Volkswagen Emission Scandal: Ethical Dilemma Case Study

This report provides a comprehensive analysis of the Volkswagen emission scandal, a major ethical and business crisis. It begins with an executive summary and an introduction to Volkswagen AG, detailing its history and market position. The core of the report discusses the unethical practices of the company, specifically the deliberate use of "defeat devices" to cheat emission tests, and its impact on the company's reputation and customer trust. It explores the issues with Volkswagen's code of conduct and the failure of its virtue ethics, emphasizing the disconnect between the company's stated values and its actions. The report then applies various ethical decision-making approaches, including utilitarian, rights, fairness/justice, common good, and virtue approaches, to evaluate the situation. Finally, it suggests green punishment as a suitable solution, advocating for the allocation of penalties towards advancing knowledge and technology, rather than just financial burdens. The report concludes by highlighting the ongoing nature of the case and the potential for implementing the proposed solutions.

Running Head: CASE STUDY ON VOLKSWAGEN EMISSION SCANDAL
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CASE STUDY ON VOLKSWAGEN EMISSION SCANDAL
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10/9/2019

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EXECUTIVE SUMMARY
Volkswagen AG is a company based in Germany which is also recognised as the
Volkswagen group and it is a German based motorized international company, It has its
headquarter in Wolfsburg. The company distributes productions and designs commercial and
passenger cars like, engines, turbo machinery motorcycles and proposals related facilities
which also includes leasing and fleet management financing, (Stanwick, and Stanwick,
2017). The company pretended that its vehicles follow the standard of emissions and
therefore they planned to conduct emission test in the lab in spite of doing the test on the
roads. The real outcome of the emission test for Volkswagen on road was thirty-five
(35) times more than resentful consequence in the lab. Albeit Volkswagen duplicitous in
the test of diesel emission was an immoral and unethical action by the leader of the resulted
in various series of disastrous problems and issues. The suggestion of green punishment is
one of the most suitable and the best solution to finalize and to help the case. Electronic cars
permit the environment safety activities to protect the cost and the time for discovering out
the new schemes in order to control the tests of emission. In this way, Volkswagen is not only
penalised but will also be able to compensate the scandal in an appropriate manner. In
conclusion, as this is an one of the on-going case, there is still a chance to lodge the
suggestion of green punishment to justice to resolve the matter in a win-win technique.

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Contents
EXECUTIVE SUMMARY........................................................................................................1
Introduction................................................................................................................................3
History of the organization.........................................................................................................4
Discussion of the case................................................................................................................5
Argument:..................................................................................................................................5
The issues with the code of conduct......................................................................................6
The issue with the Virtue Ethic..............................................................................................6
Ethical Decision Making Approaches & Theories.....................................................................6
Utilitarian Approach...............................................................................................................7
Rights Approach.....................................................................................................................7
Fairness/Justice Approach......................................................................................................7
Common Good Approach......................................................................................................7
Virtue Approach.....................................................................................................................7
Summary and Conclusion..........................................................................................................8

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Introduction
Volkswagen AG is a German based company which is also recognised as the Volkswagen
group and it is a Germany based motorized international company, It’s headquarter is in
Wolfsburg. The business distributes productions and projects commercial and passenger
vehicles like, motorcycles and turbo machinery and proposals related facilities with fleet
management and financing, leasing. During the year 2016 it was one of the world’s main
automaker by the sales overhauling Toyota and keeping this title in the year 2017 and 2018
by selling around 10.8 million vehicles. It has also managed to maintain the leading share of
market in Europe for more than 2 decades; the company was ranked on number 7 in the
fortune global 500 list in the year 2018. The company sells passenger under the following
names which were Bentley, Porsche, Bugatti, and other Volkswagen Commercial Vehicles.
The company is also alienated into 2 sections which are financial service division and the
motorized division the and as of in the year 2008 it had around 342 subsidiary businesses.
The company has its main processes in about 150 countries and it also functions in 100
manufacture facilities across various he 27 countries (Clemente, and Gabbioneta, 2017).
The current issue in the company is the unethical practices faced by the company. A year ago,
a scandal broke around 40% of the market value of the company. The company Volkswagen
admitted that they fitted 11 million of the cars with software that was deliberately designed to
trickster the emission test; it was not only unethical but illegal as well, it was kind of fraud
from the company, It was not at all expected from a big company like Volkswagen. This
case affected the trust of people and also the brand appearance of the company. This began
in the moth September and in the year 2015, it came into notice when the United States
Environmental Defence Agency (EPA) delivered a violation sign of Clean Air Act to the
German automaker the Volkswagen Group. It is highly important the solve this unethical

