Managing, Leading and Stewardship: The Volkswagen Emission Scandal

This essay provides an in-depth analysis of the Volkswagen emission scandal, focusing on the failures in leadership, management, and stewardship that led to the crisis. The essay highlights the unethical practices of Volkswagen, including the use of 'cheat software' to falsify emission test results, and discusses the organization's challenges in the market. It examines the impact of these actions on the company's reputation, market share, and the environment. The analysis covers the issues, including the deterioration of product quality, loss of consumer trust, and legal repercussions, while also exploring the role of leadership in guiding the organization and ensuring ethical conduct. Furthermore, the essay explores the importance of transformative leadership, technological advancements, and the impact of power and politics within the organization. It concludes with recommendations for rebranding and the need for effective leadership to restore Volkswagen's reputation and achieve sustainability. References from various sources are included to support the analysis.

Running head: MANAGING, LEADING AND STEWARDSHIP
Managing, leading and stewardship
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Executive summary
This is an essay, which will depict the malpractices of the organization named Volkswagen,
which has been in the limelight for their unethical practices and using cheat software.
Volkswagen is one of the major organizations in Germany who can be considered as the one of
the market. The organization had been facing stiff challenge from rival organization such as
BMW and Dailmer. The organization had falsified their result of the emission test by installing
cheat devices, which was able to detect when they are tested. . However, as it is one of the most
reputed organizations in their market segment it can change their polices and can slowly build
their organization structure to make sure that they can maintain their sustainability and gain
competitive advantage in the market.

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Introduction
This is an essay, which will depict the malpractices of the organization named
Volkswagen, which has been in the limelight for their unethical practices and using cheat
software. Volkswagen is one of the major organizations in Germany who can be considered as
the one of the market. The organization had been facing stiff challenge from rival organization
such as BMW and Dailmer (The Globe and Mail 2017). The organization had falsified their
result of the emission test by installing cheat devices, which was able to detect when they are
tested. These devices could change their performance depending upon that and the organization
was able to bypass the tests without any hindrance. This facilitated the organization to meet the
emission standards and the organization was able to enter the United States market. The
organization was able to push their product in to the United States market due the high budget
promotional campaigns, which stated that the Volkswagen is selling cars with lowest emission
rates. The EPA investigated and found out that the organization has been using defeat devices in
most of the diesel cars they were selling all over the world. The organization had used modifying
software in the 3litre engines of all their premium cars, which has affected the most of the cars
and the corresponding society (LSE Management 2017).
Issues and analysis
Volkswagen was able to capture a majority of the market in the industry due to the cheat
device they had used. However, as the quality of the product was not up to the market the cars
that had been sold were facing of lot if issues and the condition of the cars were deteriorating at a
rapid rate. The cars experienced rattles which were mysterious, starting difficulties, poor
consumption of fuel, weak acceleration and low power. Thus, the drivers who are driving have

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lost their faith on their trusted organization and they felt that the organization is degraded the
quality of the product they have been doing (Fast Company 2017). The cars that had been
affected due to this emission scandal had been sent back to the dealers. The majority of the cars
required simple up gradation of their software and the cars having 1.6litre engines required
massive changes. Volkswagen is one of the major companies and consisted of brands like
Buggati, Lamborghini, Bentley, Porsche, Skoda, SEAT and Audi so the cheat software that has
been installed has affected all these brands. The organization had lost its reputation in the market
and had profound impact on the corresponding society and environment. The organization tried
to achieve damage control by calling back their shares and gave an apology in the public. The
organization had been facing lawsuits and criminal, which has hampered the overall performance
of the organization (DISHMAN 2015).
The International council on Clean Transportation (ICCT) was able to discover this
phenomenon, which means that the program is able to detect the start of the test cycle. The
diesel engines have between the fuel efficiency, power and emission levels that are appropriate
for the cars. However, Volkswagen deliberately made sure that the validation of the product was
done incorrectly. The organization had become the target for most of the regulatory bodies in the
multiple countries (Nahavandi 2016). The governing bodies kept on investigating the incident to
find out the loopholes in their system and is considered the as act of stupidity as the cost of this
cheat quite high. However, the main issue was that a huge amount of nitrogen oxide was emitting
form the devices so it hampered the overall eco system of the society. These are green house
gases, which include the nitrogen oxide and cause the depletion of the ozone layer in the
atmosphere. The organization has been facing billions of lawsuits from all over the world and is

