateonlytothe

eventsleadinguptothediscoveryoftheemissionsscandal,nottopreviousinstances

ofcorporatewrongdoing.

Thereafewexamplesofconsensus,wherethecompanystatementsrefertosimilar

instancesinvolvingothercompanies,identifyingpracticeswhereitis“youareallowed

torecognisethetest”[20:46]and“comparablecasesinvolvingpassengervehicles”

[21:4].Inversely,PaulWillisdeniestotheUKTransportSelectCommitteethatheis

awareofcertainpracticesbeingprevalentintheindustry[8:31]andrefutesthatthe

wholeindustryisdoggedbysimilarproblems[20:30].Heseemstobeemployinga

reverseconsensusstrategy,bysuggestingthatifatypeofmalpracticeisunknownin

theindustry,itwouldbehighlyunlikelytobeoccurringVolkswageninthispoint.

30

4.2.3Weiner’sattributiontheoryandAttribution–Responsibility–ActionmodelWeiner’sattribution-responsibility-actionmodelproposesoutcomestopunish

attributedwrongdoing,orpreventitsrecurrence.Bothaspectscanbeseenfromthe

documentsstudied.

Punitiveactionsexactedonthecompanyfallintotwocategories:utilitarianand

retributive.Theutilitarianaspectschieflyrelatetoconsumersafeguardsand

restorativepractices.Theseincludefirstandforemostsoftwareandhardwarefixes,

paidforbythecompany,wherethe“vehicleswillbecorrected”[3:1]andbuy-backend

ofleasesschemesinUS[23:8].Asafurtherrestorativeoutcome,thecompanyhasalso

beenrequiredtopaytowardscostsofconsumerprotectiontrainingandenforcement

measures[23:17].

MeasuresagreedintheUSsettlementinclude$2.7billiontobepaidoverthreeyears

intoanenvironmentaltrust[23:15]and$2.0billionover10yearstodevelopzero

emissionsvehicles[23:16]maybeseenasbothrestorativeandretributive.Although

retributiveintheirfinancialscope,thesearealsorestorativemeasuresinthesense

thattheyaredesignedtomakepracticalcompensationfortheadverseimpactofthe

emissionsdeceitupontheenvironment.

Itisanticipatedthatfurtherretributivemeasuressuchasfines,legalcosts[18:29]and

potentialcriminalproceedingsagainstindividualsmayfollowbutthese,atthepoint

ofwriting,areunspecified.

Itisassumedthatspecificmeasuresdesignedtopreventrecurrencewillbeidentified

fromtheJonesDayreport.TheyarenotspecifiedintheUSsettlement,althoughthe

companyitselfoffersanumberofearlysuggestionstoimproveitspractices.Asthese

arevoluntarymeasures,itismoreappropriatetodiscussthemaspartofthe

company’scrisismanagementandimagerestorationstrategy.

Strategiestopreventrecurrencearediscussedindetailinthesectionbelowon

reductionofoffensivenessincrisismanagementandimagerestorationstrategies.

4.3CrisismanagementandimagerestorationInthecontextofCoombes’situationalcrisiscommunicationtheory(SCCT),theVW

emissionscrisismayfalleitherintothe“organisationalmisdeedsmanagement

misconduct”or“organisationalmisdeedsnoinjuries”categories.MuchofCoombes’

theoryrelatestothewaycrisismanagementreliesonconsistencyanddistinctiveness

31

andthisisarecurringthemethroughoutthedocuments.Addedtothis,thereis

evidenceofanumberofspecificimagerestorationstrategiesidentifiedbyBenoit.

Thesearechieflyintendedtoprotectthe“reputationalassets”(Coombs,2006)ofthe

company.

Theearlyresponsesfromthecompanyarealltargetedchieflytothepublicand

consumeraudience.Themostcommonresponsetargetedonreducingthe

offensivenessofwhathadhappened(seeFigure1).

4.3.1MortificationMoststatementsoverwhelminglyexpressmortification,intheformofvarious

apologies.Someoftheseapologiesarephrasedasifcomingfromtheindividual:“I

absolutelyapologisetoallofyouandtoourcustomers”[8:45].Othersinstances

involvethepersonificationofthecompany,particularlyinpressreleases:“VWdeeply

regretstheincidents”[21:2].

AnotherpersistentcaseofmortificationisVW’sapparentwillingnesstoaccept

responsibilityforthesituation.Emphasisisplacedonhowarepresentative

“volunteered”[7:1]tocomebeforetheUKTransportSelectCommittee,ratherthan

havingtobecoerced.“Fullresponsibility”[7:10]isiterated,asisthecompany’s

readinessto“accepttheconsequences”[7:12].

4.3.2ReductionofoffensivenessByfarthemostcommonresponsefromVWwastoreduceperceivedoffensivenessof

theiractionsbydownplayingthedamage.ThisisshownbythepiechartFig1.VW

maderepeatedreferencestohowthevehiclesstill“complywithlegalspecifications”

[5:15];emphasisingtherelativelysmalleffectoftheiractions[8:10];stressingthefact

thattheengines“remainsafeandlegaltodrive”[7:16];highlightingthelackofcostto

consumers[18:37]andconvenientrecallstrategy[8:54];andstatingthatthereisno

effectonbusinessanddealers.

Euphemisticlanguagewasemployedrepeatedlytoaccentuatetheperceptionthat

thereisnocrisisatall.Forinstance,VWtalkofhowtheengine“seems[tohave]

behaveddifferently”[8:20],usingtheartisticlanguagetoimplyboththatthe

irregularitieswereunexpected,andthattheyweresomewhatduetotheidiosyncratic

natureoftheengineratherthanhumandeed.Inadditiontothis,VWdeniedthat

32

thatthemechanismusedtoproducetheengineirregularitieswasadefeatdeviceat

all[20:59]andthatsuchlabellingisincorrect.

Inmanycases,thelanguageisdeliberatelyinformal,suggestingthattheirfocusison

keepingthepubliconside.Suchlanguagegivesoffthesuggestionthatthereisnot

actuallyalegalissuehereatall,whichisanotherexampleofdownplayingthe

damage.Thereareclearinstancesofresponsesbeingwordedtoavoidthesuggestion

oflegalresponsibility.Forexample,softwareissaidtobe“notadequatelydescribed”

[10:3],ratherthanhiddenormisrepresented.Defeatdevicesarereferredtoas

“irregularities”;perpetratorsarethoughttobe“afew”“rogueengineers”[8:23].Such

colloquialismsreplacecorrectterms,withthetoneinformalandsoftened.

AnothertechniqueVWemployedtoreducetheoffensivenesswastobolstertheir

positiveimage,makingtheproblemappearlesssignificantincomparison.VW

highlightedtheirethicalvaluessuchassayingthatthey“standforgoodandsecure

jobs”[5:19]andstatingthattheirbusinesshasnotbeennegativelyaffectedsince

customersare“returningtobuyvehicles”[20:45].Statementsbolsteringpositiveimage

arelikelytobetargetedattheshareholdersandworkforce,promotingavisionofthe

futurebeyondthecurrentcrisis,chieflyfocusedonthedevelopmentofnew

technologyandinvestmentintheworkforce.Thisisdoneinresponsetotheneedto

restorebusinessconfidenceaswellasconsumerconfidence.

4.3.3CorrectionCorrectionisalargepartofthecrisismanagementresponse(aswellaspartof

punitiveaction–seeAttribution).Itcanbedividedintoactionsdesignedtorestore

theoriginalconditions(inthiscase,legalconditionsinmakingthecarscompliant)

andactionsdesignedtopreventrecurrenceoftheincident.

Thereisemphasisonthewayinwhichcorrectiveactionswillbecarriedoutwith

respecttocustomers,whichisseenascrucialtotheimagerestorationprocess.Early

responsesspeakof“remedy”[7:26]andtheneedto“rebuild”[7:13]and“makethings

right”[7:20].Laterstatements,offeredtotheregulators,addressissuessuchas

compensatingtheVCA[20:75]andHMRCforcostsandlossoftaxrevenues[8:60].

Thereisalsodiscussionofnew,lowerbonusthresholdsfordealerswhomaystruggle

toachieveexistingsalestargetsbecauseofthescandal[8:58].

33

Forshareholdersandtheworkforceaudiences,correctivemeasurescentreon

organisationalchange,suchascompanyre-alignmentandbettersecurityprocesses

(e.g.“4-eyesprinciple”[20:11]).Detailsaresparse,probablybecausetheywill

ultimatelydependonspecificandasyetunknownrecommendationsfromtheJones

Dayinvestigation.

Therearefewstatementstothepublicaboutpreventingrecurrence.Responsestothe

regulatorsexpressintentionto“learntherightlessons”,makesureit“cannothappen

again”[7:18].Findingout“whatwentwrong”andavoidingfuture“misconduct”[11:5]

arepartoftheseresponses,buttheimpliedacceptanceofadegreeofwrongdoingis

evidentlynotsomethingVWwishtopromotetothepublicaudience.