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practice of Volkswagen as the company had a good brand image earlier and customer
loyalty, after this scandal lot of its customer’s faced. Due to the scandal 86 per cent of the
VW drivers were worried regarding the influence on environment from their car. On the
other hand the 83 per cent of the people also questioned the company about the influence on
the resale value of the vehicle. Another 73 per cent had a fear that the presentation of the
vehicle would be pretentious and more than half of the VW clienteles said that they will not
buy cars from the company Volkswagen in the coming future (Rhodes, 2016).
Apart from this around 96% of them specified that efficiency of fuel was an significant aspect
in purchasing the vehicle of diesel, while 90% of them said that it was the apparently limited
ecological impact. Both these questions were seen after the scandal (Jung, Chilton, and
Valero, 2017).
History of the organization
Volkswagen was originated in the year 1937 in order to production a car which would
become recognised as beetle. The production of the company raised speedily with time and
finally in the year 1965, it also learned Auto union, which produced the various models of
the car Audi, after this Volkswagen then hurled a whole new generation of obverse wheel
cars in the year 1970’s, which included Polo, Golf and Passat and the last also became its
bestseller. After this the company also acquired a controlling stake in SEAT in the 1986 and
this made the business the first non-German marque and after which it was able to
assimilated he control of Skoda in the year 1994, in the year 1988 it moved to Bentley,
Lamborghini and Bugatti 1998, Scandia in the year 2008. The operation of the company in
China grew with this and it also became the largest market for Volkswagen (Mansouri, 2016).

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Discussion of the case
During the year 2015 the company Volkswagen was proclaimed as the “diesel dupe” in the
feature of equipping the examination of emission and in order to create the diesel vehicles
appear emitting less pollution than what they really want to emit. during the year 2015 in the
month of September it was stated by the EPA that due to an plenty amount of Volkswagen
vehicles that were already traded in world, A overthrow expedient was entrenched in the
diesel machine with the main drive of changing the presentation of the vehicle and to
improve it. The company pretended that its vehicles follow the standard of emissions and
therefore they planned to conduct emission test in the lab as a replacement for of on the
roads. Afterwards, the program was then made with minor variations to setting of the
engine with the aim of lessening the level of nitrogen oxide emitted by cars based on
diesel of Volkswagen . The real consequence of the emission test for Volkswagen on
road was thirty-five (35) times more than the cheated result showed in the lab. The
emission test scandal of Volkswagen shaped a affected penalties having influence on plenty
number of establishments (Cavico, & Mujtaba, 2016).
Argument:
 The scandal of Volkswagen was an unethical practice. For all the companies it is
important to have a code of conduct statement and it is significant for the company to
establish some beliefs and norms regarding the organization. a code of conduct is
also important because it focuses on encouraging various ways of thinking and the
attitude in order to achieve the ethical conduct (Ewing, 2015).
 Although the company Volkswagen was always believed to have an outstanding code
of conduct and also a well written document, the main question is why it happened?

