Communicating and

Sustaining Change
Introduction

 Based in Germany Volkswagen is one of the most prominent automobile

companies in the world. Despite of facing tremendous challenges from
other key players in the industry like Rolls Royce, Tesla, Jaguar, Mercedes,
the organization has been able to hold their #1 rank in term of sales in 2016
and in 2017 (Coester, 2018).
 However, the Emission Scandal of 2015 or widely referred to as "diesel
dupe“ or “The Dieselgate Scandal”, left a deep and profound impact in
the reputation of the organization and their ethical behaviour (Odin, 2015).
The Dieselgate Scandal

 In September 2015, the Environmental Protection Agency discovered that a

lot the cars produced by VW has a special device/software in their diesel
engines which had the ability to detect when the cars were being tested.
Moreover, upon detection they could alter their performance accordingly
so that they can receive a better result. Later the company official
admitted their wrongdoing (Odin, 2015).
 The cars were emitting 40 times more toxic fumes than accepted level
which was impacting nearly 500,000 cars in the America also and more
than 11 million vehicles throughout the world.
 The toxic emissions resulted from their vehicles included nitrogen dioxide
and it has been estimated that between 250,000 to 1 million tons of
additional gas were being put into the atmosphere each year from 2009 to
2015.
Growing Pressure

 Due to the massive ethical violation, the company immediately became

subject to harsh criticism from their customers and external stakeholders. At
the same time, the employees of the company started to feel scared and
act defensively and it led to a growing pressure that was impacting
organization both internally and externally.
 As their credibility took a heavy blow, the company was forced to make
some radical changes and take responsibility of their unethical actions.
 Additionally, the unhappy stakeholders expected to see some big changes
as well.
 In order to win back the trust of their huge customer base the organization
had to implement a series of change management strategies from
leadership to operations.
Change Strategies

 As the pressure was both internal and external, different strategies were
required to handle internal and external business environment.
 Changes made or not made internally would surely have an impact on
their external business environment. As the external stakeholders, which
includes the governments and the society, expected to see the people
responsible for this horrendous act accountable radical changes in
leadership was required.
 On the other hand, as an external strategy, the organization had to start
repairing the damaged relationship with the customers right away by
establishing a strong communication channel.
 A series of socially responsible campaigns had to be undertaken to boost
their CSR activities.
Change in vision

 To show their internal and external stakeholder that they are actually
serious about their massage a shift in their vision was required.
 Using Kotler’s change management strategy they “created a sense of
urgency” and started to produce electric cars, after some senior officials
and leaders were fired or resigned.
 Then they followed the next step of Kotler’s change management which is
“building up coalition” and introduced “TOGETHER-Strategy 2025” where
they set their goal for becoming the leading producer of sustainable
vehicles. This strategy called for a strong association among their
employees, investors and customers, key stakeholders, speacially who were
affected by their unethical behavior (Boston, 2018).
Change in vision

 A renewed and redefined vision was the guiding force of Volkswagen’s

new change framework. “The change is set to take place in three phases
to reorient the brand to its stakeholders. Radical restructuring is the first
phase (2015-2020)”. This on-going process concentrated on building up a
foundation to represent the brand as much more competitive.
 The following phase (2020-2025) will be concentrated on obtaining
sustainability elements which is another key point revolving the change
model. They plan to become the first car manufacturer to sell a million
electric vehicle.
 The final phase (2025-2030) is focused on creating new models for business
to provide mobility solutions all over the world.
Change in vision

 For affecting the grand vision, VW has the following Code of Cooperation-
together, synergy and success. The organization also has implemented
some Key Performance Indicators (KPIs) for the key stakeholders and they
monitored very closely, each of the steps for implementing the vision. For
making customers even more motivated, the introduced a loyalty program
for rewarding the loyal customers that had a very positive impact on their
customer retention rate at such uncertain times.
 In order to reduce employee turnover, internal audit was conducted which
helped to increase organizational efficiency and find out some specific
factors related to employee perspective regarding the organization.
Communicating with stakeholders

 Customers: As due to the scandal they were unable to resell their cars, VW
offered some high-end customization to decrease their dissatisfaction.
 Employees: VW started implanting various motivational and inspirational
techniques that includes enhanced incentives, modern facilities in their
work environment, frequent training seminars etc.
 Investors: They painted an image of a profitable organization with good
dividends and increases in the value of their shares. They continued to
focus on selling strategies to project strong sales figures which was key to
retain the trust of the investor and present themselves as a prominent
investing opportunity.
Necessary Communication Skills

 Internal Stakeholders
 Negotiation
 Conflict Resolution
 Decision making
 Leadership
 Confidence
 Flexibility
 Working under pressure
Necessary Communication Skills

 External Stakeholders
 Public Speaking
 Ability to process information quickly
 Presence of mind
 Analytical skills
 Good memory
 Confident attitude
Strategic plan for sustaining the
change
 Step 1: To clearly understand the nature of the resistance.
 Step 2: Communicating reasons for change.
 Step 3: Getting employees involved at early stages
 Step 4: Creating various opportunities for meaningful changes
 Step 5: Providing support to people for adapting to change
 Step 6: Being flexible and patient while monitoring the progress closely
Strategic plan for sustaining the
change
Conclusion

 The overall discussion can predict that VW faced a great deal of

challenges at many fronts due to their lost credibility and public relation
nightmare.
 However, with their superior resources and strategic planning ability they
were able to recover fast and became the top seller of the cars very next
year.
 The proper implementation of proposed changes and strategies, both
internally and externally, helped the organization to get back on their feet
and regain trust of their stakeholders (Behrmann, 2018).
Reference

 Behrmann, E (2018) VW Board to Consider Most Sweeping Changes Since Diesel

Scandal. Retrieved from https://www.bloomberg.com/news/articles/2018-04-
12/vw-board-to-consider-most-sweeping-changes-since-diesel-scandal
 Boston, W (2018) Report on Volkswagen’s Changes Since Emissions Scandal
Cites Lack of Transparency. The Wall Street Journal. Retrieved from
https://www.wsj.com/articles/report-on-volkswagens-changes-since-emissions-
scandal-cites-lack-of-transparency-1535374982
 Coester, C, Ludwig, K, Menzel, S (2018) A peek inside Volkswagen as it tries to
change itself. Retrieved from
https://www.handelsblatt.com/today/companies/scandal-free-a-peek-inside-
volkswagen-as-it-tries-to-change-itself/23582000.html?ticket=ST-142258-
ybVAWCnaRdaOh90qvxk2-ap3
 Odin, L.C (2015) World in Motion-The whole of the year's automobile production.
Belvedere Publishing.