Emission Scandal of Volkswagen: A Critical Analysis

This essay discusses the emission scandal of Volkswagen, analyzing three news articles that reported on the scandal. The essay identifies stakeholders, ethical issues, and consequences of the scandal. The essay evaluates the scandal against utilitarianism ethics.

Running head: BUSINESS ETHICS
Business ethics
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Author note

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Introduction
The current business scenario is both having huge opportunities and challenges for the
business organizations. This is due to the reason that the current business state of affairs is
providing huge market opportunities for the business organizations and on the other hand, there
are number of challenges that are also being faced by the contemporary business organizations.
In the recent time, there are number of instances where the organizations came in to news for
their unethical practices (Slade & Prinsloo, 2013). The industry that came in news for much
number of times due to unethical business practices is the automobile industry. This industry is
plagued with scandals and issues in the recent time.
The company that is infamous for their emission scandal in the recent time is
Volkswagen. They are the second largest automobile company in the world just after Toyota in
terms of sales volume. It is also reported that currently Volkswagen is having their market
presence in more than 150 countries and having manufacturing facilities in 15 countries
(Volkswagenag.com, 2018). Thus they are one of the leading names in the global automobile
market. Volkswagen was founded in 1937 in Germany during the regime of Adolf Hitler with the
objective of manufacturing affordable cars for mass markets. Currently, they are having vehicles
ranging from vans and SUVs to sedans and hatchbacks including the performance models. Their
product range varies in different countries on the basis on local trend and demand. However, the
major setback suffered by them is in the year 2015 when the emission scandal publicized (Barrett
et al., 2015). This led to fall in their share price, market share and lawsuits against their top
brasses.

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This essay will discuss about the different major news articles regarding the emission
scandal involving Volkswagen. In addition, this essay will also critically analyze the incident
based on the information in the news articles. The involved stakeholders will also be identified in
this essay. Moreover, the identified ethical issues will be gauged against the ethical theories and
the probable consequences of this issue will also be discussed.
Emission scandal of Volkswagen (bbc.com)
According to the news report published on bbc.com, the main issue of the emission
scandal emerged due to the defeat devices set by Volkswagen in their diesel cars sold in the
market of the United States. According to the report, the defeat devices were uses to pass the
stringent emission test of Environmental protection agency (bbc.com, 2018). It is also reported
that more than 11 million cars were being affected by this. It is reported that the major
stakeholders that are involved in this case are the top level management of the global team and
also some of the board members from the sales and marketing department. It is reported that the
process of installing the defeat devices was first initiated by the top level management in order to
easily get the access to the diesel car market of the United States. According to the article, the
response from the Volkswagen was not immediate and they admitted the scandal only after the
issue became much serious (bbc.com, 2018). The first response from them came through their
top boss of the American region Michael Horn and the chief executive of Volkswagen Martin
Winterkorn. They admitted that Volkswagen had broken the trust of the customers and the public
in general. In addition, Martin Winterkorn also resigned from his job due to the emergence of the
scandal. It is also reported that Christian Klingler, head of sales and marketing is also leaving the
company as the consequences of the scandal (bbc.com, 2018).

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This article is being selected due to the reason that bbc is one of the leading forces in the
news reporting across the world. In addition they are also one of the oldest names in this sector.
Reports of bbc.com are being considered as reliable and authentic in different fields and there are
no instances where they are accused for any fake news. Thus this article is being selected.
Emission scandal of Volkswagen (Fortune.com)
Another major news article published in relation to the emission scandal of Volkswagen
is one firtune.com. This article described the incident in more elaborative manner compared to
what bbc.com reported. However, the focus of this report is mainly on the accused officials who
are involved in this incident and their consequences. According to this article, the response from
the Volkswagen at the first stage was negative due to the reason that they continuously disagreed
with the scandal and even tried to cover up the story (fortune.com, 2018). However, in the later
stage, they finally agree but delegated the entire responsibility on a group of engineers.
According to the statement of Volkswagen, it is the doings of some rogue engineers who have
done the scandal and no top executives are involved in this case. This first name that came up is
of Oliver Schmidt, engineer with Volkswagen. He was accused in this scandal and was given the
imprisonment of 7 years (fortune.com, 2018).
Moreover, according to the report, even though the CEO of Volkswagen Martin
WinterKorn was not directly accused in this incident but his name was emerged in the case and it
was concluded that the engineers involved in installing the defeat devices was instructed by the
top level management. Another stakeholder involved in this case was James Liang whose name
also emerged in this report and he was also acted as engineer and was given imprisonment of 40
months. It is also stated that the current legal procedures are going towards the top level

