Analysis of Volkswagen's Unethical Conduct: A Case Study

Running head: ACCOUNTING
Accounting
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ACCOUNTING
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Conclusion.......................................................................................................................................4
Reference.........................................................................................................................................5

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ACCOUNTING
Introduction
The main purpose of this assignment is to analysis of the case which is related to
principle of ethics in business. The case which is to be analyzed is related to Volkswagen.
Volkswagen is an automobile company which is a German based company which was
established in 1937. The company has its headquarters in Wolfsburg, Germany. The company
was considered to be the largest automobile company in 2016.
As per the case, the management of the company was involved in an unethical activity
which clearly defied the rules and regulations which were set by the Environmental Protection
Agency of USA (EPA). As per the rules the automobiles need to have control over the emissions
of nitrogen oxides or NOx which affects the environment. As per the rule the automobiles need
to conduct population tests to have an idea of the level of emissions which the automobile is
responsible for. Volkswagen company violated this law and found a loophole in the regulation
which the company utilized.
Discussion
The company had systematically introduced a software which would turn on the emission
controls when the pollution test was being conducted and turned it off when the automobile was
driving normally in the roads. This was a case of violation of law which was set by EPA. In
addition to this the company had been doing this from the year 2008. Some of the popular cars
such as the four-cylinder Volkswagen and the Audi Diesel cars were using such a device. This
was a case of unethical values towards the laws which are set for protection of the environment.
The company had already sold off around 482,000 cars which were using such a device. The
scandal was discovered in 2015 and the EPA charged a suit in the federal court against the
policies of the company. The main points which were raised by EPA was that the company not
only defied the environment protection law but also invented a software which can be used to
avoid the laws completely (Park, Kim and Kwon 2017). In addition to this the number of cars
which were sold by the company and the emission from such cars will be affecting the air quality
of US. As per the rules the maximum amount of fine which was to be paid was $ 37,500 for each
car. Therefore, considering the number of cars which were sold the company had to bear a
lumpsum amount of fine of around $ 18 billion.
The management of the company wanted to avoid the costs which were associated with
pollution controls and therefore was using such a software. The involved parties in this ethical