Analyzing Volkswagen's Corporate Governance Failure and Impact

This report delves into the corporate governance failures of Volkswagen, specifically focusing on the emission scandal. It examines the core issues of corporate governance, highlighting how the company's unethical practices, including the use of defeat devices to cheat emission tests, led to a significant decline in customer perception and brand image. The report analyzes the importance of corporate governance for Volkswagen, the challenges faced after the scandal, and the potential strategies for improving customer trust and regaining market share. The literature review provides a comprehensive overview of corporate governance concepts, the consequences of its failures, and the significance of ethical conduct in the automotive industry. The report concludes with recommendations for Volkswagen to rebuild its reputation and restore stakeholder confidence by prioritizing transparency, accountability, and ethical business practices. It highlights the importance of aligning business objectives with legal and ethical considerations to ensure long-term sustainability and success.

CORPORATE
STRATEGY

Table of Contents
Topic:-..............................................................................................................................................3
INTRODUCTION ..........................................................................................................................3
1.1 Overview of research........................................................................................................3
1.2 Background of company...................................................................................................3
1.2 Significance of research...................................................................................................4
1.3 Research aim....................................................................................................................4
1.4 Research objectives..........................................................................................................4
1.5 Research questions...........................................................................................................4
Literature Review ............................................................................................................................5
The concept of corporate governance and its failure..............................................................5
Importance of corporate governance for Volkswagen...........................................................6
Challenges faced by Volkswagen after the emission miss-conduct scandal..........................7
Use of corporate governance in improvising the customer perception towards Volkswagen8
RESEARCH METHODOLOGY.....................................................................................................9
Type of Investigation..............................................................................................................9
Research Design ....................................................................................................................9
Research Approach ................................................................................................................9
Research Philosophy ...........................................................................................................10
Data collection......................................................................................................................10
Data Sampling......................................................................................................................11
Ethical Consideration ..........................................................................................................11
Gantt Chart ..........................................................................................................................11
DATA INTERPRETATION AND FINDINGS ...........................................................................12
RECOMMENDATION & CONCLUSION .................................................................................24
REFERENCES..............................................................................................................................28

Topic:-
“To analyse the reason of corporate governance failure and its impact on customer perception in
regard to emissions scandal.
INTRODUCTION
1.1 Overview of research
Corporate governance refers to the mechanism, processes and relations through which a
company is controlled and directed along with balancing the interest of stakeholder engaged with
business. It is considered to be one of the most essential part of organisational functioning that
support it in performing operations ethically and improving the brand image of organisation
among its stakeholder. The current report is about the corporate governance failure faced by
Volkswagen related with emission scandal which affected the image of company in marketplace.
In order to conduct this investigation both primary as well as secondary data collection methods
will be used for presenting more accurate and reliable information. In addition to this, there are
number of tools and techniques will be used in order to evaluate, analyse and interpret data
effectively for making it more understandable to reader (Schiermeier, 2015).
1.2 Background of company
Volkswagen group is a German multinational automotive manufacturing company which
is headquartered in Wolfsburg, Germany. It deals in designing, manufacturing and distribution of
commercial as well as passenger based vehicles, turbo-machinery and engines (Goel, 2015). The
Volkswagen Passenger Cars brand continued its product initiative in 2018, growing its sales
revenue by 6.8 percent to EUR 84.6 billion. Operating profit before special items amounted to
EUR 3.2 (3.3) billion. The total market shares of this enterprise reached to 10.83 million in the
year 2018. Range of brands are covered under the one name which offers product starting from a
basic motorcycle to a luxury car which target the premium customers. Its global presence in the
world makes it more popular and hence the overall business grows. Current report is based on
“reason behind the corporate governance failure and its impact over customer perception regards
to emission miss-conduct performed by Volkswagen”. In this case Volkswagen has applied a
kind of defeat device or software within its diesel engine in order to defeat the carbon emission
test. The main reason behind this failure is that Volkswagen put more emphases toward earning
profit rather then following legal consideration which is very unethical and hence result into

