How to Fix a Lie? The Formation of Volkswagen’s Post-crisis Reputation Among the German Public
This study intends to clarify the psychological mechanism that explains the crisis responsibility and corporate reputation link, aiming at gaining knowledge on individuals’ perception formations in and reactions to a crisis. We extended the situational crisis communication theory through identifying the moderation effects of personal relevance and person–company fit in this relationship. The VW emissions scandal was investigated with respect to its impact on post-crisis reputation and negative word-of-mouth. A sample of 721 German respondents was analyzed through structural equation modeling. The results suggest that personal relevance strengthens the positive relationship between crisis responsibility and anger. Next to this, person–company fit weakens the impact of crisis responsibility on anger, as well as on sympathy. The results suggest that more attention needs to be drawn on the personal perspective in crisis communication, while different response strategies should be developed with respect to distinct stakeholder groups for protecting corporate reputation in the crisis context.
KeywordsCorporate reputation Crisis communication Emotion Involvement Identification Responsibility
We thank Dr. Guido Berens, the Editor of Corporate Reputation Review and two “anonymous” reviewers for their valuable feedback. We are also immensely grateful to Prof. Boris Bartikowski and Dr. Daniel Laufer for their constructive comments on an earlier version of the manuscript. Any errors are our own and should not tarnish the reputations of these esteemed scholars.
- Aiken, L., and S.G. West. 1991. Multiple regression: Testing and interpreting interactions. Thousand Oaks, CA: Sage Publications.Google Scholar
- Bender, R. 2015. Volkswagen scandal tests auto-loving Germany. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/vw-scandal-tests-auto-loving-germany-1443217183.
- Byrne, B.M. 2013. Structural equation modeling with AMOS: Basic concepts, applications, and programming. New York: Routledge.Google Scholar
- Claeys, A., V. Cauberghe, and P. Vyncke. 2010. Restoring reputations in times of crisis: An experimental study of the situational crisis communication theory and the moderating effects of locus of control. Public Relations Review 36: 256–262. https://doi.org/10.1016/j.pubrev.2010.05.004.CrossRefGoogle Scholar
- Coombs, W.T. 2014. Crisis communication: A developing field. In Crisis communication, vol. I, ed. W.T. Coombs, 3–18. London: SAGE.Google Scholar
- Coombs, W.T., and S.J. Holladay. 2004. Reasoned action in crisis communication: An attribution theory-based approach to crisis management. In. In Responding to crisis: A rhetorical approach to crisis communication, ed. D.P. Millar, and R.L. Heath, 95–115. Mahwah, NJ: Lawrence Erlbaum.Google Scholar
- Coombs, W.T., T.A. Fediuk, and S.J. Holladay. 2007. Further explorations of post-crisis communication and stakeholder anger: The negative communication dynamic model. Paper presented at the international public relations research conference.Google Scholar
- Etayankara, M., & Bapuji, H. 2009. Product recalls: A review of literature. Paper presented at Administrative Sciences Association of Canada (30), Niagara Falls, Canada.Google Scholar
- Fombrun, C. 2015. About Volkswagen, reputation, and social responsibility [Blog post]. Retrieved 26 January 2016, from http://blog.reputationinstitute.com/2015/10/07/about-volkswagen-reputation-and-social-responsibility/.
- Fombrun, C.J., and C.B.M. van Riel. 2004. Fame & Fortune: How successful companies build winning reputation. New York: Prentice-Hall Financial Times.Google Scholar
- Garcia, T. 2015. Volkswagen’s PR response made problem worse, experts say. MarketWatch. Retrived from https://www.marketwatch.com/story/volkswagens-pr-response-made-problems-worse-experts-say-2015-09-25.
- Geier, B. 2015. Everything to know about Volkswagen’s emissions crisis. Fortune. Retrieved from http://fortune.com/2015/09/22/volkswagen-vw-emissions-golf/.
- Gibson, D., J.L. Gonzales, and J. Castanon. 2006. The importance of reputation and the role of public relations. Public Relations Quarterly 51 (3): 15–18.Google Scholar
- Grunwald, G., and B. Hempelmann. 2011. Impacts of reputation for quality on perceptions of company responsibility and product-related dangers in times of product-recall and public complaints crises: Results from an empirical investigation. Corporate Reputation Review 13 (4): 264–283. https://doi.org/10.1057/crr.2010.23.CrossRefGoogle Scholar
- Härtel, C.E., J.R. McColl-Kennedy, and L. McDonald. 1998. Incorporating attributional theory and the theory of reasoned action within an affective events theory framework to produce a contingency predictive model of consumer reactions to organizational mishaps. Advances in Consumer Research 25: 428–432.Google Scholar
- heise online. 2016. Abgas-Skandal: VW beginnt mit Rückruf – zunächst für das Modell Amarok. Retrieved from http://www.heise.de/newsticker/meldung/Abgas-Skandal-VW-beginnt-mit-Rueckruf-zunaechst-fuer-das-Modell-Amarok-3085837.html.
