Ethics, Social Responsibility, and Corporate Governance | Case Study Report

Volkswagen
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Ethics, Social
Responsibility, and
Corporate
Governance
Report

Volkswagen – Ethics, Social Responsibility, and Corporate Governance
Table of Contents
Introduction - Company Analysis.................................................................................... 2
Background & History.............................................................................................. 2
Core Values............................................................................................................ 2
Ethical Culture........................................................................................................ 3
Stakeholder Analysis.................................................................................................... 3
Key Stakeholders..................................................................................................... 3
Stakeholder Map...................................................................................................... 4
CSR Analysis............................................................................................................. 4
CSRs.................................................................................................................... 4
Nature & Extent of the Responsibilities to the Stakeholders.................................................5
Problems/Issue Analysis............................................................................................... 5
Ethical Problems/Issues (dilemma), Causes, and Symptoms................................................5
Reasons for Ethical Issues.......................................................................................... 6
Why, When, Where, and How.................................................................................. 6
Stakeholders Involved............................................................................................... 9
Consequences of the Ethical Problems...........................................................................9
Evaluation............................................................................................................... 10
Management/Leadership Actions to deal with the Ethical Issues.........................................10
Correctness of the Management/Leadership Actions........................................................11
Recommended Actions at the time of the Issue..............................................................12
Recommended Actions at Present............................................................................... 12
Conclusion.............................................................................................................. 13
References.............................................................................................................. 13
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Volkswagen – Ethics, Social Responsibility, and Corporate Governance
Introduction - Company Analysis
Background & History
Volkswagen is the German automobile company that was found in the year 1937 and the
company has its headquarters in Wolfsburg, Germany. The company is the flagship marquee
of the Volkswagen Group and its car model called Beetle has been its most popular product
till date. Around 40% revenues of the organization come from China and the organization
was also recognized as the largest automaker in 2016 and 2017.
The establishment of the company was done in 1937 by the German Labour Front and it was
carried out in Berlin. Ferdinand Porsche was one of the Austrian automotive engineers and
was hired by the German Labour Front in the year 1934. This led to the development of path
for the establishment of the new factory. All of this took place in Lower Saxony in the year
1938. However, the manufacturing could not begin as the World War II broke out in 1939.
The factory was in ruins by the end of the war and it was built again under the British
supervision in 1946. At this time, the control was given to West German Government. The
company rapidly expanded in 1950s and released some of the successful products, such as
Transporter Van and Karmann Gia Coupe (Volkswagenag, 2017). The company established
its presence in the United States in 1955 and the landmark advertising campaigns were run by
an advertising agency called Doyle Dane Bernbach. The release of Beetle gave Volkswagen
a lot of popularity and acceptance among the customers. The company started manufacturing
and releasing the rear-engine cars in 1970s and the most successful model was Golf. The
organization gradually expanded to the other parts of the world, such as Mexico, Brazil,
China, India, France, etc. There are many other automotive company that are owned by
Volkswagen, such as Audi and Porsche in Germany, Skoda in Czech Republic, Lamborghini
in Italy, Bentley in UK, and Bugatti in France.
The company ended the production of its most popular model, Beetle, in 2019.
Core Values
There are a number of core values that the organization has included in its organizational
policies and processes. Integrity, servant’s attitude, accountability, continuous improvement,
teamwork, and fun are some of the core values that the organization abides by.
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Volkswagen – Ethics, Social Responsibility, and Corporate Governance
Ethical Culture
The core values, mission, and vision of Volkswagen support the ethical culture and practices
that the company aims to achieve.
However, there have been instances in the past wherein the adherence with the ethical culture
has not been maintained.
Stakeholder Analysis
Key Stakeholders
There are several stakeholders that are associated with the Volkswagen organization.
 Volkswagen Group: The primary stakeholder is the Volkswagen group itself that
comprises of the board members and CEO of the group. These are the entities that
have stakes in the organization and are also the primary decision-makers on the
policies and strategies that are carried out by the organization.
 Parent Organizations: The parent organization of the Volkswagen group is Qatar
Investment Authority which has the direct stakes in the organization.
 Daughter Companies: There are many other automotive company that are owned by
Volkswagen, such as Audi and Porsche in Germany, Skoda in Czech Republic,
Lamborghini in Italy, Bentley in UK, and Bugatti in France. These have an impact
with the decisions that are taken by the parent group (Galpinvolkswagen, 2020).
 Competitors: The automobile industry is a global industry that has a lot many giants
in the market. Some of these include Mercedes, BMW, etc. The decisions taken by the
Volkswagen group and its performance in the market have a direct implication on the
competitors and vice-versa (Hotten, 2015).
 Customers: Volkswagen Group has become an international brand and it has its
customers in Germany and all parts of the globe. The organization is required to make
sure that these stakeholders are provided with the expected services and response in
the form of products, service, and assistance.
 Suppliers: The manufacturing of the automobile is based on a number of components
that are integrated with each other. The suppliers are the key stakeholders that are
involved and Volkswagen is required to provide effective support to the suppliers and
vice versa to maintain the supplier distribution network adequately.
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