Impact of Ethics in Modern Business: A Case Study of Volkswagen's Diesel-gate Scandal

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Introduction:
The impact of the ethics in the modern business context is observed to be significant.
The effect of the ethical business conduction on the customers of the modern generation is
immense as the preferences of the customers in choosing a particular company, is notably
influenced by the above mentioned aspect. Along with that, the practices of ethics in the
modern business organizations is seen to be of great significance in the case of creating a
corporate image that will have the potential to attract the customers (Grace and Cohen 2015).
Adding to this, it is observed that the preferences of the customers are more inclined towards
the organizations which has the capability to consider the views and the opinions of the
customers and has the ability to take the stand for the customers. The ethical business
conduction from the part of the modern business organizations is much needed as it makes
sure that the organizations do not suffer any sort reputational damage in the business industry
along with the financial loss (Kolk 2016). The ethical business conduction is seen to be
crucial in the increment of the profitability through the increased sales as it produces the base
for it to the organizations in the form of the preferences or the customers. Hence the unethical
business conduction from the part of the modern business organizations is seen to cost the
organizations in significant manner.
The paper is focused in the elaboration of one such case of unethical business
conduction from the part of one of the market giant of the automotive industry in the form of
Volkswagen. The case elaborates the case of Diesel-gate which was an emission scandal that
was conducted by the organization in the year 2015. The paper elaborates the base of the
scandal and along with that, it also defines the consequences that the organization had to face
for conducting the mentioned case. Adding to that, the paper also describes the strategies for
the chosen organization to recover from the impact of the mentioned case and along with that,

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it mentions the paths to be followed by the chosen organization in transforming their business
conduction following a more ethical approach.
Organizational Overview:
Volkswagen is a German company that has the expertise in operating in the
automotive industry. The chosen company is a market giant in the global automotive industry
and has significant reputation of being the one of the very few organizations belonging to the
mentioned industry that are employing the technological gadgets and the innovations in an
efficient manner into the products and the services. The mentioned organization was
established in the year 1937 by the German Labour Front (En.volkswagen.com. 2019). The
company is currently having the headquarter in the city Wolfsburg of Germany and is seen to
serve the customers across the globe. Adding to this, the significant improvement of the
business conduction of the organization in the modern era is seen to be possible due to the
excellence in the leadership of Herbert Diess, the chairman of the board of management of
the Volkswagen passenger cars brand (Volkswagenag.com. 2019). Along with the visionary
leadership of Herbert Diess, the improved efficiency and the skills of the 117400 number of
employees of the organization recorded in the year 2017, is considered to be of great
significance in the generation of a production output of 6.073 million units in the year 2016
(En.volkswagen.com. 2019).
Apart from that, the combination of the improved skills and the competencies of the
employees of the organization and the excellent leadership of Herbert Diess was seen to be
instrumental in the generation of a revenue of 76.729 billion euro in the year 2017 along with
a net income of 4.353 billion euro in the same year (En.volkswagen.com. 2019). However,
even after having such improved financial condition, the organization was observed to face
significant crisis in their business conduction in the year 2015 when it faced the consequences