- Hair, J.F., W.C. Black, B.J. Babin, and R.E. Anderson. 2010. Multivariate data analysis, 7th ed. Upper Sadle River, NJ: Pearson Prentice Hall.Google Scholar
- Heath, R.L., and W. Douglas. 1990. Involvement: A key variable in people’s reaction to public policy issues. In Public relations research annual, ed. L.A. Grunig, and J.E. Grunig, 193–204. Hillsdale, NJ: Lawrence Erlbaum.Google Scholar
- Jin, Y., A. Pang, and G.T. Cameron. 2007. Integrated crisis mapping: Towards a publics-based, emotion-driven conceptualization in crisis communication. Sphera Publica 7 (1): 81–96.Google Scholar
- Jin, Y., A. Pang, and G.T. Cameron. 2012. Toward a publics-driven, emotion-based conceptualization in crisis communication: Unearthing dominant emotions in multi-staged testing of the integrated crisis mapping (ICM) model. Journal of Public Relations Research 24: 266–298. https://doi.org/10.1080/1062726X.2012.676747.CrossRefGoogle Scholar
- Kollewe, J. 2015. Volkswagen emissions scandal—timeline. The Guardian. Retrieved from https://www.theguardian.com/business/2015/dec/10/volkswagen-emissions-scandal-timeline-events.
- Lin, C.P., S.C. Chen, C.K. Chiu, and W.Y. Lee. 2011. Understanding purchase intention during product-harm crises: Moderating effects of perceived corporate ability and corporate social responsibility. Journal of Business Ethics 102 (3): 455–471. https://doi.org/10.1007/sl0551-011-0824-.CrossRefGoogle Scholar
- Lindner, E.G. 2006. Emotion and conflict: Why it is important to understand how emotions affect conflict and how conflict affects emotions. In The handbook of conflict resolution: Theory and practice, ed. M. Deutsch, P.T. Coleman, and E. Marcus, 268–293. San Francisco: Wiley.Google Scholar
- McDonald, L., and C.E. Härtel. 2000. Applying the involvement construct to organisational crises. In Proceedings of the Australian and New Zealand marketing academy conference, Gold Coast, Australia.Google Scholar
- McDonald, L., A.I. Glendon, and B. Sparks. 2011. Measuring consumers’ emotional reactions to company crises: Scale development and implications. Advances in Consumer Research 39: 333–340.Google Scholar
- McGee, P. 2017. VW rebounds from crisis as earnings beat forecasts. Financial Times. Retrieved from https://www.ft.com/content/6498a500-2fe5-11e7-9555-23ef563ecf9a.
- Nunnally, J.C. 1978. Psychometric Theory, 2d ed. New York: McGraw-Hill.Google Scholar
- Petty, R.E., and J.T. Cacioppo. 1981. Attitudes and persuasion: Classic and contemporary approaches. Dubuque: Wm. C. Brown Company Publishers.Google Scholar
- Petty, R.E., and J.T. Cacioppo. 1986. Communication and persuasion. Central and peripheral routes to attitude change. New York: Springer.Google Scholar
- Rauwald, C. 2017. VW says it’s ‘back on track’ after restructuring, Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2017-03-14/vw-recovery-makes-progress-as-namesake-car-brand-s-margins-widen.
- Reputation Institute. 2013. The global RepTrak® 100: The world’s most reputable companies (2013). RI report on consumer perceptions of companies in 15 Countries [Report]. Retrieved from http://www.reputationinstitute.com/Resources/Registered/PDF-Resources/The-2013-Global-RepTrak®-100-Results-and-Report.aspx.
- Reputation Institute. 2014. The global RepTrak® 100: The world’s most reputable companies (2014). RI report on consumer perceptions of companies in 15 countries [Report]. Retrieved from http://www.reputationinstitute.com/Resources/Registered/PDF-Resources/2014-Global-RepTrak-100.aspx.
- Reputation Institute. 2015. The global RepTrak® 100: The world’s most reputable companies (2015). RI report on consumer perceptions of companies in 15 countries [Report]. Retrieved from https://www.reputationinstitute.com/Resources/Registered/PDF-Resources/Global-RepTrak-100-2015.aspx.
- Richins, M.L. 1984. Word of mouth communication as negative information. Advances in Consumer Research 11 (1): 697–702.Google Scholar
- Salovey, P., and D.L. Rosenhan. 1989. Mood states and prosocial behaviour. In Handbook of psychology, ed. H. Wagner, and A. Manstead, 371–391. New York: Wiley.Google Scholar
- Silverman, G. 2001. The power of word of mouth. Direct Marketing 64 (5): 47–52.Google Scholar
- SoSci Panel für Wissenschaftler. 2015. Retrieved from https://www.soscisurvey.de/panel/researchers.php.
- Tajfel, H., and J.C. Turner. 1985. The social identity theory of intergroup behavior. In Psychology of intergroup relations, 2nd ed, ed. S. Worchel, and W.G. Austin, 7–24. Chicago: Nelson-Hall.Google Scholar
- The Guardian. 2016. VW global sales fell 2% in year emissions scandal hit. Retrieved from http://www.theguardian.com/business/2016/jan/08/vw-global-sales-fell-year-emissions-scandal-2015.
- Vizard, S. 2015. Why Volkswagen cannot survive the emissions scandal unscathed. Marketing Week. Retrieved from https://www.marketingweek.com/2015/09/24/why-volkswagen-cannot-survive-the-emissions-scandal-unscathed/.
- Weiner, B. 2006. Social motivation, justice, and the moral emotions: An attributional approach. Mahwah, NJ: Lawrence Erlbaum Associates Inc.Google Scholar
- Weiss, H.M., and R. Cropanzano. 1996. Affective events theory: A theoretical discussion of the structure, causes and consequences of affective experiences at work. Research in Organizational Behaviour 18: 1–74.Google Scholar
- Wigley, S., and M. Pfau. 2010. Communicating before a crisis: An exploration of bolstering, CSR, and inoculation practices. In The handbook of crisis communication, ed. W.T. Coombs, and S.J. Holladay, 607–634. Malden, MA: Blackwell.Google Scholar