Abstract
The paper examines Dieselgate by focusing on the role of actors in performing in and shaping the market, as a macromarketing issue. The focus on the automotive market system is due to the need to “make space for concern” and to become reflexive about the emergent dark side of its practices. To account for the practices of actors, a discourse analysis is used for the examination of the linguistic elements associated with the construction of social phenomena. This paper addresses the dark side of market practices. Market practices that are performed through mistakes and misconduct exert adverse effects on actors in their value co-creation processes. This investigation of Dieselgate in the automotive market system offers three main contributions: (1) a set of adverse constructs; (2) an understanding of the roles that such adverse factors and controversies play in market practices and (3) a multiplicity of viewpoints, concerns and controversies.
Introduction
Enron’s bankruptcy (2001) and the subprime mortgage crisis (2008) are two exemplary scandals that shed light on market practices performed using illicit actions and introducing vicious, negative cycles to the financial market system. They were, however, not singular manifestations of the dark side of market practices. Similarly, continuous scandals have dogged many different industries and countries (i.e. petroleum industry, retail, etc.), which, although have been more limited in their immediate consequences, have had far reaching effects and echoes. One of the most recent involves the automotive industry ( The Economist, 2015), with accusations of organized fraud, endangering of the lives of others, aggravated deception of sold goods, misleading advertising, forgery and the use of false statements (Frigessi di Rattalma 2017). Such industry is well depicted in the book the dark side of automobile manufacturing by Hanlon (2015) who explores the interpretive repertoires through which market transformations are mobilised and justified but does so by focusing on the management of labour. We adopt, by contrast, a macromarketing orientation, because we engage system theory to understand the scandal from a different perspective, allowing for a development of critique that exceeds the more optimistic tendency to regard such incidents as indicative of ‘bad apples’ or temporary blotches on otherwise exemplary sectors.
In September 2015, the news that Volkswagen had rigged its diesel engines to falsify emissions tests spread throughout society. Dieselgate developed very quickly, involving other carmakers (Mitsubishi, Fiat, Renault, Opel, etc.) and letting a rough picture of the automotive market system emerge. After three years, there are thousands of appeals, ongoing class actions in the U.S. and Europe, fines of billions of dollars for the involved companies and billions of dollars in legal expenses paid (New York Times 2018).
A search of the Web of Science database for Dieselgate articles that appeared in marketing journals uncovered only six studies offering an analysis of the scandal or addressing organizational unethical behavior (Raman, Gag, and Thapliyal 2019) or “deceptive manipulation” (Siano et al. 2017) linked to the misuse of environmental credentials (Wood et al. 2018) and to greenwashing (Castille, Buckner, and Thoroughgood 2018). Such wrongdoing had a negative impact on stock returns and resulted in adverse consumer engagement with the scandalized brands (Thaler, Herbst, and Merz 2018).
When the scope was widened to include business journals, a few more articles were discovered, mainly on the topics of business ethics (Fracarolli, Nunes, and Lee Park 2016), crisis management (Coombs and Laufer 2018) and environmental impact (Hartmann and Vachon 2018). Most of the studies focused only on Volkswagen and its organizational practices (Rhodes 2016) but Fracarolli, Nunes, and Lee Park (2016) show how the fraud of the German automaker spread to surrounding companies within the supply chain and the wider network, thus contaminating market values and costing companies in the U.S. approximately $6.5 billion. No studies analyse the implications of such a wide phenomenon on the market system from a macromarketing, societal perspective.
The investigation of Dieselgate can offer a wider understanding of the dark side of market practices, capable of shedding light on how the market works (Alderson 1965) as complex networked systems shaped by social, economic and political forces (Layton 2015, 2019).
Making sense of the interplay of market systems as structures and processes, the investigation offers a more holistic view of the market (Mele, Pels, and Storbacka 2015), reflecting the ontological shift from objective to interpretative positions, which in turn accentuate the move from “out-there” descriptions to socio-historically situated institutions (Araujo, Finch, and Kjellberg 2010, Mele, Pels, and Storbacka 2015). Specifically, a conceptualization of markets as nets of practices (Lusch and Vargo 2014) shifts the focus from theoretical, normative approaches to the “social arenas” (Layton 2015) with “the understandings, languages and logics that people use in everyday life” (Layton 2019, p. 1).
Markets are what actors make of them (Kjellberg and Helgesson 2006, 2007). They are socially constructed by the actors’ agencies (Rosa et al. 1999) because multiple concerns motivate them (Geiger et al. 2014). Recently, scholars have highlighted the illegal activities and practices undertaken by companies in terms of their corporate social responsibility (Lange and Washburn 2012) and the need to adopt a more critical and realistic view of the marketplace (Tadajewski 2010, 2016) by also addressing the dark side of market systems. Denunciations and controversial situations caused by concerned groups trouble the market space (Boltanski and Thevenot 2006, Humphreys and Thompson 2014)) as well as society (Geiger et al. 2014). Market studies offer advice regarding what to be concerned about, whereas “the economic and social writ large are intricately entwined” (Geiger et al. 2014, p. 2). However, it remains unclear what the key factors are and how their interplay negatively affects market actors and their practices. A recent work by Mele et al. (2018) has highlighted the dark-side facets of actors’ agency—i.e., asymmetric, ambiguous and opportunistic situations—that adversely affect relationships and resource integration in the context of shaping service ecosystems.
A further contribution to this endeavor can come from studies focused on the understanding of the dark side of relationships, networking (Anderson and Jap 2005, Reynolds and Harris 2009, Walsh 2009) and value creation (Plè and Chumpitaz Cáceres, 2010; Vafeas, Hughes, and Hilton 2016). Business-to-business (B2B) studies note relational factors that may diminish or hinder collaborations between business partners (Ford and Mouzas 2013; Heirati et al. 2016), such as conflict (Mele 2011), institutionalized creativity (Vafeas and Hughes 2016), dependence (Schmitz, Schweiger, and Daft 2016), and opportunism (Wathne and Heide 2000). From a business-to-consumer (B2C) perspective, studies also address the implications of negative relationships with customers, namely, misbehavior or perceived unfairness (Frow et al. 2011, Nguyen 2012, Smith and Bolton 1998, Weun, Beatty, and Jones 2004).
By building on market practices studies (Geiger et al. 2014, Kjellberg and Helgesson 2006, 2007, Mele and Russo-Spena 2019, Russo-Spena and Mele 2016) and on the negative factors influencing actors’ relationships (Johnsen and Lacoste, 2016) from a macromarketing perspective, this paper focuses on the following research questions: RQ1. What are the adverse relational factors in the automotive market system? RQ2. How do adverse relational factors affect the practices of automotive market systems, i.e. the dark side of market practices?
The paper examines Dieselgate by focusing on the role of actors in performing in and shaping the market, as a macromarketing issue (Layton 2007, 2019). The focus on the automotive market system is due to the need to “make space for concern” (Geiger et al. 2014) and to become reflexive about the emergent dark side of its practices.
