Volkswagen Business Ethics and Reputation

The provided document is an analysis of Volkswagen's business ethics and reputation. It explores various strategies that can be implemented by the company to improve its credibility among stakeholders, such as creating a special team for quality checks, building strategic partnerships, and increasing research and development activities. The assignment also references relevant books and journals on business ethics, including 'The Normative/Descriptive Distinction in Methodologies of Business Ethics' and 'Human Dignity-Centered Business Ethics'. Additionally, it provides online resources related to the Volkswagen diesel scandal and its implications for corporate social responsibility.

Academic and Professional
Skills

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
ANALYSIS......................................................................................................................................3
CONCLUSION ...............................................................................................................................6
RECOMMENDATIONS.................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Academic skills can be defined as approaches or strategies which are applied to learning.
Professional skills defined as competencies which are needed for managing business in
successful manner. Academic as well as professional skills are required for establishing as well
as managing business. Business ethics can be defined as the study of proper business policies as
well as practices related to potentially controversial issues such as corporate governance as
corporate social responsibility (Brenkert, 2019). It can also be defined as moral principles which
guides the way an organisation behave. All companies are required to behave in ethical manner,
as this tactics will assist them in maintaining long term business sustainability. Business ethics
can be defined as Executing business according to the self- acknowledge moral standards. It is
basically application of ethical theories as well as concepts to activity between commercial
enterprise (Dierksmeier and Seele, 2018). Business ethics is also very much important in order
to avoid legal as well as ethical issue which can have adverse effect on the reputation of firm. It
is required by companies to develop the ethical standards as it will assist them in gaining the
customer loyalty. It is the business ethics which can help an organisation developing the strong
relationship with its stakeholders.
The complete report is based on the case study of Volkswagen. It is one of the most
popular company operating business in Auto mobile sector. Business entity have to face ethical
as well as legal issues due to the installation of defeated devices on the car by its engineers.
Study will have focus on analysing the case study of Volkswagen. It will emphasize on
identifying role of ethics in business success. Assignment will also include the measure which
can be taken by enterprise in order to ensure ethical practice.
ANALYSIS
Business ethics plays a crucial role in success of any company. It is the ethical practices
which can assist an organisation in gaining the various advantages. Business ethics is becoming
crucial as it enables firm to fulfil the needs as well as meets the expectation of stakeholders such
as customers, employees, government, investors, suppliers etc. The main objectives of business
ethics is to assist companies in making responsible decisions. In addition to this, maintaining the
ethical behaviour can provide high benefits to all stakeholders including customers as well as
workers. Business ethics can considered to be as most crucial aspect of long term success. It is

through business ethics management in an organisation can increase the morale of workers. Due
to unethical practices companies might have to face serious consequences which can have long
lasting effect on its business. For instance, it has been analysed from the case study is that due to
the installation of the defeated devices Volkswagen has to face high level of criticism. In
addition to this, emission scandal has negative effect on the success of an organisation and
negative influence on the reputation of firm. It has been analysed from the given case scenario
that engineer in Volkswagen has installed the defeated devices in the car in order to enables
vehicles to pass the emission test. The other thing which has been analysed that according to
interview given by management to media top level managers in an enterprise were not about the
installation of defeated devices in vehicles (Mea and Sims, 2018). It has been analysed from the
given case scenario that the engineer in the Volkswagen has installed defeated devices in the
cars, as they have faced the difficulty in installing the engines which has high potential to reduce
the emission from car. Emission scandal has negative effect on the growth of Volkswagen. In
addition to this, emission scandal has lead to the decline in sales as well as profitability of an
organisation. It has also been analysed from the given case scenario that there has been great
decline in growth rate as well as market share of Volkswagen after the emission scandal. It is due
to the emission scandal, the shareholders, customers and other stakeholders has less trust on
company. Emission scandal has lead to the high level of dissatisfaction among stakeholders and
also resulted into decline in morale of workers.
Influence of emission scandal on the customers' behaviour towards organisation
In present scenario, customers are most conscious about the way products are
manufactured rather than quality as well as prices. Customers prefer to buy products or services
from such organisation which facilitate ethical practices. In simple words, The way business
operations performed by an enterprise has direct as well as significant influence on the
behaviour of customers towards firm. In context of Volkswagen, it has been analysed that the
emission scandal has lead to the decline in the consumer confidence as well as interest in buying
the vehicles from the Volkswagen (Roloff and Zyphur, 2018.). It is the scandal which has
completed change the perception of customers related to buying of goods or services from
organisation. In addition to this. There are many consumers those who have bought the cars from
Volkswagen has filed law suits against Volkswagen. Emission scandal has adverse influence on
the customer loyalty as well as repurchase behaviour. Now after the emission scandal, customers

