Volkswagen’s Next Steps

matthias-muller
Current Volkswagen CEO Matthias Muller

 

Certainly there could be multiple courses of action Volkswagen could take with regards to this scandal.  I think the best actions they could take at this point would be to be fully co-operational with all respective parties and be transparent with their decisions and the steps they will take to correct this issue.  It would not be beneficial for Volkswagen to not cooperate during the investigations.  If Volkswagen were to decline all allegations they would likely lose many costumers, investors, and revenue.

With current Volkswagen vehicle owners, specifically those affected by the scandal, feeling like they’ve been taken advantage of, Volkswagen needs to earn their trust back.  Volkswagen buyers and dealers as well, don’t know the additional repair costs and resale values of the vehicles and they are being asked to assume the additional risk of social approbation with ownership [1].

The approach I think Volkswagen should take follows the Existentialist Deontological framework where right and wrong are determined by the individual.  In this case the “individual” would be Volkswagen.  Up until this point, they have done a lot of wrong and made many wrong choices, but they can change their ways and make the right decisions from here on out.  Volkswagen needs to have authenticity and take full responsibility for their actions and the decisions that got them to this point.  They shouldn’t be making excuses for their actions, but rather admitting they have made a huge mistake.  They should apologize to current Volkswagen owners, which they’ve already done, so current owners do not distance themselves too far from the brand.

Volkswagen should recall all affected vehicles and stop promoting the sale of their other vehicles.  They have already lost the trust and backing of many of their costumers and investors, so why would the public want to purchase their vehicles with so many questions unanswered?  Volkswagen should wait for the storm to die down and until they have announced a solution to their problems before they begin promoting the sale of their other vehicles.

With a number of lawsuits aiming to fine and punish Volkswagen for their actions and failing to meet the strict emissions standards, Volkswagen needs to take full corrective action.  They need to assume all monetary punishment and communicate openly to all respective parties the steps that will be taken to correct the current emissions issue as well as steps that will be taken to ensure a situation like this never happens again.  They will likely be fined millions of dollars once everything gets revealed, but for as large a company as Volkswagen is, they will be able to bounce back.

I think taking this approach would yield better results and be more beneficial for their success in the future.  They need to earn the trust of the public and investors back and they will have no other choice, but to pay the fines once it is all over.  Their best bet would be to get everything out and get everything settled as soon as possible so they can begin moving on and being successful once again.

 

Resources:

[1] Behavioral Economics

[2] Car and Driver

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4 thoughts on “Volkswagen’s Next Steps

  1. I agree with everything you said. It is going to be very difficult for Volkswagen to recover from this scandal and improve their reputation. I think this has definitely caused many people that were brand loyal to change their perspective on the company. They knowingly defrauded their customers and tried to cut every corner to gain fake competitive advantage. The Existentialist framework is a good proposition. If you consider the person to be each employee in Volkswagen, how would the company be sure that each person has the right sense of what right is and what wrong is? I ask this because people are really different and what is “common sense” is not really that common these days.

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  2. You make a very good point. In that case, I think the company needs to establish a code of ethics and the supervisors need to enforce what behavior is acceptable and unacceptable. The supervisors need to reward the employees for acceptable behavior and correct any and all unacceptable behavior. If an employee continues to demonstrate unacceptable behavior then they need to be reprimanded.

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  3. I agree with everything you said earlier on this case, especially by making clear what you think the company should make starting now to be able to fix this big problem in which they are submerged .Knowing the whole issue about the fraud with the cars , what do you think Volkswagen should do in order to recover all those customers who were loyal to the brand and then left and also felt cheated? In order to get new customers, what do you think that company should do to get reverse the bad image in the market.

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  4. Well honestly I think the average consumer isn’t fully aware or will likely forget about this scandal in the future. I think those directly affected by the emissions scandal such as those who purchased diesel vehicles, will be weary of Volkswagen and their motives. If Volkswagen recalls all affected vehicles, which they have, and fixes the issue to make the vehicle emissions to pass the strict standards in the United States then I think they’ll be able to keep many of their costumers. I think they need to let this blow over for a while before promoting new vehicles so consumers don’t associate this issue with the new vehicles they advertise.

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