To account for the practices of actors in the market, a discourse analysis (Alvesson and Kärreman 2000, Hardy 2001, Phillips and Hardy 2002, Vaara, Kleymann, and Seristö 2004) is used, as it allows for the examination of the linguistic elements associated with the construction of social phenomena.
This paper extends knowledge in market studies by addressing the dark side of market practices (Araujo 2007, Callon 2007, Kjellberg and Helgesson 2006, Mele, Pels, and Storbacka 2015). Market practices that are performed through mistakes and misconduct exert adverse effects on actors in their value co-creation processes. This investigation of Dieselgate in the automotive market system offers three main contributions: (1) a set of adverse constructs; (2) an understanding of the roles that such adverse factors and controversies play in market practices and 3) a multiplicity of viewpoints, concerns and controversies.
In sum, the framework of the dark side of market practices adds to the macromarketing literature by showing the importance of identifying the controversies and problems that market actors face and that can worsen value co-creation, producing outcomes that harm the public from a macromarketing perspective.
In the next section, a literature review focuses on market practices, studies of frictions in the market and works about the adverse constructs in actors’ relationships. Then, we outline the research process and present findings related to the dark side of market practices. The paper ends with theoretical contributions, implications and ideas for further research.
Market Practices
From the macromarketing perspective, markets are a socially constructed arena in which “embedded actors compete for material and status rewards” (Fligstein and McAdam 2012, p. 5). The different combination of self-interest, morality and mutuality cause occasions of divergences (Domegan et al. 2019). The conflicting and competing interests of actors are evaluated, manipulated and solved, with the identification of threats and opportunities (Layton 2015, 2019). To study the dynamics of such complex systems, we advocate adopting a practice-based approach because it focuses on the set of practices rather than on an individual or an organization (Mele and Russo-Spena 2017; Russo-Spena and Mele 2016, Skålén and Hackley 2011; Schau, Muñiz, and Arnould 2009) as an epistemological lens through which to understand phenomena in organizations and society (Bourdieu 1990, Dreyfus 1991, Giddens 1984).
By acknowledging the social, historical and structural contexts in which actions take place (Gherardi 2012), scholars define social-material practices as a nexus of behaviors, activities, performances, artefacts, norms, values, representations and talks (Gherardi 2009, Mele and Russo-Spena 2017, 2018, Schau, Muñiz, and Arnould 2009). The concept of practices is central to any debate over market shaping and creation (Andersson, Aspenberg, and Kjellberg 2008, Azimont and Araujo 2007; Kjellberg and Helgesson 2006, 2007; Korkman, Storback, and Harald 2010). Through the adoption of a postmodern view, in which social reality is an ongoing process of creation (Skålén and Hackley 2011, Storbacka and Nenonen 2012), markets are socio-historically situated institutions (Peñaloza and Venkatesh, 2006) that are subjectively defined (Rosa et al. 1999) and shaped by actors (Geiger and Finch 2009, Kjellberg and Helgesson 2007) who populate the specific context and integrate resources because they search for new opportunities (Storbacka and Nenonen 2012) and are motivated by multiple concerns (Geiger et al., 2014).
The conceptualization of markets as nets of interlinked practices shifts the focus from theoretical or normative approaches to the way in which ideas become practices and, thus, shape ongoing realities (Kjellberg and Helgesson 2007, Mason, Kjellberg, and Hagberg 2015). Kjellberg and Helgesson (2006, 2007) see markets as resulting from translations of normalizing, exchange and representational practices; Vargo and Lusch (2014, 2016) expand this view of the market to include value co-creation and identify integrative practices as central practices for market co-creation. The integrative practice includes various forms of exchanges, interactions and other activities that require the use of resources with varying natures that are moved towards and integrated with other resources (Vargo and Lusch 2011, 2016). All social and economic actors are resource integrators of market, private and public resources, which are critical to co-creating value (Vargo and Lusch 2016). Representational practices relate to communication, the transmission and interpretation of signs, symbols and language (Vargo and Lusch 2016). Effective communication affects service provision through a performative process (Kjellberg and Helgesson 2006). Actors decide to become involved in market relationships when they accept value proposals due to representations, i.e. the images of schema they develop, which in turn affect the density of resources acquired and applied in value-creating processes (Akaka et al. 2014, Lusch and Vargo 2014). Finally, normalizing practices refer to the presence of rules, guidelines and social norms in the market (Kjellberg and Helgesson 2006). In this sense, the institutional arrangement depicts interrelated sets of institutions (norms, rules, values, etc.) constituting a coherent assemblage that facilitates the coordination of actors’ interactions and service provision (Vargo et al. 2017).
Actors’ agencies perform the three practices, enacting the taking and retaining of market forms (Nenonen et al. 2014). On the one hand, markets continually emerge as enacted by multiple authors, whereas each individual actor has a means of shaping the market by making their own concern (Geiger et al., 2014). Market-based institutions begin to form, rules are created, and social norms and practices are accepted (Layton 2007, 2015). On the other hand, markets retain form because of the continual repetition of practices (Nenonen et al. 2014). The performative idiom on the agencement of social–material practices enacts the dynamics of the market systems (Callon 2007, Kjellberg and Helgesson 2007, Kjellberg et al. 2012, Mele and Russo-Spena 2017, 2019).
Frictions in Market Practices
An ordinary consequence of the functioning of markets is the production of matters of concern. The idea of concerned markets also holds ongoing frictions and failures (Geiger et al., 2014); it refers to situations in which controversies drive dynamic criticisms and justifications “during which actors tap into different explanations or principles of justice and thereby negotiate the construction of a shared world” (Blanchet and Depeyre 2016, p. 42). Markets are sites of conflicting practices and interests (Blanchet and Depeyre 2016, Kjellberg and Helgesson, 2006).
Conflictual situations reflect the interests of a powerful group (Fligstein 1996), with actors’ denunciations being able to destabilize and trigger controversies (Boltanski and Thevenot 2006). Mapping such controversies allows a multiplicity of conflicting viewpoints to emerge (Latour 2005). In actor-network theory, the complexity of controversies depends on the enactment of actors’ agencies in their opposing forces and sensemaking (Callon 1998, Latour 2005). The concept of a marketplace drama addresses the “antagonistic performances among opposing groups of consumers and producers through which their divergent ideological goals are attained and the economic and competitive characteristics of specific market structures are transformed” (Giesler 2007, p. 740).
In such a view, a critical role is assumed by market actors’ ability to compromise over what is valuable, good or worthy, especially in marketing systems that involve matters of public interest or concern (Finch, Geiger, and Harkness 2017). Concerned groups affect market configuration “by making matters of concern visible to other actors” (Geiger et al. 2014, p. 8).
