Academic and Professional Skills - Volkswagen Assignment

ACADEMIC AND
PROFESSIONAL SKILLS

EXECUTIVE SUMMARY
This project report summarises the meaning of ethics. In addition the ethical issues faced by
various aspects in the Volkswagen diesel emission scandal. The aspects includes the managers,
customers, share holders, revenue and industry. The ethical issues and their impacts are
described. Some recommendations are also included in the report.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
The ethical issues along with impacts..........................................................................................2
CONCLUSION................................................................................................................................4
RECOMMENDATIONS.................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Ethics are the moral behaviours which reflects an individual behaviour for completion or
conducting any tasks (Becher, 2018). It is a philosophy used for governing what is wrong and
what is right. It deals with moral principles helps in distinguishing the good and bad situations.
In this report, Volkswagen case study is selected. Volkswagen is a German multinational
company established in the year 1937 and having its headquarters at Wolfsburg, Germany. It is a
leading auto mobile manufacturing firm which produces and sells passenger cars under various
reputed brands. It also offers various financial services to dealers as well as customers. The case
study is related to the manner in which the Volkswagen tries to hide the omission scandal. There
are various other companies in the auto mobile industry which have done relevant activity.
Similar example is of Mitsubishi. It is a Japanese auto mobile company who has done the
scandal of fuel manipulating. They were using unapproved tools for calculating mileage of its
mini vehicles. Another example is of the Takata who have fitted the exploding airbags. The
airbags quickly gets inflated and then explode which leads to the death of many people.
Volkswagen group is the leading auto mobile manufacturer which has made a reputation in the
international market. Brand worth as well as reputation have suffered major changes by the
company. It was the most valuable brand in the competitive market. After the incident, the firm
has lost its position and had direct impact in the important market (Markauskaite and Goodyear,
2017). The aim of such report is to understanding the ethical issues as well as analysing their
impacts.
MAIN BODY
Volkswagen is the leading auto mobile company which manufactures and sells passenger
cars in the international market (Volkswagen, 2019.). It was one of the reputed and most
valuable brand until done the omission scandal. The scandal was related to fitting the defeated
devices in the vehicles for enabling them to pass the emission tests. It concerned with the fuel
consumption and carbon dioxide emissions in some of the vehicles which were sold in various
countries.
The research report is to understand the relevant ethical issues pertaining with the scandal
along with analysing the impacts of those issues in the company. The aspects of such scandal
includes managers, revenue, customers, shareholders and industry.
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The ethical issues along with impacts
 Managers: Managers plays an important role in any organisation. They ensures that all
the operations must be performed according to the set plans and programmes and up to
standards (Moore and Morton, 2017). They play important role in setting goals for the
firm and keeps the work under tight control. Many managers were informed by the
engineers and were involved in such unethical work. The pressure on the managers was
intense to compete in the market and took help of engineers and technicians. The
engineers provided them the idea of installing cheating software. The technicians had
informed to the top level management but they ignored the alert. The ethical issue was of
dismissal of managers. Many managers got dismissed from their roles and
responsibilities. Volkswagen had fired various of its managers and had changed its senior
management team for the purpose of overhauling from such scandal (Callan, Maheu and
Bucky, 2017). The impact of such issue leads to hire new faces at the position of
managers. Out of the dismissed managers, several managers were having minimum or no
knowledge regarding the performance of engineers in the diesel emission scandal. Along
with the middle managers some of the research and development managers were also
illegally dismissed by the blame that they were also part of such scandal. The impact of
such issue leads to hire new faces at the position of managers. The new managers were
carefully informed regarding the results of the work dine by previous managers.
 Revenue: All the organisations performs work to earn more revenue. It is the amount of
money received during a particular time period by the company. Revenue describes the
profitability. The selected firm was the leading manufacturer who earned the high
amount of revenues by selling their cars in multiple countries. They every time hit the
target revenue. After the scandal, the organisation had lost much of its money. Ethical
issue was revenue reduction. The organisation has faced severe reductions in the
revenues. The company had to pay various penalties to the governments and customers.
For solving such crisis also huge money is paid. They have also paid as compensation to
its customers for the losses they have suffered. The firm had to invest in solving the
issues by buying the equipments to test the cars. As the device was fitted in many cars,
they had readdressed many of their sold as well as unsold cars. Group sales revenues
also fallen down at the particular period. The financial management had made various
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provisions by failed as their was backdrop of various cars. After solving the issue,
Volkswagen has again made a growth by reconnecting with the customers by satisfying
them through reinventing all the vehicles. The company has achieve double hit in profits
than before. They are able to again sell their cars by merging with various other brands
under it (Sadker and Silber, 2016). The impact of such issue leads to decrease the
availability of funds with the organisation to perform day to day operations for the
further business performance.
 Customers: Customers are the individuals who buy the organisational products at some
price. Any product or service influences the customers in various means. They
customers of Volkswagen were left amused after listening such news. The customers
were wondering what such device means as well as how it affects the purchased cars.
Many customers were affected through such scandal. They have made groups to file the
cases against the company. The ethical issue was customers suffered financial harm.
The customers have suffered the amount losses on the devised cars. The customers have
experienced decrease in fuel efficiency as well as overall performance of the car
mileage. Various customers were able to fix their cars from such issue where as several
customers were unable to overcome from this scandal. For repairing the affected
vehicles customers also have to pay more amount to get their cars or vehicles away from
such device. The impact of such aspect leads to frustrate and dissatisfy the customers
from the services provided by the firm (Hancock and Walsh, 2016). They were having
lack of information or kept in dark while doing business with them. Several consumers
have cancelled their recent orders placed. The scandal affected the amount of money a
consumer has in its pocket. From taking the decision to buy the diesel car various
customers have shifted to the petrol cars. This scandal has not affected the customer
preferences from the organisational products but have doubt in trusting with the
company.
