Volkswagen Scandal Case: Impact, Role of CEO and Department, Steps for Improvement

This essay discusses the Volkswagen Scandal Case, its impact, the role of CEO and department, and steps for improvement. The scandal affected the environment of US and Europe at a greater level. The CEO of the company plays a vital part in the disaster features by Volkswagen. The departments play a prominent role in coping up with the challenges faced by the company. The essay concludes with recommendations for sustainable growth.

Running Head: VOLKSWAGEN SCANDAL CASE 0
VOLKSWAGEN
Scandal Case
(Student Name)
.
3/7/2019

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Table of Contents
Introduction......................................................................................................................................2
Scandal Case of Volkswagen...........................................................................................................2
Impact of Issues...............................................................................................................................3
Role of CEO....................................................................................................................................3
Role of Department..........................................................................................................................4
Steps for improvement.....................................................................................................................5
Conclusion and Recommendations..................................................................................................6
References........................................................................................................................................7

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Introduction
Since the industrial revolution, the environment is considered as the main victim for the human
actions. The environment is greatly affected by the activities of human. Moreover, the companies
also take contribution in polluting the environment at greater level. As their ignorance towards
the environment cause the pollution in the environment that affected the atmosphere at the global
level (Dyllick and Muff, 2016). One of the leading companies Volkswagen founded culpable in
the case of secretion of diesel cars in the year 2009. Volkswagen dishonored the pace of
emission that been permitted by the government since the year 2009. The huge volume of
emanation in the situation exaggerated the fitness of human being in Europe and US (Jung,
Chilton and Valero, 2017).
In the subsequent report there will be thorough discussion on the initiate taken by CEO of the
company in dealing with such crises of the company as well as other steps taken by them to
regain the consumers trust.
Scandal Case of Volkswagen
Volkswagen is one of the largest manufacturing companies in the global market. The company
was trying to enter in the US market however; their vehicles did not meet the standards of
emission that were quiet higher as companies to the normal requirement by the government of
the country (Clemente and Gabbioneta, 2017). It is indicated that the company has installed
software in their diesel vehicles that were sold since 2009, in the country US cheats the test of
emission by reporting the lower figures. Volkswagen was appearing to contain the cutthroat
benefit against their rivals as they were glance to be one of the major car manufacturers in the
global market by the year 2018. Therefore, once they have comprehend that their goals was
nearly all of the likely to be unsuccessful then they have started to gaze for the substitute to help
the in accomplishing their goals (Mansouri, 2016). The company has started using the “defeat
device” software. They have used such software in more than 10 million cars at the global and
out of which approximately 500,000 were sold in the US since 2009. The agency of
Environmental Protection detect the trounce device software in few models of Volkswagen cars.
Following such uncovering of the check setting, it directly connected with the settings of

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ecological gracious in which the pace of the engine was under standard influence (Cavico and
Mujtaba, 2016).
Impact of Issues
By adopting the unethical manner for the success, the company has disturbed the whole system
of environment and also polluted the environment at greater level. The case of emission scandal
led to the exploration of the corporation in diverse nations. The share prices of the company
were fallen down (Valentini and Kruckeberg, 2018). The CEO of the company Martin
Winterkorn has resigned moreover, the other individuals from the other department have also
been suspended which include the head of product development, head of Research &
Development. Apart from this the company has proclaim to splurge a mount which is US$ 18.32
billion on the fixture of the emission issues as well as begin the evoke operation in which, they
will renovate the anxious medium (Clemente and Gabbioneta, 2017). The share value of the
corporation was plummeting by 23% through the last year after the case when they have
confessed that they were involved in the case of diesel emission scandal. Such scandal case of
the company also affected the sales of the company to the greater extent. In the country US, there
was a declined sale of approximately 25 % in November 2015. The entire predictable cost that
was go beyond was $8 billion due to such scandal case (Aurand et al., 2017). The things are not
incomplete to this; present are convinced other invisibles as well as long-term damages linked
with it which include:
 The brand image of the company was greatly affected as negative effect on the trust of
the brand
 The satisfaction level towards the consumers greatly affected as well as reputation
 The employees also not able to build trust on the company as it affected on the morale of
the workers as well as trustworthiness
 The confidence of the investors also shivered (Majlath, 2016).
Role of CEO
To overcome the crises as well as regain the goodwill back, it is necessary for the company to
have the brawny management under which the staff of the company would able to consider free

