Academic and Professional Skills- Assignment

Academic and Professional
Skills

Executive Summary – Ethics are the required practices that assist in creating the values of
standard of an organisation in target market. Volkswagen is a well known organisation which
deals in auto mobile sector. The organisation implements some unethical software in their
vehicles that detected through emission test. These activities impacts negatively on the business
key factors as well as on their brand image. Thus, they requires to implement some new ideas for
the rebuilding their market image again properly.

Table of Contents
INTRODUCTION...........................................................................................................................1
ANALYSIS......................................................................................................................................1
CONCLUSION................................................................................................................................4
RECOMMENDATION ..................................................................................................................5
REFERENCES................................................................................................................................6
.........................................................................................................................................................6

INTRODUCTION
Ethics and principals are two important aspects that assist in creating standards for an
organisation by which they can operate business activities (Rhodes, 2016). These kind of aspects
assist in managing a culture and environment in the firm for the betterment organisation's values.
Ethics and norms aid in developing sustainability which is essential for an company to getting
long term benefits and opportunities. For the ethics management practices, an organisation needs
to execute leadership and tactical practices for the effective removal of unethical behaviour.
Many of the companies failed to have a successful aligned organisational culture in which ethics
are deeply followed in the company even after investing a heavy amount of investment in ethics
management. This report is based on a case study of Volkswagen which depicts some unethical
activities for enhancing their profitability. The organisation basically represent their services in
auto-mobile industry which needs to implement numerous legal aspects in terms of managing
pollution level. In order to maintaining business services under these ethics, Volkswagen fitted
an device in their cars that enable vehicles to pass emission test easily. These kind of activities
claim a negative upon regulatory standards of US. Thus, the regulatory bodies have run an
operation for the organisation in order to analysing the pollution level of the firm through out its
vehicle. As it result, they detect a device that show a limited pollution level while having a
excessive pollution rate. This scandal impact negatively on the image of organisation. For this
the report is going to determine the some major points that has been affected through the false
device implications. The main focus of this reports is on the analysis on at what extent,
reputation of Volkswagen has been damaged due to this scandal. Further some recommendations
are given to improve and re-gain the reputation of company.
ANALYSIS
This section is basically seeks to determine some major points that cause of issues that
faces by Volkswagen. All these aspects assist in determining numerous aspects and its role in
order to creating some long term issues in the organisation. These factors associate some risk
factor in terms of organisational image and its industry reputation as-
Manager – They are higher authorities of an organisation who have an right to operate
business operations in a systematic manner (Cavico and Mujtaba, 2016). Volkswagen has been
erupted in the market in September 2015 when the regulatory bodies detected some unethical
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practices in the organisation. In this procedure manager of the organisation play a most important
role who permit these activities in the firm that can affect negatively on its reputation and
goodwill. They have an responsibility to monitoring operational and functional practices of the
firm that can properly in order to controlling wrongful act easily. In the media investigation, it
has been analysed that manager of research and developer team has been leading their services
with three different brands as Porsche, Audi and VW who has been suspended at the same time
due to this unethical services. On the basis of these activities, it has been identified that if
manager of Volkswagen perform their role positively in the organisation with proper
responsibility than they can avoid the uses of these kind of devices. For a manager it is required
to pay their maximum attention towards lawful activities that assist in enchaining business values
in target market with the help of quality services (Ewing, 2017). On the other hand, it has been
also analysed that some employees of the organisation has feel guilty and leave the organisation.
Main reason behind this is that some of the workers were unaware about these wrongful act due
to poor decisions of manager. Thus the lack of involvement of employees impacts as employees
turnover in the firm.
Share price – Volkswagen faced numerous issues and problems after the scandal of
Defeat device that they implemented in their vehicles to control manipulate the functions of air
pollution practices. On the basis of these false devices, firm show their their pollution level on
minimum level which assist in enhancing business profitability and market share. These kind of
unethical innovative ideas helps them in maximising business growth and sales on a hike rate.
But in September 2015, some regulatory bodies of US conducts analytical practices in order to
analyse effectiveness of the vehicles. At that time they found that some defeat devices are fitted
in the vehicles of Volkswagen which making same or excessive amount of air pollution but when
in the pollution testing practices it is shows that it makes less air pollution. After this corruption,
organisation faces billion of dollars fines as well as the share rate of organisation has been fell by
more than 30% in a single day. In the analysis of Frankfurt Stock Exchange report it has been
identified that Shares of Volkswagen eventually hit a low of $US 86.36, down from a 52 week
high of $US 262.45. Since then, it is hard for organisation to make recovery of this with a rapid
growth (Fracarolli Nunes and Lee Park, 2016). All these aspects slow down the growth of
organisation as firm grew their revenue on approx. 5% in last few quarters in which Volkswagen
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has set 6.7 billion for the deal with repairing practices of affected car (CHART: This is what
happened to Volkswagen after the emissions scandal. 2018).
Regulators - After scandal, Volkswagen have easterly caught in implementing emission
test at times of pollution test of their cars. This investigation was carried out by Mr. Winterkorn
as they were planning with reputation of car industry as well as harming environment from such
dangerous emission. For this, Germany has introduce a software which help them in caught for
doing such practices of emission as they were selling their cars in Europe and worldwide. In
UK transportation department carried out their own research on this scandal, the have appointed
