Volkswagen Emissions Scandal Analysis

This assignment provides a comprehensive analysis of the Volkswagen emissions scandal, examining the factors that led to the crisis, the impact on the company's reputation and market value, and the steps taken to address the issue. The analysis includes a discussion of the role of autocratic leadership in contributing to the crisis, as well as recommendations for implementing transformational and democratic leadership styles. The assignment also touches on the importance of designing strategic plans to use information systems to prevent similar technical glitches and maintaining ethical standards through transparency and compliance.

VOLKSWAGEN CASE STUDY

EXECUTIVE SUMMARY
This assignment is in context to the infamous controversial issue done by the Volkswagen
company. It is based on cheating their US customers' by providing them cars with defect devices
that hogged the limelight in terms of unethical repercussions that unknowingly made half a
million people in such breakage of environmental laws. Henceforth, it has laid an impeding
consequence and affected VW's vision of becoming the world's largest auto-mobile company.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................1
ANALYSIS .....................................................................................................................................2
CONCLUSION ...............................................................................................................................4
RECOMMENDATIONS.................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Corporate Social Responsibility is the conscience and sustainable business approaches
which focus on enhancements of the environment with streamlining the expectations of the
customer centric framework to reap the benefits in the most profound mode. Moreover, this
emphasis on the amalgamation of the social, economic and environmental conditions to
safeguard and protect the brand' recognition along with greater ability in bringing radical
changes for building up the customers' base with better performance management. It is that
determinant which shows the self regulatory policies of an enterprise to keep a check on their
accountability and trust among their shareholders, investors and customers in terms of the
management methodology.
This report will be giving insights on the overall evaluation of this challenging situational
crises at Volkswagen. It will also highlight the diesel duping case of VW which broke the
Environment Protection Agency (EPA) laws and affected the humanity in the most critical order.
Nonetheless, it will concentrate on the different tactics adopted by corporations these days to
break laws for generating profits without understanding its consequences in context to humanity
on the whole.
Overview of the company:Volkswagen is one of the well renowned automation establishments in
the world with literal meaning of its name as folk's wagon. It is headquartered at Wolfsburg,
Germany. Their esteemed products include Porche, SEAT, Bentley,Skoda,Audi and more.
Overview of the case:This is one of the unethical capitalistic moves taken by the manufacturing
section of this company when expanding in the US markets in the year 2015. They violated the
Clear Air Act environmental regulations in context of emissions of nitrogen oxides in the
stratosphere which was 40 times above the permitted limits(Rohrbeck and Gemünden, 2011).
This case came under the eyes of all watchdogs with respect to all the regulatory bodies and
considered as a criminal offence with the biggest settlement in association with lawsuit against
the consumers' class.
ANALYSIS
This analysis has been done to understand the implications and the extent of damage that
has been incurred by this company in context to revenues, share-prices, customers and overall
reputation at both local and global markets. It is an important step to classify the factors that

were deeply affected due to the repercussions of such fraudulent attitude of such esteemed firms
who unabashedly were apologetic but again did the same thing at lower levels.
Regulators: ICTT formulated their findings about fifteen vehicles that they had violated the
permissible limits through employment of an illegal software in their system in order to cheat
and rigged their emission tests. This was the biggest scam in which the inclusion of the
executives and top management got exposed (Cavico and Mujtaba, 2016). Moreover, the
regulators needed this to put fines and other legal compliances to combat this crisis. Furthermore,
this company was ruthless while communicating with the regulatory bodies due to their powerful
global presence in the world. The relationship between regulators and this establishment was
always nerve wrecking due to the presence of their imminent chairperson Dr.Winterkorn.
However, after his sudden resignation with this duping case brought real time powers in the
hands of them. They were informed by one of VW's employee which paved the path to engulfed
this enterprise from all corners. Moreover, this led to the legalistic hedging by the Volkswagen
management that pushed these regulators away from this corporation.
In the same regard, the strategy that was followed to make these regulators understand
the working practices was to underplay and follow all the regulations and policies as per the
specifications. Moreover, the VW's establishment drew a plan to segregate their old machines
and equipment with more advanced and authentic ones that would assist in utilisation of the
available resources for performing better through complying the environmental laws, policies
and regulations. Along with, the regulators put strict supervision on this firm's products to curb
this crisis to occur again. For instance, EPA issued notice on immediate basis after this incident
and put heavy fines that led to pollution control under the legal framework. Along with, they
circulated in notices about their clean diesel vehicles which were actually less environmental
friendly vehicles.
Revenues: According to analysis, it can be found that Volkswagen was affected by this incident
and their entire business operations and functions adversely. It was because they used the
damaged parts in their diesel cars. It affected their quarterly losses for the first time in more than
15 years and it created big questions on their products and quality. In this way, the higher
authority decided to change their policies and products (Wang, Zhang and Ouyang, 2015). It is
important for Volkswagen company to maintain their relationship with the consumer but it is
negative impact towards their brand image and minimizing the revenue in marketplace. This will

