Introduction
I am sure you have all heard about Volkswagen’s Dieselgate or the Harvey Weinstein scandal and the #MeToo movement that followed immediately after it erupted. One of the main lessons we learned is how quickly and extensively these scandals diffused across the globe. Indeed, the cross-border impact of these crises shows a lot about how institutional idiosyncrasies and media dynamics, among others, influence public responses across nations. To help us better understand this phenomenon, I will draw on two recently published studies. I aim to offer some valuable lessons on how scandals are perceived (differently) on the global stage and how businesses and societies respond to them.
The global spread of scandals: a cultural lens
When I read about a corporate scandal that has suddenly appeared on the news, a simple yet critical question comes to mind: how do different countries and contexts perceive and react to ethical failures? Take, for example, the not-too-odd Volkswagen Dieselgate scandal. We all know that this scandal achieved widespread attention as Volkswagen was found to have manipulated emissions data deliberately. While in the eyes of many people, this is a major ethical issue, in the eyes of others, this is not the case. Highlighting how cultural values shape public responses is key to answering this question. For that reason, researchers have attempted to analyze the fallout in Germany and the United States and interestingly found significant differences.[i]
In the context of Volkswagen’s home country, German consumers, influenced by their country’s collectivist culture and deep roots with Volkswagen as a national icon, exhibited what scholars call a “domestic bias”, that is a relatively forgiving attitude, as Volkswagen’s crisis was deemed a national issue, and importantly, one that could directly affect their economy and society as a whole. For that reason, also entering a survival mode, many Germans prioritized Volkswagen’s recovery efforts over punishment, focusing on rebuilding trust and establishing long-term corrective measures.
On the other hand, US consumers, driven mainly by a relatively more individualistic culture, a legal system focusing on punitive justice, and the fact that Volkswagen was not headquartered in the US, were, as expected, far less forgiving (see Figure 1 about cultural differences between Germany and US). US citizens were quicker and more aggressive towards demanding accountability and retribution, with many taking an activist role by directly boycotting the brand. The US focus on individual responsibility and immediate consequences made it difficult for Volkswagen to repair its reputation quickly.
The cultural differences in the reactions of these two different cultural groups show how important the understanding of national values and cultural roots is in the process of managing a global corporate crisis. Corporations that operate across the globe should be even more ready to adjust as a response to a corporate crisis, so they better align with local expectations. Balancing transparency, apology, and restitution in culturally resonant ways is a good start to achieve that.
The role of media in amplifying scandals
As one would rationally expect, the international scope of scandals is amplified by a country’s media, which are known to take the role of a powerful gatekeeper, one that can shape public opinion. Take, for example, the Weinstein scandal and the global #MeToo movement that erupted quickly after this was made known to the public. The Weinstein scandal is a case study of how media dynamics can drive the cross-border spread of moral outrage.[i]
What research shows is that in countries with relatively strong traditional and digital media ecosystems, the #MeToo movement was relatively more quickly and extensively diffused. For example, the US and European nations with well-established media infrastructures experienced intense public scrutiny and institutional responses. Responding to these, the governments quickly reacted with the necessary policy reforms, while high-profile resignations emerged in various industries. In these countries, extensive media coverage combined with societal norms prioritizing gender equality created the conditions for collective moral action.
On the other hand, in countries where media ecosystems are weaker, centrally controlled, or even misaligned, the impact of the #MeToo movement was not the same. For example, countries with limited digital connectivity or restrictive media environments experienced a relatively slower adoption and diffusion of the movement, with fewer public figures held accountable.
Another interesting aspect of the Weinstein scandal is the complementary roles traditional and digital media played in creating the conditions for its diffusion. Traditional media, known for their credibility and broad reach, brought legitimacy to the #MeToo movement. In a complementary way, digital platforms boosted the spread of the #MeToo movement through real-time sharing and grassroots mobilization (see Figure 2 below on the frequency of use of the #MeToo hashtag on Twitter between 2017-2018). When these two media types were aligned, the scandal’s global impact intensified, thus more quickly and extensively influencing consumer behaviour and creating a global demand for corporate accountability.
[i] Yao, F. K., Xu, M., & Ao, J. (2024). Worldwide spread of the Weinstein scandal and the# MeToo movement: cross-country diffusion of reputation loss in the film industry. Journal of International Business Studies, 1-24.
Conclusion: Navigating Cultural and Institutional Complexities
The Volkswagen and Weinstein scandals highlight a new reality of our globalized world: corporate crises are not universally perceived or responded to similarly. Then, what are the factors that shape a different view of these scandals globally? I believe it is safe to claim that the interplay of culture, media, and institutions is responsible for creating a rather diverse landscape of reactions by the public. As a response, corporations increasingly need to adopt a more sophisticated approach to crisis management.
Being an academic myself, I am not going to preach about better understanding different cultural and institutional contexts as part of just being another academic exercise. History shows that it is something more than that; it is a practical necessity for multinational corporations. A crisis response that resonates in one country may not work that effectively in another. This highlights the need for tailored strategies that consider local values, media dynamics, and institutional frameworks. What do corporations need to do? They obviously need to proactively study these factors so they can more effectively navigate crises, rebuild trust, and minimize long-term reputational damage.
For societies, these insights emphasize the importance of facilitating the creation of more robust, independent, and accountable media ecosystems and more equitable institutional structures. Strong cultural and institutional foundations ensure accountability and promote collective progress in addressing ethical challenges. Globalization will not cease to exist. Hence, the corporations’ ability to understand and respect these differences will be central to managing corporate crises in a way that aligns with the diverse moral landscapes.
[1] Bowen, M., Freidank, J., Wannow, S., & Cavallone, M. (2018). Effect of perceived crisis response on consumers' behavioral intentions during a company scandal–an intercultural perspective. Journal of International Management, 24(3), 222-237.
[1] Yao, F. K., Xu, M., & Ao, J. (2024). Worldwide spread of the Weinstein scandal and the# MeToo movement: cross-country diffusion of reputation loss in the film industry. Journal of International Business Studies, 1-24.