Finally,statementsareusedtoexpressdifferentiationtoshowthatthisbehaviouris

exceptionalandnotcharacteristicofVWasacompany.VWstatethatthey“donot

tolerateanykindofviolationoflaws”[2:6]andthattheincidenthasgone“against

everythingtheGroupanditspeoplestandfor”[5:2].

4.3.4DifferentiationPositiveadjectivesusedtodescribecompanyethos“ethical”[20:48],“upstanding”

[20:31].HistoricalcontextemphasisestheVWbrandandvaluessuchas“solidity,

reliability,credibility”[5:8],“sustainability,responsibility”[5:20].Theiruseoflanguage

emphasisescontinuity.Forinstance,“continuetostandforgoodandsecurejobs”[5:5]

isalargelyunsubstantiatedassertion,althoughthereisreferenceto“billions”spent

ondevelopinghybridvehicles[20:54].Thesestatementsmayhaverelevancetoall

audiences,althoughparticularlythepublicandshareholders.

34

Figure1:apiecharttoshowthedifferentcrisismanagementstrategiesusedbyVW

Figure1showsthattheC3a“reductionofoffensiveness”strategywasusedtwiceas

muchasanyother.

19

22

63

8

15

31

12

23

CrisismanagementandimagerestoraXonstrategies

C1Mor^ficaôn

C2Evasionofresponsibility

C3aReducônofoffensiveness:downplaydamageC3bReducônofoffensiveness:euphemis^clanguageC3cReducônofoffensiveness:bolsteringposi^veimageC4aCorrecôn:restoreoriginalcondiônsC4bCorrecôn:preventrecurrence

35

Figure2:agraphtoshowthecrisismanagementstrategiesemployedineachdocument.ThecodesonthelegendontherightcorrespondtocrisisstrategieslistedinAppendixC.RefertoAppendixAfordocumenttype.

ThetwolargestspikesinFigure2correspondtothetwolargestdocuments:the

evidencesessionsgiventotheUKParliamentTransportSelectCommittee.Here,a

rangeofdifferenttechniquesisused,butveryfewinstancesofC3c“bolstering

positiveimage”.Intheotherdocuments,whichareshorter,C3a“bolsteringpublic

image”and“downplayingdamage”areusedalmostexclusively.

4.4InformationorientationChangestoIOareimpliedinmuchofwhatVWsaysinresponsetothecrisis.From

this,inferencesmaybemadeaboutthenatureofIOpriortotheemissionsscandal.

However,asthiscannotbecorroborated,thisresearchdoesnotattempttoevaluate

thelevelsofIObeforeoraftertheemissionscrisis.Instead,thescopeofthisreportis

toexaminethelinksevidencedinthecompany’sresponsebetweencrisis

management(andimagerestoration)andIO,byidentifyingtheperceivedissuesand

theproposedsolutions.

IhavelookedatIOundertwoofthecapabilitiesproposedbyMarchand(etal,2000):

informationmanagementpractices(IMP),andinformationbehaviourandvalues

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 1011121314151617181920212223242526

Crisism

anagmen

tstatemen

ts

Documentnumber(chronological)

CrisismanagmentstrategiesemployedoverXme

C5

C4b

C4a

C3c

C3b

C3a

C2

C1

36

(IBV).Thesehavethenbeenbrokendown,whereappropriate,todemonstrate

individualcompetencies.

4.4.1Informationmanagementpractises

4.4.1.1OrganisationalchangesThecompany’sinformationmanagementpracticeswereunderscrutiny,both

internallyandexternally,throughoutthecrisis.Thereisafocusontheneedtomake

organisationalchangestomanagementstructureandbrands.Oneofthecore

elementsoftheirresponseistolookat“newstructuresintheVWGroup”[13:6],andto

“fundamentallyrealignVW”with“leanerstructures”[11:6].Byimplication,the

managementstructureswerepreviouslytoocentralisedandshouldnowbe“managed

inamoredecentralizedfashion”[18:43]andtoocomplicated,requiringareductionin

“managerialcomplexity”[18:47].

EvidencefromtheUKManagingDirector,PaulWillis,highlightsstructural

weaknessesatboardlevel.Forinstance,Willisstatesthathehasnotechnicalremit,

sitsonnocontinentalorglobalexecutiveboardsandhaslimitedfacetoface

communicationwithhisGermansuperior.

“No[Idonotsitontheinternational,theEuropeanboardortheworldboard]”[20:79]

“IsitontheUKboard[…]communicatewith[…]thesupervisoryboardinGermany”

[20:80]

Thesestatementscouldsuggestadegreeofisolationwithoutautonomy.VWsuggest

thatthebenefitsofintroducingmoredevolvedmanagementstructurewouldbeto

makethecompany“moreagile”[18:45]andmakeiteasierto“preventbreachesof

regulations”[18:24].Thereareseveralreferencestogiving“moreindependencefor

brands”[13:8,18:44],althoughitisnoticeablethattheproposalisstilltoallowthe

boardto“focuson[…]cross-brandstrategies”[13:9].Theimplicationisthattheboard

willconcentrateoncommercialstrategies,withoperationalandtechnicalmatters

devolvedtothebrand.

4.4.1.2ImprovementsinprocessingcompetenciesAswellasorganisationalchanges,therearespecificreferencestoproposed

improvementsinprocessingcompetencies.Thereisadeclaredneed“investigate[…]

processes,reportingandmonitoringsystems”[18:3]andVWacknowledgethatthere

37

are“weaknessesinsomeprocesses”[18:8].Theprocessingissuescanbebrokendown

furtherintosystemsandresponsibilities.

Systemsthatarechallengedrelatespecificallyto“testandcertificationprocesses”

[18.11]andqualityassurance,ofwhich“therewasnonebefore”[20:13].

Withregardtoresponsibilitieswithinprocessing,itisacknowledgedthat

“responsibilitieswerenotsufficientlyclear”[18:19].Theseissuesareaddressedby

proposingthe“”4-eyes”principleinsoftwaredevelopment”[20:11]whichshouldhelp

by“streamliningdecision-makingprocesses”[18:46]andalsoacheckonquality

assurance.

4.4.2InformationbehaviourandvaluesThecentralthrustofVW’sresponseintermsofIOrelatestotheinformation

behaviourandvaluesdimension.ThecommentsmadeexhibitsixoftheIO

competencies:integrity,formality,control,transparency,sharingandproactiveness

(Marchand,Kettinger,&Rollins,2000)

4.4.2.1IntegrityIntegrityrelatesdirectlytocrisismanagementstrategiestoreduceoffensivenessoftheaction

bybolsteringthecompany’spositiveimage.VWalsouseittodifferentiatethecurrent

situationfromVW’spreviousbehaviourandattitude.Thelatteraspectiscrucialinevaluating

attribution,withVWrelyingheavilyonpromotingthedistinctivenessofthepresentcasefrom

thecompany’strackrecordandcorevalues.

Thereisanassumptionthatthecompany’scorevaluesaresoundandremainunchanged.This

isanimportantpartoftheirdefence,astheysaythat“commitmentandsocialresponsibility

[…]mustbemaintained”[13:12].Nevertheless,itissuggestedthatthereneedstobea

“realignmentoftheGroup’scultureandmanagementbehaviour”.

Integrityisalsorelevanttohowmistakesareviewed.Interestingly,somebreachesof

rulesseemedtobetolerated,butmistakeswerenot.VWarguethatthereisaneed

allowformistakes“asanopportunitytolearn”[18:54]–inotherwords,aspartofthe

creativeprocess.

4.4.2.2FormalityFormalityistobeincreasedbyhaving“sharplydefinedandbindingpowersand

responsibilities”[18:17]andprocesses“developedmorestrictlyinaccordancewiththe4-eyes

38

principle”[18:14].AccordingtoVW,“Foureyesmeansnobodycandoanythingontheirown”

[20:22].

4.4.2.3ControlThisalsodemonstratesincreasedlevelofcontroloverindividualsandprocedures.Itis

suggestedthatthiswillbeextendedfurtheroncethefindingsfromtheinternalinvestigation

arepublished,when“internalcompliancestructures”willbeputinplace“toaddressthose

findings”[19:2].Itisalsosuggestedthatthereisalsoenhancedcontrolfromexternal

agenciesas“publicationoffigures[…]mustmeetregulatorystandards”[8:65].

4.4.2.4TransparencyandsharingThesetwoarecloselyinterlinked.Referencestoacommitmentto“transparencyand

openness”[8:3]and“fulltransparency”[10:6]aremultiplethroughoutthedocumentdataset.