Scholars argue that market actors can exert negative effects that counter external actors and others, mediated through culture, market and society (Edelman and Suchman 1997; Giddens 1984). Mistakes, misconduct and disaster can produce adverse outcomes that harm the public (Vaughan 1999). Mele et al. (2018) analyze the problems and challenges that actors face in the context of shaping service ecosystems. They define the dark side of actors’ agency as an actor’s deliberate attempts to influence a service ecosystem to achieve benefits relating to self-interest, with the understanding that these actions inhibit other actors from providing service and can also be detrimental to other actors and the ecosystem as a whole. Often a simultaneous presence can be assumed: opportunism can lead to conflict, and overcoming ambiguity might require temporary conflict; moreover, ambiguity can create a breeding ground for opportunism.
Adverse Constructs of Actors’ Relationships
The dark side reflects problems, challenges, difficulties or drawbacks related to structural issues in actors’ relationships (Abosag, Yen, and Barnes 2016). A review of literature on the adverse constructs of actors’ relationships, using the search terms ‘dark side’, ‘negative’, ‘adverse’, ‘controversies’, ‘adverse relationship’, ‘business’, ‘firm’, ‘company’, ‘actors’, ‘customers’ ‘market’ and practice, covered business studies databases such as Google Scholar, Emerald, ScienceDirect and JSTOR. To ensure that this keyword search did not exclude relevant papers solely because they used different terminology, we also checked the reference lists of all identified papers (Mustak, Jaakkola, and Halinen 2013). The data set—including results from 1985 to 2018—consisted of a corpus of more than 500 references. Each researcher conducted a separate critical reading of the abstracts of documents from the data set based on a common interpretative schema leading to the comparing of concepts and interpretations (Denzin and Lincoln 1994).
The most commonly debated elements in the literature are opportunism, conflict, power, unfairness, ambiguity, uncertainty, tension, collusion, distance, institutionalized creativity, misbehavior and asymmetry (Abosag, Yen, and Barnes 2016, Johnsen and Lacoste 2016, Mele et al., 2018). However, the discourse analysis (Ellis et al. 2012; Ellis and Rod 2014) carried out in the research process (section 5) highlighted five main constructs as crucial in this study: opportunism, conflict, power, unfairness, ambiguity and asymmetry. We present a brief literature review of such constructs. Table 1 summarizes the main features.
Adverse Constructs of Actors’ Relationships.
Opportunism
Opportunism is “self-interest seeking with guile” (Williamson 1975, p. 6) through negative behaviors that an actor adopts in relationships with others to obtain advantages. Through guile, the actor takes “advantage of opportunities with little regard for principles or consequences” (Macneil 1981, p. 1023). The term “deceit” also highlights the idea that self-interest seeking is not equivalent to opportunism; opportunism is deliberate and not accidental (Das 2005). Opportunism is not restricted to activities that directly benefit the agent “but also admits the possibility of expending resources in activities undertaken solely to impose costs on a trading partner in hope of eliciting concessions” (Masten 1988 p. 183). Opportunism can assume different forms, such as misrepresenting information, activities, results, intentions, promises or selling costs (Anderson 1988). The literature distinguishes between different categories of opportunism (Niesten and Jolink 2012), such as ex ante (Akerlof 1970) or ex post (Williamson 1985); blatant or strong (Williamson 1985); lawful (Williamson 1991) or “weak-form” (Luo 2006); and active or passive (Wathne and Heide 2000). Regarding outcomes, opportunism can have a strong negative impact on the interacting actors’ performances (Lui, Wong, and Liu 2009), leading to bargaining position and the dissipation of firm-specific assets (Park and Ungson 2001), and on the networks’ developments impacting the stages of the network life cycle (Yaqub 2011).
Conflict
Conflict refers to “a clash between divergent perspectives, interests, objectives, or behaviors” (Mele 2011, p. 1378). Extensive literature on this construct provides many categorizations addressing a process in which one party is perceived as being opposed to, or negatively affected by, another party (Pondy 1967, Wall and Callister, 1995). With a stage approach, different forms of conflict—latent, manifest and affective—have also been identified (Duarte and Davies 2003). Amason (1996) distinguishes between cognitive and affective forms of conflict, while other authors identify relationship, task and process conflict (Jehn and Mannix 2001). By offering a wider perspective on the nature of conflicts, Mele (2011) proposes a categorization of five types of conflict: (i) task-related conflicts, i.e. differences in opinions regarding a group task; (ii) process-related conflicts, i.e. controversies over how tasks should proceed to accomplishment; (iii) role-related conflicts, i.e. differences in the degrees and types of responsibilities that various people think they should have; (iv) affective conflicts, i.e. emotional arguments based on interpersonal compatibility (or lack thereof); and (v) values-related conflicts, i.e. controversies caused by different systems of values. Conflicts produce varying effects that tend to escalate as they proceed from individuals to dyadic relationships, teams and, finally, networks: hostile communication and inappropriately competitive behavior, distrust, lack of commitment and diminution of quality (Fang, Chang, and Peng 2011, Halinen and Tähtinen 2002). These destructive conflicts waste resources and diminish the generation of value (Mele 2011).
Asymmetry
Asymmetry stems from “an imbalance in the size and characteristics of a relationship” (Lee and Johnsen 2012, p. 692). Johnsen and Ford (2008) link size differences to certain relationship characteristics, such as mutuality, interpersonal inconsistency, power dependence, conflict and cooperation. Lee and Johnsen (2012) add trust as an important relationship characteristic for understanding asymmetry and relationship development. Information asymmetry is a pertinent issue for service provider–customer relationships (Gallouj 1997) that can create moral hazards for the seller and adverse selection concerns for the buyer (Kirmani and Rao 2000). Asymmetrical information constitutes a form of vulnerability that enables one actor to behave opportunistically (Kirmani and Rao 2000, Wathne and Heide 2000). Such an unbalanced situation can negatively impact relationship performance (Redmond 2018). Regarding relational outcomes, information asymmetry may cause a spiral of suspicion, hindering the development of trust, commitment and satisfaction (Anderson and Jap 2005, Tong and Crosno, 2016).
Unfairness
Whereas fairness refers to a “judgment of whether an outcome and/or the process to reach an outcome are reasonable, acceptable, or just” (Bolton, Warlop, and Alba 2003, p. 474), perceptions of unfairness involve an actor’s view of the degree to which the distribution of rewards relative to effort is inequitable (Samaha and Palmatier 2015, Samaha, Palmatier, and Dant 2011). Unfair exchange arises from differences in bargaining power and information asymmetry between transactors (Adkins and Jae 2010). Unfairness can take on three main forms: distributive (Adams 1965), procedural (Leventhal 1980) and interactional (Bies and Moag 1986). These forms pertain, respectively, to the outcomes and the way in which people are treated in relationships (Cohen-Charash and Spector 2001; Kumar, Scheer, and Steenkamp 1995). Inefficient or unfair outcomes also occur because there are limits to what law and rules can accomplish. Unfair treatment by the more powerful actor can manifest itself as the customer’s perception that a firm acts immorally or consistent with abuse and fraud that cannot be prevented (Bechwati, Sisodia, and Sheth 2009). Perceived unfairness can negatively affect customer behaviors, especially in terms of repurchase intentions (Fernandes and Calamote 2016) or negative word of mouth (Blodgett, Granbois, and Walters 1994). Jin, He, and Zhang (2014) identify unfairness perceptions linked to the customer’s power state and dissatisfaction; distrust may also emerge due to perceptions of unfairness and negative feelings experienced by disadvantaged customers (Nguyen and Mutum 2012). A sort of reciprocal side of unfair transactions is also assumed; for example, if one party reneges on the goodwill, the ensuing equilibrium is for both to act unfairly (Jang and Chu 2012).