chief executive to handle this scandal (Siano and et. al., 2017). From this groups of people are
being blamed and many of individual has been suspended from their designation. This scandal
lead to French and Italy individual and group members of car to investigate as it was found that
two rouge engineers ware main party of this scandal and it was confirmed by police of
Germany. Moreover it was founded by Germany transport ministry minster that they have done
scandal near about 3.6 millions cars in Europe. This lead to bring new fuel tank and important
hardware changes are per the requirements. European investment bank has given statement that
they were investing if they have taken any loan from bank top cheat in emission test and if taken
then they will demand money for this emission. Further, more criminal complaints was filed
against Volkswagen had done such a huge scandal regrading such emission which was illegal in
nature. U S authorities have accused car makers of installing such defective devices in luxury
sports cars.
Public relations – Volkswagen faced numerous issue after the detection of defeat device
in their on road vehicles. With the help of these kind of practices, organisation has earned a
desired hike in its profitability and market share (Mansouri, 2016). On the basis of these kind of
practices, organisation has earn a positive public relation in target market that assist in sustaining
customers with them for a long run duration. On the basis of these kind of activities, Volkswagen
expand their business in different countries that help them in enchaining market share of firm at
desired locations. But the public relation of Volkswagen has been also affected after the scandal
of defeat device. The result of these analysis reduce number of potential customers of the
business. Current public relation have become massive issue for Volkswagen on which
Volkswagen will put £4.7 billion moreover it in order to handle the crises of public relation as
well as to win back the trust of their customers again. In order to recreate the positive public
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relations, firm needs to implement transparency with their employees as well as customers in
order to reducing level of fraud and further legal issues (Clemente and Gabbioneta, 2017). Some
of the major issue has arose for the organisation due to negative market image and vehicles
values. Internet and social networking platforms also denoting the massive vale of the firm in
which they identified that customers provides negative and adverse feedback in context of
organisational services and their vehicles. Through out the firm identified that they needs to
improve relationship with their customers by implementing positive changes in their services.
Evaluation of the Extent
On the basis of some articles it has been identified that the scandal of Volkswagen has
impacts negatively upon their brand image as well as on its public relations too (Stanwick and
Stanwick, 2017). The impact of these scandal has been shown on the search engines on which
some articles denotes the value of name of Volkswagen as the revolution of illegal software. The
scandal of the organisation has been disclosed on 18th September through emission tests that
prevent the vehicle to produce up to 40 time more pollution than its legal limit. As per it results,
Volkswagen’s shares immerse by approx. 18% as well as organisation has lost around 14 billion
euros in share value. Volkswagen also faced major issue in its investment practices as some
countries as Japan, Italy and USA cut down its investments rates from the shares of organisation
that reduce its market share worldwide.
CONCLUSION
As per the above report it has been analysed that for an organisation it is required to
implement ethics and norms that assist them in creating values properly in the market.
Government of each country has introduced numerous regulation for each industry that requires
to implemented by different organisations for creating a legal framework in their operating
activities. In this procedure, manager and employees provides their major support by making
decision or by implementing core activities for business growth. Through this, an organisation
can grab numerous opportunities for their desired success. Unethical working activities can
create major challenges for the firm by which reputation of the can be affected in negative
manner. Thus, the code of conducts and ethical consideration needs to be considered for the
business growth.
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RECOMMENDATION
The case study is based on Volkswagen emission scandal as company used the technical
device in order to pass emission test. Due to this scandal, company has lost its brand image in the
market and faith of customers also. Now days world is full of innovation so that company can
come up with some innovation in their cars and attract its customers. Due to scandal company
has lost image so road to recovery would be bit difficult for them but as innovation can help
them to come out from this situation. The company is currently dealing in petrol and diesel cars
only so electric car can be a turnaround opportunity for company. As there is not so much of
companies which is providing electric cars so if Volkswagen come up with electric cars at
affordable price than it can be very helpful for the organisation to regain faith and trust of
customers. Electric car would also be environmental friendly. As public relation is another way
for gaining customers loyalty and grow in market.
 Company should organise campaign and events at across the country so more public
come and join that event. And with help of these kinds of events organisation can make
better public relation which will be helpful for business to have positive relation with the
customers.
 As to regain the faith and and brand image company's higher authority need to apologize
to the customers and government also which will help them to gain customer sympathy.
 The company can cut the cost and provide better quality to the customers than it can be a
bit helpful for the company to set back in market. As consumers are considered as price
sensitive so this low cost model can be helpful to attract customers and also be
competitive in market.
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REFERENCES
Rhodes, C., 2016. Democratic business ethics: Volkswagen’s emissions scandal and the
disruption of corporate sovereignty. Organization Studies. 37(10). pp.1501-1518.
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.
Ewing, J., 2017. Faster, Higher, Farther: The Inside Story of the Volkswagen Scandal. Random
House.
Fracarolli Nunes, M. and Lee Park, C., 2016. Caught red-handed: the cost of the Volkswagen
Dieselgate. Journal of Global Responsibility. 7(2). pp.288-302.
Siano, A., and et. al., 2017. “More than words”: Expanding the taxonomy of greenwashing after
the Volkswagen scandal. Journal of Business Research. 71. pp.27-37.
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.
Clemente, M. and Gabbioneta, C., 2017. How does the media frame corporate scandals? The
case of German newspapers and the Volkswagen diesel scandal. Journal of
Management Inquiry. 26(3). pp.287-302.
Stanwick, P. and Stanwick, S., 2017. Volkswagen emissions scandal: The perils of installing
illegal software. International Review of Management and Business Research. 6(1).
p.18.
Online
CHART: This is what happened to Volkswagen after the emissions scandal. 2018. [Online].
Available through:<https://www.businessinsider.com.au/chart-this-is-what-happened-
to-volkswagen-after-the-emissions-scandal-2015-12>.
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