Management Theory & Practices Assignment

Added on - 28 May 2020

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Running head:MANAGEMENT OF THEORY AND PRACTICEManagement of Theory and PracticeStudent’s name:Name of the university:Author’s note:
1MANAGEMENT OF THEORY AND PRACTICEEthics are the codes associated with moral that govern the attitude and behaviour of anindividual or group of people regarding right and wrong. Moreover, managerial ethics are set ofstandards which state the conduct of the managers operating within an organisation. The sole aimof an organisation is to generate profit and giving the customers what they promise throughadvertisement (Shapiro & Stefkovich, 2016). Managerial ethics are the guidelines to help themanagers to take decisions when they face any conflict of values. The thesis statement of theessay is to showcase autocratic leadership and lack of managerial controls in Volkswagen led toface the dilemma in ethics. In past two years, Volkswagen has been facing the managerial ethicalissues in operating the business in the global sphere. Managerial ethics set the standard forethical behaviour in an organisation. In theoretical perspective, there are various approaches toethics that could be followed in business, teleological, egoism, Utilitarianism, Deontological,justice and relativism. In this essay, Utilitarianism and Deontological theoretical perspectivehave been chosen to align the concepts with Volkswagen ethical dilemma and scandal. In thefollowing section of the essay, these theoretical concepts have been evaluated to show how theyinfluence managerial practices of Volkswagen. Lastly, a reflection of leaders in Volkswagen hasbeen presented that may ensure organisational decisions are made ethically.Volkswagen is a German automaker and it was founded in the year 1937. Volkswagenhas it headquarter in Wolfsburg and it is one of the largest automakers in the world. Recently, itincreases its production to 6.073 million units per year (, 2018). It servesworldwide and it is considered in German as ‘people’s car’. Volkswagen has more than 626,715(approximately) employees across the globe. Of late, its revenue is decreased to 105 billion andprofit percentage was lowered in 2016 due to recent scandal of Volkswagen. In motorsport,
2MANAGEMENT OF THEORY AND PRACTICEVolkswagen got the awards in World Rally championship, Formula racing, Volkswagenmotorsport worldwide and Dakar rally.Volkswagen faced the issue of environmental issue of diesel emission violation.Volkswagen emission scandal started at the end of 2015 when United States EnvironmentalProtection Agency (EPA) submitted a notice to Volkswagen associated with a violation of CleanAir Act. EPA found that Volkswagen had intentionally used software programme namedTurbocharged Direct Injection (TDI) in diesel engine system to activate emission control duringlaboratory emission testing. This type of programming shows the emission of NOxgas lower thanwhat it actually injects. This emission met the standard of regulatory guideline of USA, however,in reality; it emits 40 times more NOxin the real world (, 2018). Volkswagen had beenused this system programming in more than 11 million cars worldwide and more than 500,000cars only in the USA during 2009-2015. International Council of Clean Transportation showedthe figure of discrepancies of emission of harmful gases in the year between US models of carsand European models of cars. There are approx 15 models fall into this category in whichVolkswagen used this programming. Therefore, Volkswagen cars became the bullseye ofregulating authority in multiple countries to investigate about emission. This led to falling in thestock price of Volkswagen and CEO of Volkswagen resigned from the post. R&D heads of Audiand Porsche have been suspended from the posts. Volkswagen already spent more than US$ 19billion to rectify the emission issues. Volkswagen promised to refit the affected vehicles as partof recall the vehicles.This scandal brought out the awareness of high pollution that is being emitted from carsin the world market. This scandal also brings out the idea of cheating using software-controlledmachinery in the cars to hide the real figure and it is required public scrutiny. San Francisco
3MANAGEMENT OF THEORY AND PRACTICEFederal court agreed to a civil settlement of $15.3 billion for dodging the Clean Air laws(, 2018). Therefore, Volkswagen's emission fiasco provides a valuable lesson toorganisations regarding corporate and managerial ethics. Volkswagen did deception and it wasan egregious breach of ethics in professional fields. When Volkswagen was caught, Volkswagenofficials did not accept the matter at first and then they reluctantly accepted to compensate thecar owners. Ethics for an organisation to be clear about what they are promising to the customersfollowing the rules and regulation. In this breach of ethics, Volkswagen officials must haveknown this as this scandal is so devastating to dupe governments and customers. This fact isunethical that Volkswagen’s deceives the customers and stakeholders and they do wrong to themajority of stakeholders such as shareholders, government authorities, customers andenvironment.Deontological ethicsmainly focuses on rightness and wrongness and the consequencesof the actions as a whole. Deontological ethics focus on habits of the actor it is called virtueethics. A situation is bad or good depends on actions that are brought. Right is conformity ofmoral norm and it can take priority over good (Chakrabarty & Bass, 2015). Deontological theorysometimes keeps consistent with moral absolutism. In this regard, consequentialism conceptargues that final state of matter justifies the drastic action. Deontological ethics provideprominence on the relationship between morality and duty of human actions. In addition,deontological ethics consider an action morally proficient as some of the characteristics of theaction itself are good not the product of the action is fair. Deontology refers that at least some ofthe actions must be fair and morally obligatory that provide good consequences for humanwelfare (Hoover & Pepper, 2015). The virtue-based ethical theory was proposed by Greekphilosophers Aristotle and Plato. They opined that judgement is not exercised through a set of
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