A Cultural Approach to Crisis Management : Comparison between Sweden and Germany

Abstract: Problem:  Triggered by the present emission scandal of Volkswagen, we came across the fact that corporate crises constitute a revenant topic in the business world. They often entail significant consequences for the affected companies such as reputation damages, financial losses and loss of trust from stakeholders. Also the people working at these companies experience exceptional situations, managers as well as employees on all levels. Corporate crises can be influenced by many factors, for instance through internal triggers like power distance, transparency and communication. These factors can influence the development of a corporate crisis in a positive as well as in a negative manner.  Purpose:  With the underlying study our goal was to find fostering and hindering factors for corporate crises that are connected to internal processes within multinational companies. Initially we sought to understand which impact organizational structures have on the crisis management in a company. Later in our study, the impact of corporate culture as well as cultural origin emerged and caught our interest. That resulted in a shift of our focus towards the impact of a company’s cultural origin on corporate crisis management.  Method:  For the underlying master thesis, we conducted 17 semi-structured interviews with 13 companies and investigated the real-life case of Volkswagen through secondary data. Based on that we created 14 case studies. Through a highly explorative iterative process, we further analyzed our collected data going back and forth between our empirical data and emerging theory.  Main Findings:  Our empirical data suggested that corporate crises can be triggered internally, initiated for example by strict governance, hierarchy and insufficient transparency. Moreover, organizational structures are strongly influenced by the corporate culture of a company. Corporate culture, furthermore, seems to be strongly influenced by the cultural origin of a company, regarding decision-making procedures, responsibilities and communication. Finally, in the perception of our respondents within our empirical study there is a link between the cultural origin of a company and its crisis management.  Contribution:  Although crisis management constitutes an exhaustive researched topic, we were able to contribute to the area of crisis management with an empirical indicator of the cultural origin of a company constituting an impacting factor for corporate crisis management. This coherence has not been acknowledged by crisis management literature to a meaningful extent so far.