Case Study Analysis: Volkswagen's Emission Scandal Impact

This report provides a comprehensive analysis of the Volkswagen emissions scandal, focusing on the ethical failures and their subsequent impact on the business. The report begins with an executive summary highlighting the importance of ethical practices in today's competitive market and the negative consequences of unethical behavior, using Volkswagen as a case study. It delves into the introduction, emphasizing the significance of ethics and principles in establishing organizational standards and fostering a healthy corporate culture. The core of the report analyzes the scandal, examining the role of management, regulatory bodies, market share, public relations, and the impact on Volkswagen's brand image and financial performance. The analysis covers the implementation of a defeat device to manipulate emission tests, the resulting decline in market share and public trust, and the legal ramifications. The report concludes with a summary of the findings and offers recommendations for Volkswagen to regain market share and improve its public image, stressing the importance of transparency, ethical conduct, and adherence to regulations. The assignment underscores the need for ethical management practices and their role in ensuring long-term business sustainability.

Academic and
Professional Skills

Table of Contents
INTRODUCTION...........................................................................................................................1
Analysis of the case study( Volkswagen)........................................................................................1
CONCLUSION................................................................................................................................4
RECOMMENDATION...................................................................................................................5
REFERENCES................................................................................................................................7

EXECUTIVE SUMMARY
In today's context ethic are required to be practice in an effective manner that assist in
creating value of standards of an organisation in competitive marketplace. Volkswagen is one of
the well know organisation which deals in automotive industry. The organisation was performing
unethical software in their car that was detected during emission test. Such activities impacts
negatively on the performance of business and decrease their brand image in competitive
marketplace. Thus, they required to implement some new innovation and ideas for regaing
market share and attain market share in same industry line.
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INTRODUCTION
In toady's context ethics and principles are playing an equivalent role in developing
standards for an organisation in which employers can perform a range of operational activities
and function effectively(Rhodes, 2016). It also help in assisting a health cultural environment
within an organisation in order to create unique organisation values. For developing
sustainability in business, ethics and norms are considered as main aspects that aid in
achievement of long term benefits and opportunities. Ethics management practices should prevail
within an organisation so that execute leadership and business tactics can be adopted for
reducing inappropriate behaviour within an organisation. Now a days, many organisation fail to
align the successful and positive organisational culture, which are formed on the basis of certain
code of ethics. This report is based on the case study of Volkswagen, engaged with some
unethical activities within their products for enhancing their profitability. It basically deals in
automotive sector which is need to adopt various norms and regulation in managing pollution
level of their vehicle. In order to maintain business operation within ethics management
framework Volkswagen have adopted a device within their car that enables vehicles to pass
emission test easily. From the adoption of such device have created negative impact upon
regulatory standards Of United Kingdom which adversely created negative impact of image of
Volkswagen. For such instance these regularities have run an effective operational strategy for
analysing pollution level of vehicle in order to determine reason behind it that has been affected
through false device implications(Cavico and Mujtaba, 2016). In this report we are going to
determine some of the major points that have affected pollution negatively by the device that
have been utilised by Volkswagen. Eventually, providing recommendation and conclusion to the
respective organisation in order to gain goodwill again in competitive marketplace.
Analysis of the case study( Volkswagen)
In this analytical part, of case study will analysis some of the major points such as issues
and problems faced by Volkswagen. Herein, determining numerous aspects and role in order to
create long term issues within an organisation. The factors that are associated with risk factor of
van organisation reputation of same industry line are determined below:
Management/ Managers: Mangers with in an organisation have higher authorities who
basically have rights to take decision and perform business function and operations in a
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systematic manner. As per the case study Volkswagen have erupted into marketplace in
September 2015 when United Kingdom regularities bodies have defected some unethical
practices within their vehicle(Ewing, 2017). For such purpose manger of a respective
organisation need to perform unique role in order to overcome from the activities that have
negatively effected on reputation and goodwill of organisation. It is responsibility of mangers to
monitor operational and function activities of the firm so that illegal act can be controlled in
correct manner. Moreover, media had investigated that mangers of research and development has
been leading their services with respect of three different brands that are Audi, Volkswagen and
Porsche which were suspended for involving in unethical behaviour of services in marketplace.
Eventually, if managers of Volkswagen perform their roles and responsibility positively within
an organisation then they can avoid use of such defective device from their product and services.
Additionally, mangers of an organisation need to pay maximum attention towards legal norms
and regulation so that they can assist goodwill in competitive marketplace of same industry.
Apart from this it also been observed that some of the employees and staff member have left
their job due to guilt as the were not ware about the wrongful act due lack of proper decision
making.
Regularities: Volkswagen has been caught in a certain scandal by the regularities bodies
in which it has implemented a device in cars and automobile vehicles to pass pollution test. An
investigation was carried out by Mr Winterkorn, as they were planning to know about pollution
of car industry that were harming environment for such dangerous emission. For such instance,
government of German have introduced a software which help them to caught for doing such
illegal practices of emission as they were selling out their car worldwide(Fracarolli and Lee Park,
2016) This scandal lead to France and Italy and it was founded that two rouge engineers were
involved in this scandal and it was confirmed by police of Germany. It was also founded that
Germany transportation ministry have done scandal about 3.06 million car in Europe too.
Moreover, more criminals cases were filed against Volkswagen has done such huge illegal act
regard carbon emission which as unlawful in nature. Thus, United Kingdom have accused that
