Volkswagen's Business Practices and the United Nation's Global Compact

Running head: GLOBAL BUSINESS MANAGEMENT
Global Business Management
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1GLOBAL BUSINESS MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Volkswagen and its business practices......................................................................................2
Volkswagen’s business practices and the principles of Global Compact..................................3
Principle 8..............................................................................................................................3
Principle 10............................................................................................................................4
Positive and negative lessons.....................................................................................................5
Recommendations......................................................................................................................5
Benefits, challenges, and implications for key stakeholders......................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

2GLOBAL BUSINESS MANAGEMENT
Introduction
As opined by Crane and Matten (2016), the concept of ‘business ethics’ has gained a
significant amount of prominence within the framework of the contemporary business world
because of the ever increasing amount of damage that the business activities of the firms are
causing to the environment and society. Trevino and Nelson (2016) are of the viewpoint that
in the contemporary business world, the firms are not only required to take responsibility for
their actions but at the same time follow the notion of business ethics for contributing in an
effective manner towards the planet and society. In this regard, the United Nation’s Global
Compact (UNGC) is an important pact or initiative on the part of the UN to encourage the
firms to embrace sustainable as well as socially responsible practices (Unglobalcompact.Org
2019). This paper will analyze the business practices of Volkswagen on the basis of Principle
8 (undertake initiatives to promote greater environmental responsibility) and Principle 10
(Businesses should work against corruption in all its forms, including extortion and bribery)
of UNGC.
Volkswagen and its business practices
Volkswagen Group, founded in 1937, is a German automobile which specializes in
the manufacture of commercial as well as luxury vehicles (Volkswagenag.Com 2019). The
firm had active association with the different automobile brands like Audi, Bentley, Bugatti,
Lamborghini, Porsche, SEAT, Škoda, Porsche and others and this in turn enabled the firm in
2016 to become the largest automobile firm of the world both in terms of revenue generated
by it and also in terms of the number of vehicles it had manufacture (Volkswagenag.Com
2019). However, things started to spiral downwards for Volkswagen in September, 2016,
when the Environmental Protection Agency (EPA) discovered that the firm was taking the
help of unethical practices to enhance the prospects of their business (The Guardian 2019). In