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to lift their voice as well as stipulation whatever thing similar to this happening then, the issue
should be present in front of the boards. Therefore, it is essential to have robust leadership power
in their organization so that employees will bale to put their points in front of the higher
authority in effective manner to overcome from the crises as well as that would assist in earning
the reputation back from the market (Yahaya and Ebrahim, 2016).
The CEO of the company plays a vital part in the disaster features by Volkswagen. If the
corporation has an ability to take the verdict effectively, then the corporation would able to cope
up from the challenges faced by them sue to the scandal case. There is certain manner through
which Mr. Mathius Muller can lead and manage the company in effective manner:
 Listen to the team: Muller need to create a confortable environment for the employees by
listening to the team in effective manner. By listening and understanding the employees
will lead the Muller to regain the trust of the company. For example, if Muller will
arrange meeting on a monthly basis, the employees will share their issues and concerns.
 Deliver on promised results: the effective must deliver actual results rather than just
giving the promises very time therefore, Muller need to fulfill their promises to regain the
trust of consumers for example; if they promise to deliver cars free from emission then
they should make such efforts that can be shown to the consumers.
 Implement experience: The CEO can put into practice their practice to make the
alteration of the corporation in more effective manner. They can manage as well as
overcome from the challenges faced by the corporation by generate as well as be relevant
dissimilar approach amongst natives in order to facade any type of confront (Raman,
Garg and Thapliyal, 2017).
Muller is hired by the company due to the following reason:
 Volkswagen was required to handle the litigation or the disruption which caused the
decrease in the price of shares.
 The government scrutiny required the disclosure in regulatory filings.
 The staff of Volkswagen was affected die to the reason of such emission case

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Role of Department
The departments play a prominent role in coping up with the challenges faced by the company
therefore, such activities are explained in below points:
 The HR plays a vital role in the company. The HR of the company can provide ethical
training to the employee that arranges in a month that motivates the employees to work in
an ethical manner and punish the individual if they found guilty ethically. The department
of the R & D and Engineering should be properly analyzed and should be provided
proper ethical training that would motivate them to adopt the path of ethics in their
business.
 The scandal appears to implicate everyone from engineering manager to senior
executives. The accountability cannot exist without transparency that represents that
Muller should maintained shared project plan which is majorly visible to every individual
(Zhang et al., 2016).
 Muller need to consider the SOP of the company to check the issues of accountability
that made changes according. It is necessary to find out the root cause of the scandal case.
 For maintaining sustainability, Muller needs to adopt the technique of incentives and
other offers to motivate the employees as well as consumers that made participation
towards sustainable growth. In order to overcome from the issues, Muller need to focus
on the contract designing that specify the roles of the agents as well as create penalty or
rewards for their behaviors that help the company to guide the employees and other
stakeholders towards the path of sustainability
 By adopting effective supply chain, the company can conserve their resources, can save
cost, optimize the process, enhance productivity as well as promote the corporate values.
The integration of the supply chain within the company can be hard but the malfunction
to do something may be the main peril for the corporation at greater level (Crete, 2016).
Steps for improvement
There are certain manners through which the CEO of the company can enhance the reputation of
the company:

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 The re-branding of the company can make the company relaxed by improving the
program of efficiency as well as potentially that can enhance the brand reputation of the
corporation. Such process can increase the cost to the company however; it can aid in
plummeting the unenthusiastic exposure that has raised due to the case of scandal. They
can try to make contact with other companies such as Federal Trade Communication that
would help the company in rebuilding the image of the company (Andrews, 2016).
 The company can tie up with Federal Trade Commission, Fair Labor Association, and
Landfill Methane Outreach Program as they have already tied up with other companies as
well. The committee of such agency meets more than two times in a year regarding the
discussion of issues related to sustainable development. Therefore, it helps the company
to get strong credibility in the market.
 The company can earn the trust of consumers with the help of posting a bond in which
the company assure the public that such scandal case will not replicate yet again in the
prospect. The company can affirm that if such case will replicate yet again in the prospect
than company will pay according to the bond signed that is out to the automotive industry
of European Commission. In order to funding such bond, the corporation need to vend
their one brand due to the reason that they need to concentrate on creating cleaner hybrid
as well as electronic vehicles that is one of the best manners to re-enter in the market with
new product (Tanaka et al., 2018).
Conclusion and Recommendations
From the above analysis it can be concluded that sustainable growth is one of the essential part
for the business. Most of the companies ignore the sustainability practices while during their
business that affected the environment at greater level. The scandal case of Volkswagen affected
the environment of US and Europe at greater level. The emission of diesel engine was too high
that affected the health of the public at greater level. Therefore, it is essential for the Muller who
is appointed as new CEO of the company to take certain initiates to reenergize the brand in the
market and make them successful in the market in effective manner. The company can adopt the
strategy of rebuilding the image instead of rebranding due to the reason rebranding will increase
cost to the company and will be recognized from the new brand rather rebuilding the image will

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take time but would increase the faith among the consumers in more effective manner and will
be recognized in the global market like before.

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test. International Journal of Science and Engineering Applications, 5(4), pp.211-216.

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