Power
The power of an actor in a relationship is the actor’s ability “to affect another’s decision making and/or overt behavior” (Wilkinson 1974, p. 15). Some scholars regard power as an authoritative control mechanism (Weitz and Jap 1995), expressing one actor’s potential influence on the other party’s beliefs, attitudes and behaviors (Frazier 1984). In this regard, studies distinguish the possession of power from the means used to exercise it, as well as the consequences of control over the other actor (Frazier and Antia 1995). Other scholars, defining power in terms of the resources that an actor controls, identify five interrelated sources: economic-based, technology, expertise, trust and legitimacy (Thorelli 1986). Leveraging source-dependence theory (Pfeffer and Salancik 1978), some authors (Casciaro and Piskorski 2005) distinguish the power imbalance, i.e. when one actor depends more on its exchange partner (Gulati and Sytch 2007) and mutual dependence power that reflects the sum of the partners’ dependencies (Ritter, Wilkinson, and Johnston 2004). Power-unbalanced relationships result in unbalanced sharing of benefits (Duffy and Fearne 2004). Also, a “power-over” process produces long-term disorganising effects (Layton 2015, Domegan et al. 2019).
Research Process
This research adopts case theory (Gummesson 2017). Taking a macromarketing perspective, we looked at the automotive market system as a set of stakeholders—people and organizations—”who produce patterns of behaviors, choices and value-based exchanges through their actions, non-actions, reactions and interactions over time and space” (Domegan et al. 2019, p. 1). To gain fresh insight into the dark side of market practices, we used case studies from the automotive industry related to emissions scandals involving automakers (i.e., Dieselgate). These cases offer theoretical suitability (Taillard et al. 2016) linked to actual adverse practices that emerged in 2015 following a published study of the International Council on Clean Transportation (ICCT).
The data were collected as part of an ongoing study from September 2015 (when the Volkswagen scandal first came to light,) to July 2019, and they come from multiple sources. We started with Google searches for the keywords “emissions scandal,” “Dieselgate,” “automotive industry” and “dark side” to gather data, public statements and interviews of the involved actors. We also analyzed posts on blogs and social media, which are “important for the social construction and sense making of different types of phenomena” (Helkkula, Kelleher, and Pihlström 2012, p. 65). Ad hoc interviews with dealers, customers and other actors were integrated to reconstruct the stories, as experienced by these actors. In addition, we gathered information related to other automakers that might have been involved in the scandal during this period.
We looked for data diversity and data pluralism (Blanchet and Depeyre, 2016). The diverse data produced by actors are carriers of meanings as well as “objects to be constructed, employed, and manipulated in various processes of market-shaping. Such varied data may contribute to a practice-based approach to markets” (Blanchet and Depeyre 2016, p. 47). Data pluralism allows us to account for the many points of view involved.
Our focus was on understanding the actors’ views and perspectives by searching for how actors constructed what was happening and how they positioned themselves within the scandal process. Reporting what people said and their word choices was especially useful in illuminating their underlying assumptions, ambivalences and uncertainties (Hardy 2001, Tuominen, Talja, and Savolainen 2002).
Data Analysis: Discourse Approach
The data analysis was carried out through a discourse analysis (Alvesson and Kärreman 2000, Hardy 2001, Phillips and Hardy 2002; Vaara, Kleymann, and Seristö 2004) and through an examination of the linguistic elements associated with the construction of social phenomena. As Tuominen, Talja, and Savolainen (2002, p. 273) explain, “discourse is the vehicle through which the self and the world are articulated, and on the way different discourses enable different versions of selves and reality to be built.” This method focuses on the relationship among text, discourse and context (Phillips and Hardy, 2002). Discourse is the set of representations, meanings and statements that together depict a particular version of the social world (Berglund and Johnson, 2007). In line with Potter and Wetherell (1987) and Potter et al. (1990), we conceive of discourse as a construction, obtained through systems of terms, metaphors and common places, that creates the possibility that the same phenomena can be described in multiple ways (Potter et al. 1990). We thus leverage an interpretative repertoire, defined as a cluster of terms frequently used by actors as building blocks for their conversations (Gilbert and Mulkay 1984, Potter and Wetherell 1987), to “enable evaluative micro discursive constructions about the behaviors of the self and others” (Ellis et al. 2012, p. 405).
We increased the chances of achieving saturation (Strauss and Corbin 1998) and established guidelines for our further analysis to incorporate emerging themes. In the first step of the coding process, we identified key interpretative repertoire nodes, characterized as second-order themes (Ellis et al. 2012). To manage the substantial data, we relied on NVivo 11 software. In the second step, we focused on developing an understanding of the way in which interpretative repertoires might be used by identifying different discursive forms and their users, when and with reference to what (van Dijk 1997). Similar to Cowan and McLeod (2004), we identified interpretative repertoires as they emerged from patterns of talk, both in the same text and across the sample of collected texts. Although the research step also revealed a recurrence of terms and expressions within texts that different actors produced, we started with the assumption that “the relative frequency of occurrence of each interpretative repertoire is not necessarily the most significant issue in discourse approach; rather, it is the strategic use of language by speakers that matters more” (Ellis and Rod 2014, p. 87). The aim was not to transform texts into quantitative data but to gain a deeper understanding of the analyzed phenomena and the discursive strategies that actors adopt in their talk (Géring 2015).
Different sets of linguistic resources emerged as being of significance with respect to the dark side of market practices involved in the Dieselgate scandal. In line with the coding strategy that Ellis et al. (2012) proposed to represent two competing interpretive repertoires related to the same topic, the data analysis led to the identification of different second-order themes (as “parent” repertoires) and first-order themes (as “child” repertoires) to outline different discursive constructions of actors in the market. These aspects enabled us to capture the countervailing discourses and thereby delineate different categories and boundaries surrounding the themes and how they emerge through the inter-subjective perceptions of different actors.
Some themes characterize the discourse of specific practices even if no exclusive links can be detected between themes and practices. As a result, the findings exhibit variability in the actors’ language according to the different practices they perform in the market (Cowan and McLeod 2004). Furthermore, we followed Wood and Kroger’s (2000) recommendations for safeguarding reliability and validity by showing explicitly “how the interpretations of [the] individual segment of talk, as well as overall claims, are grounded in the data—hence the emphasis on illustrating excerpts of stretches of talk” (Rod, Lindsay, and Ellis 2014, p. 607).
