Volkswagen Emission Scandal Assignment PDF

Running Head: Volkswagen Emission Scandal
Ethical and Professional Practice
Volkswagen Emission Scandal

Volkswagen Emission Scandal 1
Table of Contents
Introduction.....................................................................................................................................2
About the Issue................................................................................................................................2
Theory 1: Kantianism.......................................................................................................................3
Theory 2: Utilitarianism...................................................................................................................3
Pros and Cons..................................................................................................................................4
Recommendations...........................................................................................................................4
Conclusion........................................................................................................................................5
References.......................................................................................................................................7

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Introduction
Technology is considered to be an important asset as it provides human beings the leisure of
doing work in an easy manner as well as saves time. But if looked in an opposite direction,
technology can create issues and problems for human beings if it is used in a wrong way. Similar
is the case of Volkswagen Emission Scandal. In the year 2016, the environment Protection of
Agency found out that Volkswagen cars were emitting pollution and creating harm to the
environment. Volkswagen is a well-known company in car manufacturing field. When come to
talk about the ethical failure of any company, this case of Volkswagen is definitely the best
example to be talked about. Ethical dilemma in any business is one of the situations where
confusion is one of the most important things that play the role. Organizational managers or
decision makers are confused between the two or three decisions to be taken and in the end takes
the unethical moves which are harmful for everybody.
About the Issue
The German company “Volkswagen” is one of the leading companies in the world as they are
well known for their designs and the engines. EPA found a software in the engine of the cars
attached which used to control the nitrogen oxide emission at the time of the test in the
laboratory and those cars were approved of going on the roads. While actually, the cars used to
release 40 times more nitrogen oxide and that started creating pollution in the environment. VW
had this belief that the production of the diesel cars would be great as it was just the few
percentage of the US market until 2007 (Hotten, 2015). There were cars like Beetle, Audi, Passat
and Golf etc. which were emitting pollution in the environment. EPA issued the notice for the
violation of the “Clean Car Act” and VW also agreed that about 11 million cars all over the
world had undergone that software. Earlier from this discrepancy, VW people said that this
ethical issue was caused due to the technical mistake and later they agreed that it was the fault of
the higher authorities who took this decision to earn short term profit. Volkswagen as a company
had to pay 10 billion dollars to the consumers of United States in the form of compensation,

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dollar 2.7 billion as remediation fund and for vehicle clear projects they had to pay 2 Billion
Dollar to EPA (Vlasic, 2017). 3 liter deiseal engine was attached in the cars like Porsche and
Audi. Volkswagen was also charged for this. However, it was denied by VW that 10,000
automobiles were affected due to this scandal. Due to this unethical act of VW, the customer’s
trust was broken and they no longer wanted to buy VW cars. An organization should maintain its
image along with thinking about its customers too. The organization in which people have good
minds would never ever think of hurt or betray their customers. A good business company’s
tagline should be “customers first”. Later in the news about Volkswagen, it was found out that
senior executives and the CEO was involved in this fraud (Trovey, 2018).
Theory 1: Kantianism
Kantian theory for founded by Emmanuel Kant (Delk, 2013). According to Kant, all the actions
should be performed in such a way that it promoted growth and not any kind of downfall. For
every organization, growth is the one and only aim which takes the company towards the
success. This growth should be up to the level of competing with the competitors (Dierksmeier,
2013). In the case of Volkswagen, the company made profit for the short term by letting this
technology stop the emission at the time of testing. By doing that Volkswagen sold a lot of cars
in that year and gained the award of becoming the second largest selling company. Yet, morally
they were wrong. Exploiting the environment was an unethical thing to do. Consumers have the
full right to know about the real status of the cars before they buy it. Hence, the customers were
also betrayed. This was also immoral. The higher authorities knew about the scandal and in fact
some of them too the decision, but no one went against that decision and let the company do
whatever was being done. The technical managers who were involved in the development of the
software which stops the emission while testing was also at fault. All those people who were
involved in this scandal were at fault.
Theory 2: Utilitarianism

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This theory suggests that a huge number of people should be affected in a good way when any
act is done. Utility here can be taken as the good impact of outcome that is performed by the
company (Riley, 2010). According to Jeremy and John Stuart who were also the founders of this
theory, utilitarianism is actually the amount of kindness and the goodness done in any kind of
action instead of creating any painfulness for others. VW had its own interest in mind and
polluted the environment which was not at all good for others and also for earth. The
organization had this idea of negative impacts this act was going to create yet they went ahead
with the act (Eggleston, 2012). On the whole, VW lost its image in the eyes of the customers
when they denied the accusations and they also did not with complete heart apologized to the
customers. The concept of this theory do not apply in this case as nothing positive came out of
this act. This theory also advices the punishment in order to not repeat this task again. The stock
of the company came down and the company had to incur a huge loss in the end.
Pros and Cons
Pros: In everyone’s opinion, absolutely nothing positive came out of this act. The company
gained a short-term profit by this act but later it all went to vain. Hence, it can be said that
nothing was positive.
Cons: As it was an unethical act, there were surely cons there which are to be discussed below.
 Long term loss to the company as VW had to bear too much loss in return of this scandal.
 VW lost its customers to betrayal and it was analyzed that the selling became less after
this scandal.
 Stakeholders of the company were also accused of being with the company. Especially
the external stakeholders.
 Financial loss of the company was done (Selin, 2015).
 Technology was used in the wrong way.
 Image of the company went down.
Recommendations