corporate failure (Krall and Peng, 2015). In addition to that after getting informed about this
shareholders immediately reacted over this and as a result of which share price get dropped.
Apart from this after hearing about this scandal customers refused to buy VW cars in future and
also some of them performed legal actions over company in order to get cost of repairing. So,
this is the major corporate governance issue which affected the market value as well as image of
brand up-to a great extend and in order to overcome this they have company is required to focus
more over corporate governance and strategy.
1.2 Significance of research
By conducting this investigation, Volkswagen will be able to deeply analyse the impact
that this scandal have over its stakeholders and other area of business. So this information can be
further used to determine the strategies or solution that can be adopted to get ride of this situation
(McCahery, Sautner and Starks, 2016). Apart from this it will help researcher in enhancing their
knowledge in this regard and addition to this it will further be able to improve research skill, data
collection and interpreting skill that support them in conducting future research in more effective
manner. Despite of that, this investigation also help in determining the perception that customers
have toward brand after this emission scandal (Stanwick and Stanwick, 2017). This data will
help in forming up strategies to improve their customer perception as well as contribute toward
improving brand image in marketplace. In addition to this if this research will further used for
academical purpose then it support in enhancing the knowledge of student in this regrading along
with the measures that are taken by company to over come this issue.
1.3 Research aim
To analyse the reason of corporate governance failure and its impact on customer
perception in regards to emission miss-conduct performed by company. A case on Volkswagen
1.4 Research objectives
 To analyse the concept of corporate governance and its failure.
 To identify the importance of corporate governance in the context of Volkswagen.
 To determine the challenges faced by Volkswagen after emission miss-conduct scandal.
 To access the use of corporate governance in improving the customer perception towards
Volkswagen

1.5 Research questions
 Explain the concept of corporate governance and its failure?
 What are the importance of corporate governance in context of Volkswagen?
 What are the challenges that Volkswagen has faced after the emission miss-conduct
scandal?
 Describe about the use of corporate governance in improvising the customer perception
towards Volkswagen

Literature Review
Literature review is defined as the process of performing a comprehensive summary by
evaluating and interpreting the previously performed research. This summary is basically
performed after reviewing the number of sources such as books, articles, scholarly papers and
other relevant sources.
The concept of corporate governance and its failure
As per the view point of James McRitchie (2019), Board of director are consider as the
central of corporate governance whose relation with other primary participants such as
management and shareholder is very essential for the proper management of business. These all
are responsible for governing the organisational operations performed by considering all the
legal as well as ethical norms. Because an effective corporate governance is one whose
framework is formed by integration of regulatory, legal, institutional and ethical environment of
community. These all support an organisation to perform its operations ethically which in turn
also reduces the external risks that may harm brand image at marketplace.
The constituents of corporate governance are transparency, accountability and security
which are of great importance to be maintain specially in automobile industry. It is so because
hiding any valuable fact from the customer may affect the purchasing decision of clients which is
not ethical. Also, when a particular amount is paid by the user against the car or any automobile
than the accountability of the seller is established and they have to make sure that all what is
assured to the customer at the time of purchase is true and I not than proper justification is given.
According to the author, business which follow all these constitutes of corporate governance is
capable of developing goodwill in the market and can do a good business in the long run. In case
of Volkswagen, company has used cheat devices in their engine to fool the emission detector that
has a great impact over the market image as well as customer perception toward it. This happen
due to unethically practices performed by company which is a result of Corporate governance
failure as it get distracted from the adherence of legal standards. It highly affect the customer
perception as they feel cheated and refused to buy car of this brand that in turn affected the
market share of company. These impact have a negative influence over customer loyalty just
because of corporate governance failure as company has adopted unethical and illegal practices
to earn profit despite of serving its customer ethically.

According to the view point of James Chen, 2018, Corporate governance is considered as
a set of rules, processes and practices by which firm get controlled and directed. It basically
involve the practices that work toward balancing the interest of company's stakeholders such as
customers, financier, government and community. It is very essential for the sustainability and
success of business when performed effectively. But there are some reasons which leads to
failure of corporate governance such as
 Improper governance mechanism which causes due to lack of board meeting or
committees.
 Management that deliberately underestimate the role of several governance structure by
avoiding the internal control and misrepresenting the auditor and boards. In case of
Volkswagen the engineers circumvented the internal system and attached the cheat
devices in engines of its car in order to misrepresent the vehicle quality in term of less
emission.
 Not properly qualified members, for instance, audit committee members that don't have
proper accounting and financial qualification for analysing the key business transactions,
family members holds up the brand position without any appropriate knowledge
McRitchie (2019).
These all leads to business failure in implementation of corporate governance and as a
result of which massive problems get arises in front of company as it was in case of
Volkswagen. In which company get failed to work by considering corporate governance
standards and practices which in turn also affected its brand image in front of customers and
other stakeholder that leads to heavier loss of Volkswagen.
Importance of corporate governance for Volkswagen
According to Tricker (2015), Corporate governance is considered as one of the essential
implication in forming up a marketplace confidence by performing all the activities in ethical
manner. By performing its operation along with considering the implication of corporate
governance, Volkswagen being able to maintain as well as attract new investors with in the
organisation. In addition to this by promoting good corporate governance, Volkswagen will be
able to maintain its sustainability, reducing risk of any allegation and achieving better standard
of performance. Apart from this Corporate governance practices also help Volkswagen in
improving its organisational culture in which everything get permeates from the ethical practices.

