Sample Business Paper on The Volkswagen’s Scandal


It is no industry secret that stakeholders play an integral part in determining the business
organization's outcomes. Besides, the stakeholder relationship is often considered as a
representation of the company's net value. Because human beings are sentient beings by nature,
there is a need to create a relationship built on trust and goodwill. This principle extends to the
market space. Hence, international corporations must evaluate not only to understand how
human relationships work to the benefit of the organization, but also in expanding the base of
prospective stakeholders, maintaining reputable relationships, and enhance the mutually
beneficial engagements for a lengthy period.


Volkswagen's emission scandal allows a closer examination of the role of stakeholder
relationships in business. The Volkswagen Group, A German-based auto manufacturer, is the
second-largest vehicle manufacturer with operations across the globe. Its superiority in the global
context, encompassing superior social and cultural aspects, attracts a large pool of stakeholder
interests. However, despite its reputable position, Volkswagen's emission scandal that was
publicized in 2015 has taken over the headlines years after the announcement (Peltz &
Masunaga, 2016). This scandal continues to shock the many corporate management specialists,
industry layers, and observers alike. Why would such a reputable organization like VW reach
such extents to deceive their crucial stakeholders, including consumers and shareholders
Before the scandal, the company deviated from the practice of demonstrating their green
credentials, making public their development a major milestone in curtailing the nitrogen oxide

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emissions in compliance with environmental management standards. The presenting scandal not
only put the reputation of the company at stake globally as well as the reputation of other
German brands altogether (Dörner et al., 2016). Hence, it is vital to conduct a critical analysis of
the reasons behind such decisions and the subsequent consequences of such
Mapping Volkswagen Stakeholders

Considering that Volkswagen Group is an international company comprising diverse
stakeholders, it is not surprising to witness the massive interest the scandal earned among the
fleet of experts, regulatory agencies, competing firms, dealers, environmental advocates, and
other interested groups. The scandal left all stakeholders in disbelief and dismay. One systematic
way of assessing the various degrees of stakeholder groups is by broadly categorizing the types
of stakeholders to identify those that contribute to organizational growth and those affected by
the company's actions. Another way is grouping them depending on the proximity to the daily
operations of the company.
The Mendelow's Matrix tool allows for evaluating the type of relationships between the
VW Company and its diverse pool of stakeholders. It facilitates categorizing stakeholders
depending on their contribution to organizational growth and power to influence a company’s
strategy (Bernstein et al., 2020). The Volkswagen stakeholders’ groups fall into two broad
categories: internal stakeholders and internal stakeholders. Internal stakeholders comprise of
automotive services and financial services. The external stakeholder category comprises of
customers, society, capital markets, and partners. The partner category comprises of trade
unions, work counsel, suppliers, employees, and trade partners. The customer group includes
fleet operators, dealers, and consumers. The capital market is made up of shareholders, investors,
financial analysts, and banking institutions.

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Using Mendelow's Matrix, the most influential stakeholders comprise of shareholders and
customers. This is attributed to the high interest and high level of influence on VW Company's
operations. The stakeholder relationships with these parties require concerted efforts to keep
them engaged, satisfied, and updated with the company's development and plans. These
stakeholders possess a high degree of influence on the direction of the company and are mostly
the drivers of the Company’s strategy. When these groups are disgruntled about the direction of
the organization or identify weakening relationships, they possess the power and stake on the
company's operations and the long-term outlook. Their position allows them to pressure the
management for strategic changes and reviews of the corporate structure.
On the other side, less influential stakeholders are characterized by low interest and low
power even though they require minimal input, fewer resources, and overall effort than other
categories; however, they require dynamic monitoring. This group mostly comprises of
competitors. If a company ignores its competitors, it can suffer adversely in competitive markets.
These stakeholders require constant monitoring, as they are also likely to keep a keen eye on VW
Company to exploit any chance to expose any weakness or copy from the organization’s

Most Affected Stakeholders

Soon after the emission scandal entered the public domain, the VW Group's stock value
began to decline. Consequently, the company shocked the portfolios of numerous shareholders
and investors of the implications of the Dieselgate scandal on the blue-chip investment on a
company that boasted a moderate and lengthy growth spell. Besides, the reputation of the
company suffered severely (Dörner et al., 2016). Globally, many shareholders registered legal

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actions against VW Company claiming to suffer adverse outcomes due to the company’s
administration strategies that resulted in the scandal and betraying their trust, besides causing
massive financial losses, consequently.
Undoubtedly, customers who unknowingly bought the highlighted models endured huge
financial implications because the resale value depreciated drastically following the Dieselgate.
Nonetheless, because there were legal proceedings on course by the federal government on
behalf of its citizenry, the settlement deal included 85000 car buybacks that allow the customer
to sell the vehicle back to the company and receive monetary compensation for the loss suffered
(Brannon, 2016). The agreement reached upon inclined on the consumer side both as a means of
punishing VW for intentional deceptive practices and as a means of deterrence for other auto
manufacturers against tampering with emission regulations.
Crisis Communication with Stakeholders

Because the company betrayed its customers' confidence by cutting corners and
deceiving them when they should have worked the extra mile to make up for the wrong, an
effective communication strategy would encompass a range of tactics to restart rebuilding the
public trust. It would be appropriate if the VW Group would release as much information as
possible through clear and accessible means (Painter & Martins, 2017). This would be the initial
step to ensure that all parties with interests with the case are adequately informed about the
developments and the appropriate interventions the company would undertake. Besides,
regularly updating politicians and journalists with the appropriate insights would work to avert
possible events of misrepresentation. Nonetheless, responding appropriately to portray openness,
which encompasses releasing substantial information, and public education programs about the

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development of the crisis would be crucial steps towards reconstructing VW Company’s
integrity. This communication approach is vital to enhance positive public participation.

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Bernstein, S. L., Weiss, J., & Curry, L. (2020). Visualizing implementation: Contextual and organizational
support mapping of stakeholders (COSMOS). Implementation Science
Communications, 1(1).
Brannon, I. (2016). Who are the victims of the Volkswagen scandal? Not their customers. Cato
Diers-Lawson, A. (2019). The stakeholder relationship management perspective on crisis
communication. Crisis Communication, 41-55.
Dörner, A., Murphy, M., & Kreijger, G. (2016). Investor lawsuit: VW’s legal tsunami swells. Handelsblatt
– Nachrichten aus Finanzen, Wirtschaft plus
Painter, C., & Martins, J. T. (2017). Organisational communication management during the Volkswagen
diesel emissions scandal: A hermeneutic study in attribution, crisis management, and
information orientation. Knowledge and Process Management, 24(3), 204-
Peltz, J. F., & Masunaga, S. (2016). The biggest auto-scandal settlement in U.S. history was just
approved. VW buybacks start soon. Los Angeles