VW needs massive marketing campaign to regain consumer trust – and survive — Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From The Conversation

Over the years, we’ve seen quite a few scandals in the automotive industry. However, the recent one at Volkswagen sets the bar at a whole new level. This isn’t your garden variety crisis involving a mechanical or safety issue.

While many of those (think Toyota and accelerator pedals) have been huge, the VW scandal involves years of deception to the public, and there are currently more questions than answers. It’s not unreasonable to ask if VW can survive this. In the weeks and months ahead, it faces a raft of questions that will greatly influence its fate.

Public trust

The company has recalled 11 million diesel cars worldwide, but what is the actual solution? The company will remove the software that cheated on emissions tests, but can it make the cars perform as promised during actual driving conditions? If not, how will it adjust its marketing message about those cars? As for the environment, what will it do about the revelation that those cars produced as much as 40 times the allowed amount of nitrogen oxide, a pollutant linked to asthma and other respiratory problems?

Other companies will have to address questions related to this crisis too. For example, automotive manufacturers of diesel cars face the prospect of random emissions audits to ensure they don’t have similarly deceptive software installed. Those companies are surely wondering if the public mistrust of VW is contagious and will spread to all diesel cars. If so, then the diesel industry could also experience fallout.

Perhaps the biggest question – and one that must be addressed head-on for the sake of long-term survival – is whether VW will be able to rebuild public trust. After all, the deception at VW apparently went on for six years. That is remarkable!

Everyone is now asking what happened. How could this level of deception have existed for so long, much less at a German company known for its attention to detail, skilled engineering and commitment to the environment?

Read the full post at The Conversation.

Neal Hartman is a Senior Lecturer in Managerial Communication at the MIT Sloan School of Management.

President Obama’s Inaugural Speech: Exceptionalism with a view — Leigh Hafrey

MIT Sloan Senior Lecturer Leigh Hafrey

In the months leading up to last fall’s presidential election, even Obama’s supporters mourned his lack of a vision for the next four years. They haven’t taken much consolation from developments since then, despite the moment of unity over the shootings in Newtown, and the rhetorical uplift of the second inaugural address. At first glance, that speech seems merely to confirm the President’s conventionally liberal intent on multiple fronts: the war in Afghanistan, immigration, health care and education reform, climate change and social justice. Republicans see little or no effort at the bi-partisan solidarity the President had announced—perhaps naively—in his first inaugural address.

And yet, the form of engagement that he at one point calls “collective action” does surface repeatedly in the speech: so, if not a bridge across the aisle in Congress, what collectivity does the President have in mind?

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How waiting longer for the iPhone could help workers — Richard Locke

MIT Sloan Deputy Dean Richard Locke

From the So. China Morning Post

Richard Locke faults a production system geared to speed at all costs

Two decades after Nike faced heat for poor working conditions in its suppliers’ overseas factories, Apple has been responding to a series of scandals – health and safety problems, worker suicides and riots by workers employed at Foxconn, one of its lead suppliers in China. And, once again, consumer activists and others are calling for better standards, more workplace inspections and other steps to prevent such abuse. Read More »

MIT Sloan Alumna Judy Lewent on the future of finance

MIT Sloan Alumna Judy Lewent

Recently MIT Sloan alumna Judy Lewent was inducted into the Financial Executives International Hall of Fame. A former executive vice president and chief financial officer of Merck, Lewent was recognized for her performance, leadership and integrity as a financial professional who has made significant contributions to the betterment of her organization and profession. The following is an excerpt of her remarks at the event:

“It is a momentous time for finance. As the global economy teeters on the brink, much of the world stands by holding its collective breath. This is, no doubt, a time of great anxiety. That anxiety is shared, not just by 50% of the public or 75% or even 99%. Everyone shares it.

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