This will support Volkswagen in demonstrating its social responsibility efforts and principles
through which it can shape the way organisation leaders lead, employees work. These practices
also support it in improving the way in which customers think about the company and form up
their purchasing decision.
As per the view point of Nicholas and Price, (2017) the benefits of corporate governance
can't be denied in such a progressive and aggressive business environment of car industry as it is
very crucial for achievement of new frontier of profitability and competitive advantage. It is
crucial for an organisation as it highly affect the organisational practices i.e. from
communication to leadership and strategic decision making by getting involved with board of
directors. Therefore corporate governance is considered to be one of the most essential factor
that Volkswagen must consider in its practices as well as operations performed by them. This is
because it help in increasing the interest of investors and other stakeholders within the
organisational practices. This will further help Volkswagen to get support from its stakeholders
in order to deal with external threats and practices. In addition to this, implementation of good
communicational skill helps in building up a foundation of transparency, trust and accountability.
This ensures that the practices performed by the workforce of Volkswagen would be more
effective and performed in ethical manner by complying with all the ethical as well as legal
standards of automotive industry. It help in improving the goodwill of company at marketplace
that directly linked with the sales as well as profitability of Volkswagen.
Challenges faced by Volkswagen after the emission miss-conduct scandal
As per the view point of Neal E. Boudette (2019), after the Volkswagen admitted that
company was using a cheat device on emission test, it has to face various challenges. These
includes Volkswagen was hit by the federal investigation and lawsuits from the dealers as well as
customer which in turn affected its image in market up-to a great extent. In addition to this
various American consumer also change their priority in term of brand choice which results in
loss of company's sale as well as profitability. This in turn has reduces the overall sale of its car
due to company's affected image. The scandal that took place affected the interest of many
stakeholders which resulted into overall decline in the business of the company. Investors
withdraw their amount from the brand which was a major challenge to the management. Also to
develop the faith of customers in brand again become difficult as their safety was kept at stake
by the company. In this it has been found that the industry is decline this year after the growth of

seven years growth which was recorded as the sale of approx. 15.5 million cars and trucks within
year 2016. In addition to this, Volkswagen lead to modify more then 308,000 vehicles within
United State which results into heavier loss. This in turn also affected its brand image in
marketplace and because of which other competitors get a chance to attract the customers in
order to grab up larger market share by performing a negative publicity of Volkswagen. These
all created a number of challenges in front of Volkswagen as because of this scandal company
started loosing its market share as well as its sale. Apart from this customers also sue the
company in order to get their compensatory amount regarding the losses they face and asked
company to repair their vehicles. For this Volkswagen have to pay off around $37,500 for its
vehicle that are not manufactured as per the standards fixed by government. Apart from this the
net profit of Volkswagen has fallen up to 50% i.e. around 1.1 billion euro after keeping €2.6
billion aside for the repairing the diesel cars. The major challenge in front of Volkswagen after
this scandal is to regain its sale as it has been fallen down by 1.3% to 1.354 million trucks & cars
(Cost of Volkswagen Scandal Could Hurt Company’s Electric Vehicle Push, 2019).
Use of corporate governance in improvising the customer perception towards Volkswagen
As per the view point of Davies (2016), in order to regain its market position as well as
positive image in front of customers, Volkswagen is required to improve its business practices.
For this company must put more emphasis toward the implementing corporate governance in its
managerial operation and perform its marketing as well as operational activities by considering
all the legal and ethical norms. By emphasising over corporate governance, Volkswagen will be
able to perform its operation in systematic and ethical manner that also help company in
improving its image in market place. This will further contribute toward vanishing the bad
publicity of company due to emission scandal. In addition to this, Volkswagen must also try to
improve its legal policies by considering all legislator standards and implementing it through
Corporate governance strategy in order to improve its customer perception and brand image in
marketplace.
According to the view point of Dr Alessandro Merendino, (2019) products are basically
move through life cycle which includes stages like birth, growth, maturity and decline, but in
case of Volkswagen it is on decline stage. This is because of fraud it has performed by applying
cheat devices within its engine in order to pass on the emission test, but as a result of which
Volkswagen vehicles are emitting more carbon even then the fixed amount over roads. This has