Thereisfurtherevidenceofthis,suchas”

“Obligationtobecometransparent,withtestingintherealworld”[20:35]

Thisintroducestheideaofgenuineopenness,withmorecompanyinformation

(particularlytestresults)putintopublicdomain,andnotlimitedtostatutory

requirements.Thisisreiteratedthroughoutthedataset,throughphrasessuchas“We

needtransparencyandopenness”[8:32]“Commitmenttofulltransparency”[10:6].

Referencestotransparencyalsopermeateresponsesrelatingtotheinvestigationitself,

althoughthecompanylineismoreguarded.Forexample:

“Wehavebeenastransparentaswecan”[20:64]

“Ifinditimplausiblethatifyouemployedindependentlawyersyouwouldeditthereport”[20:38]

Thesephrasesimplyadefensivetonewhentalkingabouttheinvestigationreportandthe

possibilitythatthecontentsmightbeeditedbeforegeneralpublication.

Therearealsoissuesrelatingtothesharingofinformationfromtheinvestigation

reportmaybealsoseentounderminethedeclaredresolveto“informthepublic”[4:7],

since“disclosure…wouldprejudicetherestoftheinvestigation”[22:2].

Thereismoreconfidenceinproposingmeasurestoimproveinformationsharing

withinthecompany,including“opendiscussions,closerco-operation”[18:53]and“co-

operationbetweenBoard…andtheWorksCouncil”[16:5].This“New,opencultureofco-

operation”[11:7]isenvisagedasextendingtoallstakeholdersandparticularlytheshareholders.

Therearemultiplereferencesaboutopennessandtransparencywithregardtoshareholders,

39

whoareobviouslyacriticaltargetforcrisismanagementanddamagelimitationstrategies.

Thus,thereisareaffirmationthat“VWwillreporttotheshareholders”[4:6],andact“Seeking

shareddecisionsintheinterestofthecompany,shareholdersandemployees”[16:6].

Crucially,VWintendstosharemorewithoutsideregulators,withexternal

verificationofemissionstests[18:26]

4.4.2.5ProactivenessThereisevidenceinthetextsofthecompany’sproactivenesscapabilitywithin

informationorientation.Unsurprisingly,thereisaresolveto“drawnupanactionplan”

[5:10],buttheproactiveresponsegoesfurtherthanaddressingtheimmediateaftermathofthe

crisis.Thereisafocusonlooking“beyondthecurrentsituationandcreatetheconditionsfor

VW’s[…]furtherdevelopment”[13:1],whichisfocusedinthe“TOGETHER-Strategy2025”[23:6]

Thethinkingbehindthisisbothstrategicwith“newalignment”which“affectsthinkingand

[…]strategicgoals”[18:42]andeconomic,therehavingbeenanavowedneedto“make

decisionsthatfactorineconomicsjustasmuchasemployment”[16:1].

Thereistheaddedimplicationthatthis“Clearmission”[18:58]willhaveapositiveeffecton

thecompany’sabilitytorecoverafterthecrisisandbecome“betterandstronger”[18:59].

Therearehintsofchangemanagementstrategiestobeemployed,with“renewalof

personnel”[18:49]atthetop,“co-operationbetweenBoardofManagementandWorks

Council”[16:5]and,again,inthelaunchof“Strategy2015”[23:6].

4.5SummaryFromthechosendataset,thereisaclearfocusonreducingtheoffensivenessofthe

actionbydownplayingthenegativeeffectsandstatementsrelatingtothisstrategy

significantlyoutnumberthoseonotherstrategies.

Thesecondmostprevalentstrategyreferredtointhedataisthatoncorrectionby

restoringoriginalcondition.Takenwithstatementtodownplaythedamage,there

seemstobeaconsensusthatthecompany’sprimaryfocuswastopresentasituation

whereeverythingis,orsoontobe,fineandsatisfactory.

Itisdifficult,withouthavingaccesstoeverydocumentorstatementeverissued,to

determineanydefiniteshiftsinthecompanyresponseovertime.However,itwould

seemthatthereisaslightmovementincrisismanagementemphasisfrom

mortificationintheearlystagestopreventionofrecurrencelateron.

40

Overall,amulti-facetedresponseismaintainedthroughout,althoughthereissome

differentiationbyaudience.Statementsdirectedtothepublicorconsumeraudience

areheavilyfocusedonmortification,downplayingthedamageandcorrectionto

restoreoriginalconditions.Statementsdirectedtotheregulatorsandshareholders

aremoreconcernedwithevasionofresponsibility,bolsteringthepositiveimageof

thecompanyandcorrectiontopreventrecurrence.Statementsaimedat

differentiatingthemistakesoftheemissionscrisisfromVW’spreviousbehavioursare

focusedstronglyontheregulatorsandemployees.

41

Chapter5:DiscussionofFindings5.1AttributionHeider’stheory(1958)describinginternalandexternalattributionwasusefulin

clarifyingstatementsrelatingtobothcorporateandindividualresponsibility.Itwas

interestingtodiscoverthat,whilstthecorporateculturecouldbeseenasanexternal

attributionfromthepointofviewofanindividualemployee,externalattributions

couldbemadeaboutthecorporatebodyitselfwasunderpressurefromoutside

agenciessuchasthetighteremissionscontrolsintheUSandscopeforvariation

withintheresultssubmittedunderdifferenttestingregimes.

Attributionsregardingtheoriginsofthesoftwaredeceitareforthemostpartinternal:

theyareeitherattributionstoindividualemployeesorattributionsofdispositionwith

respecttothecompanyitself.Oneofthemainthrustsofthecrisismanagement

strategyistoacknowledgeresponsibilityandreflectthispositivelyincontritionand

mortificationinthepublicsphere.

ThetreatmentofattributionbyVWisclearlyverycarefullyworded.Althoughthe

companyacknowledgesanelementofoverallresponsibility,thestatementsare

guardedwithregardtoattributionsaboutspecificareaswheretheycouldbefound

liable.Theattributionsthattheydomake(orwishthepublictomake)informtheir

useofcrisismanagementandimagerestorationstrategies.

ItisnotthepurposeofthisresearchtoevaluatethelegalresponsetoVW’semissions

deceit.Itwouldappear,frommanyofthestatementsrelatingtoattribution,thatthe

companyisbeingcarefultoavoidcommentsthatcouldtriggeranyfurtherlegal

liability.ThereisacarefuldistancebetweenreferencetotheJonesDayinternal

investigation,whose“findings[…]mustholdupincourt”[18:30]and“We[…]takefull

responsibilityforouractions”[7:10].

ApplyingKelley’sco-variationmodel(1967),thereareanumberofinstancesof

distinctivenessbeingusedtoreducetheattributionofdispositionwithrespecttothe

company.VWmakessimilarpointsofdifferentiationaspartofitscrisismanagement

andimagerestorationstrategy,tomitigatethenegativeeffectsofthescandalonits

corporateimage.

42

Itisnotindoubtthattheeventsoftheemissionsscandalwillbeattributedtothe

companytosomeextent,andthattherewillbebothpunitiveandutilitarianjudicial

consequences.ThesettlementagreementoftheUSFederalRegulators,Private

Plaintiffsand44USStates[26]requiresVWtomakelargefinancialcontributionsto

environmentalprotectiveandresearchinitiatives.Thisisbothpunitiveand

utilitarian,followingWeiner’smodel(1995),beingsimultaneouslyaretributiveanda

restorativemeasure.Asthelatter,itprovidesanelementofcorrection,whichthe

companyisabletoincludeaspartofitscrisismanagementstrategy,andaroute

towardseventualimagerestoration.

5.2CrisismanagementandimagerestorationVW’spublicacceptanceofresponsibilityandrepeatedapologiesforthesoftware

deceitgivesitanopportunitytodemonstratesomeofthepositivecorporatevalues

whichitverypubliclyclaimstoespouse.Themannerinwhichthecrisisismanaged

thereforebecomesanopportunityinitselftopromoteabettercompanyimage.This

isdevelopedfurtherinthemanyassertionsaboutthecompany’shistoryas“an

upstandingcompany”[20:31]“thathasinvestedinenvironmentalefforts…”[7:24].

Thesestatementsservetominimisetheeffectsofthecrisisbydifferentiatingitfrom

previousactions.

Thecoreofthecompany’scrisismanagementstrategyrestsinreducingthe

offensivenessoftheactionsthattookplace.Thisisconsistentlyaddressedby

downplayingthedamagecausedandstatementsrelatingtothisstrategysignificantly

outnumberthoseonallotherstrategies.Thisisfurtherenhancedbytheuseof

euphemisticlanguagetodescribethedetailsoftheoffence.Theuseofexamplesto

bolsterthepositiveimageofthecompany,withastrongforward-lookingfocuson

jobsandinvestments,givescontexttotheoffenceandservestoreduceitsoverall

significance.

