Question:
Discuss about the Stakeholder Relationship Management for Operational Research.
This is report, which will depict the stakeholder’s relationship management of the organization named Volkswagen. Volkswagen has been in the limelight because of the emission scandal, which has made them lose their competitive advantage in the market and they were literally struggling to maintain their sustainability in the market. This report will critically analyze the Volkswagen emission scandal to provide insights on the stakeholder management of the organization. Utilization of social media is very evident in today’s world and most of the companies in the market are making use of the social to create their profiles on micro blogging websites to support the image of the brand. The main advantage of social media is that the information can be easily disseminated and the organizations can interact with the consumers in the market (Jung, Chilton and Valero 2017). However, as the social media has provided transparency so the image of the organization is affected during time of crisis as they lose their reputation in the market. The stakeholders in the organization consist of the shareholders, employees, distributors and consumers. The profitability of the organization is dependent on these stakeholders and so management of relationship with the stakeholders is very important for the organization.
A structured approach is followed for the management of the relationship with the stakeholders (Holloway 2016). This structured approach consists of five steps, which will provide assistance in stakeholder’s relationship management. These steps are described as follows:
Volkswagen is one of the brands in car manufacturing industry who consist of a diverse portfolio in the market. The renowned brand includes Audi, Porsche, Buggati, Lamborghini, Skoda, Seat and Bentley under their product portfolio. The organization has been known for their technical prowess and sustainability in the environment. However, the organization had falsified the emission test while entering in all the countries with the help of cheat devices. The cheat devices were able to detect and change their mode when it is under test procedures (BBC News 2017). This has caused the level of emission of gases from the device as very low and got passed in to the United States market. However, in actual the emission levels of the cars were much higher than the benchmark that has been set in the market. However, no markets that were able to detect the cheat software and the sale of the cars increased at a rapid rate. The performance of the cars went down and most of the cars were not in a condition to be driven in the roads of he various markets. The ICCT were investigating on the organization and they are able to detect the cheat Volkswagen has applied. The representatives of the organization agreed to the fact they have installed cheat software in some of the TDI models in a verbal conversation. Then finally, the organization finally made an official announcement. The organization was forced to withdraw the cars from the market due to quality issues and the high level of NOx emission from the diesel vehicles. The overview of the case study shows that the organization has deceived all their major stakeholders and they will have to manage them in a proper way so that they can maintain their sustainability in the market.
The organization had to go through a series of devastating events after the scandal was revealed. The facts in that time period will be illustrated in chronological order and they are as follows:
The impact on the stakeholders is as follows:
Communication management is one of the essential parts of knowledge sharing within the organization. The technological advancement has caused the inclusion of the social media in to the communication system of the organization, which were used for sharing of knowledge. Therefore, in the time of crisis communication has considerable significance because it will facilitate in managing the stakeholders of the organization. However, as the crisis will have an adverse effect on the organization it is advisable to make use of communication to identify the strategies for recovery of the organization. Social media is a platform which is used in this situation by the stakeholders of the organization for expression their views and criticizing the organization (Jung, Chilton and Valero 2017). When the EPA revealed the scandal, the internal and the external stakeholders of the organization were waiting for a response from the organization. However, it is difficult to control the sentiments and the emotions of the stakeholders in this situation. Thus, effective communication is necessary for managing the relationship with the stakeholders. The timing of communicating the response is crucial and the creditability of the source will help in diffusion of the topic (De Brucker, Macharis and Verbeke 2013). However, in this scenario, the organization took their time in providing with the response in this matter as the organization is centralized and the decision taken by the main headquarters is circulated to other branches. Thus, when Volkswagen was accused of these charges they should have immediately responded with a counter response. However, the organization was unable to manage their relationship with stakeholder that led to the downfall of the organization. The organization should have made use of the social media platform in an effective manner to respond to the concerns and the grievances of the external stakeholders (Hörisch, Freeman and Schaltegger 2014).
The listing techniques that are generally used for the stakeholder analysis are stakeholder analysis, need and expectation of stakeholders, stakeholders and business planning. The stakeholder analysis will identify all stakeholders and arrange them in order of their priority. This can be done by making a list of all the stakeholder and determine the influence of each of the factors on the organization (Kazadi, Lievens and Mahr 2016). The stakeholders who have large influence on the business will have to be communicated so that they could be informed about the activities of the organization. However, in this scenario the organization did not communicate with their stakeholders, which caused the issues to become more inflated than before.
The next method includes the identification of the needs and the expectations of the stakeholders. It is important for the business to look in to the concerns of the stakeholders. The shareholder expects to maximize he profit and expansion of the business. The consumers want to avail the product at reasonable prices along with satisfactory service. Volkswagen should have had catered to the needs and expectations of the stakeholders so that they could have minimize the damage due to the emission scandal (Lawrence and Weber 2014). The organization was reluctant and failed to provide the stakeholders with satisfactory explanation that they deserve.