those who had buy the car from Volkswagen is feeling betrayed. Many of the customers of
Volkswagen are demanding for the compensation for the losses suffered by them due to
installation of defeated devices in the car (Werhane, 2019). Now the customers are not ready to
buy the cars at even low cost. Emission scandal has lead to the decline in trust of customers. In
addition to this, emission scandal has lead to the ineffective communication which further has
detrimental financial effect on the company at global level also. Because of the installation of
defeated devices in the car Volkswagen has lost his leading position in an industry. Business
entity has also lost its tittle of number one cra maker company.
Media coverage
In 2016, the Volkswagen has been the company which has been highlighted by media
due to the emission scandal. Media has also critics the Volkswagen for conducting unethical
practices. After the emission scandal, professionals including media and other stakeholders
waited for the response from the side of an enterprise. Media has also supported Volkswagen in
communicating its messages to stakeholders. It is through media, management in Volkswagen
has admitted their mistakes and company has made politicize for the same. Management in
Volkswagen has announced their decisions to recall cars from the market through media. After
the emission scandal many of the researchers and other professional including media noted that
company was less interactive with its stakeholders (Singer, 2018.). It has been analysed from the
given case scenario that Volkswagen has provided an appropriate response as well as has
performed the best practices in crisis communication. The communications facilitated as well as
messages shared by Volkswagen through media has assisted an enterprise in re-gaining the trust
of stakeholders including customers. Emission scandal has adverse influence on the relationship
of customers with the company. It has lead to the high level of dissatisfaction among the clients
of Volkswagen. Consumers those who have purchased cars from the Volkswagen are wondering
about the way emission scandal will affect their purchase of leased vehicles. Volkswagen
consumers who take their cars to fix this issue may notice a decrease in fuel efficiency and/or
overall performance.
Effect of emissions on the shareholders
The business practices executed by the companies also have direct as well as significant
effect on the shareholders. It also have great influence on the management relationship with its

shareholders. In context of Volkswagen, it has been analysed that due to the installation of the
defeated devices in the cars Volkswagen has to face the criticism from shareholders as well.
Shareholders has filed the law suit against Volkswagen and they have made the claim for the
losses suffered by them due to the unethical practices conducted by organisation. In context of
Volkswagen emission scandal, it has been analysed that an organisation went to trial in order to
face investors those who are demanding 9.2 billion euros. The investors are demanding for such
big amount of money, as business entity has failed to inform them about the financial effect of
scandal on business (Visser, 2019.). Such instance has adverse effect on the relationship of
company with its shareholders. In addition to this, emission scandal has lead to the decline in
stock as well as share value of firm because of which shareholders have to face financial losses
that has further lead to high level of dissatisfaction in them. It has been analysed from the case
study of emission scandal by Volkswagen that shareholders in Volkswagen representing the
1670 claims and they are demanding for 10.7 billion $ for the damages suffered by them due to
the emission scandal (Rhodes, 2019). Investors of Volkswagen perceives that installation of the
defeated devices in the car is criminal activity. In addition to this, emission scandal has adverse
influence on the brand value of an enterprise.
CONCLUSION
It has been concluded from the report that business practices conducted by an enterprise
has significant influence on the performance of company. Other fact which has been discovered
from the assignment is that success of an enterprise is completed based on the way business
operations are performed by firm. It has been concluded from the study that unethical activities
conducted by any of employee can have adverse effect on the reputation of an enterprise. From
the above report, it has been summarised that facilitating the ethical practices is very much
essential in order to maintain the business sustainability for long run. It has also been concluded
from the assignment that ethical business practices is very much crucial in order to increase the
morale of workers and to develop the strong relationship with shareholders or stakeholders. Iot
has also been concluded from the report that ethics plays important role in success as well as
demise of company.

