The Volkswagen Diesel Emissions Scandal
Added on 2020-11-23
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ETHICS
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3A. Explanation of ethical concern and identification of key stakeholder...................................3B. Ethical Theories......................................................................................................................6TASK 2............................................................................................................................................8Qualities for ethical leadership and creation of ethical organisation..........................................8CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONEthics refers to the moral principles which directs the behaviour of people for conductingthe activities in right manner. Ethics in business are the norms, standards and procedures whichmust be followed by the business firms while performing their business operations in propermanner (Barry, 2016). Following ethics in business is very important for the organisations inorder to sustain in the market as well as to maintain the brand image. Chosen company for thisassignment report is Volkswagen which is a auto-mobile firm having headquarter in Germany.The company is employing more than 302,554 employees in their 100 production facilitiesacross 27 countries. This report will outline the ethical dimensions of the issues along with theexplanation of various factors associated with the ethical issues. Further two ethical theories willbe discussed which can be applied to the given case. In the end, this report will discuss whatmakes an ethical leader and how ethical managers manage their business to a high ethicalstandard along with the personal ethics, unethical organisations and practices, aboutorganisational values and methods of compliance etc.TASK 1A. Explanation of ethical concern and identification of key stakeholderIt is very essential for the Volkswagen to manufacture the cars based on the needs andexpectation of the people as well as to adhere to the laws and standards set by the government orindustry. This is essential for the Volkswagen in order to maintain their market position. Theemission scandal of the company in the year 2015 was a major unethical act for the companywhich negatively impacted the organisation (Clemente and Gabbioneta, 2017) . The companywas using the cheat software in the manufacturing of their cars in order to avoid the pollutiontest. The firm was heavily criticised for using unethical practices in developing their cars by thepublic. The software which was used in the production of 11 million diesel vehicles was againstthe standard set by the industry. This issues results in the bad brand image of the firm at globallevel (Everything You Need to Know About Volkswagen Diesel Emission Scandal, 2018). Due tothe defected cars, company has to withdraw these from the market and as a result, company hasto face the loss of around 1.6 billion euros. An organisation needs to perform their operations insuch a way that the society will get positive impact from the operations as community is also amajor stakeholder of the firm. By using the cheat software in the cars, Volkswagen cars are
releasing high pollution which is harmful for the environment as well as living beings such ashumans and animals.Impact on Key StakeholdersA large number of people are associated with the business of Volkswagen which areimpacted by the decisions and acts of the company. These stakeholders plays a major part in thesuccess of the firm in the marketplace. These stakeholders are also impacted by the scandal doneby the Volkswagen as discussed below:Employees: Volkswagen is operating their business operations in various countries and alarge number of employees are working for the company in these countries. But, theseemployees are also engaged in the scandal of installing cheat software or devices in thecars with the permission of board (Fracarolli Nunes and Lee Park, 2016). After criticisedby the public, these individuals or employees also lost their trust in the company as thiswill negatively impact their personal as well as professional growth.Shareholders: Volkswagen is a big auto-mobile firm having a huge number ofshareholders. These shareholders invested their money in the company in hope of earninggood amount of money in return. However, the scandal leads to negative impact uponthese shareholders. The firm faced a heavy loss due to these defected cars which alsoimpacted the shareholders too. The shareholders did not get the favourable return upontheir investment which leads to suing of company from these shareholders.Customers: These are the stakeholders of the Volkswagen which also gets negativelyimpacted by the scandal done by the company. This is because the company dose notmanufacture the car based on their needs and requirements which results ininconvenience of customers in riding these defected cars. Also the relationship of thecompany with the customers will also becomes negatively impacted due to not takingcare of needs of customers while providing them cars. The company did notmanufactured the cars based on the expectations of the customers and provided thecustomers with defective cars which are impacting the environment also (Hibbert andCunliffe, 2015).Ethical ThinkingCompanies such as Volkswagen needs to think ethically in order to determine the suitableprocedure for accomplishing an ethical framework for performing the business operations. There
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