be big problem that arises at the time of business development. This organization will use the
technical approaches to modify their strategy according to the requirement of consumers. There
are different ways aspects that always influenced their brand image to increase the market value
and reputation. Due to rigging of emission Volkswagen at the time of testing the parts of cars in
US but it affects the entire processing of products. According to analysis, it cannot beneficial for
consumers because it affects the body part due the large number emission. This will be impact on
the real time access on their stability in marketplace. This problem will arise in the software and
hardware system where it cannot control the entire fuel emission process in proper manner.
Afterwards, it can found in marketplace therefore, Volkswagen firm is cheating to the
consumers. The firm also committed when they used the bad parts that cannot good for
customers and environments. According to crisis, it stated that it bring more diesel product in the
marketplace therefore, it takes more attention to increase the price 2% in the marketplace. In this
way, there are different location to increase the risk of pricing and people move to another firms.
At last, it will reduce the revenue and less profit in marketplace.
Customers: This factor played a pivotal role in bringing their revenues and share prices in
negative value. This incident made their customers realise the significance of following all the
norms and policies for better sustainable components and also realised the importance of health.
In raged to this case which was based on poisonous emission that affected the entire
surroundings in slow but steady effects. Additionally, they stopped buying any of their brands or
services and also voiced their concerns through different mediums for generating awareness and
vigilance before purchasing of any auto-mobiles. They felt a pang of betrayal and cheating that
impacted their reputation in the most negative approach. With this, VW came out with a plan that
directed their customers with any queries directly to their company's site, leaving the local
dealerships out of the loop and led them to satisfy them (Lappe and Spang, 2014). However, the
customers were agitated and felt it was the biggest fraud as having a car is among the most
celebrated commodities.
As a strategic move, they just followed a simple apology and admitted their mistake by
recalling their cars from the markets. But the damage was already established and did not help
this company to regain their customers'. With time, they could have build this base but in that
case, it was the most difficult time for the customers' to gulp this cheating from their throats and
they got deviated towards other directions.

Public Relations: This parameter has a huge contribution in exposing their rigging methods for
the diesel emission tests to the entire world. Their vigorous participation led to an eye opening
mindset in the minds of their loyal customer base. Along with, the media coverage was heavily
relying on the social media platforms such as Facebook, Twitter and more. It has brought the
limelight on VW's management tactic in keeping dead silence while also avoiding any
conversations with the media people. Furthermore, this news was in almost all the news channels
that tarnished their reputation at global levels and affected their vision of becoming the leading
company in this sector (Jung and “Alison” Park, 2017).
Along with, after the resignation of their autocratic chairperson, there were speculations
that were rife about their positioning in the global marketplaces. Henceforth, this firm initially
discarded these accusations and put the blame on a small section of people. However, the
explosive revelations by the media coverage led to spiralling effects on their brand value. This
was proved when this firm saw a stark decreased share prices in the markets plus saw a dipping
number in the selling of all their products.
The strategy adopted by this firm was that they avoided all the external contacts
from the media-persons. Moreover, they gave very little details regarding this case and its results
on their official website and other social media podiums as well. The establishment was clear in
not posting anything on various channels like Facebook etc. to minimise the risks of getting
asked from any individual regarding their doldrums in combating this situational crisis in the
initial phase.
CONCLUSION
This assignment has given an outline on the burning concerns of environmental issues
especially in relation to the corporate misbehaviour of Volkswagen by jeopardizing their
reputation and image worldwide. Moreover, it has summed up the need of compliance in all the
companies working in the same industry and supporting the concept of achieving the carbon
footprint. Along with, it described the participation of the media coverage on the entire duping of
diesel engines and brought revolutionary alterations by imposing the environmental laws and
regulations with strict adherence. This has also explained the comprehensive demonstration of
such issues on various arenas such as customers', revenues, board, managers and public relations.

