Volkswagen Company Analysis and Improvement Recommendations

This assignment requires analyzing the importance of logistics dimension in information management using the Volkswagen case study. It involves identifying factors that affect a company's overall condition and suggesting improvements to business policies. The report should provide recommendations for Volkswagen to develop good image among customers.

PROJECT- REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Ethics............................................................................................................................................1
Summary of case study................................................................................................................1
Comparative example from similar circumstances......................................................................1
Significant of reputation to a similar sector industry...................................................................1
Aim of report................................................................................................................................1
ANALYSIS......................................................................................................................................2
Introductory information including a thesis statement and a map sentence................................2
Aspects of this scandal on certain factors of organisation...........................................................2
An evaluation on factors by which Volkswagen reputation has decreased.................................4
CONCLUSION................................................................................................................................4
RECOMMENDATIONS.................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Ethics
The moral concept of any study as well as behaviour of an individual will be defined as the
ethics of the study. Therefore, these ethics will be appropriate in terms of defining the quality of
work. In the present report, there will be ascertainment of the Volkswagen case study. Thus, on
which researchers will analyse and evaluate the impacts of case incurred in the environment.
Summary of case study
The case of Volkswagen which states that the firm is using Defeat devices in their model
for preventing the negative results as well as passing the emission tests. Thus, company had
officially announced that they have used such devices in 600000 cars made for US market while
it was later discovered that there has been development of 11 million such kinds of vehicle
worldwide. Moreover, after such identification it was found that this action was made by the
organisation was not for assertion while it was the agreement for developing the diesels' car
market for Volkswagen. To meet the competition as well as with the motive of retaining high
performance level which insists the professionals to make such unethical operations (Anunciação
and et.al., 2018).
Comparative example from similar circumstances
To analyse the similar aspects there have been various cases which are stated in the
environment as well as there have been several suggestions and solution had been awarded to
them (Kraus, Kennergren, and von Unge, 2017).
Significant of reputation to a similar sector industry
Carbon emission reports or tests are required to be given by the manufacturing units to the
government (Robins and et.al., 2017). It will help in analysing the level of pollution is being
generated by their products in the environment. Thus, controlling such issues are the prime
requirement in every industry.
Aim of report
This report aims at find and analyse the causes which have encourages Volkswagen for such
unethical activities (Uden and He, 2017). Along with this, there have been ascertainment
techniques to overcome with such obstacles.
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ANALYSIS
Introductory information including a thesis statement and a map sentence
In relation with the case of Volkswagen on which the professionals have officially admitted
that they have used Defeat device in their cars. Thus, it was made by them due to enhancing the
performance of their diesel cars in the market . Therefore, it has been found that the engineer in
this manufacturing business were not capable of developing the high-performance carbon
emission cars (Everything You Need to Know about the VW Diesel-Emissions Scandal, 2018)
Therefore, due to such aspects they have analysed and manufacture this device which will
record and reduce the emission. However, it respects the outcomes satisfactory to the legal limits
(Sanesi and et.al., 2017). Thus, due to such unethical approaches there were various managers
states in the firm have supported the use of this devices while there were some people which are
protesting against it.
Volkswagen was known to be a second largest auto mobile industry after the brand Toyota
corporation. Engineers of the company admitted that they have developed diesel emission test by
which company have to suffer huge cost burden in organisation. This scandal came into force
when a whistle blower write a report to environment authority regarding pollution create engines
of Volkswagen which harming environment seriously. When agency go for the testing of engines
it is found that company has intentionally fitted turbocharged direct injection in their diesel
engines (Cavazos, Rutherford and Berman, 2018).
This is also found that company fitted this software to pass emission testing in laboratory.
Because of this scandal overall stock price of company fell down immediately when news came
regarding this scandal of organisation. Company has also admitted that almost in 11 million cars
engineers of company has fitted defeat devices. Therefore, company have to take back those cars
and have to destroy them for the sack of environment. Environmental agency of British
government also charged heavy penalty on company for harming environment of the city.