The business is generally set in order to meet the needs and expectations of one of the stakeholders. However, it is essential for focusing on the needs and the expectations of other stakeholders on the market (De Brucker, Macharis and Verbeke 2013). This is the main failure for Volkswagen who are unable to provide importance to the needs of the other crucial stakeholders which has led to their downfall in the market.
The subsidiary of Volkswagen in Australia had been waiting for instructions during the time of the emission scandal. the organization delayed their response to the public which has further aggravated the media and the consumers who are searching for answers for the embarrassment they had to face (The Conversation 2017). This had increased the level of frustration among the employees, as they were still not clear about the situation. This shows that the organization is lacking in their personal relation skills and it further damaged the reputation of the organization. The organization should have been quick to respond to the situation and interacted with the media and the consumers to make them understand their perspectives, the damage can be minimized (Lawrence and Weber 2014).
This is a case, which is completely unethical as the organizations in order to maximize the interest of the shareholder have caused harm to the corresponding environment and have cheated the consumers. It is the duty of the public relations team to make the organization aware of the consequences of the organizational malpractices. However, Volkswagen was unable to manage their public relations, which shows that the PR team were not efficient enough to handle these situations (Weiss 2014). Moreover there was an ethical dilemma which suggest that the even though the PR team is trying to defend the organization they themselves are aware of the wrong doings. However, in this scenario in order to protect the interest of one stakeholder the interest of other stakeholders will be neglected. Thus, the organization should have communicated with the consumers, dealers and the media to protect their interest but they did not follow such practices.
The organization was he market leader in the industry but due to the emergence of this scandal the organization had to go through considerable amount of losses. The stock prices of he organization fell down by 35% and several law suits were filed against the organization. Moreover, the sales of the products were reduced to half which shows the organization was in need of restructuring and rebranding.
Conclusion
Thus, it can be conclude that Volkswagen is unable to manage their relations hip with their stakeholders. This caused detrimental impact on both the revenue and the image of the organization. The management of the stakeholders is important for any organization as they have a degree of influence of the organization. However, the Volkswagen Emission Scandal is a classic example of poor stakeholder relationship management. Therefore, the organization is still under a lot of pressure and struggling to get back to where it was before.
References
BBC News. 2017. Volkswagen: The scandal explained. [online] Available at: https://www.bbc.com/news/business-34324772 [Accessed 24 Oct. 2017].
De Brucker, K., Macharis, C. and Verbeke, A., 2013. Multi-criteria analysis and the resolution of sustainable development dilemmas: A stakeholder management approach. European journal of operational research, 224(1), pp.122-131.
Falconi, T.M., 2014. Global stakeholder relationships governance: An infrastructure. In Global Stakeholder Relationships Governance: An Infrastructure (pp. 1-55). Palgrave Macmillan UK.
Holloway, J., 2016. What stakeholder management should learn from sales and marketing. Further Advances in Project Management: Guided Exploration in Unfamiliar Landscapes, p.236.
Hörisch, J., Freeman, R.E. and Schaltegger, S., 2014. Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organization & Environment, 27(4), pp.328-346.
Jung, K., Chilton, K. and Valero, J.N., 2017. Uncovering stakeholders in public–private relations on social media: a case study of the 2015 Volkswagen scandal. Quality & Quantity, 51(3), pp.1113-1131.
Kazadi, K., Lievens, A. and Mahr, D., 2016. Stakeholder co-creation during the innovation process: Identifying capabilities for knowledge creation among multiple stakeholders. Journal of Business Research, 69(2), pp.525-540.
Lawrence, A.T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.
Mansouri, N., 2016. A Case Study of Volkswagen Unethical Practice in Diesel Emission Test. International Journal of Science and Engineering Applications, 5(4), pp.211-216.
Padayachee, A.D., Naidu, A. and Waspe, T., 2015. Structure and governance of systems, stakeholder engagement, roles and powers. Twenty Years of Education Transformation in Gauteng 1994 to 2014.
Sierra?García, L., Zorio?Grima, A. and García?Benau, M.A., 2015. Stakeholder engagement, corporate social responsibility and integrated reporting: an exploratory study. Corporate Social Responsibility and Environmental Management, 22(5), pp.286-304.
The Conversation. 2017. Volkswagen fallout shows how not to manage a crisis. [online] Available at: https://theconversation.com/volkswagen-fallout-shows-how-not-to-manage-a-crisis-48590 [Accessed 24 Oct. 2017].
Verbeke, A. and Tung, V., 2013. The future of stakeholder management theory: A temporal perspective. Journal of Business Ethics, 112(3), pp.529-543.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download