Retailing Issues and Application: Analyzing Volkswagen's Challenges

This report examines the retailing issues faced by businesses, using Volkswagen as a primary case study. It delves into the decline of the retail industry, the rise of corporate social responsibility (CSR), and the impact of ethical and legal issues on a company's reputation and financial performance. The report highlights Volkswagen's emission scandal, ethical controversies, and legal violations, comparing them to similar challenges faced by companies like Nike. It explores the importance of ethical standards, accountability, and sustainable business practices for regaining customer loyalty and maintaining market share. Strategies for addressing these issues, including improvements in operational and production systems, investment in research and development, and building stronger accountability structures, are discussed. The report emphasizes the significance of CSR in the global corporate agenda and its direct impact on the growth and success of companies in the retail industry.

Retailing issues and application

Table of Contents
INTRODUCTION ..........................................................................................................................1
Main Body.......................................................................................................................................1
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The global power of retail industry in UK is continuously declining. There has been
increase in the rise in several risks which has direct as well as significant impact on the growth
of an organisation. In present scenario, dynamic business environment and increase in level of
competition has created challenges for retail companies to maintain their sustainability in
market and concentrate on the business objectives. Companies operating in retail industry can
formulate the strategies for fulfilling their responsibilities towards society. As this activity will
assist business entity in gaining the loyalty of people.
The purpose of the project is to identify major issues which have direct as well as
significant impact on the growth as well as success of companies operating in retail industry
such as Volkswagen.
Main Body
In present era, corporate social responsibility as well as sustainability has achieved an
important position in context of global corporate agenda. Many companies including
Volkswagen in retail auto mobile sector engaging in responsible as well as sustainable business
practices with the purpose of creating social as well as corporate value. Volkswagen is
recognised as German company which is operating in Auto mobile industry. Business entity has
gained popularity as largest car manufacture in Europe and an organisation also enjoys a high
reputation in the world for its excellent performance and rigorous producing procedure. But due
to the some unethical business practices an enterprise has to face ethical and legal issues which
has major effect on the reputation of firm. Volkswagen which is recognised as the large car
manufacturer ought to shoulder the corresponding responsibilities for society because social
responsibilities and profit seeking are closely related. Strategies followed by the Volkswagen
company is considered to be as important in terms of increasing sustainability (Berger, 2016)
corporate social responsibility is considered to be as the active as well as voluntary
contribution made by an organisation for improving social, economic and environmental
condition. These responsibilities are taken generally by firm usually with the intention of
increasing its competitive position and its value. The another objectives of business entity
behind fulfilling the corporate social responsibility is to generate brand awareness , improve
reputation and to get recognition in the market. It has been identified that Volkswagen has failed
to fulfil its corporate social responsibility , due to which business entity has to face legal and
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other issues which has direct as well as major impact on the reputation of an organisation. The
problems have arises due to the emission from the cars produced by Volkswagen company which
has adverse effect on the health of people in the society as well as on the environment. The other
reason or activity due conducted by the company due to which the firm has to face such issues is
the bad quality of cars and sine infective services (Azevedo and Wittmann,2016)
Ethical issues in present dilemmas have become a very crucial aspect the success of a
business. Corporate ethics is defined as relying on the social, opinion of the people in the society
and inner belief in specific social atmosphere, regarding ethical principles. In other words it can
be considered that the sustainability of an organisation in the industry or market is completely
based on the moral values of employees and worker behaviour at workplace. Ethical issues has
direct as well as significant influence on the attitude as well as performance of workers in an
enterprise. Rise in ethical issues can give birth to the conflict at workplace which as direct effect
on the business performance. Disputes within an enterprise also have effect on the working
environment, culture and reputation of firm. The major issues faced by business entity is
rejection of any ethical standards in engineering, which has led to the resignation by chief
executive officer.