Thesecondmostprevalentcrisismanagementandimagerestorationstrategyreferred

tointhedataisthatofcorrectionbyrestoringoriginalcondition.Takenwith

statementstodownplaythedamage,thereseemstobeaconsensusthatthe

company’sprimaryfocuswastopresentasituationwhereeverythingis,orsoontobe,

“alright”.Althoughtechnicalfixesontheaffectedvehiclesareobviouslythemost

immediatepriority,alargepartoftheemphasisoncorrectionrelatestorestoring

43

consumer(andinvestor)trustandthelatterisarguablythecompany’shighest

priorityovertime.

Thereisadeclaredintentiontopreventrecurrence,to“learntherightlessonsand

avoidsuchmisconductinfuture”[11:5].Theresolvetoachievethisisclearlypartof

thecompany’srehabilitationstrategyasfarasconsumersandinvestorsare

concerned.Muchofthedetailastohowthisistobeachievedrelatestoinformation

orientationandisdiscussedinthenextsection.

Itisdifficult,withouthavingaccesstoeverydocumentorstatementeverissued,to

determineanydefiniteshiftsinthecompanyresponseovertime,howeveritwould

seemthatthereisaslightmovementincrisismanagementemphasisfrom

mortificationintheearlystagestopreventionofrecurrencelateron.

Figure2showsapreferencefordownplayingdamageandslighttendencytobolster

positiveimageinthepressreleasesandannouncementstoshareholders.Theseare

theshortestdocuments.ThismightsuggestthatVWfavouredthesestrategieswhere

verbositywasnotsuitable.Onecouldthinkthatthisisbecausetheyperceivethemas

themostgenerallyeffectivestrategies.ButuponfurtherexaminationofFigure2,one

canseethatthe“bolsteringpositiveimage”strategywasnotemployedatallin

document8,andnotemployedmuchindocument20.ThesewerethetwoTransport

SelectCommitteeevidencesessions.Ifthiswasagenerallyeffectivestrategy,then

whywasitbarelyemployedduringthesetimes?Onereasonmaybebecausethey

werecateringforadifferentaudience:thistime,itwasapanelofregulatorsrather

thanthegeneralpublic(containingpotentialcustomers)orshareholders(already

investedinthecompany),whodonothaveanecessaryinterestinVWbeing

successful.

Overall,amulti-facetedresponseismaintainedthroughout,althoughthereissome

differentiationbyaudience.Statementsdirectedtothepublic/consumeraudienceare

heavilyfocusedonmortification,downplayingthedamageandcorrectiontorestore

originalconditions.Statementsdirectedtotheregulatorsandshareholdersaremore

concernedwithevasionofresponsibility,bolsteringthepositiveimageofthe

companyandcorrectiontopreventrecurrence.Statementsaimedatdifferentiating

themistakesoftheemissionscrisisfromVW’spreviousbehavioursarefocused

stronglyontheregulatorsandemployees.

44

5.3InformationorientationStatementsmadebyVWrepresentativestotheUKTransportCommittee,andalsoto

shareholders,areparticularlyrevealingaboutaspectsofinformationorientationin

thecompany.Whilstitisnotpossible,withinthescopeofthisproject,toquantify

levelsofinformationorientationinthecompanyeitherbeforethebeginningofthe

crisisorafterwards,thereismuchvaluableinsighttobegainedaboutperceivedissues

relatingtoinformationorientationandthestatusthiswillbegiveninthefuture,asa

resultoftheemissionscrisis.

Thecompanyacknowledgesanumberofweaknessesininformationorientationthat,

onthefaceofit,contradicttherobuststatementsmadeinotherpartsofthedataset

aboutVWvaluesandrelationshiphistorywithregardtoconsumersandthe

environment.

Manyoftheattributionsmadeaboutthecompany’sresponsibility,eithercorporately

orindividually,fortheemissionsdeceitcanbelinkeddirectlytostatementsabout

changesthatithasidentifiedasneededwithininformationorientation.

Itcanbeseenthat“DeficienciesinsomeareasofVW’sITinfrastructure”[18:21]links

tomultiplereferencestochangesincompanyorganisationthroughrestructuring,

decentralisationandrealignment.Similarly,thelackofinformationsharing(“Ifindit

implausiblethatseniorpeopleinthecompanywouldhaveknown”[8:62])leadsto

“ChangesarenecessaryinhowWVcommunicates”[13:12].Thestatementthatitwas

“clearthatsomeoftheworkprocessesneededtobeimproved”[20:44]isan

acknowledgementofinternalcorporateresponsibilityandleadsdirectlytoremarks

about“streamliningdecision-makingprocesses”[18:46]andtheintroductionofthe“

“four-eye”principleinsoftwaredevelopment”[20:11]

Giventhenatureofthedocumentsinthedataset,itisunderstandablethatthereis

notagreatdealoftechnicaldetailaboutchangestotheorganisationalandprocessing

competencieswithininformationorientation.Itis,however,possibletodetectaclear

emphasisoverallonchangestotheinformationbehaviourandvaluescapability,

particularlyinthecapabilitiesoftransparencyandsharing.Thisneatlycorroborates

thecompany’simplieddefencethattheemissionsdeceitwasperpetratedbyasmall

numberofindividualswithinonedepartmentandwithouttheknowledgeofsenior

management.

45

5.4SummaryTheprocessofcorporaterehabilitationafteracrisisisinitiatedinthepublicsphereby

pressreleasesandreflectedineverystatementpubliclymade,includingstatementsto

stakeholdersandevidencetoregulatorybodies.Thecompany’spublicattributions

regardingcausationofthecrisismustnecessarilybeconsistentwiththestrategiesit

usestomanagethecriticalsituationandtorestorecorporateimage.Inthecaseof

VW,issuesrelatingtodifferentaspectsofinformationorientationarepresentedas

partofattribution(causation)andalsopartofcrisismanagementandimage

restoration(consequence).Withoutspecificdetailofinformationmanagement

practicesorinformationbehaviourandvaluesinthecompanypriortothecrisis,or

subsequently,itisnotpossibletoquantifylevels,orchanges,ininformation

orientation;neverthelessitisclearthatthecompanyhasidentifiedininformation

orientationboththerootsofitsproblem.Theacknowledgementoftheproblemand

thedeclaredintentiontoaddressthoseissuesisacommonthreadinthecompany’s

publicstatements.Itcannotbedeterminedwhethertheviewsinternallywithinthe

companyalignaccordingly.

46

Chapter6:Conclusion

Thisstudyhasdemonstratedthattheoreticalframeworksofattribution,crisis

managementandimagerestorationandinformationorientationhavedirectrelevance

toVW’spublicresponsetothecrisis.Theselectedframeworkswerereflectedina

highproportionofstatementsmadebythecompanytodifferentaudiencesandat

differentstagesofthecrisis.

Byclassifyingthestatementsmadeaccordingtodifferentframeworks,itwaspossible

toidentifyattributionsmade,orimplied,byVWandgaininsightintothecompany’s

attitudetowardsitsownresponsibilitiesandliabilities.Thisinturnwasreflectedina

numberofthestrategiesemployedtomanagethecrisisandrestorecorporateimage.

Theuseofaclassificationsystemderivedfromframeworksofcrisismanagementand

imagerestorationfacilitatedtheidentificationofspecificstrategiesemployedbythe

companyandtheprioritiesarisingfromthosestrategies.

Aswellastheinter-relationbetweenattributionsandcrisismanagementstrategies,it

wasclearfromthestudyoftheseaspectsthatbothwerelinkedtoinformation

orientation,asapre-existingconditionbeforethecrisisandasapotentialmeansof

remedyafterwards.Anumberofattributionsweremadebyconcerninginformation

orientationwhichimpliedpre-existingproblemsinthisareaenabledtheemissions

deceittobeperpetratedandcontributedtothecrisisoverall.Manyofthecompany

statementsexplicitlyrefertoitsresolutiontomakechangestoandimprove

informationorientation,anditwasclearlyimportanttodemonstratethisintentionto

thepublicinordertominimisenegativeoutcomesbymakingcorrectionsandalsoto

bolsterconsumerandinvestorconfidenceforthefuture.

Althoughtheanalysisofcrisismanagementandimagerestorationstrategiesforms

thecentrepieceofthisresearchproject,informationorientationprovidesabridgeto

thefutureforthecompanyandfortheresearcher,bymakingalinkfromcausal

attributionstorestorativeandpreventativereparations.Whilstthepresentstudymay

provideanotherdimensioninthebodyofexistingresearchintocorporateattitudes

andcrisismanagementfollowingcriticalepisodessuchastheFukoshimanuclear

disasterandtheDeepwateroilspill,itwouldbeusefulforfutureresearchprojectsto

makefurtherinvestigationintochangesinthelevelofinformationorientationbefore

47

andafterthese,andsimilar,crises.Inthisway,itcouldbeseentowhatdegreethe

actuallevelofinformationorientationaccordedwithwhatwasperceivedorpublicly

acknowledged.