Aspects of this scandal on certain factors of organisation
Certain aspects of the companies are very much affected by this scandal of company.
These factors are as follows-
 effect on revenue
When company admitted that they used illegal software in their production. Soon after this
company had to face certain federal investigation and lawsuits from customers and dealer of
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business market (Le-Khac and et.al., 2018). Many consumers demand their return from the brand
which badly affected revenues of the company in financial year. In the words of CEO of
Volkswagen, he said that there were week when nobody came for purchasing car from their retail
stores. Its 20% of profit got reduces with this diesel emission scandal.
 Effect on Shareholders
Shareholders of the company badly affected with this ill-legal fitted software in car engines of
company and overall shareholders of the company got reduces and demand their investment back
from the company. Shareholder has demanded 9.2 billion euros to company to recover damage
which they faced during this scandal. Investors of company file suits in German court regarding
their loss of billions of amount which they have faced due to this scandal of Volkswagen.
Investors also claim that company do not inform them regarding policies of the company.
Investor also claim that accurate information is not provided about its cheating which they have
created with emission test (Prasad, 2018).
 Effects on customers
When report of United States Environmental Protection Agency has come out, company's overall
market shares rapidly get reduced which also affect customers perception regarding the use of
Volkswagen car. Company loose with their major customers which affect revenues of the
company. Many customers demand their return from company by which company faces heavy
loss and its overall impact is that company loose with its loyalty of customers. With this scandal,
company's overall brand image also changed among customers. Company loose with relationship
which they have incurred from customers (Bachmann, Ehrlich and Ruzic, 2017).
 Effect on Board members
Disclosure with the report of environmental agency, huge effect is on the board members of
company. Investors demand for suspension of CEO and Engineers who are involved in doing
this type of fraud to customers as well to investors. Investors has claimed that they are not
informed about this illegal software which used to pass emission testing in laboratory. With this
overall claim by investors result appeared is that CEO and Engineers are suspended from
organisation and CEO is appointed to handle situation of company (Lanis and et.al., 2018).
 Effect on other auto mobile car industries
With the scandal of Volkswagen in business market, it also affected other auto mobile industries
of business market. With this scandal, other companies' also go with test of diesel engines in
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their manufacturing of car. Overall sales and revenues of the companies also affected with
Volkswagen case study (Zasada and et.al., 2017). Investors has become more aware therefore,
from each company where they have invested money demand for accurate information which
creates a heavy burden on other companies of business market. More influence of government is
now therefore the auto mobile companies by which effective financial statements have to
disclosed by companies which is proper time.
An evaluation on factors by which Volkswagen reputation has decreased
Company faced loss of reputation just because of their fraud policies which they have
created to earn higher profitability in organisation (Barth and et.al., 2017). Company faced this
scandal because they do not have provided sufficient information to their investors and
shareholders and with this result company have to face huge loss with their reputation.
CEO did not develop effective ethical policies and also regular audit is not developed in
doing their work which overall result with developing corruption process in workforce.
Managers of the company did not find suitable to take guidance from investors of the company.
Also, they do not have disclosed their policies among investors who are the real owners of
company. This result in loss of company's reputation among its employees and also among
business market.
CONCLUSION
From the above analysis it can be concluded that Volkswagen company did not have
developed effective ethical policies in doing business operations effectively. Because of their
unethical policies in their workplace, company loose with their strong goodwill in business
market. This analysis also shows that ineffective operations of Volkswagen regarding fitting of
illegal diesel software in manufacturing of car result them with loss of customers, shareholders,
employees, and also with their strong brand image in business market.
Company also have to bear heavy penalty from British government and also with
environmental agency of united states to hard environment 40 times as per the given limit. This
scandal also affect company's revenue, profitability, performance and as result of this huge loss
has faced by company. Company's shareholders also claim in German court where they demand
9.2 billion euros from the company. Company's CEO also has been arrested in June 2018 with all
this fraudulent activities. This overall concluded that ineffective policies of company leads them
to fall in business market.
