Ethical Responsibilities of Volkswagen in Global Environment

Running head: MANAGING IN GLOBAL ENVIRONMENT
Managing in global environment
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1MANAGING IN GLOBAL ENVIRONMENT
Introduction
In the recent time, Volkswagen emission scandal is the biggest scam being happened in
business history. According to the news article published in BBC news on 10th December 2015,
Volkswagen is accused of installing cheating software in their diesel cars in order to get away
with the stringent emission standard by Environmental Protection Agency (bbc.com 2018). It is
reported that in order to portray and position their diesel cars as cleaner than their competitors,
Volkswagen used the software to get pass the emission test. This device is installed in millions of
Volkswagen cars sold around the world. Thus, the scam gets amplified around the world and
affected a number of stakeholders. Further investigations revealed that top level management of
Volkswagen was involved in the scam and they have initiated this strategy in order to maintain
their leadership in the global automobile sector (Siano et al. 2017). However, publication of the
scandal led to the lawsuits against the top level managers along with adverse impact on the
goodwill of the brand and fall of the share price.
The chosen article of BBC news have stated about the response by Volkswagen in
countering the incident. It is reported that Volkswagen also proved ineffective in handling the
issue properly and caused further amplification of the issue among the relevant stakeholders. It is
also being reported that number of top managers of Volkswagen are prosecuted and CEO also
resigned from his post. This essay will discuss about the ethical responsibilities of Volkswagen
in against the principles of United Nations Global Compact. In addition, CSR and ethical
theories will be used in evaluating the actions of Volkswagen.

2MANAGING IN GLOBAL ENVIRONMENT
Ethical responsibilities of Volkswagen
There are number of ethical responsibilities being stated by United Nations Global
Compact that should be followed by Volkswagen in their global business operation. According
to United Nations Global Compact, the first ethical principle is protection of human rights. It is
important for Volkswagen to look after the violation of human rights in their global workforce.
The second principle states that business should also not get involved in abuse of human rights
(Unglobalcompact.org 2018). Third principle states that business should respect the right of
collective bargaining. Volkswagen should have the respect for the labor association and their
bargaining power. Fourth and fifth principle states that business should rid of forced labor and
child labor. It is also important for Volkswagen due to the reason that having child and forced
labor will reduce the ethical approach and morality of Volkswagen in the global market.
Sixth principle states that business should eliminate the employee discrimination. It is
more important for global organizations such as Volkswagen. This is due to the reason that
Volkswagen is having diverse workforce with having employees from different social and
cultural backgrounds. Seventh principle states that business should have precautionary measures
against degradation of environment (Rasche, Waddock and McIntosh 2013). Volkswagen should
be more careful due to the fact they are automobile manufacturing company and is having direct
impact on the environment. Eighth principle states about the importance of initiating responsible
environmental activities. Volkswagen should initiate these activities in order to generate positive
word of mouth in the market. Ninth principle states about the importance of developing more
sustainable and environment friendly technologies (Unglobalcompact.org 2018). It is the
responsibility of Volkswagen to develop more sustainable and cleaner vehicles to reduce their