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going under prosecution for criminal offense. This shows that leadership is one of the major
factor for the development and sustainability of the organization (Ehrhart 2015).
It is necessary for the leaders to guide their organization in the path of success and it is
the responsibility of the leader to decide how the organization can give back to the society. The
use the triple bottom line the organization is the way of giving back to the society and the
corresponding environment. Thus, transformative leadership is one of the major factors for
making changes in the organization and providing them with the appropriate guidance. This case
of Volkswagen is against the principles of the organization theory as the decision taken by the
top management in the organization is against all the normative theories (Latham 2014). It is the
responsibility of the top management to take the accountability for the actions of their
organization. However, Volkswagen made an apology and called back all their defective cars but
still they had the full intention of the cheating the public. These malpractices in the organization
should have stopped by the top management and they should have focused on providing the
society with a good car that can contribute to the society (Schyns and Riggio 2016).
Technological advancement and cross culture of the organization are important factor for
the change in the leadership patterns. The organizational structure has changed completely for
top to bottom, which shows that modern organization work in a different manner. the great
leaders are able to convey their message to their employees and avoids any sort of malpractices
in the organization. Power and politics is one of the most important aspects of leadership and is
related to this incident (Stanley 2016). The right balance in power and politics is required in the
leaders so that the interest of the public is kept in mind. The organization tried to gain maximum
amount of profit so they were forced to sacrifice the good of the society. Volkswagen gave more
priority to the personal goals of the organization so the overall interest of the society is lost.

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Recommendations and conclusions
The organization does not have much option left so hey will have to go for rebranding of
their product by changing their current leaders. The organization requires an effective leader who
can provide proper guidance and transform the organization in to something completely
different. The organization will have to restart the organization under a different brand which
could be a viable option.
Thus, it can be concluded from the report that Volkswagen lacked in effective leadership
and they needed a better leader to provide them with better goals and objectives. However, as it
is one of the most reputed organizations in their market segment it can change their polices and
can slowly build their organization structure to make sure that they can maintain their
sustainability and gain competitive advantage in the market.

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References
DISHMAN, L. 2015. How Volkswagen’s Company Culture Could Have Led Employees To
Cheat | Fast Company. Fast Company. Retrieved 13 October 2017, from
https://www.fastcompany.com/3054692/how-volkswagens-company-culture-could-have-led-
employees-to-cheat
Ehrhart, M.G., 2015. Self-concept, implicit leadership theories, and follower preferences for
leadership. Zeitschrift für Psychologie.
Fast Company 2017. How Volkswagen’s Company Culture Could Have Led Employees To
Cheat | Fast Company. Fast Company. Retrieved 13 October 2017, from
https://www.fastcompany.com/3054692/how-volkswagens-company-culture-could-have-led-
employees-to-cheat
Latham, J.R., 2014. Leadership for quality and innovation: Challenges, theories, and a
framework for future research. Quality Management Journal, 21 (1), 5.
LSE Management. 2017. Volkswagen: the need to enforce ethical corporate behaviour. LSE
Management. Retrieved 13 October 2017, from
http://blogs.lse.ac.uk/management/2016/03/21/volkswagen-the-need-to-enforce-ethical-
corporate-behaviour/
Nahavandi, A., 2016. The Art and Science of Leadership -Global Edition. Pearson.
Schyns, B. and Riggio, R.E., 2016. Implicit Leadership Theories. Global Encyclopedia of Public
Administration, Public Policy, and Governance, pp.1-7.

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Stanley, D., 2016. Leadership Theories and Styles. Clinical Leadership in Nursing and
Healthcare: Values into Action, pp.25-46.
The Globe and Mail. 2017. The Volkswagen emissions scandal: A case study in corporate
misbehaviour. The Globe and Mail. Retrieved 13 October 2017, from
https://beta.theglobeandmail.com/report-on-business/rob-commentary/the-vw-emissions-
scandala-case-study-in-what-not-to-do/article26550100/?ref=http://www.theglobeandmail.com&