Findings
The analysis is articulated into three tree steps. First, a short story about the “scandal” is depicted. Then we present the emerging themes and their competing interpretative repertoires, analyzing the adverse relational factors in the automotive market system. Finally, we discuss the dark side of market practices by analyzing the different discursive constructions in the context of those market practices.
The automotive market: Recent scandals
In September 2015, the news that Volkswagen had rigged its diesel engines to falsify emissions tests spread quickly through the business world and society. However, the scandal dated back some months. Fig. 1 provides the timeline of the scandal, including the key events and the actors involved.
The Scandal timeline.
The scandal started at the top of Volkswagen’s management chain. It was the major contributor to this crisis, as were the top-down organizational culture attributes. The focus on results with no oversight as to how these results were to be achieved left operations without either legal or ethical boundaries, thereby creating a climate for fraud (Stewart, 2015). However, beyond a focus on Volkswagen, the sources of all the causes must be more broadly extended. Responsibility for the scandal must be assigned to multiple actors.
Authorities in the U.S. and Europe performed a crucial investigation into the situation. In May 2014, a study of emissions in modern diesel cars, carried out jointly by the ICCT and West Virginia University’s Centre for Alternative Fuels, published results that were shared with the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), prompting these government agencies to start an investigation. In refusing to cooperate with these authorities, Volkswagen claimed miscalibration, arguing in meetings that “The discrepancies between test results had to do with the conditions under which the test was done” (VW engineer, reported on www.reuters.com, September 24, 2015).
In the spring of 2015, Volkswagen recalled diesel vehicles in the United States, telling regulators that a software update would fix the excess emissions. After tests showed only a modest improvement, CARB intensified its inquiry. Only in September did Volkswagen confess to the Environmental Protection Agency and CARB that its diesel cars had been equipped with defeat-device software.
In the wake of these events, government agencies expanded their testing to detect irregularities; any such irregularities were widely publicized by the media, which spread the suspicion that the German company was not the only one misleading consumers. The ICCT—the council that carried out the study that made the Volkswagen scandal public—also published a white paper describing how other diesel manufacturers systematically exploited imprecision and technical tolerances to make their test results look better.
When the scandal spread, it became apparent that many other automakers were involved. In April 2016, the Japanese carmaker Mitsubishi admitted to having manipulated emissions tests to make its cars’ fuel consumption rates more favorable; the announcement had negative effects on the market value of the company’s cars. Soon after the scandal broke, Mitsubishi’s president resigned despite his continued claims that he had been unaware of the company’s lies. A few months later, other important brands—i.e., FCA, Renaults, BMW, Opel, etc.—were involved.
When the illegal conduct became evident, Volkswagen agreed to a first settlement offer in the U.S. to compensate car owners and to introduce environmental repair measures to atone for its cheating. A year later (2017), the first legal punishments started to arrive. In the U.S., Volkswagen pleaded guilty to federal criminal charges of conspiracy, fraud, making false statements and obstruction of justice. It agreed to pay over $25 billion in civil compensation and restitution to consumers and federal and state authorities. Additionally, it bought back or fixed most of the vehicles and compensated customers for a variety of losses, including the diminished resale value. After a year (June 2018), Volkswagen was fined one billion euros by German authorities over diesel emissions cheating; this was one of the highest fines ever imposed against a company.
In 2019, the Volkswagen Group announced investments of nearly 44 billion euros in e-mobility, autonomous driving, digitalization, and other modernization measures to speed up innovation and make the electric car a more affordable choice for millions of people. However, the company’s path to the electric business wasn’t exactly a self-propelled process, as it was part of the settlement with the U.S. government in 2016.
A long-term, ripple effect of the scandal is the fact that the VW brand and Dieselgate have become synonymous with illegal and corrupt behavior at a systemic level, bringing about many economic, political and social consequences (Majláth, 2016).
The consistency of economic consequences was mainly a huge financial penalty and the cost of expected repairs, which could take many years. The scandal brought on the political and legal front to enforce the regulatory framework, especially in the U.S.; the scandal also had significant social costs, as it damaged the economy by creating a reduction of the employment rate, a fall in corporate tax returns and an implicit cost due to health damages.
Emerging Interpretative Repertoires about the Dieselgate Scandal
Our findings reflect five second-order themes (“parent” repertoire) and 10 first-order themes (“child” repertoire) that outline the different discursive constructions of the actors involved. We provide a summary of these interpretative repertoires in Table 2.
Emerging Repertoire about the Dieselgate Scandal.
The parent repertoire named “opportunism” results as the most common in the texts collected. Its first-order themes were “recognizing opportunism,” which emphasizes the term “cheat” and its synonyms to describe and detect the poor behaviors of key actors (i.e., provider and other suppliers), and “rejecting opportunism,” featuring weaker terms such as “misconduct” and “incidents.”
The parent node named “information asymmetry” emerged as the second most common theme in the order of citations. This repertoire was addressed through first-order themes such as “fighting information asymmetry,” shaped around the term “know” and its gemmed words—”news” and “information”—and “establishing information symmetry,” which was used as a different repertoire related to the verbs “clarify” and “inform” and to the adjectives “transparent” and “clear.”
The parent node named “conflict” arose from the adoption of a “prompting conflict” interpretative repertoire, involving terms such as “anger” and “frustration,” as well as modal verbs such as “should” and the imperative “must.” The conflict also arose from the “managing conflict” interpretative repertoire related to the terms “understand” and “mistakes,” which are adopted to distinguish between what is right and what is wrong.
With regard to the second-order theme named “perceived unfairness,” the two related child interpretative repertoires were “claiming inequities” and “restoring fairness,” representing the double-sidedness of the same words that opposing subjects use to explain differences in the perception of the technical content of the outcomes provided or experienced.
The second-order theme named “power” comprises two first-order themes: “arranging the institutions” and “exercising influence and pressure.” The former relies on terms such as “diligence” and “commitment,” which are designed to re-align differences in existing power positions. The latter can be detected in the use of words such as “lobby” or “pressure” and their synonyms.
The Dark side of Market Practices
The competitive interpretative repertoires related to the second-order themes—conflict, opportunism, information asymmetry, perceived unfairness and power—provide support in addressing the discourses on the dark side of practices—integrative, representational and normalizing (Lusch and Vargo 2014)—that have come to emerge in the automotive market system. Table 3 offers an overview of the different discursive constructions of the market practices that are presented in the next sections. Additional quotations have been included in the table to provide more evidence.
Dark Side of Market Practices.
Integrative practices
In the investigated cases, the smooth occurrence of integrative practices was impeded by conflicts and opportunism, which altered the way in which resources were integrated and incorporated into others’ processes.
First, actors showed different perceptions of how resources had to be used or integrated, and their conflicting views and interactions influenced different perceptions of resources, tasks and the roles they performed in various actions. The child interpretative repertoire “managing conflict” has been used by both automakers and the suppliers of the incriminating device, suggesting a different use of the resources that they provided to the markets to legitimate their actions: “How these components are calibrated and integrated into complete vehicle systems is the responsibility of each automaker” (source: Rene Ziegler, Bosch spokesperson, excerpt from September 24, 2015).