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management of Volkswagen as well as to their associate brands. The major difference between
the article of bbc.com and fortune.com is focused area. While bbc.com reported mainly about the
timeline of the entire incident, fortue.com reported more towards the stakeholders involved
(fortune.com, 2018).
On the other hand, the similarities between the two articles includes conclusion that
Volkswagen tried to cover up the case in the initial stage. In addition, both the articles reported
that Volkswagen even tried to pass on the responsibility to their engineers in order to safeguard
their top officials. Fortune.com is selected due to the reason that fortune is considered as
benchmark for measuring the standards of the companies such as the index of Fortune 100,
fortune 500. Thus, their article can be considered as reliable and authentic.
Emission of Volkswagen (thesun.co.uk)
According to the report on thesun.co.uk, the former CEO of Volkswagen is being charged
with conspiracy and wire fraud by the United States regulatory bodies. In addition, it is also
reported that another five top officials of Volkswagen are also being charged. Thus, according to
this article, the top officials are involved in this case and Volkswagen also agreed to pay US$
4.3bn as penalties (Harper, 2018). The major difference between this article and the other two is
reporting of accusations against the top officials. While the other two have not reported of charge
against top officials, the sun reported it. On the other hand, the major similarity between all the
three articles is that CEO of Volkswagen is accused as key stakeholder in this case. This article is
chosen due to the reason that it is considered as one of the leading brand in news reporting in the
United Kingdom. In addition, they are also one of the very first newspapers who came up with
the scandal of Volkswagen.

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Evaluation of ethical theories
According to utilitarianism theory of ethics, if any act cause benefits for maximum
people then the act can be termed as ethical (Moehler, 2013). Thus, in accordance to this theory,
act of Volkswagen is unethical due to the act that it caused harm to major number of
stakeholders including the environment. According to utilitarianism ethics, emission scandal of
Volkswagen is unethical (KORTENK AMP & Moore, 2014). The consequences faced by
Volkswagen from this issue are financial loss in terms of fall of share price and payment of huge
penalties. They also faced issues in maintaining their goodwill, which affected their global
business. Their market share got reduced by huge margin. In addition, they faced termination of
top officials along with attracting number of lawsuits against them (Krall & Peng, 2015).
This issue has to be resolved due to the reason that according to the utilitarianism ethics,
this issue will cause harm for maximum stakeholders and it will further degrade the brand value
of Volkswagen. In addition, the more effectively and swiftly this issue will be resolved; the less
will be the further damage for Volkswagen in the global market.
Conclusion
Thus it can be concluded that Volkswagen faced a major ethical issue due to the emission
scandal. This essay discussed about the major three news articles that reported about the
emission scandal of Volkswagen. It is identified that all the three news articles reported that the
top executives of Volkswagen are involved in this case and they tried to cover up the matter.
This essay also concluded that according to the utilitarianism ethical theory, the scandal of
Volkswagen is unethical in nature and it should be mitigated properly. The consequences faced
by Volkswagen are also discussed in this essay.

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Reference
Barrett, S. R., Speth, R. L., Eastham, S. D., Dedoussi, I. C., Ashok, A., Malina, R., & Keith, D.
W. (2015). Impact of the Volkswagen emissions control defeat device on US public
health. Environmental Research Letters, 10(11), 114005.
bbc.com. (2018). Volkswagen: The scandal explained. Retrieved from
https://www.bbc.com/news/business-34324772
fortune.com. (2018). http://fortune.com. Retrieved from
http://fortune.com/2018/02/06/volkswagen-vw-emissions-scandal-penalties/
Harper, P. (2018). What was the Volkswagen emissions scandal and what was the car giant
fined?. Retrieved from https://www.thesun.co.uk/motors/4002356/volkswagen-
emissions-scandal-defeat-device-fix-limp-mode-vw-scandal/
KORTENK AMP, K. V., & Moore, C. F. (2014). Ethics under uncertainty: the morality and
appropriateness of utilitarianism when outcomes are uncertain. The American journal of
psychology, 127(3), 367-382.
Krall, J. R., & Peng, R. D. (2015). The Volkswagen scandal: Deception, driving and
deaths. Significance, 12(6), 12-15.
Moehler, M. (2013). Contractarian ethics and Harsanyi’s two justifications of
utilitarianism. Politics, Philosophy & Economics, 12(1), 24-47.
Slade, S., & Prinsloo, P. (2013). Learning analytics: Ethical issues and dilemmas. American
Behavioral Scientist, 57(10), 1510-1529.

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Volkswagenag.com. (2018). Volkswagen Group Homepage. Retrieved from
https://www.volkswagenag.com/