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RECOMMENDATIONS
 As per the above report, there are some recommendations which has followed in each and
every organization which helps company to find undesirable loopholes which created in
organization.
 To develop effective work at workplace, leaders of the company has to develop effective
ethical policies by which work done with proper discipline which helps organization in
achieving overall business objectives of the organization.
 Company also have conduct effective audit regularly for business operation which helps
them in finding loopholes which are not opened up in a financial statement of
organizations.
 Regular situational analysis will have to conduct by the marketing managers of the
organization which helps them in finding factor which affect business operations. Such
factors would be political, economical, technological, social, legal and environmental
factors.
 By analyzing these factors company will able to develop effective policies and strategies
by which performance of the company did not affect this factors. Further, company also
have to regularly conduct SWOT analysis by which strength and weakness of the
company will get measured by managers.
 This analysis helps managers to develop effective strategies by which company will
overcome with weaknesses and convert them into strength.
Effective marketing mix model
 It also helps company to develop effective strategies which products of the effectively get
developed. Another recommendation for Volkswagen company is to create market
situation analysis by developing effective audit in workplace in which auditors will find
wrong strategies of companies which they have developed in their business operation.
 Audit is the major factor by which analyze overall condition of business in market and
also suggest companies regarding improvement of business policies of organization.
 These are some recommendations for Volkswagen company so that by developing this
recommendation improvement will be developed regarding business operations of
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company which helps them in developing good image of company among customers of
organization.
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REFERENCES
Books and Journals
Anunciação, P. F., and et.al., 2018. The Importance of Logistics Dimension in Information
Management: The Volkswagen Case Study. In Handbook of Research on Strategic
Innovation Management for Improved Competitive Advantage (pp. 583-601). IGI Global.
Bachmann, R., Ehrlich, G. and Ruzic, D., 2017. Firms and collective reputation: the volkswagen
emissions scandal as a case study.
Barth, F and et.al., 2017. Spillover Effects from the Volkswagen Emissions Scandal: A
Comprehensive Analysis of Stock, Corporate Bond, and Credit Default Swap Markets.
Cavazos, D. E., Rutherford, M. and Berman, S. L., 2018. Assessing the effect of government
surveillance on firm supererogation: The case of the US automobile industry. Business
Ethics: A European Review. 27(2). pp.156-163.
Kraus, K., Kennergren, C. and von Unge, A., 2017. The interplay between ideological control
and formal management control systems–A case study of a non-governmental
organisation. Accounting, Organizations and Society. 63. pp.42-59.
Lanis, R., and et.al., 2018. The impact of corporate tax avoidance on board of directors and CEO
reputation. Journal of Business Ethics. pp.1-36.
Le-Khac, N.A and et.al., 2018. Smart vehicle forensics: Challenges and case study. Future
Generation Computer Systems.
Prasad, R., 2018. Maximisation of Shareholder’s Value and The Theory of Innovative
Enterprise: A Case Study Comparison of Two Automotive Enterprises.
Robins, L. and et.al., 2017. Making water policy work in the United Kingdom: A case study of
practical approaches to strengthening complex, multi-tiered systems of water
governance. Environmental Science & Policy. 71. pp.41-55.
Sanesi, G. and et.al., 2017. Urban green infrastructure and urban forests: a case study of the
Metropolitan Area of Milan. Landscape Research. 42(2). pp.164-175.
Uden, L. and He, W., 2017. How the Internet of Things can help knowledge management: a case
study from the automotive domain. Journal of Knowledge Management. 21(1). pp.57-
70.
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Zasada, I. and et.al., 2017. A conceptual model to integrate the regional context in landscape
policy, management and contribution to rural development: Literature review and
European case study evidence. Geoforum. 82. pp.1-12.
Online
Everything You Need to Know about the VW Diesel-Emissions Scandal. 2018. [ONLINE].
Available through <https://www.caranddriver.com/news/a15339250/everything-you-need-
to-know-about-the-vw-diesel-emissions-scandal/>
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