Goal incompatibility, dissension about expectations, and differences in perceptions also hinted at a different interpretative repertoire, i.e. “prompting conflict,” used by customers and other actors with respect to the effect of conflicts on their resource-integrating practices. Both the affective and the cognitive forms of conflict were involved in this interpretative repertoire; they nurtured hostility, frustration or anger and produced manifest forms of explicit disagreements that hindered the achievement of the other party’s objectives. “I purchased a Golf Bluemotion specifically for low emissions to help do my bit for the environment. I and my son suffer from asthma; I’m frustrated by these actions” (source: Scottish owner, blog, September 22, 2015).
Dissonance in feelings and between what is considered wrong or right characterized the discursive construction among all actors and affected the integrative practices in the broader actors’ networks. “As a Volkswagen dealer, I am very concerned about my employees, the people that for many, many years have worked on these cars, we’re proud to represent them. When they go home, they are being asked simple questions: Did you know about the fraud? Did you know that they were cheating?” (source: Steve Kalafer, dealer in New Jersey, October 7, 2015).
Conflict combined with opportunism to shape the ways in which actors integrated resources and co-created. One of the pillars of this node was centred on the “rejecting opportunism” interpretative repertoire, detecting the role that the main actors played in hiding or misrepresenting the events and their actions to obtain advantages. For example, some automakers preferred to talk about mistakes, misconduct, incidents and faults, while others preferred to affirm that they had complied with the law. “Group Audit examination of the relevant processes indicates that the software-influenced NOx emissions behavior was due to the interaction of different factors including the misconduct and shortcomings of individual employees, the weaknesses in some processes and a mindset in some areas of the Company that tolerated breaches of rules. It is clear that, in the past, deficiencies in processes have favored misconduct on the part of individuals” (source: excerpt from a public statement published on the official website, www.volkswagen-media-services.com; date: December 10, 2015). “This kind of behavior is totally inconsistent with our qualities. Nissan has not and does not employ illegal defeat or cheat devices in any of the cars that we make…our cars have been correctly homologated under Korean regulations…” (source: Nissan public statement reported on www.forbes.com; date: May 16, 2016).
However, the focus on the poor behavior of the main actors (automakers, suppliers and national authorities) was emphasized in the child interpretative repertoire “recognizing opportunism” to detect their accountability in actions performed and to benefit themselves with no regard for the consequences for others. The discourse resulted in the emphasis of a series of consequences that were detrimental to the integrative practices of customers and other actors—dealers, media, competitors, etc.—as well. “For the carmakers, implementing real driving emissions laws means new technology to curb pollution that adds weight and cost to vehicles—a bigger problem for small cars than larger ones” (source: European Automobile Manufacturers’ Association, February 17, 2016). “VW produced the problematic vehicles for the pursuit of higher profits and circumvented laws, which has worsened the air pollution and has affected public health and rights” (source: China Biodiversity Conservation and Green Development Foundation, December 15, 2015).
Representational practices
In the investigated cases, the smooth emergence of representational practices was influenced by opportunism, information asymmetries and unfairness.
Opportunism in such practices emerged during early interaction through the child interpretative repertoire of “rejecting opportunism,” altering information and activities, adjusting results, or misrepresenting intentions and promises. An active form of opportunism emerged as companies tried to build a representation of the market that was different from what actors expected it to be. By 2018, the Volkswagen Group is aiming to be the world’s most environmentally compatible automaker. In order to achieve this goal, we have set ourselves some ambitious targets, particularly with regard to environmental protection. In 2014 we continued our consistent pursuit of these goals. Our Environmental Strategy embraces all of our brands and regions and extends throughout every stage of the value chain (source: Volkswagen Sustainability Report 2014, p. 86). “I am absolutely disgusted with this. I purchased my VW Golf due to the fantastic low emissions it was ‘claimed’ to produce.…The reason I chose such a car was because VW was a well-known, respectable company, but this could not be further from the truth. I want to know as soon as possible if my car has been affected and if so what are the actions from this point on” (source: consumer post, reported on www.bbc.com; date: September 2015).
The interpretive repertoires of “establishing information symmetry” and “fighting information asymmetry” represent two sides of the same discourse that were used by different actors to perform different actions. On the one hand, actors with the primary responsibility (automakers, suppliers, legal authorities, etc.) used this repertoire in their attempt to restore adverse meanings and actions for less knowledgeable parties. “Bosch is fully cooperating with authorities, assisting them in clarifying the facts concerning the exhaust-gas treatment issue” (source: public statement of Rene Ziegler, Bosch spokesperson, as reported by the Wall Street Journal on www.wsj.com; date: December 16, 2016). “Mr. Winterkorn is also under investigation for market manipulation by German prosecutors who are looking into claims that he should have informed VW shareholder” (source: The Independent; date: September 17, 2016). “The truth is that all diesel cars fail to meet pollution targets” (source: Telegraph; date: September 22, 2015). “In July, VW’s failure to compensate UK owners of cars affected by the emissions scandal was described as “deeply unfair” by the transport select committee, which also claimed the government had been too slow to investigate whether VW should be prosecuted in the UK for the scandal” (source: Medianews reported on www.theguardian.com; date: October 29, 2016). “We are working hard to make the procedure on the affected vehicles as convenient as possible for all our customers and have promised to ensure that the implementation of the technical measures will not incur costs for any UK customer. We continue to meet regularly with the Department for Transport to update them on progress […] (source: VW spokesperson, public statement reported on www.theguardian.com; date: October 29, 2016).
Normalizing practices
Power and information asymmetry affected the smooth emergence of normalizing practices.
The exercising influence and pressure interpretative repertoire helped explicate the control mechanism, expressing the authoritative pressure and influence that actors exerted on another party’s beliefs, attitudes and behaviors. “Volkswagen deeply regrets the behavior that gave rise to the diesel crisis. Since all of this came to light, we have worked tirelessly to make things right for our affected customers and have already achieved some progress on this path. The agreements that we have reached with the U.S. government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear” (source: Matthias Müller, Chief Executive of Volkswagen Group, excerpt from www.volkswagen-media-services.com; date: January 11, 2017). “This new test is being marketed as a ‘real driving emissions’ test but it is a sham. It is instead a gift to car manufacturers who have made no effort to meet the EU’s car pollution rules. Governments are not only keeping their heads in the sand with regard to the ongoing car emissions scandal but are also willing to ignore the major and growing public health problems linked to air pollution” (source: Dutch MEP Bas Eickhout, October 28, 2015). “CARB, in conjunction with the U.S. EPA, will continue to evaluate VW, Audi, and Porsche technical proposals to determine if and in what way the affected vehicles can be fixed. We will also address the issue of mitigating the past and future harm to the environment as a result of excess NOx emissions. And, we will continue to assess and determine the penalties for the violations of California air quality regulations” (source: CARB public statement reported on the official website www.arb.ca.gov; date: December 16, 2016). “German carmakers accelerate their plans for e-mobility. Dieselgate forces VW to embrace green mobility, Reluctant Daimler plans ‘radical’ push into new mobility world, and Early e-car starter BMW plans new mobility sprint. We have got the message and we will deliver” (source: VW CEO, date November 7, 2017). “It would appear that the EPA either has to step up its random testing or, better yet, perform all the tests itself; trusting the automakers to self-certify would now seem to be an expediency we can ill afford” (source: www.driving.ca; date: September 21, 2015). “The Federal Motor Transport Authority has confirmed—as it already had previously—that implementing the technical solutions for the affected models will in no way adversely affect fuel consumption, engine performance or noise emissions. Once modified, the vehicles will also meet all legal requirements and the applicable emissions standards” (source: Volkswagen excerpt from the official website www.volkswagen-media-services.com; date: December 21, 2016). “The EU nitrogen dioxide (NO2) limits are too strict and should be relaxed. In doing so, it is possible to avoid that exploited loopholes in regulations can be exploited by car makers assuring the possibility to rebuild trust not only for car makers’ own sake, but also for industry and market as a whole” (source: head of the German car industry association VDA, June 5, 2017).
