Ethics and Legality in Business Cases

This assignment examines two contrasting business cases: Volkswagen's unethical diesel emissions scandal and Billabong's environmentally conscious approach through Corporate Social Responsibility (CSR). It explores the ethical implications of Volkswagen's actions, highlighting the consequences for the company and its stakeholders. Conversely, it analyzes Billabong's CSR strategies, demonstrating how their commitment to environmental sustainability aligns with their core values and enhances brand image. The assignment delves into the concepts of corporate ethics, consequences of unethical practices, and the role of CSR in promoting responsible business conduct.

1. Volkswagen Ethical Issue
Volkswagen is a car manufacturer based out of Germany and formed in 1937. The organisation
has global presence and is one of the most popular car manufacturers all across the globe. The
organisation has also been one of the best in diesel cars and recently it had claimed that the diesel
cars that it manufactures are environment friendly and low on emission. However, this claim was
proven to be false as it was found that the organisation had been “engineering” its cars to provide
deceptive results. The scandal was termed as the “Diesel Dupe” and in this the organisation had
software in the engine which could sense if the car was being tested (Mansouri, 2016). On being
tested the software would change the performance factors and thus provide deceptive results.
Later on Volkswagen accepted cheating emission tests in the US market but denied other
allegations. However, this unethical practice has led to loss of reputation for the organisation and
also has led to financial losses. According to ABC News (2015) Volkswagen is facing billions of
dollars in losses and fines as it had to recall its cars and also had to pay huge fines. This is further
magnified with diminished sales. Ethics and ethical practices have several branches and if
Consequentialism is applied it will be clearer why this act of Volkswagen was unethical.
According to this branch of ethics the outcome of the action needs to provide for a greater good.
In this case the outcome would mean increased environmental pollution (de Vries et al. 2017).
People were lured into buying these cars as they were low on pollution, but eventually they are
adding to environmental pollution and thus the action is causing a greater harm to the
environment.
Apart from ethics there have been legalities that have been associated with the Volkswagen
scandal. Volkswagen has been manipulating the emission test results and therefore it has been
duping the customers and also the government (The Conversation, 2017). This is definitely a
case where the organisation has been utilising technology for fraudulent purposes in order to
boost their own sales and profits. In every country there are government regulations on
emissions. There are set standards and the car manufacturers are to abide by these regulations.
However, Volkswagen used a mechanism to alter the performance and hence dupe the emission
tests and thus although it was actually polluting more it provided results which were
controversial. All of these meant that there were several legalities that Volkswagen had broken
and as a result there are Government investigations against the organisation.

From this case it could be seen that Volkswagen had used unethical means to boost the car sales
but however, the unethical business practice was only capable of giving the organisation a short
term sales boost and ultimately lead to huge losses for the organisation. Any organisation needs
to focus on ethical business practice in order to sustain in the long run. The triple bottom line
sustainability approach focuses on environmental, economical and societal sustainability and this
approach ensures long term success for any organisation.
2. Billabong CSR
In the first part it was illustrated how organisations need to focus on triple bottom line
sustainability. Corporate Social Responsibility is a way of focusing on the environment and the
overall society at large. Businesses take from the society and the environment and it is their
responsibility to give back. Major organisations all across the globe have CSR charters but
unfortunately it can be seen that CSR is a way or promoting or marketing. CSR should in line
with the values and this is something which needs to be investigated. Billabong has been chosen
for the same and the following will look into how the CSR activities of Billabong reflect the
values of the organisation
Billabong International started as a surfing company and therefore values of the organisation
always included environmental protection. Environment has been one of the key concerns for
this organisation and this gets reflected in the CSR. Billabong has been supportive of
environmental groups and has also focused on recycling for focusing on the growing concerns of
climate change. Billabong has also focused on reducing the carbon footprints by focusing on
recycling. It has been noticed that approximately 100 million plastic bottles are used each day
and 86% of these bottles go into landfills (Billabongbiz.com, 2017). Billabong has focused on
recycling plastic bottles and 57 million bottles have been recycled so far. Recycling the bottles
also ensures that there is 50-60% less power consumption and therefore this adds towards the
reduction of carbon foot prints.
Billabong has had a five year plan to cut down its carbon emissions by 15% by the end of 2017.
Focus on the environment has always been a prime concern for the organisation and towards this
direction there have been several innovative steps that the organisation has taken
(Billabong.com, 2017). The organisation has also teamed up with the World Wildlife Funds

Southern African Sustainable Seafood Initiative to focus more on innovative products which are
made from recycling. This has dual benefits as it keeps the environment clean and also ensures
reduction of emission (Billabong.com, 2017).
Billabong has been an environment friendly organisation and its concern for the environment has
been its value. The CSR activities that have been carried out by the organisation also reflect its
core values. The organisation has not focused on CSR for marketing purposes but has concern
for the environment at large. From a single shop to a multinational organisation the journey of
Billabong has been made possible because of its values. These values have been reflected in the
CSR strategies. These have provided Billabong with good reputation and brand image and at the
same time have catered to environmental causes.

References
ABC News. (2015). Despite the recent scandals, 'business ethics' isn't a contradiction in terms.
[online] Available at: http://www.abc.net.au/news/2015-10-05/thompson-business-ethics-isnt-a-
contradiction-in-terms/6827488 [Accessed 18 Sep. 2017].
Billabong.com. (2017). BILLABONG TAKES AN ENVIRONMENTAL STANCE WITH THE
RECYCLER SERIES - Blog | Billabong Asia. [online] Available at:
http://www.billabong.com/asia/blog-post/4123/billabong-recycler-series [Accessed 18 Sep.
2017].
Billabong.com. (2017). How are Billabong's Eco Products, environmentally friendly? - Blog |
Billabong South Africa. [online] Available at:
http://www.billabong.com/za/blog-post/2272/2010-11-29 [Accessed 18 Sep. 2017].
Billabongbiz.com. (2017). Billabong Biz : Behind the Brand - Investors - Environment. [online]
Available at: http://www.billabongbiz.com/phoenix.zhtml?c=154279&p=environment [Accessed
18 Sep. 2017].
Mansouri, N., 2016. A Case Study of Volkswagen Unethical Practice in Diesel Emission Test.
International Journal of Science and Engineering Applications, 5(4), pp.211-216.
de Vries, R.E., Pathak, R.D., van Gelder, J.L. and Singh, G., 2017. Explaining Unethical
Business Decisions: The role of personality, environment, and states. Personality and Individual
Differences, 117, pp.188-197
The Conversation. (2017). 7-Eleven, Volkswagen cases show why we should push back on
'corporate ethics'. [online] Available at: http://theconversation.com/7-eleven-volkswagen-cases-
show-why-we-should-push-back-on-corporate-ethics-48739 [Accessed 18 Sep. 2017].