Ethics and Sustainability in Volkswagen: A Stakeholder Perspective

Running head: ETHICS AND SUSTAINABILITY
Ethics and Sustainability
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1ETHICS AND SUSTAINABILITY
Executive Summary
This report is based on ethical and sustainable issue occurred in Volkswagen due to
incorporation of fake device with the engine. The report provides a complete overview of
stakeholder perspectives in terms of how business should consider its stakeholder interest when
taking a management decision. The impact of the ethical issue has been analyzed with a strategic
analysis tool called PESTLE, while the discussion on stakeholder theory determines how
business should react on a complex ethical issue like VW had. In order to minimize the impact of
public damage VW has been suggested to develop a horizontal communication approach in the
internal environment and keep an intrinsic values with the product to meet the stakeholder needs.

2ETHICS AND SUSTAINABILITY
Table of Content
1.0 Introduction................................................................................................................................3
2 Summary of the scenario..............................................................................................................3
3. Description of the theories used for analysis...............................................................................4
4. Analysis.......................................................................................................................................6
5. Identification of 3 alternatives solutions......................................................................................8
6. Recommendation.........................................................................................................................9
7. Conclusion...................................................................................................................................9
References......................................................................................................................................10

3ETHICS AND SUSTAINABILITY
1.0 Introduction
The following report is performed on ethics and sustainability issues that businesses face
particularly when dealing with a large operation and globally dispersed markets. The report
discusses the techniques or the strategies that businesses essentially apply when dealing with
complex ethical issues. Discussion has been made on the basis of ethical and sustainability issues
faced by Volkswagen- a car manufacturer. The report also analyses the impact of external market
trends on the ethical and sustainability issue observed in Volkswagen. On the basis of the
analysis, three different alternative solutions have been generated in the report and one particular
suggestion has been proposed to address the type of ethical challenge faced by Volkswagen.
2 Summary of the scenario
The “Environmental Protection Agency” found that several VW cars were being sold in
America, which was designed with fake software or a device associated with the engine, which
exceeds the range of carbon emission legally allowed by US. The CEO of Volkswagen targeted
US market to gain optimum success (Ruddick 2018). Volkswagen had observed a major push to
increase the sales of diesel cars in United State with the support of a huge marketing campaign
promoting low emissions. So, to deal with the market needs, Volkswagen engineers were
required to design powerful diesel cars whose emission should pass the test of America’s
stringent pollution regulations.
In the middle of the implementation, VW has changed their idea by going with an
innovatively designed diesel cars, which was expected to reach the fuel efficiency range.
However, the end design generated more pollutants compared to gas powered cars (Siano et al.,