Theoretical Contributions
Markets emerge from complex structures and processes (Edelman and Suchman 1997, Vaughan 1999). Actors engage in practices that shape such structures and are processed and affected by them. Scholars encourage becoming more concerned about markets and understanding the intricacies of economic, political and social aspects (Mele, Pels, and Storbacka 2015). The production of matters of concern comes from the functioning of a market and its matter-of-facts (Callon 2007, Cochoy 2015).
This paper contributes to the debate over the market systems by extending knowledge about the dark side of market practices: market practices being performed through controversies, mistakes and misconduct that exert adverse effects on actors in their value co-creation processes at the levels of organization, macromarketing and society (Araujo 2007, Callon 2007, Layton 2015, 2019). Two research questions guide the investigation of market practices in the automotive market system: RQ1. What are the adverse relational factors in the automotive market system? RQ2. How do adverse relational factors affect the market practices of automotive market systems?
The findings are relevant to macromarketing theory, as they address the wider picture of the Dieselgate scandal, related not only to a single unethical behavior with wider and longer-term consequences than negative stock reaction to multiple actors and societal views of such misleading wrongdoing. Three main contributions come from: (1) a set of adverse constructs; (2) the effects of such adverse factors and controversies on the practices of market systems; and (3) a multiplicity of viewpoints, concerns and controversies.
First, with regards to RQ1 (What are the adverse relational factors in the automotive market system?), a set of five adverse constructs was identified: opportunism, conflict, information asymmetry, unfairness and power. The analysis showed how market actors talk within multiple interpretive repertoires, shedding light on the dark side of market practices. By analyzing two competing interpretive repertoires for each of the factors, the paper offers a richer description of their role in affecting actors’ interaction, resource integration and meaning-making. The analysis of such factors allows the plurality of relations to emerge and the views “bearing matters of concern” to be monitored (Geiger et al. 2014). A map of relations and controversies expands in time and space, often according to unpredictable trajectories and, thus, involves multiple market actors (Blanchet and Depeyre 2016). This is in line with Latour (2005), who argues for being “encouraged to multiply viewpoints and perspectives…. to explore the social where it gets most complicated” (p. 259). The automotive market concerns actors in the ways it relates to, affects and worries them (Geiger et al. 2014). The adverse social, economic and institutional factors are not separate spheres but, rather, are interconnected, letting an intricate complexity emerge (Layton 2015) and making this a clear macromarketing issue.
Second, the adverse factors and controversies pertain to systemic tensions that are part of integrative, representational and normalizing practices. These aspects represent factors critical to studying the way in which actors challenge the current market practices (processes, representations, tools, values, rules, etc.) and try to modify or create new ones. By building on Kjellberg and Helgesson (2007) and Lusch and Vargo (2014), we go a step further and address the ways in which adverse relational factors affect the market practices, i.e. the key dark side of market systems (RQ2). Such adverse elements produce different directions for actors to act and inform the norms and rules that shape how the market works as a system. Regarding integrative practices, the study provides evidence of how automakers worked in disassociation from what the actors would have preferred to see accomplished. Suppliers, customers, dealers and other actors cited the roles of conflict and opportunism. The process and relational dimensions of conflict entail different levels (i.e., individuals, dyads, network and ecosystem). Access to resources is impeded or worsened because an inaccurate course of action or performance quickly starts to diffuse to other actors in the network. As a result, less beneficial configurations for resource integration emerge. In the case of representational practices, opportunism affects actors’ sense-making, by which they offer representations of the market that develops differently from how the actors perform. Information asymmetry and perceived unfairness contribute as well, through the spreading of negative feelings and meanings throughout the market system, derived from judgements of unequal value creation. Misrepresentations arise due to confusion and frustration among actors about poor communication, as well as strong clashes over resource capture, rights and responsibilities. The perceived unfairness, together with the enactment of power, also contributes to a set of destabilized norms, values and roles that, combined, are the institutional arrangements and the related normalizing practices (Koskela-Huotari and Vargo, 2016). As the analysis reveals, dependence in power relations and complacency towards practices provide evidence of the constituting and ordering influence of the negative elements of practices on shaping the market system. Actors perform de-institutions of the automotive, market rules, norms and values.
Third, taking a closer look at the negative dynamics—i.e., controversies, mistakes and misconduct and their interrelated links—provides a richer understanding of the dark side of market practices in terms of relationships, processes and patterns, i.e. market systems perspectives. Kjellberg and Heldberg (2006) and Lusch and Vargo (2014) point to the interrelationship of different market practices. This article advocates for the need to uncover interdependencies between multiple actors and add to previous studies on controversies in macromarketing literature (Blanchet and Depeyre, 2016). A market system perspective on the dark side of market practices requires an understanding of the kinds of values, mechanisms and processes that shape markets and how they work together. By not following rules (due to opportunistic behaviors and power), actors hinder resource integration and attack institutions. By misrepresenting a problem, they increase conflicts and perceived unfairness, which inhibits resourceness and accessness. The three practices do not stand side by side; a process of interweaving develops with a texture framing (Mele and Russo-Spena, 2017, 2019). Blurring the lines between economic, social, environmental and political issues, the automotive market system exists in all its complexity to cater to various and integrated concerns that are raised (Callon et al. 2013; Cochoy 2015). What happened in Dieselgate was not only “a matter of facts”; it became “a matter of concerns” (Cochoy 2015), combining objective and moral dimensions and stressing social effects in terms of the co-construction of society. The dark side of market systems emerges as a complex, adaptive ‘texture of practices’ (Mele and Russo-Spena 2017, 2019) in which both structure and function become important and in which purpose derives from a dynamic integration and matching of different resources (rules, information, knowledge, abilities, values, etc.) and involving multiple actors.