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The issues with the code of conduct
The ethical standards of Volkswagen clearly specified that one of the most important goal for
them was to protect the interest of public and to safe them and provide ethical guidance, but
sadly the actions of the company did not match with its words (Krall, and Peng, 2015).
Through this it can be seen that the code of conduct of Volkswagen is not sufficient to guide
the actions of the company and in the above case it can be seen that the structure of the
business allows the individuals to choose the independent moral actions if the The code of
conduct, if functional as written, would not inspire the creation of the “defeat devices.”
(Oldenkamp, van Zelm, and Huijbregts, 2016).
The issue with the Virtue Ethic
 In the above case it was the accountability of the software engineers and the corporate
leaders to make sure that there is trust and safety in the products of the company.
Their choice which includes installing the software can be perceived that the
company does not have any virtue (Crête, 2016).
 Airstole a researcher labelled virtue as a main character trait that was also seen in the
habitual actions, the above Volkswagen scandal, honestly is the trait that can be
applied in the Volkswagen case. The honesty and anxiety for the shared goods was
not reinforced by the actions of the business the leaders of the company believed in
violating the rule for their own benefit and this is what led to the scandal
(Georgievski, and Al Qudah, 2016)
Ethical Decision Making Approaches & Theories
The following are five worldwide tactics to consider while making the ethical decisions:

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Utilitarian Approach – this includes that as to what are the benefits and hard that each
step or each sequence of action will create and what is the substitute that wills principal to
best consequence for the company. These are some of the questions that answer the quandary
of which choice will yield the greatest welfares and smallest harm.
Rights Approach – this includes the questions such as what are the moral rights of the
affected party and what course of action can help in representing those rights. This approach
believes that the persons have the capability to create the decisions freely; this approach also
trusts that if any act does not admire the rights of every person then it is a wrong thing to do.
Fairness/Justice Approach – under this comes the following questions as to what are
the course of action that treats each and every person in the same exact manner expect at the
points where there is a justified reason to not treat the people right, this kind of approach
helps the individual and gives them an opportunity in order to reflect if the act is fair to the
persons.
Common Good Approach – this includes the questions such as what are the actions that
will give advantage to the common good. The question helps in driving choice in order to
agree if the action taken by the company would be good foe own benefit and the society and
this approach also open doors for various other question related to the type of society that the
company wishes to become and how the company can achieve this (Siano, Vollero, Conte,
and Amabile, 2017).
Virtue Approach – this is an approach that questions as to which course of action helps in
developing the moral virtues. This approach believes that every company or human hold
some morals and internal values that helps in striving to conserve and hold onto.

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Summary and Conclusion
The scandal of Volkswagen was a huge thing and it was hence proposed to the company that
in spite of striking the additional monetary burden in order to penalize the companies, various
other conducts such as green way to penalise Volkswagen equipping in the test of emission.
It was thus suggested to the company rather than putting heavy money consequences, it more
positive to devote the amount of penalty to the advance knowledge tradition. After this
scandal it was recommended to the company that Volkswagen is accountable to recall all the
current vehicles with device defeat in order to fix them. Mainly, EPA had a critical part to
enforce Volkswagen in order to hurry up its roll-out of zero emission cars which emit zero
pollutant to the atmosphere.
The deceptive scandal of Volkswagen was thus was one of the most complicated and
overwhelming case which created various histrionic hassles for both its indirect and direct
investors. Albeit Volkswagen dishonesty in the emission test of diesel was a very unethical
action by the leader of the resulted in various series of calamitous problems and issues. The
suggestion of green punishment is one of the most suitable and the best solution to finalize
and to help the case. Electronic cars allow the environment defence activities to protect the
time and the cost for discovering out the new schemes in order to control the tests of
emission. In this way, Volkswagen is not only penalised but will also be able to compensate
the scandal in an appropriate manner. In end, as this is an on-going case, there is an
opportunity to lodge the suggestion of green punishment to justice to resolve the matter in a
win-win technique.

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References
Siano, A., Vollero, A., Conte, F. and Amabile, S., 2017. “More than words”: Expanding the
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Krall, J.R. and Peng, R.D., 2015. The Volkswagen scandal: Deception, driving and
deaths. Significance, 12(6), pp.12-15.
Oldenkamp, R., van Zelm, R. and Huijbregts, M.A., 2016. Valuing the human health damage
caused by the fraud of Volkswagen. Environmental Pollution, 212, pp.121-127.
Crête, R., 2016. The Volkswagen scandal from the viewpoint of corporate
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Ewing, J., 2015. Volkswagen says 11 million cars worldwide are affected in diesel
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