A case study- VW: the case of consumer deception
Added on 2020-10-23
13 Pages3695 Words481 Views
Leadership ManagementProfessional DevelopmentPhilosophyPolitical Science
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Business Ethics andResponsible Management
Table of ContentsINTRODUCTION...........................................................................................................................1PART 1............................................................................................................................................1A case study- VW: the case of consumer deception...................................................................1Role of business towards society and stakeholders.....................................................................2Ethical choices which impact other companies .........................................................................3Recommendations in developing ethical policies in company...................................................4Ethical theories............................................................................................................................5PART 2............................................................................................................................................7Working as an ethical manager to manage business in high ethical standard.............................7Conclusion.......................................................................................................................................9REFERENCES .............................................................................................................................10
INTRODUCTIONBusiness ethics is the important concern for all the organisations. It is the study ordevelopment of policies and practises by which company will able to contribute their parttowards corporate governance, insider trading, discrimination, or corporate social responsibilityby which company will able to gain public acceptance. In this present report case study ofVolkswagen is to be discussed under which detailed information is to analysed and also twoethical theories is to be explained for the implement in chosen organisation. Further, in thisreport a view is provided as an ethical manager to conduct ethical policies in organisation.PART 1A case study- VW: the case of consumer deceptionThis case study is about the false advertisement done by Volkswagen company todeceived customers with its “Clean Diesel” campaign. A federal consumer has sued on thecompany regarding their false advertisement of vehicle in which they are promoting with sayingclean digital vehicles as environmentally friendly.(Li and et.al., 2018.) They are doing businesssince seven years and has almost sells 5,50,000 diesel cars by promoting fraudulentadvertisement. In a survey it is found that they cleared test of clean diesel task on vehicle byinstalling illegal software under the vehicle. Theirs vehicles are polluting environment above theprovided limit of government in world. This scandal opens up in market when US protectionagency issue notice to this German group regarding Clean Air act. All this leads to arrest of CEOon 18 July 2018. According to the compliant report it is said that company is doing theirpromotional activities through high profile marketing campaign which is through Super Bowlads, also with social media marketing campaign, and with print advertisement among consumers.They are constantly promoting and claiming that they have low levels of emission inwhich they reduce use of Nitrogen Oxides emission by 90% in their cars. But in a test it is foundthat they have used Nitrogen Oxide emit up to 40% which is very much dangerous for theenvironment. They also claim that their vehicles has passed in the test of federal emissionsstandards but this claim was proved wrong when that report of FTC appears, and it is mentionedthat they have ill-legally installed software in car tank to passed that test. This all result in payingmore that 20 billion dollars fine in polluting sir environment of US and also a hundred of angrycustomers has filed suit against Volkswagen company.(Valentini and Kruckeberg, 2018)1
Now the question arise this is what they have paid to the environment in regulating theiroperations. This is what they have contributed in ethical behaviour or in maintainingresponsibility towards social environment of the city. And this is what they have played theirroles in maintaining business environment.Role of business towards society and stakeholdersBusiness is considered as the backbone for development of society. It is the responsibilityof business organisation to contribute their part in developing social responsibilities towardsenvironment and also to maintain environment which does not affect stakeholders of thecompany. For developing large business operations' organisation has to develop effectivepolicies and strategies by which they will able to maintain their responsibility towardsdevelopment of society and also not to harm environment with doing fraudulent activities. According to the case study of Volkswagen, with doing this fraudulent activity they havetremendously affected business environment as well as their key stakeholders. For everycompany their key stakeholders are society, local government, creditors, suppliers, and unions.They all are affected with organisation's actions, with their objectives and with developedstrategies.(Tanaka and et.al., 2018.) Due to this scandal which is done by Volkswagen, majorimpact is that they lose their relationship with the stakeholders. Role of company towards societyis to develop effective relationships with their stakeholders as well to contribute their parttowards development of society. To gain public acceptance business organisation have to careabout the development of society which also helps them to attract customers in the organisation. Volkswagen, in doing their false advertisement loose with the customers as well asstakeholders. To improve their overall operations company have to develop effective ethicalbusiness policies which helps them to run operation smoothly in business environment. Majorlyaffected with this fraudulent advertisement of company is there key stakeholders who haveprovided an interest towards Volkswagen operations. In losing their stakeholders it will provevery difficult for the engineers who are involved in this deception with customers to holdeffective relationships and to provide true and fair information on impact of environment whichis demanded by stakeholders. All this fraudulent activities has dangerously affected stakeholders.They have lost their jobs, stock market changes, their reputation in market got decrease and havefaced many environmental issues.(Crane and et.al., 2017.) Role of business is to developeffective policies in maintaining ethical policies in business by which they will able to develop2
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