Table of Contents INTRODUCTION..............................................................................................................1 1. Article:.........................................................................................................................1 2. Ethical responsibilities.................................................................................................3 3. Principles of the United Nations Global Compact.........................................................4 4. Identification of Principle breached by this case..........................................................5 5. Application of business ethics and corporate social responsibility..............................5 6. Recommendations......................................................................................................5
INTRODUCTION The aim of this report is to identify and analyse current challenges or issues that is related to various responsive business practices by companies working in the global environment. The case study will include article about Volkswagen that has been reported for performing unethical business. It will also focus on ethical responsibilities of the company while doing business in America. Furthermore, the report will identify UN global compact principles breached by the cited company along with the application of ethics and corporate social responsible theory. 1. Article: Volkswagen: The scandal explained,By Russell HottenBusiness reporter, BBC News 10 December 2015 1 Illustration1: Volkswagen in America (Source:Volkswagen: The scandal explained, 2015)
Volkswagen(VW) is one of the leading car manufacturers all around the world, emissions-gate scandal began in September 2015 highly influenced this automotive company. The United states environmental protection agency issued a notice related to violation of the clean air act to Volkswagen that made this scandal popular. Environmental protection agency found that various cars produced by the company and being sold in America had device or software in diesel engines that could detect when they were being tested, changing performance consequently in order to improve the outcomes or results. Volkswagen admitted that it has been cheating emissions tests in the United states. The organisation has also been accused by the Environmental protection agency found of modifying software on the 3 litre engines fitted to some Audi and Porsche as well as VW models. Volkswagen has denied these claims, which influenced more than 10,000 vehicles. This scandal raised awareness over the higher levels of pollution emitted by every vehicle powered by diesel engine from various car manufacturers, that exceeded legal emission limits under real world driving conditions. 2. Ethical responsibilities Volkswagen design, develop, manufacture and distribute auto-mobiles in almost every country around the world for preserving individual mobility. The company bear a huge responsibility for continuous development and improvement in the environmental tolerability of their products as well as reducing the demands of natural resources by takingintoaccountessentialeconomicconsiderations.Itiscorporatesocial responsibility of the organisation that it achieve its economic aims with human progress and sustainable growth. However, each and every business has its unique approach to create value orientated corporate management this approach is generally bases upon established conceptions. These concepts of corporate social responsibility encourage organisations to include elements such as attitude towards human rights, needs of customers, suppliers and employees, and commitment to social problems or issues. The organisation has various responsibilities related to environment, good working practices and its customers which is essential to be fulfilled. Volkswagen must produce vehicles which are not harmful for the environment such as low emission cars. It is a moral responsibility complying with the ethical standards. It is compulsory for every organisation to to follow ethical code of conduct, and they should avoid getting engaged 2
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
into unethical activities. Volkswagen failed to carry out its business activities according to the ethical responsibilities as their cars were emitting higher level of carbon dioxide which can harm the environment globally. The Scandal demonstrated bad ethics in the business activities of the organisation which must be avoided to perform organisational operations in a ethical way. 3.Principles of the United Nations Global Compact There are various principles on the basis of which a business needs to perform various business activities. Corporate sustainability start with a organisation's value system and a approach based on principles that assist in doing business ethically. This states that it is necessary for an organisation such as Volkswagen to operate in ways that it can meet important responsibilities in the areas of labour, human rights, anti corruption and environment. The ten principles can be discussed as below - Human rights 1.Principle 1 : This principles states Volkswagen should respect and support the protection of internationally proclaimed human rights. 2.Principle 2 : It is essential to ensure that they are not complicit in human rights. Labour 1.Principle 3 : Organisations should maintain the freedom of association and the effective identification of the right to collective bargaining . 2.Principle 4 : The elimination of each and every kind of compressor and forces labour. 3.Principle 5 : Termination of child labour defectively 4.Principle6:Eliminationofdiscriminationwithrespectofoccupationand employment. Environment 1.Principle 7 : Volkswagen must support preventative approach to environmental issues or challenges. This case is linked with this principle as the company failed to meet this principle due to the identification of high level emission in their vehicles. 2.Principle 8 : Undertake initiative to promote environmental responsibility 3
3.Principle 9 : Volkswagen should motivate the diffusion and development of technologies friendly to environment. Anti-corruption 1.Principle 10 : Volkswagen must work against corruption in all its types consisting bribery and extortion. 4. Identification of Principle breached by this case According to the case of Volkswagen principle 7 in environment segment of the United Nations Global Compact has been breached. The company lied to regulators and consumers were not appropriate to its business, it was rather critical to the ways in which company promoted its cars with diesel engines in United states. Volkswagen promised that it is using diesel technology in order to control expenses on fuel and helping customers to get lost cost rides with their vehicles. The company cheated on emission tests for achieving high level of profitability in the global market. Principle 7 of the United nations global compact states that organization should adopt and support precautionary measures or approaches to protect the environment by its products. It cheatedtheemissiontestandemissionscandalprovedthatVolkswagendiesel poweredcarshaveahighlevelofemissionwhichcanbeveryharmfulforthe environment, therefore it breaches the principle. 5. Application of business ethics and corporate social responsibility Ethical responsibility refers to doing what is right even if it is not enforced by any law or policy. The auto-mobiles manufacturer needs to understand their responsibilities regardingenvironmentasvehiclesareemittingcarbondioxideandotherharmful componentsthatcanaffecttheglobalenvironmentnegatively.Corporatesocial responsibility theory implies that it is a ethical obligation on companies which are making products that can harm or pollute a society or environment that they take effective measure to control the level of emission or negative impact of the products. Volkswagen should focus on developing new method to produce vehicles by using new technologies so that emission level can be minimized and it can perform its business practices with respect to the corporate social responsibilities. 4
6. Recommendations In order to overcome the challenges faced by scandal Volkswagen can focus on implementing the following recommendations - 1.Joining an independent verification agency – Volkswagen currently has its own internal team that monitor and examines emission level in the vehicles. It can be effective and beneficial if the organisation collaborate or partner up with some other independent verification agencies so that it can rebuild consumer trust. 2.Posting bond – Another useful method to regain trust of customer is to 5
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.