affected the brand image in front of its stakeholders. It can only be recovered by effective
corporate governance practices that help in steering the company as well as its image in front of
customers by improvising the practices and service quality. For this company can release
improved code or guidelines which are released by regularities which help in strengthening and
improving the practices of top management. By strengthening the regulatory guidelines
Volkswagen can also improve the monitoring tools in which operations performed by middle
and lower management will regularly evaluated and rectified. This help in ensuring that
operations are performed by considering ethical and legal practices that further help in avoiding
future crises. These all contribute toward improving brand image and regaining the trust of
customer that further support in repositioning the brand by enhancing the sale and profitability.
RESEARCH METHODOLOGY
This section describe about the specific set of techniques or procedure that are used for
selecting, evaluating and analysing the data regarding particular topic of concern. In an
investigation, research methodology part will help a reader in evaluating the validity as well as
reliability of project (Tuck and McKenzie, 2014). This is the most important part of an
investigation work as it is effective in providing an effective direction to the researcher to carry
out the work in right direction and also provide support to the literature. This part is emphasises
on various applications that collectively performs a vital role in completion of the work in right
manner. The suitable applications for the section of methodology are described as below:
Type of Investigation
The potential obligation of an investigator is to select the type of research for the purpose
of implementing the investigation activities in potential manner. A research is either qualitative
or quantitative in nature, thus the selection is based on the data accumulated by the researcher
that covers the aim and objective of the research (Kamil and et. al., 2016). Qualitative
investigation is based on qualitative means of data, as in this theoretical investigation is done
through accumulation of descriptive data and on the other side quantitative research is conducted
on the basis stats and figures. In this particular investigation qualitative investigation has been
applied by the researcher, thus it is most suitable tool for developing a theoretical base with the
support of detailed investigation. It is more preferred in this particular research as through this
method issue will be discussed in more detail that will help user in getting a better understanding

of the topic. The facts that will be highlighted by the qualitative method will assist in reaching to
the conclusions more easily.
Research Design
This is also an imperative part of research methodology which works as a blue print of
the research and assist a clear direction to conduct research actions in proper manner. This
section is emphasising on three major aspect i.e. descriptive, exploratory and experimental
research design (Fox and Alldred, 2015). In this present investigation work descriptive research
design has been applied by the researcher because it is most effective and significant tool for
conducting qualitative research because it provides an effective descriptive analysis on study.
This particular method is suitable here sin this research as through this the given situation and
topic will be discussed in detail covering all the valuable aspects. Hence using this the
understanding of the topic would be more effective.
Research Approach
This can be measured as the important aspect of research methodology and this section of
investigation is classified among two different tools likewise, inductive and deductive research
approach. In the case of deductive approach research work can be moving forward through
observing existing facts and figures which are collected for the purpose of addressing any
specific area of study. On the contrary, inductive approach is based on new theories which are
based on creating hypothesis. In this case outcomes are fixed by observing theories and
hypotheses related with similar area of study (Patten and Newhart, 2017). In this current
research inductive research approach has to be taken into proper action as the whole research
work is based on qualitative means and this tool provide support through suitable theories or
hypothesis.
Research Philosophy
Research philosophy is the key area of an investigation as it helps in providing support to
the literature by proper source of information. Research philosophy deals with the source, nature
and development of knowledge in a specified area. In another words, a research philosophy is
belief about the structure in which data about a phenomenon should be collected, analysed and
used. This section is categorised on the basis of two different aspects one is interpretivism and
other one is positivism. In this present investigation work Interpritivism philosophy has been

applied by the researcher because it is most suitable tool for qualitative research also also
provide support to the literature through analysing the views and opinion of various authors and
writers.
Data collection
It refers to the process of gathering data regarding the particular topic of concern so that
reliable information can be collected that support in objectives behind conducting the research.
The data collection method are of two types which are explained below:
Primary data :- It refers to a type of data collection method in which fresh information
is collected which is not yet been gathered by any other person (Gnan, Montemerlo and Huse,
2015). The main reason behind gathering primary information is that it help in collecting more
reliable and specific data as it is collected through one to one interaction which help in exploring
information most effectively. In order to conduct this research close ended Questionnaire will be
used to collect primary data.
Secondary data :- It is a method of data collection in which data is gathered from the
information which is already being searched by some another person. This information is
collected with the help of sources like internet, article, books or journals (Ocasio and
Radoynovska, 2016). The main reason behind collecting secondary data is that it help in forming
up a base or hypothesis over which further information can be explore to achieve research
objectives. Under this research literature review will be used to gather information as per view of
several authors.
Data Sampling
This is the most significant section of research methodology which emphasizes on
choosing the sample which replicates from the original population. In this section researcher
having choice to select probabilistic or non-probabilistic sampling methods which suits the most
for research work (King and Mackey, 2016). In this present investigation work random sampling
tool from the non-probabilistic section has been chosen by the researcher in respect to
accumulation of information in appropriate manner. In this particular research sample size of 40
respondents are taken into proper action to collect reliable and valid information.

