Business Ethics - Volkswagen Case Study

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Added on 2020-11-23

Business Ethics - Volkswagen Case Study

Added on 2020-11-23

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Volkswagen casestudy

Executive summaryThe failure to meet the legal compliances can have an adverse impact on the overallperformance as well as brand image of organisation. The report has analysed the case study ofVolkswagen in which organisation fails to meet the legal standards. It has discussed the impactof this incident on reputation and revenue generation of the organisation. The document alsoevaluated that how such legal issues influences the public relations and consumers. The incidentleads to dissatisfaction among its consumers as well as employees. The study has also providedrecommendations to manage such legal troubles and how organisation can recover from thedamages caused to its share value, customer relations and revenues.

Business Ethics - Volkswagen Case Study_2

Table of ContentsINTRODUCTION...........................................................................................................................1ANALYSIS......................................................................................................................................1CONCLUSION................................................................................................................................4RECOMMENDATION...................................................................................................................4REFERENCES................................................................................................................................6

Business Ethics - Volkswagen Case Study_3

INTRODUCTION Ethics refers to a branch of knowledge that deals with moral principles. Whereas businessethics means professional ethics which can arise in business environment. Organization needs towork in ethical manner so that it can generate good reputation within industry. Volkswagen wasinvolved in a scandal in 2015. Ruiz-Alba and Sánchez, 2017 stated that Company admittedthat almost 600000 cars produced in US was fitted with a defeat device. This was done in orderto pass the emission test. But at later stage it was found that devices were installed to improvethe performance of car but it resulted in consuming large quantity of diesel and high level ofsmoke and rise in pollution level in different states of US. Soon, the company published astatement in which they said that devices was installed in around 11 million cars. Therefore, theoperational head of US, Michael Horn claimed that it was work of some software engineers. Butin annual report of company it was clarified that organization engineers were having difficulty inbuilding that devices. similar case occurred in Mitsubishi’s where they used unapproved methodto calculate mileage of car for 25 years. According to Mujkic and Klingner, (2018) in 2016 theystopped the production of mini vehicles. Reputation helps them to attract large number ofcustomers and sustain in market for long time. moreover, it is necessary to maintain reputation inmarket as it contributes in generating revenue. this assignment will discuss about howVolkswagen was involved in scandal case and what were the results of it. besides this, it willdescribe how organization reputation is damaged due to it and what can be done to rebuildreputation in market. in another section some recommendations are given. ANALYSISBrand image refers to reputation of a company within industry and in the minds ofpeople. It means the perception of people when they hear or see logo, sign, etc. of that particularbrand. Therefore, every company tries makes huge efforts to build and develop a positive andbetter brand image. Reputation can be damaged if there is any legal obligations or scandal inwhich firm is involved. This can result in downfall in organization growth and market value. Inaddition to it, the overall industry condition is affected by this. The negative image is created inminds of people and they start resisting in buying company products. Besides this, speculationsare built in market about business growth said by Strittmatter and Lechner, (2017). It shapesperception of people towards firm. apart from it, there is high decline in sales and profits. the1

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