Along with, the technical aspects that are been incorporated to enhance the acceleration with
minimising the consumption of fuel have also implied major repercussions on the VW's brand
value in all over the world. This concluded that consumers' cheating is fatal for the entire
community with adverse implications.
RECOMMENDATIONS
This Volkswagen fiasco about the exceeding limits of the emissions due to diesel has led
the foundation of dodging attitude from such large corporations that paved the path of
rehabilitation in terms of recovery of their brand name and reputation. This scam led a great deal
on their value and worth in the global marketplaces. However, now this enterprise can
compensate by providing their customers' with a transparent and authenticated sources to
establish their qualitative standards as per the specifications laid by all the international and
national regulatory bodies.
This enterprise operations came into questionable positioning which they must work
upon by adopting the task-oriented approaches through employment of valid and reliable testing
methodologies. Along with, they must hire more skilled people with experience to maintain the
ethical standards and bring a transparency in their workplace. Their executive board must
become more vigilant in handling such issues and must not try to cover up them by putting the
compliance with strict adherence (LeBeau,2015).
Moreover, they must design a strategic plan to use the latest information systems to curb
any technical glitches for such performance metrics. Along with, the software installed for the
testing phases must be updated and in sync with regulations specified by the government
regulated organisations. However, this entire incident was a sham due to the cut throat
competition prevailed in this sector for reaching the top-notch level in faster modes by keeping
their design elements or any other technological opportunity under the wraps. And, this is the
basic triggering point that leads to such unethical corporate behaviour and must be kept under
vantage points to audit in on regular intervals of time to halt the manipulations done in context to
the marketing and sales volumes (Berger and et.al., 2015). Lastly, they are free from the
autocratic leadership of Winterkorn who controlled the operational activities in catastrophic
manner. Henceforth, they must now implement the transformational and democratic leadership
style.

REFERENCES
Books and Journals
Berger, C. and et.al., 2015. Simulations on consumer tests: A systematic evaluation approach in
an industrial case study. IEEE Intelligent Transportation Systems Magazine.7(4).pp.24-36.
Cavico, F.J. and Mujtaba, B.G., 2016. Volkswagen emissions scandal: a global case study of
legal, ethical, and practical consequences and recommendations for sustainable
management. Global Journal of Research in Business & Management.4(2). pp.303-311.
Jung, J.C. and “Alison” Park, S.B., 2017. Case Study: Volkswagen's Diesel Emissions
Scandal. Thunderbird International Business Review.59(1).pp.127-137.
Lappe, M. and Spang, K., 2014. Investments in project management are profitable: A case study-
based analysis of the relationship between the costs and benefits of project
management. International Journal of Project Management.32(4). pp.603-612.
Rohrbeck, R. and Gemünden, H.G., 2011. Corporate foresight: Its three roles in enhancing the
innovation capacity of a firm. Technological Forecasting and Social Change.78(2).pp.231-
243.
Wang, H., Zhang, X. and Ouyang, M., 2015. Energy consumption of electric vehicles based on
real-world driving patterns: A case study of Beijing.Applied Energy.157. pp.710-719.
Online
LeBeau,P., 2015. Volkswagen dealer: Biggest fraud I have ever seen. [Online].Available
through:<https://www.cnbc.com/2015/10/07/vw-dealers-customers-feel-betrayed-by-
emissions-cheating-scandal.html>.