Strategy Formulation Process in Crisis Management : Volkswagen Case Study

Abstract: Aim: The aim of this study is to understand what strategies are used over time by a company facing a transgressional CSR crisis, in order to regain legitimacy, and towards which stakeholder group these strategies are directed. Methods: In order to achieve our aim, Qualitative case study based on secondary data published by Volkswagen as well as news articles were used to identify what strategies the company used over time. Results: To be able to answer our aim, different theoretical lenses were used; SCCT response strategies, legitimization strategies, strategy formulation process and stakeholder theory. Therefore, four main different strategies were identified, minimize attribution, blind adaptation to strategy 2025, US differentiation and internal moral reasoning. The former two were addressed to all stakeholders while the latter two were concerned with specific stakeholder groups. Conclusions: Strategy formulation process during a transgressional CSR crisis is a complex procedure and literature on crisis management should move away from static frameworks towards a more dynamic understanding of how strategies can come to life. Coupled with the complexity of societal expectations in general, a company might have to adopt the paradoxical approach even for one stakeholder. Lastly, an addition to Situational Crisis Communication Theory is proposed.