Implications for Scholars and Further Research
This study highlights the novelty of the dark side of market practices. Dieselgate moves the understanding of the automotive market from a matter of facts to a matter of concerns. It is not simply markets that are embedded in social institutions (Polanyi, 1955) or social relations (Granovetter 1985); there is an entanglement of political, economic and social realms within and around the market and its practices. Scholars should adopt a system perspective and interdisciplinary effort to fully understand market complexity and the dark side of market practices (Mele, Pels, and Storbacka 2015).
The view of a market system as a social institution that is highly adaptive to cultural, political and social context requires a wider analysis of how to address the clash between different worlds and conflicting interests. Dieselgate is still ongoing. New resolutions and decisions continue to emerge from the automakers, the government and other actors. How new controversies and adverse relations emerge and can be combined, and how a circular effect is produced to reinforce, balance or change relationships and practices, must be further explored. This includes understanding how the interconnected dark side of market practices results from the propagation of conflicts and controversies and the consequences that can change and provide the transformations in markets.
New insights might be achieved by investigating, in-depth, the role that other automakers play in the automotive market and/or the relationships between governments (U.S., EU) and companies that aim to establish different interventions to support customers. Indeed, scholars must better explore the role of institutions and, more generally, institutional arrangements as endogenous coordination mechanisms shaping markets and their practices (Vargo, Wieland, and Akaka 2015), as well as how they evolve over time and produce new issues.
In addition, the dynamics of automotive market systems are deemed to be underpinned by a wider societal and long-term effect. The vast impact on the environment and sustainability, the waste of resources and the worsening of trust and relationships could be framed as a wider tragedy of commons (Ostrom 1999). A longitudinal study could reveal how the dark side of market practices results from historical, cultural and social contextual conditions as well as determine the long-term effects of different dark-side factors. Studies of market practices in different contexts can also address specific factors and more context-dependent or independent processes. Future research should take a long-term and integrated perspective towards understanding how the controversies and conflicts can co-exist with current practices in the market or, in some instances, give rise to better solutions to new or existing problems.
In this sense, the investigation of the recent transition to the electric vehicle orientation of VW and other carmakers as a consequence of Dieselgate could still offer a proper context to investigate the light side of the scandal consequences.
By advancing studies on controversies, mistakes and misconducts from a macromarketing perspective, scholars could understand the multiple factors that affect the market, actors and their practices. Thus, researchers might analyze the potential detrimental effects of dark-side practices on societal well-being. Cross-fertilization among business ethics, corporate social responsibility and organizational dark sides could offer a more holistic understanding of market dynamics and actors’ behaviors.
Implications for Practitioners
This study has implications for practitioners, enabling them to comprehend the impact of the dark side of market practices and the complex network of actors. It is crucial to understand the macromarketing consequence of the scandal, widening the perspective of environmental standard failure as an organization affair to wider wrongdoing at a societal level.
First, practitioners should be aware of their organizational and managerial culture (Hanlon, 2015). They should not focus on results with no oversight of how these were achieved left operations without either legal or ethical boundaries, i.e. creating a climate for opportunism. The result is “teleopathology” including some mix of “moral myopia” and “moral muteness.” Within the systems perspective, extra-organizational forces can either fortify or discourage attributes of organizational cultures.
Second, managers must consider the multiple adverse constructs affecting the actors’ relationships and the effect they produce on different market practices. The competitive interpretative repertoires on opportunism, conflict, information asymmetries, unfairness and power are inherently interdependent and, together, form a unity that actors tend to perceive as a distinct integrated aspect of the dark side of market practices.
More attention should be paid to how resources are integrated. Resource density can be improved by reducing conflicts and opportunistic behavior and by improving the relational atmosphere in the business, economic and political spheres. Similarly, managers must mitigate the distortion of information, opportunism and inequities by noting how different actors make sense of companies’ intentions and promises. In addition, practitioners should work to better understand how rules, norms and guidelines work and can be combined to support their business actions in the market, and how they can better align with them in accordance with social, economic and ethics goals.
Third, the dark side of market practices is tied to unintended networking consequences within and across different market actors. Because managers act in complex systems of interrelated interactions, efforts to manage them must make managers pay more attention to how controversies and adverse relationships emerge and evolve and how their cascade effects are produced by adopting a wider networking vision. Understanding how dark-side interpretative repertoires spread through the different market practices—and the chain of disruptive events that can follow—can be useful for better managing the companies’ adverse patterns.
Then, managers should be in charge of not only companies’ positive outcomes but also the extensive social costs that threaten the public. The ability to manage the coexistence of contradictory elements sets the stage for using the tension between these elements as an opportunity for learning and increasing value creation in a system perspective. Managing the dark side of market practices may also take the form of complex leadership behaviours that incorporate the ability to mitigate frictional aspects and contradictory elements.
Finally, important implications for business management education can be drawn from the study close to the Principles for Responsible Management Education (PRME). Management educators should consider preparing the responsible leaders of tomorrow on how to deal with a multiplicity of concerns and controversies and to understand the roles that adverse factors can play in market practices. They can educate next managers to relate social and ecological considerations to market systems and foster a more cohesive and inclusive economy (Compact 2007). Thus, responsible management education could be a powerful driver of corporate sustainability and social justice in a macromarketing perspective.
Implications for Policymakers
Markets are not fixed and immutable; they continuously emerge. Because they are complex networked systems, they touch many actors (Layton 2015, 2019). Frictions and divergent behaviors release the tension between opposing elements and produce a new set of arrangements and practices that enhance transformation and new institutions.
As no “invisible hand” guides markets to equilibrium, policymakers and regulators should adopt a more reflexive role in shaping markets, going beyond merely “fixing market failures,” and should acknowledge “the visible hand of the State, the visible hands of managers and the visible hands of market mediators” (Cochoy 2015, p. 240). Markets are bound by path dependency and intricate interactions involving social, cultural and moral aspects. Thus, policymakers must be able to distinguish between tensions in different market practices and the different rhetoric used to legitimize tensions in a way that supports or changes practices. Policymakers must recognize that any given tension is inextricably linked to many other contradictions, both within the practices and at the intersections of different market practices, which compose the social co-constructed reality. Policymakers must “make space for concerns” (Geiger et al. 2014, p. 15) in market practices, with the acknowledgement that “what people produce in their situated practices is not only work but also the (re)production of society” (Rouse 2002, p. 16).
Policymakers should be reflexive about society, the environment, industry and market concerns, including the economic, social and political intricacies. Market actors are affected and worried by controversial practices that must be carefully and continuously monitored. Politics are not separate from markets; politics are entangled with markets (Cochoy, 2015). It is a macromarketing affair.
Recognizing and addressing the dark side of market practices can enhance institutional change as a process by which policymakers and governmental actors purposefully iterate between contradictory elements to ensure attention is paid to them. Actors can avoid paralyzing and often vicious cycles of establishing new rules and prescriptions and instead initiate virtuous cycles of social co-construction processes and enhanced well-being.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