 Shareholders: These are the company's owners which includes any individual or
institution who has own atleast one share from the company stock. They enjoy the
benefits from the profits of the firm. When the stock value increases more profits are
earned. The shareholders are not liable for the debts or any other obligations related to
the business. No management of resources are done by the such personalities. Many
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rights are given to them such as dividend distribution, voting in shareholders meeting
and more. Ethical issues was lose in value in profits and reputation. Majority of
shareholders were angry on the company owner for not providing them any information
regarding such activity. After the news of such scandal, the values of shares of the
company reduces which reduces the profitability of the shareholders. Impact of such
scandal leads to file the case against the organisation regarding performing unethical
operations in the market place by the shareholders. Several minority shareholders have
faced the situation of decreasing reputation in the competitive market. Shareholders
were involved in the decision making to overcome from such scandal by applying
tactics. They have taken it as the opportunity to claim for the more invested in the
shares. For such purpose. they have hired lawyers for gaining the capital losses as well
as reputation.
 Industry: Volkswagen was the top auto mobile manufacturer company in the industry
or sector (Hyland and Shaw, 2016). The company sold various cars and had made much
profits. When the news of the diesel emission scandal was leaked in the market, it also
affected other companies in the industry. Ethical issue was decrease in brand image
of the industry. With the decrease of customers towards the selected company, the
industry has also faced the decrease of the brand image in the mindset of customers. The
scandal had direct impact on the various companies such as Rolex, Rolls-Royce and
many more. The industry had suffered reputational damages. Such hit had also affected
the heart of the auto mobile industry. The customer perception has reduced the
reputational image in such sector. The impact of such scandal had limited scope in the
auto mobile sector. They had far reaching consequences.
CONCLUSION
From the detailed analysis of such report it can be concluded that ethics plays important
function as they are the moral behaviours which defines individual as well as organisational
practices for completion or conducting any activity. These are the social responsibilities to
conduct the work in fair as well as ethical manner. Ethical issues are the problems which causes
dissatisfaction as well as undesirable options. As understanding the case study of Volkswagen
diesel emission scandal, it can be said that the work was not performed ethically by the
managerial positions. The management was not aware regarding the operations performed by the
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middle level to achieve the goals. The aspects are clearly analysed with the ethical issues. The
aspects includes managers, revenue, customers, shareholders and industry. Various managers had
faced the issue of dismissal without doing any wrong performance. Company has faced revenue
reduction after such scandal. Customers faced the issue of financial harm of the devised cars.
Shareholders are facing ethical issue related to lose in the value of profits along with reputation.
The industry or sector is facing issue of the decrease in the value of brand image in the
international market.
RECOMMENDATIONS
From the above scenario following are the recommendations for the enhancement of the
reputation of the organisation has been damaged. The recommendation are the following for the
aspects:
 Managers: The managers should adopt various training programs for the hired
employees for speed upping the decision process to enhancing the efficiency as well as
reducing complexities. They should properly monitor the work of each individual by
preparation of performance reports. The managers should adopt the techniques of
artificial intelligence to monitor, control and measure the products with the standards
before launching or selling them to the clients. They should also understand the customer
preferences and accordingly manufacture innovative cars with distinct features. This will
attract more customers and will increase the reputation of firm in the competitive market.
 Shareholders: For building the trust with share holders, the company should have open
communication with the multiple shareholders. This will increase the trusted
relationships between entity and shareholders. The shareholders should participate in the
meetings with the other members in the organisations. The employees should be given
proper training and development for enhancing the efficiency to work harder. By
performing better they are able to attract maximum customers to satisfy the needs,
demands and resolving there problems. When the problems will be resolved they will
able to retain loyal customers and hence able to enhance the damaged reputation of the
organisation.
 Industry: The industry should motivate the company to overcome from the scandal and
should focus on achieving the brand image again by performing the tasks ethically. It
should not discourage the firm regarding the past performance but should actively
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involve the entity to take further steps to provide innovative cars in the international
market to build the reputation which is damaged.
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REFERENCES
Books and Journals:
Becher, T., 2018. Professional practices: Commitment and capability in a changing
environment. Routledge.
Callan, J. E., Maheu, M. M. and Bucky, S. F., 2017. Crisis in the behavioral health classroom:
Enhancing knowledge, skills, and attitudes in telehealth training. In Career paths in
telemental health (pp. 63-80). Springer, Cham.
Hancock, S. and Walsh, E., 2016. Beyond knowledge and skills: rethinking the development of
professional identity during the STEM doctorate. Studies in Higher Education. 41(1).
pp.37-50.
Hyland, K. and Shaw, P. eds., 2016. The Routledge handbook of English for academic purposes.
Routledge.
Markauskaite, L. and Goodyear, P., 2017. Epistemic fluency and professional education.
Dordrecht: Springer.
Moore, T. and Morton, J., 2017. The myth of job readiness? Written communication,
employability, and the ‘skills gap’in higher education. Studies in Higher Education.
42(3). pp.591-609.
Sadker, D. and Silber, E. S., 2016. Gender in the classroom: Foundations, skills, methods, and
strategies across the curriculum. Routledge.
Online:
Volkswagen. 2019. [Online]. Available through:
<https://www.volkswagenag.com/en/group.html>
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