ThestudywasalsorestrictedbecauseoftheexclusiveuseofdatafromVWsources.

ThesesourceshavetheadvantageofrevealingtheprioritiesVWwouldlikeits

audiencetobelievethatithas.However,thereisastrongpossibilitythatthese

explicitorimplicitprioritiesareredherrings.Thereisnoguaranteethatthe

statementsVWgivearereflectiveoftheorganisationsactualbehavioursorambitions.

DeWolf&Mejri(2013)analysednewspapers,magazines,annualreportsandblogsin

theirresearchintotheDeepwaterHorizonoilspill.Byaddingthesesourcestothe

dataset,itwouldmeantheinferencescouldbetriangulatedandtheiraccuracy

verified.However,thesheervolumeofsuchdataavailableaboutacrisisthat,atthe

timeofwriting,isstilldeveloping,addsfurthercomplications,solutionstowhichare

beyondthecapabilitiesofthisdissertation.1

1ItshouldbenotedthattheobviousremedytothisissuewouldbetoexaminethependingJonesDayinvestigation.Theoriginalaimwastoexaminethereport’sinterimresults,duetobepublishedinApril2016.However,theresultsweredelayedatshortnotice.

48

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AppendixA:Datalist

DocNo.

Date Type Title

1 20.9.15 Pressrelease StatementofProf.Dr.MartinWinterkorn,CEOofVolkswagenAG

2 22.9.15 Pressrelease Volkswagenisworkingatfullspeedtoclarifyirregularitiesconcerningaparticularsoftwareusedindieselengines.

3 29.9.15 Pressrelease VolkswagenAGannouncesactionplantoupdatedieselvehicleswithEA189EU5engines

4 1.10.15 Pressrelease StatementfromtheExecutiveCommitteeofVolkswagenAG’sSupervisoryBoardfollowingitsmeetingonSeptember30,2015

5 6.10.15 Pressrelease MatthiasMuller:“Wewillovercomethiscrisis”

6 7.10.15 Pressrelease FrankWitterappointedVolkswagenGroupBoardMemberforFinance

7 8.10.15 Transcript TestimonyofMichaelHorn,PresidentandCEOofVolkswagenGroupofAmerica,Inc,beforetheHouseCommitteeonEnergyandCommerceSubcommitteeonOversightandInvestigations

8 12.10.15 Transcript UKTransportCommitteeoralevidence:VolkswagenGroupemissionsviolations,HC495

9 15.10.15 Pressrelease FederalMotorTransportAuthority(KBA)decidesonrecallforaffectedEA189dieselvehicles

10 21.10.15 Letter FromPaulWillis,ManagingDirector,VWGroupUK,toLouiseEllman,ChairofTransportCommittee

11 21.10.15 Pressrelease PrimeMinisterStephanWeilvisitsVolkswagen’smainplantinWolfsburg

12 22.10.15 Pressrelease Volkswagenconfirms:EA288enginesdesignedforEU5andEU6arenotaffected

13 28.10.15 Pressrelease MatthiasMullerunveilsnextstepsfortheVolkswagenGroup

14 29.10.15 Pressrelease VolkswagenreaffirmsinvestmentsinChattanooga

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15 2.11.15 Pressrelease StatementontheannouncementbytheUnitedStatesEnvironmentalprotectionAgency(EPA)

16 9.11.15 Pressrelease GroupBoardofManagementandWorksCouncilagreeonjointsteps

17 25.11.15 Pressrelease TechnicalmeasuresfortheEA189dieselenginesaffectedpresentedtotheGermanFederalMotorTransportAgency

18 10.12.15 Pressrelease Volkswagenmakinggoodprogresswithitsinvestigation,technicalsolutionsandGrouprealignment

19 21.12.15 Letter FromPaulWillis,ManagingDirector,VWGroupUK,toLouiseEllman,ChairofTransportCommittee

20 25.1.16 Transcript UKTransportCommitteeoralevidence:VolkswagenGroupemissionsviolations,HC495

21 2.3.16 Pressrelease Volkswagenconsidersshareholderlawsuittobewithoutmerit

22 22.4.16 Pressrelease StatementbyVolkswagenAGregardingthestatusofthecomprehensiveinvestigationinconnectionwiththedieselmatter

23 28.4.16 Speech MatthiasMullerSpeechattheAnnualMediaandInvestorsConference,PartI

24 28.4.16 Speech FrankWitterSpeechattheAnnualMediaandInvestorsConference,PartII

25 28.4.16 Speech MatthiasMullerSpeechattheAnnualMediaandInvestorsConference,PartIII

26 28.6.16 Pressrelease VolkswagenReachesSettlementAgreementswithUSFederalRegulators,PrivatePlaintiffsand44USStatesonTDIDieselEngineVehicles

59

AppendixB:Timelineofsignificantevents

15.5.14 CenterforAlternativeFuels,Engines&Emissions(CAFEE)reportfindspooron-roademissionsforlight-dutydieselvehiclesinUS

2014-15 USEnvironmentalProtectionAgengy(EPA)contactsVWforexplanationofpooron-roademissionsforVWdieselcars

December2014 VWordersavoluntaryrecallofTDicars3.9.15 EPAthreatenstowithholdcertificationof2016diesels.

VWadmitscarsfittendwithsoftwareprogrammedtocheattesting18.9.15 EPAannouncesannouncesdiscoveryofcheatsoftwareand

recallfor2009-2015cars20.9.15 VWadmitsdeceptionandissuesapublicapology21.9.15 Euros15BnoffVWshareprice22.9.15 VWbudgetof$7.3Bntocovercosts;sharepricesdeclinerapidly23.9.15 CEOMartinWinterkornresigns25.9.15 MatthiasMuellerannouncedasnewCEO26.9.15 SwissbanonVWsales28.9.15 GermanprosecutorslaunchinvestigationintoMartinWinterkorn29.9.15 VWannouncesrefitofupto11millionaffectedvehicles30.9.15 VWagsupervisoryboardmeeting30.9.15 Morethan1:10VWdieselcarsinUKthoughttobeaffected2.10.15 JonesDayappointedbyVWtoruninternalinvestigation6.10.15 CEOaddressesemployees,Wolfsburg8.10.15 USCEOMichaelHorntestifiestoUSHouseCommitteeonEnergy

andCommerce8.10.15 PoliceraidVWGermanheadquartersinWolfsburg9.10.15 RecallofvehiclesannouncedinAustralia10.10.15 ConcernsraisedovervehiclesinChina12.10.15 VWGroupUKDirectorPaulWillistestifiestoUKTransport

Committee15.10.15 8.5millionvehiclesrecalledinEU20.10.15 Pollsays2outof3GermansstilltrustVW21.10.15 StateofLowerSaxonylodgescriminalcomplaintagainstVW28.10.15 VWEuros3.5Bn“inthered”2.11.15 LawsuitagainstPorchebroughtinUS6.11.15 VWannouncesitwillpayforextrataxesincurred10.11.15 Porcheprofitsdown50%25.11.15 GermanFederalMotorTransportAuthority(KBA)approvesfirst

fixesfordieselcarsinEurope26.11.16 RecallofvehiclesinSouthKoreaannounced2.12.15 VWtakesoutEuros20Bntocovercostsandprotectjobs10.12.15 VWpressconferencesummarisingprogress16.12.15 CustomersinEuropecontacted4.1.16 CivilcomplaintbroughtbyEPAinUSdistrictcourt25.1.16 PaulWillisandOliverSchmidttestifytoUKTransportCommittee2.2.16 Europeantechnicalfixesstart4.2.16 USJusticeDepartmentbringscaseagainstVW2.3.16 VWdismissesshareholderlawsuit

60

10.3.16 MichaelHornstepsdownasUSCEO29.3.16 USFederalTradeCommissionsuesVW21.4.16 USfix/buybackschemeannounced22.4.16 JonesDayreportdelayeduntilfourthquarterof20161.6.16 VWsaledown13%inUSduring2016

28.6.16 USsettlementagreedwithUSFederalRegulators,privateplaintiffsand44states

61

AppendixC:Codinggrid

DOCUMENTTYPE

pPressrelease/statement

eEvidence

AUDIENCE

CConsumers&public

WWorkforce&dealership

RRegulators

SShareholders

DIMENSION

AATTRIBUTION CCRISISMANAGEMENT

IINFORMATIONORIENTATION

1Internal2External3Distinctiveness4Consensus5Consistency6Punitiveactions

1aIndividual1bCorporate6aUtility6bRetribution

1Mortification2Evasionofresponsibility3Reductionofoffensiveness4Correction5Differentiation

3aDownplaydamage3bEuphemisticlanguage3cBolsteringpositiveimage4aRestoreoriginalconditions4bPreventionofrecurrence

1Informationtechnologypractices2Informationmanagementpractices3Informationbehaviourandvalues4Investigationprocess

