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Firms and Collective Reputation
Report

Firms and Collective Reputation

The Volkswagen Emission Scandal as a Case Study


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Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Well Structured

Recommendation

Volkswagen’s admitted deception involving diesel car emissions in 2015 violated the standards on which the German automotive industry stakes its vaunted worldwide reputation. In one ethical breach, a single firm’s conduct negatively affected the US sales, stock prices and consumer opinions of other German carmakers. In this technical but compelling report, academics Rüdiger Bachmann, Gabriel Ehrlich and Dimitrije Ruzic present an important look at the power of reputation in business. getAbstract recommends their analysis to policy experts and executives.

Take-Aways

  • The 2015 Volkswagen (VW) emissions scandal tarnished the reputation of the German auto industry and inflicted spillover damage on BMW, Smart and Mercedes-Benz.
  • A US complaint alleged the presence of a “defeat device” that cheated on emissions-compliance testing. The device operated in around one-half million VW and Audi diesel-engine cars sold between 2009 and 2015.
  • One study estimated that the extent of life lost to the additional emissions had a value of $39 billion.

About the Authors

Rüdiger Bachmann is an associate professor at the University of Notre Dame. Gabriel Ehrlich is an assistant research scientist at the University of Michigan, where Dimitrije Ruzic is a PhD candidate.