Ethical Consideration
An investigator faces various kind of issues and conflicts at the time of conducting an
exploration work, thus this section plays vital role in resolving the errors and conflicts by
following some norms and ethics. The prior consideration of an investigator is to ensure their
respondents about the safety and security of their personal as well as professional information.
Research should also follow the research ethics and norms in respect to carry out the overall
work in right manner. The another major considerations are time and cost, so it is also requires
for the researcher to manage time, however for this researcher develops a time frame in which all
activities are mentioned as per the priority of task (Psacharopoulos, 2014). Cost also plays vital
role in execution of research activities, so researcher needs to maintain appropriate flow of funds
and capital in respect to conducting all actions in right manner without facing any kind of errors.
Gantt Chart
It refers to the a graphical representation which depict the time allotted to different set of
activities that are performed within research. This representation is usually presented in pictorial
form to show the activities performed and time taken by them.

DATA INTERPRETATION AND FINDINGS
Data analysis is defined as the process of analysing, evaluating and then modelling the
gathered data with an objective to extracting the accurate information so that it can further help
in forming up conclusion of investigation. In order to gather the information from both primary
as well as secondary data collection method. The secondary data will be interpreted through the
discussion after evaluation of literature review. On the other side for primary data questionnaire
will be used that help in collecting and presenting the information in more concise and
meaningful manner. For interpretation of primary data thematic approach will be used under the
investigation.
Secondary Research (Discussion):-
The concept of corporate governance and its failure
From the above mentioned information it has been analysed that Board of directors are
centre of corporate governance whose interaction with primary stakeholder are very essential for
smooth operations as well as management of business. These are the key persons who are
responsible for governing the organisational operations and ensuring that organisational
framework must be an integration of legal, regulatory, ethical and institutional environment of
community. This will support Volkswagen to regain its market image which get affected through
its unethical conduct by implementing cheat devices in its engine to pass emission test. The
brand image of Volkswagen get improved by effective corporate governance as it consists of
certain rules, processes and practices through which firm can be controlled and directed.
Importance of corporate governance for Volkswagen
As per the about performed investigation it has been found that Corporate governance is
very crucial for Volkswagen as it help company in performing its operation in ethical manner.
This in turn help company in attracting new investors, maintaining sustainability, achieving
better standard of performance and reducing the risk of allegation. This is because it has a huge
influence over the organisational practices as it involve improvisation of leadership to strategical
decision making. Hence, it help in increasing the interest of customers, investors and other
stakeholder within the organisation which in turn also help in improving the goodwill of
Volkswagen.
Challenges faced by Volkswagen after the emission miss-conduct scandal

From the above performed investigation it has been analysed that after miss-conduct
performed by Volkswagen regarding the implementation of cheat devices in the engine of cars
and other vehicle to clear up all the standard test there are number of issues and challenges that
area faced by Volkswagen which includes:-
 Cars emit more carbon even then the rate fixed by government over road that leads
Volkswagen being sued by the dealers, customers and community at large.
 The sale and profitability of company get reduced due to this news.
 Volkswagen has to pay off around $37,500 that are claimed by stakeholders over the
vehicles that are not manufactured as per the standards .
Use of corporate governance in improvising the customer perception towards Volkswagen
From the above performed evaluation it has been found that for regaining its market
position and goodwill back Volkswagen is required to improve its business practices that are
only possible through the implementation of corporate governance in its managerial operations.
This will help company in performing its practices in ethical and systematic manner by
considering all the standards and norms which further support in vanishing the negative publicity
of company at marketplace.
Primary Research :-
Questionnaire
Q1. Have you ever go through by the concept of corporate governance?
a) Yes
b) No
Q2. Do you thing that Corporate governance is effective for the growth of an organisation?
a) Yes
b) No
Q3. Which kind of influence does corporate governance have over the operations of automotive
industry
a) Positive
b) Negative
c) Neutral
Q4. What is the need of a company to implement corporate governance?