The Nike company as well as wall mart which are the big organisation have to face major
issues due to failure to fulfil corporate social responsibilities. These firm also have to face ethical
controversies which has effect the organisation image and reputation in industry. In context of
Volkswagen , business entity the steps or actions taken by the company for restoring its
credibility, the firm has to face issue for accusing the another organisation of impeding and
obstructing regulators’ inquiries and providing misleading information. The another issue which
has been faced by Volkswagen is related to the production of diesel cars which have high
emission and adverse effect on the environment as well as on the health of people. Such cards
were not purchased by the customers in the market which further had great as well as significant
impact on the sales and profitability of firm. The ethical and other problems related to the
corporate social responsibility has great and major influence on financial performance of an
enterprise. Volkswagen companies in order to deal with or eliminate such type of problems in the
future has adopted the strategy to employ the software for checking the emissions tests. This
software has been used by an organisation for checking the tests when not being tested, the cars
emit up to 40 times the allowable levels of nitrogen oxide pollution (Okpara and Idowu, 2013)
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This emission' scandal is a big case of regular corporate fraud that lead to negative effect on
customers, governments, and the health and well-being of people in the societies. Scandal related
to corporate fraud has long lasting effect on the growth , success and reputation of company in
the market. There has been tremendous decline in sales , profitability and market value of an
organisation. Ethical issues has been faced by Volkswagen as management team in an enterprise
was deceiving the stakeholder by paying lip-service and workers were treaty very badly. This is
the significant factor due to which the company has to face such complex as well as difficult
situation which has significant impact on the valuer of its business (Jamali, ed., 2016)
Volkswagen company has to face the legal issues as well due to the lack of knowledge about the
laws prevailing in the country. Business entity has also caught violating legally binding, as we;;ll
as voluntary commitments. This factors had the great influence on the market share of the
company. The issues have lead to serious consequences when the management team and owner
of the company has given the statement that they were not aware about the cheating activities. It
has been analysed from the case study of Volkswagen that business entity has to face difficult
situation and major problems due to diesel-powered vehicles were outfitted with software that
would make them appear to run cleaner in tests.
Other company which has faced the same problems as well as challenges due to unethical
practice include beyond petroleum company. Business entity has to face ethical issues for
conducting a marketing campaign in the early 2000s which was organised with the intention of
rebranding the organisation as Beyond Petroleum while still investing heavily in oil.
Business entity also has to bear short as well as long term losses due to unethical activity
or fraud. This type of unethical practices by firm also have great influence on the customer
perception , buying behaviour as well as on their attitude towards company. It has been analysed
that , company can easily build good image in the mind of customers by offering the premium
quality of product. But some unethical activities by a firm can have great effect on the reputation
and in such situation its hard to regain the loyalty of customer. In context of case study of
Volkswagen company, unethical practices conducted by firm not only have impact on their
reputation but also have significant influence on the reputation of other auto maker in auto
mobile industry. It is required by the management team in Volkswagen company to learn as well
as gain experience from the other organisations which has undergone same problems or
situations. As this will assist business entity in formulating the suitable strategies as well as
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determining the appropriate tactics which can be used for dealing with difficult situations. Nike
is a well reputed company which has faced same situations due to unethical labour practices,
due to which customers in the market have planned to boycott against organisation and public
has also decided not to buy product or services from the Nike company. This factor has great risk
on the sustainability of firm in the market (Carroll and Shabana, 2010) The management team in
an enterprise has planned to formulate strict regulation in order to improve labour practices
within an enterprise. Top level management team in Nike company has made a plan to appoint
the external auditors for conducting the investigation in business to analyse the relationship of
company with suppliers as well as labour practices within an organisation. Business entity has
also provided annual report on list of corporate social responsibilities which has been fulfilled
by company. It has been analysed that ethical issues also have significant effect on business
performance and overall growth of firm. The Nike organisation has adopted strategy to form
partnership with fair labour association which has assisted business entity in rebuilding image
and gaining loyalty of customers. It has also provided firm an opportunity to redevelop strong
relationship with their workers and expand business operations. Partnership strategy has also
enabled business entity to building sustainable supply chains.
In context of Volkswagen company, if a firm wants to rebuilt its image, an enterprise is
required to fulfil their responsibility towards society. Management team in Volkswagen company
also need to develop an appropriate tactic as well as formulate strategies in order to deal with
emission scandal. The company should make the improvement in operational and production
system. As this activity will help business entity in enhancing quality of products or services.