62

AppendixD:Attributionanalysis

INTERNALATTRIBUTION(Heider)INDIVIDUALGeneralreferencestoindividualattribution“Responsiblepartieswillbeidentifiedandheldaccountable”[7:15]“Noideaifthereweretworogueengineers”[8:28]“Thoseresponsibleforwhathappenedmustfacesevereconsequences”[13:5]“Misconductsandshortcomingsofindividualemployees”[18:7]“Misconductonthepartofindividuals”[18:10][Reduce]“dependenceonindividuals”[18:23]“Over1500employees’deviceshavebeentakentobelookedat”[20:43]“Oneortwopeople-thatisconjecture…Itisverywidespread”[20:45]Situationalfactors“Icankeepcostsdown[incentive].Thatwouldbemyspeculation”[20:40]“PeoplewantedtomeettheAmericanemissionsregulationswiththetechnologyavailable”[20:41]“Individualswhohaveyettobequestionedcouldaligntheirstatements”[22:3]Specificreferencestoindividuals/departments/functions“Ifinditimplausiblethatseniorpeopleinthecompanywouldhaveknown”[8:62]“Ninemanagerswhomayhavebeeninvolved…weresuspended”[18:34]“Thereisonesetofengineers…itisnotseveralsets”[20:37]“Itisthesamegroupofengineers…forthelast10years”[20:38]“Nineemployeeshavebeensuspended”[20:36]“IndividualVWemployeesdiscussedthedieselissue”[21:12]“MrWinterkornwasinformedaccordingly”[21:15]

CORPORATEAcceptanceofcorporateresponsibility“We…takefullresponsibilityforouractions”[7:10]“Acceptingtheconsequences”[7:12]Denialofcorporateliability“WeakenVW;spositioninanyremainingproceedings”[22:4]“JeapardisethecreditVWmay…receiveintheeventofitsfullcooperationwiththeDepartmentofJustice”“Notanadmissionofliability”[23:7]Attributionsofdisposition(corporate)“AmindsetinsomeareasoftheCompanythattoleratedbreachesoftherules”[18:9]“Oneortwopeople-thatisconjecture…Itisverywidespread”[20:45]“Thequestionofdeceit”[20:48]Situationalfactors“DeficienciesinsomeareasofVW’sITinfrastructure”[18:21]“Testandcertificationprocesses…notsuited”[18.11]“Provesnottohavebeenaone-timeerror,butratherachainoferrors”[18:31]“Startingpoint..decisiontolaunchalarge-scalepromotionofdieselvehiclesintheUSin2005”[18:32]“TechnicalprocesstoreduceNOxemissions…notemployed…”[18:33]“Developedwithinengineering…putintoproduction”[20:14]“Clearthatsomeoftheworkprocessesneededtobeimproved”[20:44]“Startingpointwasthestrategicdecision…tostartamajordieselcampaignintheUS”[21:6]“Dieselmatter…didnot…receiveparticularattentionatthemanagementlevels”[21:8]

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EXTERNALATTRIBUTION(Heider)TESTINGREGIME“Question…howstrongandhowfitforpurposethetestingregimeis”[8:16]“Emissionsregimeisveryoutofdate”[8:29]“Differencesbetween…testcycleandwhathappensintherealworld”[8:39]“Noquestionofanythinggoingonspecificallywiththetestingregime”[8:35][Testing]overlookedindependentlybyTUV,whichisacompletelyindependentcompany”[8:36][Theregulation]“needstochange”[8:40]“Hugeamountsofvariation…ruledoutonthetestcycle”[8:41]“Questionmarkovertheissueofregulationanditsapplication”[8:63]“ProvedimpossibletohavetheEA189enginemeetbylegalmeansthestricterNOxrequirementsintheUSwithinthetimeframeandbudget”[18:33]“ThemotivationwastomeetAmericalemissionsregulations”[20:39]DISTINCTIVENESS(Kelley/Coombes)CONTRARYTOVALUESHISTORY“Wedonotandwillnottolerateviolationsofanykindofourinternalrulesoroflaw”[1:5]“WentagainsteverythingtheGroupanditspeoplestandfor”[5:2]“ContrarytoVW’scoreprinciples”[7:21]“DonotreflectthecompanythatIknow”[7:22]“Inconsistent“[7:23]“Yes[VWisanethicalcompany]”[20:48]“Yes[itknowsthedifferencebetweenrightandwrong]”[20:49]

CONTRARYTOACTIONSHISTORY“Solidity,reliabilityandcredibilitybelongtotheessenceoftheVWbrand”[5:8]“Companythathasinvestedinenvironmentalefforts…”[7:24]“Highdegreeofsocialresponsibility”[18:52]“Wespendbillionsonthedevelopmentofplug-inhybridvehicles”[20:54]

CONSENSUS(Kelley)CONSENSUSWITHOTHERCOMPANIES“Youareallowedtorecognisethetest[nottamperwithemissions]”[20:46]“Comparablecasesinvolvingpassengervehicles”[21:4]“Violationsbyothermanufacturershadbeensanctionedbysettlements”[21:16]

NOCONSENSUSWITHOTHERCOMPANIES“Ihaveneverhearoforseenanythinglikethat[othermanufacturersdoingthingstoaffecttestresults]”[8:37]“Noevidencethatanyothermanufacturer…”[8:42]“Idonothaveanyevidencethatsuggeststhatanyothermanufacturer…hasundertakenthissortofactivity”[8:43]“Irefute[wholeindustrydoggedbysimilarproblems]”[20:30]

CONSISTENCY(Kelley/Coombes)“Provesnottohavebeenaone-timeerror,butratherachainoferrors”[18:31]PUNITIVEACTIONS(Weiner)UTILITY/RESTORATION RETRIBUTION

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Technical“Buybackorterminatetheleasesofeligiblevehicles”[23:8]“Choosetohavetheirvehiclemodifiedfreeofcharge”[23:13]Customer“CashpaymentfromVW”[23:14].Socialandenvironmental“Payapprox.$583million…forconsumerprotectionoversight,trainingandenforcement”[23:17]“Reimbursementofcostsandexpenses”[23:19]“Singlefundingpool[tocoversettlementprogram]”[23:12]“$2.0billionover3yearsintoanenvironmentaltrust”[23:15]“$2.0billionover10yearsinzeroemissionsvehicle”[23:16]

Legal“Takeslegalresponsibilityintoaccount”[18:29]“Findings…mustholdupincourt”[18:30]Financial“$2.0billionover3yearsintoanenvironmentaltrust”[23:15]“$2.0billionover10yearsinzeroemissionsvehicle”[23:16]

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AppendixE:Crisismanagementstrategiesanalysis

MORTIFICATION(Benoit)APOLOGY“Deeplysorry”[1:1]“Sincereapology”[7:5]“Iagainapologize”[7:25]“Apologisesincerelyandunreservedly”[8:1]“Iabsolutelyapologisetoallofyouandtoourcustomers”[8:45]“ApologyonbehalfoftheVWGroup”[10:1]“Sincereapologies”[10:8]“Thatiswhatweapologisefor”[20:19]“VWdeeplyregretstheincidents”[21:2]“VWexpresslyregrets…”[21:11]“Regretsthatitisnotabletopublishinterimresults”[22:6]

ACKNOWLEDGEMENTOFPROBLEM“Wehavebrokenthetrustofourcustomer,dealershipsandemployees,aswellasthepublicandregulators”[7:9]“Fallenshortofthestandardsexpected”[8:4]“Wehaveadutytothepublicandtoconsumers”[8:30]“Werecogniseourobligations”[20:55]

ACCEPTANCEOFRESPONSIBILITY“Ihavevolunteeredtocomebeforethiscommittee”[7:1]“We…takefullresponsibilityforouractions”[7:10]“Acceptingtheconsequences”[7:12]“Wemishandledthesituation”[8:17]

EVASIONOFRESPONSBILITY(Benoit)LACKOFINFORMATION“Nothadtheopportunitytoreviewallaspects”[7:3]“Testimony…basedonbestcurrentrecollection”[7:4]“InformationIhaveatthemoment”[8:9]“Ididnotknowtheywerefittedwithdefeatdevices”[8:11]“Ididnotknowwhichcarswereaffected”[8:12]“Ididnotknowwhichvehicleswereaffected”[8:13]“Iamnotanengineer”[8:15]“Ihavenoonetoadvisemeonthedetail”[8:22]“IcannotcommentonthemediaandIdon’tknow”[8:33]“Notpossibletogivefurtherinformationatthistime”[10:2]

DENIAL/SHIFTBLAME“Idonotseeanyhintofshoppingaround[fortypeapproval]”[20:58]“Irefuteyourallegationthatwemisrepresentedthevehiclesinanyway”[20:67]