a) Effective managerial practices
b) Systematized framework
c) Avoiding legal threats
Q5. What benefits are attained by Volkswagen through the implementation of corporate
governance?
a) Attracting new investors
b) Avoid external risk
c) Achieving sustainability at marketplace
d) Maintaining customer base
Q6. What are the several challenges that Volkswagen faced due to its emission miss-conduct
scandal?
a) Decline in sale
b) Lawsuits by customers and dealers
c) Regaining customer trust
Q7. What is the use of corporate governance in improvising the customer perception towards
Volkswagen ?
a) Ethical operation
b) Enhancing brand image
c) Fulfilling the legal norm and standards
Q8. Among the following who are the most affected stakeholders of Volkswagen through out
the emission miss-conduct scandal?
a) Customers
b) Investors
c) Suppliers
Q9. Do you think that implementation of corporate governance is effective for the systematized
operations of Volkswagen
a) Yes
b) No
Q10. Recommend the measures through which Volkswagen can regain its brand image in
marketplace?

Data Interpretation
Theme 1: The concept of corporate governance
Q1. Have you ever go through by the
concept of corporate governance?
Frequency
a) Yes 30
b) No 10
a) Yes b) No
0
5
10
15
20
25
30
30
10
Frequency

Interpretation:- From the above given data it can be interpret that around 30 out of 40
respondent state that they have knowledge regarding the concept of corporate governance . But
on the other side other 10 respondents state that they don't have any idea regarding corporate
governance in term of business practices.
Theme 2: Corporate governance is effective for the growth of an organisation
Q2. Do you thing that Corporate
governance is effective for the growth of an
organisation?
Frequency
a) Yes 25
b) No 15
a) Yes b) No
0
5
10
15
20
25
25
15
Frequency

Interpretation:- As per the above given information it has been identified that 25 out of
40 respondent state that corporate governance is very essential for the growth of an organisation
as it help in improving the practices performed by company. But on the other side another 15
respondent said that corporate governance is not only responsible for growth of an organisation
until it has as high skilled and unique resource which help it in providing high quality services.
Theme 3: Influence of corporate governance over the operations of automotive industry
Q3. Which kind of influence does corporate
governance have over the operations of
automotive industry?
Frequency
a) Positive 20
b) Negative 5
c) Neutral 15
a) Positive b) Negative c) Neutral
0
2
4
6
8
10
12
14
16
18
20
20
5
15
Frequency

Interpretation:- As per the above given information it has been interpreted that 20 out of
40 respondents state that corporate governance has a positive influence over the operations
performed within automotive industry. Apart from this another 15 respondents said that they it
has a neutral influence over the performance but on the other side 5 respondents state that
corporate governance has negative influence operations.
Theme 4: Need of a company to implement corporate governance
Q4. What is the need of a company to
implement corporate governance?
Frequency
a) Effective managerial practices 15
b) Systematic framework 15
c) Avoiding legal threats 10
a) Effective managerial practices
b) Systematic framework
c) Avoiding legal threats
0
2
4
6
8
10
12
14
16 15 15
10
Frequency

Interpretation:- From the above given data it has been identified that 15 out of 40
respondents said that corporate governance implementation help in performing managerial
practices in effective manner. On the other side 15 respondents said that implementation of
corporate governance help an organisation to perform its operation in systematic manner. But
another 10 respondents said that it help company in avoiding the risk of legal compliances.
Theme 5: Benefits gained by Volkswagen through the implementation of corporate
governance
Q5. What benefits are attained by
Volkswagen through the implementation of
corporate governance?
Frequency
a) Attracting new investors 10
b) Avoid external risk 5
c) Achieving sustainability at marketplace 10
d) Maintaining customer base 15

Interpretation:- As per the above mentioned data it has been assumed that Volkswagen
get benefited with Corporate governance implementation. Over this 10 respondents out of 40
said that it help Volkswagen in attracting new investors but another 10 said that it help them in
achieving sustainability at marketplace. Apart from this 5 said that it help in avoiding external
risk and 15 state that it help Volkswagen in maintaining its customer base.
Theme 6: Several challenges that Volkswagen faced due to its emission miss-conduct scandal
Q6. What are the several challenges that
Volkswagen faced due to its emission miss-
conduct scandal?
Frequency
a) Decline in sale 15
b) Lawsuits by customers and dealers 15
c) Regaining customer trust 10
a) Attracting new investors
b) Avoid external risk
c) Achieving sustainability at marketplace
d) Maintaining customer base
0
4
8
12
16
10
5
10
15
Frequency

