Volkswagen Emission Scandal: An Analysis of Ethical Issues and Dilemmas

Running head: BUSINESS ETHICS
Business Ethics
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1BUSINESS ETHICS
As stated by Pearson (2017), business ethics is a type of applied ethics which checks the
morality and ethical principles while working a business environment. The different aspects of
conducting business are examined to identify the policies and actions that are not appropriate.
There are different frameworks used by the organizations to develop ethical codes which guide
them to stay ethically appropriate. In this context, Volkswagen emission scandal has been chosen
as the case which will thoroughly be analyzed to identify the ethical issues and dilemmas faced
by the parties involved.
Volkswagen AG is one of the German automotive multinational companies which have
its headquarters at Wolfsburg in Germany. The organization is known for designing, developing
and selling commercial and passenger vehicles, engines, and motor cycles and offers other
services such as fleet management, leasing and financing (Volkswagen.com 2018). The
organization has been the market leader in this industry till the year of 2016 and had taken over
the current market leader Toyota. The company is listed among the top 10 companies in the
fortune 500 and consists of premium brands such as Audi, Bugati, Bentley, Porsche,
Lamborghini, SEAT, Volkswagen Marques and Skoda. The organization also sells motorcycles
under the brand name of Ducati and sells commercial vehicles under the brand name of marques
Man and Scania. The organization has been able to maintain their supremacy in Europe but the
operating margin of their own brand is low.
However, the organization was in the lime light for the wrong reason where the EPA
(United States Environmental Protection Agency) found out the cheat device used by the
organization and issued a violation against the German automotive company in respect to the
Clean Air Act (Hotten 2015). The organization had used Turbocharged direct injection during
the lab test to reduce the level of emission by activating the emission controls. This software was

2BUSINESS ETHICS
installed in all the cars that were sold worldwide. These defeat devices were developed in such a
way during testing period it would automatically increase their level of performance.
Volkswagen had a major push for selling cars in the United States market and their marketing
campaign were developed highlighting the fact the diesel cars provided by the organization had
low diesel emissions.
The findings of EPA shows that the 482,000 cars sold in the United States had defeat
device installed in them. This consists of models such as Jetta, Golf, Beetle, Passat and Golf
(kansascity 2016). Moreover, the organization sold more than 11 million worldwide with cheat
devices installed in them. Moreover, the organization was also accused on modifying the
software in some of the Porsche models. The development these devices were deliberate which
shows that the organization has spend huge sums of money on developing these software.
However, on the other hand, this amount could have been spent effectively to actually reduce the
emission (Cavico and Mujtaba 2016). These are one of the biggest scenarios of malpractices in
the current times where the consumers bought inefficient system at premium prices which had
more emission than the industry standard.
This scandal has harmed both the surrounding environment and has cheated million of
consumers. The organization sustainability report shows their efforts in protecting the
surrounding environment but everything holds false in comparison to these case (Aurand et al.
2017). Moreover, the higher officials had full knowledge about this cheat device and still they
allowed the organization to sell these cars in different countries. This scandal definitely poses
amoral dilemma where the actions of the organization were illegal as they have not followed the
industry regulations. However, the managers and the engineers could have protested and stopped
these from happening by acting as a whistle blower.