DIFFICULTTOPROVE“Wouldbeverydifficulttoestablishhowmuchofanypricefallwasattributabletotheemissionsscandal”[20:71]“Notclearwhethertheparticipantsunderstood…thesoftwareviolatedUSenvironmentalregulations”[21:13]

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“WehavetofindoutfromtheJonesDayinvestigationprecisely…”[20:20]“Iwasnotinpowertraindevelopment”[20:30]“Ihavenoknowledgeaboutwhodidit”[20:34]“Icannotremember[exactcostspentonlawyers]”[20:41]“Ididnotknowwhatadefeatdevicewas…andneitherdidmycolleagues”[20:46]“Wehavenothingtodowithenginedevelopment”[20:47]“Iamnotawarethatwehavesetanymoneyaside[forfines]”[20:72]

REDUCTIONOFOFFENSIVENESS(Benoit)DOWNPLAYDAMAGECompliance“Vehicles…withEU6dieselengines…comply”[2:1]“Presentingthetechnicalsolutionstotheresponsibleauthorities”[5:12]“EUdieselvehiclescomplywithlegalspecifications”[5:15]“KBAdoesnotregardtheuseofthistechnologyintheEUasproblematic”[10:5]“Thoseenginescomplywithlegalrequirements”[12:2]“No…defeatdeviceasdefinedinlawisinstalledinEA288EU5aswellasEU6engines”[12:1]“Nosoftware…installedinthe3-literV6…toalteremissions…inaforbiddenmanner”[15:1]“Thevehicleswillcomply”[17:3]“Technicalsolutionshavebeenapproved”[18:36]“WewerewithinthelegallimitsforNOxlevelsbeforeandafterwards”[20:4]“Yes[stillcompliantwithEuropeanregulations]”[20:39]“Europedoesnothavearegimewhereyouneedtodeclaresoftware”[20:57]

EUPHEMISTICLANGUAGE“Eliminatethesedeviations”[2:4]“Wemishandledthesituation”[8:17]“Itseems…theenginebehaveddifferently”[8:20]“Softwarefunction…notadequatelydescribed”[10:3]“SoftwareisnotdefinedasadefeatdeviceinEurope”[20:9]“Nothelpfultoourbrandimage”[20:44]“Thisisnotadefeatdevice”[20:59]“Itismostcertainlynotadefeatdevice”[20:83]

BOLSTERINGPOSITIVEIMAGE“Productioncancontinue”[5:16]“Continuestostandforgoodandsecurejobs”[5:19]“ClosetieslinkingtheStateofLowerSaxonywithVWanditsworkforce”[11:1]“Showingyoursupportfortheteam”[11:2]“VWcontinuestostandforinnovationandoutstandingtechnology”[11:3]“Reaffirmed…plannedinvestmentsattheChattanoogalocation”[14:1]“InvestUS$600millionintheStateofTennesseealone”[14.2]“ConfirmsourengagementinNorthAmerica”[14:3]“Confidenceinthelocalteam”[14:4]“Prioritizingforward-

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“IntheUSthedescriptionofadefeatdeviceistotallydifferent”[20:84]

Smallnumber/littleeffect“Averysmallproportion”[8:10]“CurrentgenerationofEA288dieselengines…notaffected”[9:6]“Correctionmeasurehavebeenfixedforthemajorityofthevehicles”[17:1]“Inreal-worlddrivingthereisasmallimprovement”[20:6]“Versionsofthisengineonthestreettodayarenotaffected”[20:31]“Vehiclesonthestreetthatmeettheemissionswithoutthesoftware”[20:32]“Intherealworldandforrealcustomersthereisnoeffect”[20:33]

Technicallysafe“Allvehiclesaretechnicallysafeandroadworthy”[3:2][5:13]“Atnotimewasthesafetyofourcustomerscompromised”[5:14]“Remainsafeandlegaltodrive”[7:16]“Ourcarsaresafe”[8:31]“Notasafetyrelatedissue”[8:56]“Allvehicles…technicallysafeandroadworthy”[9:5]

Customerconvenienceandcost“Customers…informed…vehicleswouldbeupgraded”[5:11]Trytogetitcompletedbytheendof2016”[8:50]“Putthemright”[8:51]“Inconvenience…Wewillhavetoprovidealoancar”[8:54]“Continuedunrestricteduseofthevehicles”[9:1]“Nocosttoourcustomers”[9:3]“Toppriorityistosupportthe

lookingproductsandtechnologies”[16:3]“Safeguardingthefuturesuccessofourcompanyandemployment”[16:4]“Expandourworkforce”[20:43]“Customersarereturningtobuyourvehicles”[20:45]“[USsettlement}withinthescopeofourprovisions”[23:4]“FurtherclarityforourUDcustomersanddealersaswellasforourshareholders”[23:5]

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customers”[13:2]“Maximumcustomer-friendliness”[17:2]“Timeneeded…asshortaspossible..forcustomers”[17:5]“Considerindividualcustomerneeds”[17:6]“Avoidanydisadvantages…curbingoftheirmobility”[17:7]“Appropriatereplacementmobilityoptionsfree”[17:8]“Customers…notbedisadvantagedbywaiting”[17:9]“Solutionswillbeimplementedfreeofcharge”[18:37]“Company…waivesstatuteoflimitationsforthetechnicalsolutions”[18:38]“Provideanappropriatereplacementvehicle”[18:39]“Noneofthisaffectedcustomersinanyway”[20:33]“Fixthecarswithoutanyinconvenience”[20:65]“Wedonotexpecttoseeanyreductioninvalues”[20:70]“100%ofeligiblecustomerchooseabuybackorleasetermination”[23:3]

Technicalperformance“Software…doesnotaffecthandling,consumptionoremissions”[2:2]“Forthemajorityoftheseengines,thesoftwaredoesnothaveanyeffect”[2:3]“Therecannotbeanychangeinthemilespergallon”[8:44]“Maintainthesameleveloffuelconsumption”[8:49]“Samemilespergallon”[8:52]“Withoutanyadverseeffectson…output,fuelconsumptionandperformance”[17:4]“Confirmedmeasuresdonothavenegativeimpactsupon…performance”[19:3]“Nodecreaseinmilespergallon”[20:7]

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“Noimpactonfuelconsumption”[20:34]“Nodifferenceinthefuelconsumptionsothereisnoloss”[20:69]

Effectonbusinessanddealers“Idonotthinkconsumerconfidenceortrustisbroken”[8:38]“Doingeverything…tolimittheeffectthecurrentsituationhasonitsbusinessperformance”[18:57]“Givinganenormousamountofhelptodealerships”[20:1]“Idonotintendtomakeanyredundancies”[20:42]“Noindications…ofrelevance…tothestockprice”[21:3]CORRECTION(Benoit)RESTOREORIGINALCONDITIONSCo-operation“Co-operatefullywiththeresponsibleagencies”[1:2]“Commitmenttoco-operation”[7:2]“Workingwiththeagencies”[7:7]

Rebuildconsumertrust“Winbackthetrust”[5:9]“Determinedtomakethingsright”[7:11]“Restorethetrust…rebuildthereputation”[7:13]“Developaremedyforourcustomers”[7:14]“Makingthingsright”[7:20]“Remediesforourcustomers”[7:26]“Willtakeallnecessarystepstoregaintrust”[8:5]“Putthingsright”[8:7]“Regainingcustomertrust”[8:8]“Actionstoregainthetrustofourconsumers”[10:9]“Wewillre-establishtrustbyhavingasign-offfromtheKBA”[20:10]“Ourobjectiveistoregaintrust[20:74]

Technicalfixes“Vehicleswillbecorrected”[3:1]“Remedytheaffectedengines”[8:6]“Remedialactionsonthevehicleswillbegin”[9:2]“Removesthesoftwarethatrecognisedthedrive

PREVENTRECURRENCEInvestigation“Orderedandexternalinvestigation”[1:4]“Swiftandrelentlessclarification”[5:1]“Cannothappenagain”[7:18]“Neverhappenagain”[7:27]“Bettertobethoroughandgetitabsolutelyright”[8:47]

Implementchanges“Learntherightlessonsandavoidsuchmisconductinfuture”[11:5]“Testingpracticemustundergocomprehensivechanges”[18:25]“Wenowhavea“four-eye”principleinsoftwaredevelopment”[20:11]“Randomlyselectedreal-lifetests”[20:18]

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trace”[20:5]“WeremovewhatiscurrentlyintheECU”[20:8]

Financialmeasures/compensation“Setaside…6.5billionEUR”[2:5]“Yourconstituentsshouldnotpayforit”[8:34]“Paycustomersatisfactionbonuses[todealers]”[8:57]“Changedbonusthresholds”[8:58]“TheBritishtaxpayershouldnotbeoutofpocket”[8.59]“Ifnecessary,wewillhaveameetingwithHMRC”[8:60]“HaddiscussionswiththeVCA[topayforretesting]”[20:75]“Vehiclescurrentlyinuseandeligibleforbuybacksandleaseterminationsoremissionsmodifications”[23:1]“Freeemissionsmodifications”[23:9]“Cashpayments…toaffectedcurrentandcertainformerownersandlessees”[23:10]