Interpretation:- From the above given information it has been interpreted that 15 out of
40 respondents said that emission scandal of Volkswagen leads to declining of company's sale,
but another 15 said that it leads company to get lawsuits by its dealers and customers. On the
other side 10 respondents said that after this scandal Volkswagen found a biggest challenge in
regaining customer trust.
Theme 7: Use of corporate governance in improvising the customer perception towards
Volkswagen
Q7. What is the use of corporate governance
in improvising the customer perception
towards Volkswagen ?
Frequency
a) Ethical operation 15
a) Decline in sale
b) Lawsuits by customers and dealers
c) Regaining customer trust
0
2
4
6
8
10
12
14
16 15 15
10
Frequency

b) Enhancing brand image 10
c) Fulfilling the legal norm and standards 15
Interpretation:- As per the above given information it has been interpreted that 15 out of
40 respondents said that corporate governance implementation by Volkswagen help in
improvising the customer perception as it ensure ethical operations. On the other side 10
respondents state that it help in enhancing the brand image at marketplace. But 15 out of 40
respondents said that use corporate governance help Volkswagen in fulfilling the legal norms
and standards.
Theme 8: Most affected stakeholders of Volkswagen through emission miss-conduct scandal
Q8. Among the following who are the most Frequency
a) Ethical operation
b) Enhancing brand image
c) Fulfilling the legal norm and standards
0
2
4
6
8
10
12
14
16 15
10
15
Frequency

affected stakeholders of Volkswagen
through out the emission miss-conduct
scandal?
a) Customers 15
b) Investors 15
c) Suppliers 10
Interpretation:- From the about mentioned data it can be interpret that 15 out of 40
respondent are agreed with the fact that customers are highly affected stakeholder from
Volkswagens miss-conduct scandal. But another 15 respondent state that investors are highly get
affected with the scandal of company and on the other side 10 respondents said that suppliers are
the most affected stakeholder as they have to face sever loss.
a) Customers b) Investors c) Suppliers
0
2
4
6
8
10
12
14
16 15 15
10
Frequency

Theme 9: Implementation of corporate governance is effective for the systematized operations
of Volkswagen
Q9. Do you think that implementation of
corporate governance is effective for the
systematized operations of Volkswagen?
Frequency
a) Yes 30
b) No 10
Interpretation:- As per the above mentioned it has been identified that 30 out of 40
respondents are agreed with the fact that implementation of corporate governance effective for
systematic operations by Volkswagen. According to them if corporate governance is marinated
in the operations than the stakeholders of the brand are kept happy which is very important for
nay brand and also growth in the long term can be ensured. But on the other side 10 respondents
a) Yes b) No
0
5
10
15
20
25
30
30
10
Frequency

said that implementation of corporate governance not lead to systematized operations of
Volkswagen.
RECOMMENDATION & CONCLUSION
Conclusions:-
From the above conducted investigation it can be summarised that corporate governance
plays a crucial role within the growth and success of an organisation as it help in performing the
operations in ethical manner. In addition to this it also contribute toward improving the
managerial practices and ensuring the proper implication of ethical practices. From this
investigation it has been identified that customer are more affected stakeholders by the miss-
conduct of Volkswagen. In addition to that, this scandal also affected the sale as well as growth
of company due to its unethical practices performed in order to cheat the emission test and earn
more revenue. Therefore, it has been identified that corporate governance support an
organisation to perform its operations by considering ethical and legal standards so that it would
be able to avoider the legal risk and other external threat that may harm goodwill of company.
Recommendations
From the above performed investigation it has been identified that corporate governance
is very crucial factor for automotive industry as there are number of legislations and standards
that are required to be consider by players in order to offer their vehicles. The avoidance of these
largely affect the image of company at marketplace and also influence its profitability with the
declining of sale as in case of Volkswagen. Hence in order to overcome this following
recommendation is given below:
 It is recommended to Volkswagen that it must focuses toward improving its
organisational structure by adopting effective corporate governance. For this it must
focuses toward considering all the legislator and ethical norms while formulating
business strategy. This help in ensuring the business operations performed in ethical
manner.
 In addition to this Volkswagen must focuses toward creating a cultural environment
where there should be a regular evaluation of work performed by employees. This will
help in determining that whether the operations are performed as per the ethical
principles and standards decided by Volkswagen corporate board members.