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For the avoidance of such unethical issues, there are some points which should be kept in mind.
They are:
 The vision statement should always be analyzed as to if it will help the organization in
future or not. After then the actions should be taken so that the leaders and the managers
would have the idea about the move they are going to make (Donaldson & Fafaliou,
2003).
 Organization should follow the code of ethics which are defined by the organization
itself. This code of ethics should be able to clearly state the need of the organization.
Also, they should mention the consequences of the unethical act.
 There should be an ethics officer appointed in every company so as to take care of the
ethical acts going on in the company. This officer will make sure that the functions are
being done ethically. Such type of officers usually foresees if any unethical move is about
to be taken and if the strategy for such acts is going on (Zhou, 2016).
 In many of the organization, people know the importance of the virtue. All the ethical
moves should be rewarded in order to influence people to always focus on performing
ethically rather than allying the mind in doing something unethical.
 Every organization should not just monitor the behavior of the employee but also go deep
in to the fact as to how an employee percepts the values of the organization.
 Ethics always comes in the way of leadership. It is the issue of leadership actually.
Leadership always sets the rules, tone and standards of the company. Problems arise
when the leaders themselves are diverted form the issues in the company. If the leaders
pay attention to what is going on, the ethical dilemmas will be rare (Gilman, 2005).
 Ethics program and the trainings should be conducted in each and every organization to
make people realize the fact that such kind of things are important for the organizations
and employees will also feel the importance of ethical moves. After the turning, it would
be easy to analyze the issues.
Conclusion

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From the study of this scandal where Volkswagen manufacturers attached the software for the
low emission of pollution at the tie of laboratory testing was done, it was clear that this unethical
move did not do goodness to anyone. When the analysis of this scandal is done in terms of the
ethical theories, it was proved that this act was not at all good and it harmed the organization
itself. The ethical dilemma that was faced by the leaders of the company is discussed in this
report. However, the higher authorities were the only people who took this decision and did
wrong with the customers. There are some theories like Kantianism and Utilitarianism are
discussed in terms of this VW emission scandal case. This is one of the most popular cases when
ICT comes into picture. There is a thin line within the decision making, leadership and the ethics.
All should go hand in hand in order to take the organization to a certain growth. This report also
discusses the recommendations as to how a company can work ethically with the positives and
the negatives of this act.

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References
KarimiJahromi, P. S. (2016, July). iosrjournals. Retrieved January 23, 2018, from
iosrjournals.org:
http://www.iosrjournals.org/iosr-jhss/papers/Vol.%2021%20Issue7/Version-4/
D2107043439.pdf
Donaldson, J., & Fafaliou, I. (2003). Business ethics, corporate social responsibility and
corporate governance: a review and summary critique. European Research Studies, 6(1-
2).
Zhou, A. (2016). Analysis of the Volkswagen Scandal Possible Solutions for Recovery. Retrieved
May 10, 2018, from gps.ucsd.edu:
https://gps.ucsd.edu/_files/faculty/gourevitch/gourevitch_cs_zhou.pdf
Gilman, S. C. (2005). ETHICS CODES AND CODES OF CONDUCT AS TOOLS FOR
PROMOTING AN ETHICAL AND PROFESSIONAL PUBLIC SERVICE: Comparative
Successes and Lessons. Retrieved May 10, 2018, from oecd.org:
https://www.oecd.org/mena/governance/35521418.pdf
Hotten, R. (2015). Volkswagen: The scandal explained. Retrieved May 10, 2018, from bbc.com:
http://www.bbc.com/news/business-34324772
Vlasic, B. (2017). Volkswagen Engineer Gets Prison in Diesel Cheating Case. Retrieved May
10, 2018, from nytimes.com:
https://www.nytimes.com/2017/08/25/business/volkswagen-engineer-prison-diesel-
cheating.html
Trovey, A. (2018). VW compensation case to start with carmaker demanding costs from
plaintiffs' lawyers. Retrieved May 10, 2018, from telegraph.co.uk:

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https://www.telegraph.co.uk/business/2018/03/26/vw-compensation-case-start-carmaker-
demanding-costs-plaintiffs/
Riley, J. (2010). Mill’s extraordinary utilitarian moral theory. politics,philosophy & economics,
9(1), 67-116.
Eggleston, B. (2012). Utilitarianism. Encyclopedia of Applied Ethics, 4, 452-458.
Dierksmeier, C. (2013). Kant on Virtue. Journal of Business Ethics, 113(4).
Delk, E. (2013). A Kantian Ethical Analysis of Preimplantation Genetic Diagnosis. CedarEthics:
A Journal of Critical Thinking in Bioethics, 12(2).
Selin, N. E. (2015). One of the biggest consequences of the Volkswagen diesel scandal.
Retrieved May 10, 2018, from Fortune.com: http://fortune.com/2015/09/30/volkswagen-
diesel-scandal-consequences/