DIFFERENTIATION(Benoit)(Coombes)CONTRARYTOVWVALUES“Wedonotandwillnottolerateviolationsofanykindofourinternalrulesoroflaw”[1:5]“VWdoesnottolerateanykindofviolationoflaws”[2:6]“WentagainsteverythingtheGroupanditspeoplestandfor”[5:2]“EnsurethatVWcontinuestostandforgoodandsecurejobs”[5:5]“Abouttheverycoreofourcompanyandouridentity”[5:7]“DidnotthinkthatsomethinglikethiswaspossibleattheVWGroup”[7:8]“ContrarytoVW’scoreprinciples”[7:21]“DonotreflectthecompanythatIknow”[7:22]“Inconsistent“[7:23]“Yes[VWisanethicalcompany]”[20:48]“Yes[itknowsthedifferencebetweenrightandwrong]”[20:49]“VWisanupstandingcompany”[20:31]“Weareastraightforwardorganisation”[20:56]

CONTRARYTOCUSTOMERRELATIONSHIPHISTORY/ENVIRONMENTALRECORD“Groupwithastrongfoundation”[5:3]“Bestautomobileteam”[5:4]

“Solidity,reliabilityandcredibilitybelongtotheessenceoftheVWbrand”[5:8]“Groupanditsbrandsstandforsustainability,forresponsiblity,forcredibility”[5:20]“Companythathasinvestedinenvironmentalefforts…”[7:24]“Standardsexpectedofus”[10:7]“Buildontraditionalstrengths”[18:51]“Highdegreeofsocialresponsibility”[18:52]“Itcaresaboutitscustomers”[20:32]“Wespendbillionsonthedevelopmentofplug-inhybridvehicles”[20:54]

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AppendixF:Informationorientationanalysis

INFORMATIONMANAGEMENTPRACTICESORGANISINGManagementstructure“MyroleintheUKisinsales,marketing,distributionandfinance”[8:26]“TechnicaldevelopmentinWolfsburg”[8:27]“FundamentallyrealignVW…leanerstructures”[11:6]“IntroducenewstructuresintheVWGroup”[13:6]“Groupmanagementwillbedecentralised”[13:7]“Bodiesresponsiblearebeingreorganized”[18:15]“DeficienciesinsomeareasofVW’sITinfrastructure”[18:21]“Structure…preventbreachesofregulations”[18:24]“Comprehensivenewalignment”[18:41]“Managedinamoredecentralizedfashion”[18:43]“Moreagile”[18:45]“Reducemanagerialcomplexity”[18:47]“Renewalofpersonnel”[18:49]“RealigningVWstrategicallyandtechnologically”[18:55]“Thebasesoftwareisdeployedinonedepartment”[20:51]“No[Idonotsitontheinternational,theEuropeanboardortheworldboard]”[20:79]“IsitontheUKboard…communicatewith…thesupervisoryboardinGermany”[20:80]“Ihavebeenincloseliaisonwithvariousseniorlevelsofthecompany”[20:81]“Ihavetalkedverythoroughlywithlevelsofthecompany”[20:82]

Brands“Moreindependenceforbrands”[13:8]“Board…willfocuson…cross-brandstrategies”[13:9]“Brandsandregions…grantedmoreindependence”[18:44]“Brandshavehadtheirtoppersonnelchanged”[18:50]

PROCESSINGSystems“Investigate…processes,reportingandmonitoringsystems”[18:3]“Weaknessesinsomeprocesses”[18:8]“Testandcertificationprocesses…notsuited”[18.11]“Structuringtheseprocessesmoretransparentlyandsystematically”[18:12]“Deficiencies…inthereportingandmonitoringsystems”[18:18]“OurQAchecksthesoftware”[20:12]“Therewasnone[QA]before”[20:13]“NoprocesswheretheQAlookedatthesourcecode”[20:15]“BetteruseofITtocheckprocesses”[20:16]“Itcouldnothavebeendetectedunderconformityofproduction”[20:35]“Clearthatsomeoftheworkprocessesneededtobeimproved”[20:44]

Responsibilities“Responsibilitieswerenotsufficientlyclear”[18:19]“Streamliningdecision-makingprocesses”[18:46]“Wenowhavea“four-eye”principleinsoftwaredevelopment”[20:11]“TheHeadofEngineeringandtheheadofQAsigneditoff”[20:21]“Itisthepeopleworkingforthem[whosignitoff]”[20:27]

INFORMATIONBEHAVIOURSANDVALUESINTEGRITY“SucceedHansDieterPotsch…FrankWitter”[4:8]“Examineourcompliance,

CONTROL“Publicationoffigures…mustmeetregulatorystandards”[8:65]“Pursuitofperfection…mustbe

SHARINGShareholders“VWwillreporttotheshareholders”

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processesandstandards”[7:17]“Groupstrivesforaholisticsolutionforcomplyingwiththerespectivevalidstandards”[12:3]“RealignmentofGroup’scultureandmanagementbehaviour”“Commitmentandsocialresponsibility…mustbemaintained”[13:12]“IntegrityandLaw…representedasitsowndepartmentonthe…Board”[18:28]“Thequestionofdeceit”[20:48]

maintained”[13:11]“Internalcompliancestructures…toaddressthosefindings”[19:2]“Futureemissionstestswillbecheckingworkflows”[20:17]“Foureyesmeansnobodycandoanythingontheirown”[20:22]“Someone…completelyoutsidethedepartment…tocheck”[20:24]“Everymanufacturer…isforced…topublishtheirreal-worldmeasuringresults”[20:36]

[4:6]“Seekingshareddecisionsintheinterestofthecompany,shareholdersandemployees”[16:6]“Yes[responsibilitytoshareholdersaboutcosts]”20:40]

Public“Informthepublic”[4.7]“Anyadvertisement…hastocontaintheregulateddata”[8:64]“I’mnotsurethattheentirereportwillbegivenoutwherethereiscompetitivelysensitiveinformation”[20:37]“Disclosureofinterimresultsoftheinvestigation…wouldpresentunacceptablerisksforVW”[22:1]“Disclosure…wouldprejudicetherestoftheinvestigation”[22:2]“WeakenVW;spositioninanyremainingproceedings”

Internal“New,opencultureofco-operation”[11:7]“ChangesarenecessaryinhowWVcommunicates”[13:12]“Weneedacultureofopennessandco-operation”[13:14]“Attachgreatimportance

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to…workscouncils”[16:2]“Co-operationbetweenBoard…andtheWorksCouncil”[16:5]“Seekingshareddecisionsintheinterestofthecompany,shareholdersandemployees”[16:6]“Opendiscussions,closerco-operation”[18:53]

Regulators“Emissionstestwillbeevaluatedexternallyandindependently”[18:26]

FORMALITY“Developedmorestrictlyinaccordancewiththe4-eyesprinciple”[18:14]“Sharplydefinedandbindingpowersandresponsibilities”[18:17]“ManagementboardfulfilleditsdisclosureobligationunderGermancapitalmarketslaw”[21:1]

TRANSPARENCY[Co-operate]“withtransparency”[1:3]“Opencommunicationwithourcustomer,dealers,employeesandthepublic”[7:19]“Weneedtransparencyandopenness”[8:32]“Commitmenttofulltransparency”[10:6]“ChangesarenecessaryinhowVW…handlesitsmistakes”[13:13]“Weneedacultureofopennessandco-operation”[13:14]“Structuringtheseprocessesmoretransparentlyandsystematically”[18:12]“Willingnesstoallowmistakes…asanopportunitytolearn”[18:54]“Obligationtobecometransparent,withtestingintherealworld”[20:35]“Ifinditimplausiblethatifyouemployedindependentlawyersyouwouldeditthereport”[20:38]“Wehavebeenastransparentaswecan”[20:64]

PROACTIVENESS“Drawnupanactionplan”[5:10]“Criticalreviewofplannedinvestments”[5:17]“Intensifyingtheefficiencyprogram”[5:18]“LookbeyondthecurrentsituationandcreatetheconditionsforVW’s…furtherdevelopment”[13:1]“Strategy2025”[13:15]“Makedecisionsthatfactorineconomicsjustasmuchasemployment”[16:1]“Newalignment…affectsthinkingand…strategicgoals”[18:42]“Clearmission”[18:58]“Betterand

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stronger”[18:59]“TOGETHER-Strategy2025”[23:6]

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September 2016 - University of Sheffielddagda.shef.ac.uk/dispub/dissertations/2015-16/External/Christopher_Painter.pdf · BP Deepwater Horizon oil spill. Like this study, they did