Firm can also employ the advance technology at workplace which will assist an organisation in
reducing the wastage and controlling the expenses. Technology is also important to implement as
this is the factor which will aid business entity in reducing emission from vehicles. Management
team in Volkswagen company requires ensuring that all business activities are performed and
procedures are executed as per the standards or norms. As this strategy will support business
entity in reducing chances of uncertainties which might arise due to failure to fulfil corporate
social responsibility. Volkswagen company is required to make investment in research and
development activities, as this will help business entity in keeping updates about the latest norms
and business trend. It will also support business entity in identifying the needs as well as
demands of customers in the market. By adopting the investment strategy business entity will be
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able to fulfil the demands of the customers, which will further assist firm in regaining the loyalty
of client. Management team in an enterprise are also required to develop the plan for bringing the
positive as well as drastic improvement in business culture as well as working condition. As this
strategy or activity will support an enterprise in reducing the chances of ethical issues.
Volkswagen company also need to built stronger accountability structures and practices (Du,
Bhattacharya and Sen, 2010)
It is required by management team , stakeholder or government to regular monitor the
practices or activities conducted by the firm. As this will help in reducing or controlling the
unethical trade practices. It is the duty of manager or leader in an organisation to motivate
employees to follow the regulation and working according to the ethical standards (Gainer,
2010)
In context of the Volkswagen,management team in an organisation has planed to
purchase back the diesel vehicles and has adopted the product development strategy.
As per the particular theory related to the corporate social responsibility defines the way
an organisation interact or deal with the changes in business environment. Hypothesis related
also states that corporate social responsibility four major obligations these are economic, legal,
ethical and philanthropic responsibility (Keyes, 2016)The another model is pro founded by the
Carroll's which is recognised as Carroll's model which provides the explanation about the three
dimensions of responsibility, responsiveness, and social issues into a hypothesis of rule. Carroll
model have focus on corporate social responsibilities can be integrated with the other business
strategies as well as organisational objectives. As per the corporate social responsibilities
pyramid model, it is required by the management team in Volkswagen to create a Hierarchy of
separate responsibilities. This hypothesis also states that economic or financial responsibilities
should be given with the first priority and should be positioned at the top of hierarchy. The
corporate social responsibility pyramid model is created to analyse the expectation of society
towards fulfilling of responsibility by an organisation. This hypothesis can be used by
Volkswagen company , as this activity will help business entity in identifying the social concerns
and by providing the solution to the people about specific problems, an enterprise can rebuilt its
image and gain customer loyalty. It is also the duty of legal authority in nation to send regular
notices to remind companies about their responsibility towards society as well as country. It is
required by the Volkswagen to develop suitable strategies for fulfilling corporate social
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responsibility. As this activity will help business entity in increasing profitability and sales. It
will also support firm in accomplishing other business objectives. After bearing the lots of
ethical issues, difficult situation and legal obligations,Volkswagen has taken the high initiatives
to fulfil its responsibilities towards business as well as society. An organisation has adopted the
new technological software for testing the emission from cards and establish new objectives of
making good cards in order to provide safe journey to the customers (Aguilera and Crespi-
Cladera, 2016) Now the Volkswagen enterprise examine environmental, economic and social
objectives in equal measures which has supported a firm in accomplishment of its long as well as
short term targets. It is required by management team in an enterprise to develop the
understanding that corporate social responsibility does not mean that fulfilling the responsibility
towards society, firm also have some liabilities towards their workers as well as other
stakeholders. Management team in Volkswagen company should develop some attractive
policies for protecting the rights of employees .As this strategy will help business entity in
developing the strong relationship with workers and influencing them to work for the benefit of
business. Corporate social responsibility is also considered as essential activity in terms of
gaining the support of gaining the support of people in the society for expanding business
