Corporate Social Responsibility-Volkswagen Emissions

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Corporate Social Responsibility-Volkswagen Emissions
Ideally, the overall Volkswagen emissions scandal began in the wake of 2015at the time
when the United States Environmental Protection Agency (EPA) had issued a notice of the
violation of the Clean Air Act by the German based automaker the Volkswagen group.
According to the Agency, the Volkswagen group had internationally programmed virtually all its
turbocharged direct injection (TDI) diesel engines with an aim of activating the emissions
regulator only at the time emission testing. Consequently, this caused the vehicles’ NOx to be at
par with the overall United States standards at the time of regulation testing despite the fact that
it emitted close to 40 times more of the NOx in a normal driving routine (Riehm, Thomas, and
Lukas). In essence, Volkswagen was responsible at deploying this particular programming
software in almost eleven million vehicles across the world with about 500,000 in the United
States between 2009 and 2015.
Primarily, a study was commissioned by the California Air Resources Board on the
emissions disagreements lying between the Europeans and the US vehicle models particularly
from the International Council on Clean Transportation. The investigation found out that there
were additional emissions during live road tests on various diesel cars. After the news of the
investigation which was followed by the regulations in various countries to investigate
Volkswagen, the overall stock price dropped in value by about a third (Robertson). Essentially,
the overall scandal raised some sort of awareness over the intense pollution levels particularly by

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the diesel-powered cars for a wide range of car producers which exceeded the acceptable
emission limits. However, the general discussion was sparked based on the software-controlled
machinery that was prone to cheating. As a result, the crisis left many people unemployed while
those that had initially purchased the car for sale had to undergo some damages despite the fact
that Volkswagen promised to shoulder some cost as compensation. According to various outlets,
VW was likely to face up to a fine of $37,500 per vehicle (Jung, Kyujin, Kenneth, and Valero).
Additionally, the company was likely to face civil penalties as well due to a deliberate cheated
on the level of emission.
In essence, Volkswagen has been cheating for the past six years on the issue of emission
testing particularly for the diesel cars across the world. Nonetheless, cheating especially on
regulatory testing has no doubt a long history in the corporate American society. Notably, this
scenario tends to happen more often in automobiles emissions control (Nemeth, Kristin, and
Jorge). While this issue is under close scrutiny, in my opinion, there were worries whether the
executives were going to interpret the whole issue as a cautionary tale that would involve
punishment for a rather bad mistake in the long run. As a result, I think that most drivers would
not be motivated to allow their cars to be fixed despite the fact that VW announced that it would
be free. Apparently, this is because such changes were likely to reduce the overall performance,
gas mileage as well as engine longevity.
One solution that the company should have put into consideration was for those owning
the vehicles to present them at the testing while being given a certificate afterward indicating that
the issue had been fixed. Additionally, a fair approach would be for the VW to make sure that
they have provided a significant amount of cash to those that bring in their vehicles for repair as

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compensation. This would tend to not only motivate those that owned the cars for having the
performance of their car reduced but also the compliance process.
Over the last couple of decades, the corporate social responsibility (CSR), as well as
sustainability, has been a debated issue in the global corporate world. Additionally, there has
been an increasing number of corporations who have started engaging themselves in responsible
as well as sustainable business practices with an aim of creating social and business values in the
society. Nonetheless, the fact that Volkswagen was caught cheating concerning emission is clear
evidence that every year there is always a high profile company violating set standards or rather
caught in ethical scandals (Moravcsik). Notably, such scenarios have often attracted the attention
of the media and therefore damaging the overall public’s trust in the entire corporation as well as
their social accountability. The impact of the corporate crisis that was resulted by VW is no
doubt profound and lasting. As a result, the market value of VW dropped by close to 23 percent
in 2015 after they had admitted diesel emission cheat. According to research, it was estimated
that the total cost for the scandal amounted to about $8 billion. Additionally, the negative impact
was on brand trust as well as reputation, employee morale and loyalty, customer satisfaction, and
investors’ confidence.
Furthermore, there were various impacts on the external side of the VW operation.
Apparently, the magnitudes of deception mounted by VW not only taint the overall reputation of
the corporation and other companies in unrelated industries but as well undermine the trust that
the public had on the business thus heightening customer’s cynicism regarding frauding
(Hachenberg, Britta, Florian, and Dirk, 180). According to researches, business values are no
doubt created in case there is a consideration to embed the aspect of social responsibility and
sustainability in a country’s culture as well as fundamental business strategies. In case this is