 Volkswagen must focuses toward improving its internal audit practices so that the
vehicles manufactured within the company can be tested properly and illegal practices
can be rectified so that proper measures can be taken in timely manner. Apart from this it
also help in ensuring that cars and other vehicles are manufactured by considering all the
governmental standards that are fixed for automotive.
 It is also recommended to Volkswagen that it must focuses toward increasing the
involvement of higher management so that actions can be taken in more effective
manner. Apart from this Volkswagen must also focuses toward involving other
stakeholders in its decision making process so that actions can be taken by considering
the will and acceptance of other partners who get affected by the practices of
organisation.
 Volkswagen must focuses toward reforming its organisational structure by considering all
the governmental norms and standards with the implementing corporate governance so
that it would be able to perform its operations in ethical manner. Volkswagen must also try to adopt CSR practices in order to perform such activities that
doesn't harm environment. This can be done by using such devices that help its vehicle to
emit less carbon and doesn't harm the echo-system. It helps company in contributing
toward the environmental safety which in turn also support in improvising its brand
image among customers as well as other stakeholders.
Action plan
Action plan:- It is defined as a kind of document which enlists the step to be taken in
order to achieve organisational goals or objective. The main reason behind creating an action
plan is to identify the resources which are required to accomplish those goals and objectives by
presenting activities in sequential manner. The actions plan for Volkswagen is given below that
help it improving the image in front of customers and other stakeholders:
Steps Description
Step 1: Identify the
measures for
improvement
First and foremost step is to identify several actions as well as
measures that can be taken in order to regain goodwill after the
emission miss-conduct scandal. For this Volkswagen can organise a
board meeting in which key members of organisation can suggest
several ideas through which corporate governance can be improved

that also contribute toward enhancing its brand image.
Step 2: Formulate the
strategies
Once the measures has been identified next step is to formulate
effective strategy that support Volkswagen in improving its corporate
structure. This includes organisation of seminar in which employees
will get training regarding the standards and norms that must be
consider while performing their job. Further company can make new
employee learn about the standard and norms followed by
Volkswagen in order to ensure it in their practices.
Step 3: Employee
engagement
After formation of strategy, Volkswagen must try to engage its
employees within the improved structure and practices, so that the
company can work toward improving its practices and hence improve
brand image at marketplace. For this Volkswagen can arrange a
employee meet and make them inform about the new structure and
procedure employees have to follow as per the ethical norms and
legislations.
Step 4: Improve
organisational culture
and environment
An organisational culture is consider to be one of major factor which
influence the performance of a company. Therefore in order to
implement the new corporate structure it is very essential for
Volkswagen to improve its culture. This will help employee in
accepting and implementing the changes much quickly which support
in getting the positive result effectively.
Step 5: Implementation
of strategy
After formulation of effective strategy and improvising the
organisational culture next step is to implement those strategies into
practices. Implication of new improved structure will help
Volkswagen in enhancing the quality of work performed within the
company. In addition to this it also help in reducing the illegal or
fraud practices within the company that may influence its image in
marketplace. With the improvisation of culture, Volkswagen will be
able to perform its operation along with consideration of all the legal
and ethical practices. This in turn contribute toward improving the

brand image in marketplace. Apart from this more involvement of
management in practices performed by lower management help in
ensuring the quality of services and avoiding any sort of hidden or
illegal practice. These all contribute toward promoting a positive
brand image in front of customers as well as other stakeholder.

Reflection
I am glad that I got this opportunity to perform an investigation over such a broader
concept that is “To analyse the reason of corporate governance failure and its impact on
customer perception in regard to emissions scandal.” By conducting this investigation I would be
able to enhance my knowledge regarding the biggest scandal conducted by Volkswagen and
impact it have over the performance as well as market position that company holds. In addition
to this I also become able to enhance my understanding regarding several tools and techniques
that are used for collecting, arranging, evaluating and interpreting the information for
accomplishing the research objectives.
During research methodology, I have undertaken several activities such as planning for
sample size, research sample techniques such as primary & secondary data collection to gather
valid data & information about how people reacts on particular topic or agenda. While planning
for RM, I decided that information or data will be gather using questionnaire in which questions
related to topic has been given and people perception would be measured on this. I realised that
proper & effective planning is necessary in case of selecting research design, in which focus will
be on opting perfect techniques to plan for this research in an effective period of time. First, I go
for planning of questionnaire and also stated what level of questionnaire will be taken into this
perspective. Hence, it is realised that budget allocation is also one part of the research
methodology and conduct an effective completion of the data collection.
While performing investigation I went through several issues like respondents are not
clear about the answers they are providing, some are not interested in responding to the questions
that are asked by them. Another major issue that I have faced is time provided for conducting the
investigation was also very limited but despite of all this I tried my best to conduct the research
in effective manner by presenting more authenticated and reliable information. For dealing the
issue of limited time period I decided to use questionnaire which support in gathering larger
amount of information in limited time period by presenting questions in front of larger number of
people. In addition to this for making respondents revert decently I presented them with the main
reason behind conducting this investigation so that they are clear with the aim behind they are a
part of this research.

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