RECOMMENDATIONS
The suggestion to management in Volkswagen that they should enforce strict regulations
as it will assist in ensuring the ethical practices within an enterprise. In addition to this, the other
recommendation is that management in an enterprise should conduct regular monitoring, as this
tactic will help them in ensuring that all the regulations are being followed. In addition to this,
Volkswagen has been provided with advice to implement quality management system as it will
assist an enterprise in ensuring that the goods or services which are delivered to customers are of
good quality. It has been recommended that management in Volkswagen is required to develop
an appropriate strategy for re-gaining the trust as well as loyalty of customers. Renaming is the
business strategy which can be implemented by Volkswagen as it will assist an organisation in
building the creditability among customers. It will also support business entity in rebuilding its
reputation. In addition to this, other strategy which can be adopted by Volkswagen is rebranding
as it will provide organisation an ease in enhancing its reputation in the market. Management in
Volkswagen can create special team for checking the quality of the cars. In addition to this,
Volkswagen can built strategic partnership with special agencies such as world business council,
federal business commission etc. Posting the bond is another important strategy which can be
implemented by the Volkswagen, as it will help business entity in gaining the loyalty of
customers. Business entity needs to make customer a commitment that management will ensure
that such types of unethical activities will not be performed in an enterprise. As it is the strategy
which will support Volkswagen in building the creditability among stakeholders. Business entity
need top increase their capital investment of research and development activities as it will help
an enterprise in identifying the latest technology which can be utilised for enhancing the quality
of cars.

REFERENCES
Books and Journals:
Werhane, P.H., 2019. The normative/descriptive distinction in methodologies of business ethics.
In Systems Thinking and Moral Imagination (pp. 21-25). Springer, Cham.
Dierksmeier, C. and Seele, P., 2018. Cryptocurrencies and business ethics. Journal of Business
Ethics.152(1). pp.1-14.
Brenkert, G.G., 2019. Mind the Gap! The Challenges and Limits of Business Ethics.
Mea, W.J. and Sims, R.R., 2018. Human Dignity-Centered Business Ethics: A Conceptual
Framework for Business Leaders. Journal of Business Ethics. pp.1-17.
Roloff, J. and Zyphur, M.J., 2018. Null Findings, Replications and Preregistered Studies in
Business Ethics Research. Journal of Business Ethics. pp.1-11.
Vazquez, P., 2018. Family business ethics: At the crossroads of business ethics and family
business. Journal of Business Ethics. 150(3). pp.691-709.
Singer, A., 2018. Justice failure: Efficiency and equality in business ethics. Journal of Business
Ethics.149(1). pp.97-115.
Visser, M., 2019. Pragmatism, critical theory and business ethics: Converging lines. Journal of
Business Ethics.156(1). pp.45-57.
Rhodes, C. and Pullen, A., 2018. Critical Business Ethics: From Corporate Self‐interest to the
Glorification of the Sovereign Pater. International Journal of Management Reviews, 20(2),
pp.483-499.
Rhodes, C., 2019. Disturbing Business Ethics: Emmanuel Levinas and the Politics of
Organization.
ONLINE
Exhausted by Scandal: ‘Dieselgate’ Continues to Haunt Volkswagen. 2019.[ONLINE].
Available through :<https://knowledge.wharton.upenn.edu/article/volkswagen-diesel-
scandal/>.
The VW Scandal Continues: Implications for Corporate Social Responsibility. 2016. ONLINE].
Available through :<https://www.triplepundit.com/story/2016/vw-scandal-continues-
implications-corporate-social-responsibility/29201>.

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