Volkswagen :Scandal, Ethical and Professional issues

Volkswagen - VW The case
of consumer deception and
corporate culture

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
(a) Ethical dimensions of the issue from the case........................................................................1
(b) Two theories theories and demonstrate with the chosen case................................................4
PART 2............................................................................................................................................5
CONCLUSION ...............................................................................................................................8
REFERENCE ..................................................................................................................................9

INTRODUCTION
Consumer deception also called false advertisement and it include the misleading, false
statement or manufacturing confusion. Advertisement law save the consumers from their
deception with the help of specific legislation (Bovens, 2016). Corporate culture include the
individual beliefs or behaviour and how they react at the time of facing business transaction or
other challenges outside the business. This report include the case of Volkswagen, deception of
consumers when US Environmental Protection Agency (EPA) issue violation notice regarding
Clean Air Act to Volkswagen Group. Agency found that company intensional programme
turbocharged direct injection to activate emission control which cause the vehicle. Volkswagen
company deployed the software which is about 11 million cars all over the world. This report
include the ethical dimensions of the case, ethical theories and it also discussed about ethical
leader, manager or standards.
PART 1
(a) Ethical dimensions of the issue from the case
Goal of the Volkswagen company is ambitious & simple, Marlin Winterkorn plane to
transform their company into world's largest auto maker through selling 10 million of cars in a
year. CEO of the company Merlin Winterkorn decided to triple their sale in the US market to
achieve their business goals & objectives. Volkswagen dismiss the idea to compete in hybrid
market and start building diesel cars which have only 5 % demand in the US market. After
knowing that diesel cars generate more pollution in comparison to gas cars (Brooks, 2016). So
company face the enough of issues in the market. There are three factors which drive ethical
breakdown and force their employee to take those actions which unethical or against the value of
the organisation. These factors influence the employees to take unethical actions or practices.
 Pressure: - Management get the pressure from the top authority to provide ostensibly
training in ethics to their employees. In the Volkswagen organisation management follow
the autocratic leadership style to take decision and try to achieve single minded goal at
any cost. Engineering reputation was at stake and the failure of German economy will
create the pressure among the employees or manager of the company. Economy or top
management pressure will encourage the person to break their ethical issues and done
something unethical which is against the company's values, beliefs or cultural. So
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organisation have to be careful because when pressure increased in the company so there
is high chances of unethical actions or activities. Due to lack of understanding among the
organisation and different situation which encourage the employees to perform unethical
behaviour. Top authority need to recognize these values & believes every day to their
employees so it can reduce the chances of using unethical practices in the organisation.
Because employees get these values in their mind and before taking any action they
identify that which action is ethical or which one is unethical (Bruijl, 2017).
 Opportunity: - It is also depend upon the opportunity when it comes in front of the
people. Employees receive the direction at the same time when company's engineer
required a new solution for the problem. Bosh company sold diesel engine management
software to the Volkswagen company which help to detect emission controlling device at
the time of testing vehicle. Use of software for the internal testing is illegal in vehicle and
sold to the general public. In the current market, modern cars will operate the 100 million
lines of software codes and and it easy to hide but it will create the complexity among
organisation. So basically, in the organisation engineers get the lots of opportunity to
solve their issues unethically and it will not be recognised by others easily. But it is
personal choice of a person to perform their task effectively or choose the unethical
practices as a shortcut to complete their work and grab the unethical opportunity (Carder
and et.al., 2017). Because of that issues company's change the corporate culture with the
help of new ideas or new leadership styles which overcome the unethical behaviour and
provide them warrants against unethical practices occur in the organisation.
 Rationalization: - It is an Defence mechanism where controversial behaviour or feeling
justified in rational or logical manner for the avoidance of true explanations. Volkswagen
engineers installed defeat device which allow the company to cheat on newly emission
standards. For this company bear the fine of $120,000 and it was minimum in comparison
to consequences. So it was rational decision because punishment was light in front of the
emission of ethics. Controlling agency have to be rational otherwise these practices will
increase rapidly in the organisation. It will not just affect the company's employees,
production or profitability. It will also affect the stakeholders of the company and provide
negative impact on society.
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