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Clean diesel and dirty scandal: The echo of Volkswagen’s dieselgate in an intra-industry setting

In 2015 the U.S. Environmental Protection Agency revealed that German car manufacturer Volkswagen had illegally installed software to produce fake NOx-emissions results. This study aims to analyze how the German news media framed VW’s role.

Wouter Jong, Vivian van der Linde
01 March 2022
Find the report here

Current crisis response strategies tend to apply “crisis history” as a contributing factor for an organization in crisis. This research broadened the scope and takes note of the potential impact of “crisis history” developed by a close competitor. As a consequence, the “crisis history” of a competitor might become an industry-related crisis history, when other organizations within an industry experience the same or similar crises.

Furthermore, since the scandal shifted from a single entity to an industry-wide crisis, this contribution also sought to establish whether the German news media reframed the crisis as an industry-wide phenomenon in 2018. The analysis showed that the media questioned VW’s strategy and reframed the scandal by attributing responsibility to the entire corporation. In particular, by stressing the improbability of the executive level having been unaware of the intentional wrongdoing. Unlike in previous studies, the media frequently applied the morality frame both directly and indirectly and accused VW of continuing to act dishonestly during their crisis management. In response to what extent the German news media reframed Dieselgate as an industry-wide crisis in 2018 and whether they distinguished amongst competitors, it is clear that there was a shift from portraying VW as the responsible party to focusing on the entire industry and pointing out other car manufacturers’ involvement. An intra-industry scandal effect was discussed, based on an intentional unethical transgression to both Daimler and BMW

intra-industry effects

Based on their findings, they argue that a scandal can have intra-industry effects. Related to Dieselgate, the experience of Volkswagen in 2014 created a crisis history that cast a long shadow, not only for Volkswagen but also for its competitors. Similar to other findings on oil spills, the crisis at Volkswagen echoed in 2018, when its close competitors BMW and Daimler found themselves in a similar situation. Even though the crisis situations in 2014 and 2018 were similar from a factual point of view, media used different frames to report on the situation at BMW and Daimler. The moral outrage about the unethical wrongdoing decreased over time. It did not, however, diminish. The change in media frames provides strong support for our proposition that competitors are benchmarked against comparable wrongdoing at the initial company. Companies apparently do not start from a similar position with a blank sheet but become part of a developing story which relates to the crisis at their competitor. 

Thus, in this report is argued that the first wrongdoer in an industry creates a crisis history, which potentially becomes an intensifying factor for competitors who are confronted with similar crises in a later stage. Although one has to consider potential legal and financial ramifications, based on the media’s assessment of the car manufacturers’ crisis communication strategies and the media’s subsequent reframing, companies implicated in a scandal should opt for timely, fact-based, and transparent communication. Therefore, this report concludes that the only way to handle a dirty scandal is to come clean.

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