operation. Management team in Volkswagen has planned to increase their contribution in social
events or other activities which is organised for the well being of people in the society. Fulfilling
the corporate social responsibilities by Volkswagen has provided firm chance to explore as well
as capture several business opportunities. The set idea of improvement in Volkswagen combines
ecological, social issues with economic development, which intends to protect the environment
and business entity has also realized the sustainable development. The several laws or norms are
developed by government for supporting the companies in resolving their issues. Another
purpose of implementation of some legislation by legal authority in the nation is to restrict the
unfair competition in the industry. It is required by the Volkswagen company, it is required by a
company to develop the understanding about legal norm in the host country or nation in which an
enterprise is planning to expand business operation. As this strategy will help firm in eliminating
or reducing the chances of legal obligation. It will also support business entity in increasing
sustainability in international market. Media is considered to be as an effective source for the
customers in the market to get the information or latest news about the business activities of
several firms. An organisation can also seek support from media in order to analyse the
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economic as well as social conditions in the nation. In the context of Volkswagen,an organisation
can use media for communicating with customers and informing them about new policies as
well practices. As this will help business entity in gaining customer loyalty and influencing them
to buy the company products or services. It is also essential for the marketing team in enterprise
to consider the norms as well as other ethical issues when developing the marketing strategy or
plan for promoting brand, goods or services. As this activity will help firm in achievement of
marketing objectives (Beaverstock, 2017)The another strategy which can be adopted by firm is
to participate in social events or programmes as this will help business entity in gaining
recognition in the market. It is required by the companies to comply with several norms or
legislation formulated by the governed or develop their own regulations. As this strategy will
assist an enterprise in eliminating the ethical issues. Corporate social responsibility is considered
to be the important activity which are required to be performed by each and every organisation,
as this will help firm in accomplishment of objectives.
CONCLUSION
It has been concluded from the assignment that ethical issues and failure to fulfil
corporate social responsibility has direct as well as significant impact on the reputation of the
company. Project has also concluded that Volkswagen company has to face complex as well as
difficult situation due to unethical practices conducted by an organisation. The ethical
consideration is important in terms of maintaining or increasing sustainability in global and
highly competitive environment. It has also been concluded that corporate social responsibility is
the the factor by which an organisation ca easily achieve success and foster growth.
There are various strategies has been suggested to Volkswagen company which can be
adopted for eliminating the serious issues. Some techniques have also been recommended to
help business entity in dealing with present issues. It has also been advice management team in
an enterprise to make suitable plans for bringing improvement in policies , procedures , practices
and business system.
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REFERENCES
Books and Journal:
Du, S., Bhattacharya, C.B. and Sen, S., 2010. Maximizing business returns to corporate social
responsibility (CSR): The role of CSR communication.International Journal of
Management Reviews. 12(1). pp.8-19.
Gainer, B., 2010. Corporate social responsibility. In Third Sector Research(pp. 187-200).
Springer New York.
Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice.International journal of management
reviews. 12(1). pp.85-105.
Okpara, J.O. and Idowu, S.O., 2013. Corporate Social Responsibility. Springer Berlin
Heidelberg.
Jamali, D. ed., 2016. Comparative Perspectives on Global Corporate Social Responsibility. IGI
Global.
Azevedo, J. B. and Wittmann, M.L., 2016. SOCIAL RESPONSIBILITY AND CORPORATE
IMAGE: A GLOBAL BRAND COMPANY STYDY. REVISTA ELETRONICA DE
ESTRATEGIA E NEGOCIOS-REEN. 9(1). pp.95-117.
Berger, R., 2016. Corporate Strategy| Functional issues (Japan)| Expertise| Roland Berger.
Keyes, J., 2016. Implementing the IT balanced scorecard: Aligning IT with corporate strategy.
CRC Press.
Aguilera, R. V. and Crespi-Cladera, R., 2016. Global corporate governance: On the relevance of
firms’ ownership structure. Journal of World Business. 51(1). pp.50-57.
Beaverstock, J. V., 2017. The Spatial Mobility of Corporate Knowledge: Expatriation, Global
Talent, and the World City. In Mobilities of Knowledge (pp. 227-246). Springer
International Publishing.
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