car makers are installing such defective devices in luxury sport cars.
Market share price: Volkswagen have decreased their reputation and mark share in
competitive marketplace after scandal of defective device that they have implemented to
manipulate function of air pollution practices(Siano and et. al., 2017). This kind of unethical
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behaviour and illegal act have maximised their business growth and sales effective. In September
2015, the regularities bodies of United Kingdom have conducted analysis in order to know
effectiveness of vehicle. It was founded that some of defective devices are fitted in vehicles of
Volkswagen which were leading to have excessive amount of air pollution but at time of
pollution testing it showed less air pollution. After such scandal an organisation have faced
million dollars fines as well as share rate have fallen by 30 to 40 % in a single day. Moreover,
Frankfurt Stock exchange have analysed that shares of Volkswagen have hit low just within 52
weeks. Now it become difficult for respective organisation to make rapid recovery, growth and
sustainability in competitive marketplace. Thus, firm's revenue has decreased and set 6.7 billion
for dealing with unethical practices car in repairing the affected car.
Public relationship: In today's context public relation is very much essential for an
organisation as it help in establishing and maintaining mutual lines of communication and
cooperation between an organisation and its target customers(Mansouri, 2016).Volkswagen have
faced many issues and problem after scandal of defective device for reducing carbon emission on
road emission. This practice had lead them to earn positive relationship with public in
competitive marketplace that assist in attaining sustainability for longer period of time. The
scandal have adversely affected public relation of Volkswagen this lead to reduce customer
loyalty and reduce its potential customers. Moreover, on basic of these kind of activities
Volkswagen lead to expand their business activities in different countries in order to enhance
large number of market share in same industry line as to over come loss. Herein, the current
public relation have become one of the massive issues of public relation as well as again gain
trust of their customers. Moreover, in order to create positive public relation a respective
organisation need to have transparency to its customer, employees and staff members so that
they can reduce unethical behaviour as well as reducing fraud(Clemente and Gabbioneta, 2017 ).
Apart from this, their were negatively effected in social networking sites as it was denoting
negative effect within value of an organisation. It was also founded that customer have are
creating bad reviews, negative thoughts in context to organisation after the case of scandal. Thus,
it is high time for Volkswagen to improve their public relation with their customers by adopting
legal framework as well as implementing positive change in their product and services.
On the basis of articles and journals it has been observed that the scandal of Volkswagen
has adversely impacted upon their business operation and function. Such as brand image, its
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product and services, public relation, growth and sustainability in marketplace. The impact of
this scandal has defined that some of the illegal software were adopted that were illegal in nature.
Moreover, the scandal was disclosed by the government of United Kingdom on 18th September
through the emission test in order to prevent vehicle to produce up to 40 times more pollutant
that its legal limit. Moreover, it has been observed from the investigation is that Volkswagen
shares has immense by 18% along with that have loosed 14 millions euros in share their share
value(Stanwick and Stanwick, 2017).Initially, Volkswagen have also faced major issues in their
investment practices in many different countries such as Italy, Japan, France and United States of
America have adversely cut down investment rates. Thus, this scandal of carbon emission have
lead to reduce share price of an organisation at world wide.
The above discussed are some of the major points that have been analysed from the case
study in order to gain again competitive advantage in marketplace of same industry line. Herein,
a manger of an organisation need to play a major is developing strategies against unlawful that
have already taken place. They need adopt strong strategies in their product in order to overcome
their wrongful act and gain positive customer loyalty towards their organisation. For such
instance they need to bring transparency and involving its employees and staff member so that
effective decision can be adopted by them in rendering services to its potential customers.
Though it is difficult to regain same goodwill again but Volkswagen need to do it in order to
have competitive advantage and attain sustainability for longer period of time. Thus, their main
motive is to earn public relation again and acquire large number of market share in high
competitive edge.
CONCLUSION
From the above discussion it has been concluded that an organisation need to perform
ethics, norms and regulation in operating their business function and activities. It is essential for
an organisation in order to create value in effective nature within competitive marketplace place
of automotive industry. Whereas Government of each country has evolved certain norms and
regulation for different industries that are required to be implemented in order to create legal
frame work in operating business activities. Moreover, mangers and employees are providing
major support by making decision in making process so that they can boost up the reputation in
competitive marketplace. Additionally, in way an organisation cab grab opportunities in
marketplace with desired success as they want to have. Eventually, working with unethical
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behaviour an organisation have to face many challenges and negative impact on an organisation
which can lead to reduce goodwill in competitive marketplace. Thus, it is necessary for an
organisation to maintain ethics, norms and regularities in accurate manner so that they can
maintain stability for longer duration of time.
RECOMMENDATION
As per the case scenario Volkswagen have scandal regarding carbon emission that was
used in technical device in order to pass emission test in an effective manner. This scandal have
effected an organisation brand image negatively in competitive marketplace. Moreover, the
effect of scandal was too high that it have become difficult for a respective organisation to regain
benefits again in market of automotive industry within shorter period of time. Some of the
recommendation to the mangers of Volkswagen in order to attain competitive marketplace are
determined below:
 Volkswagen can organise different events and campaign in different countries in order to
create public relationship in an effective manner that is helpful for business in positive
manner.
 The mangers of Volkswagen need to follow norms, rules and regulation of a particular
country where they are operating in order to have goodwill in marketplace.
 Moreover, they can attain market share by coming up new car model that is electric car in
order to grab opportunities and attain large number of market share in competitive edge.
 Additionally, to this they can regain faith and trust of its customers by apologising to
government and customers so they can have good image as well as gain sympathy.
 Eventually, a respective organisation can cut down its cost of product and services as it
help them to gain some market share after such scandal.
 They can also adopt low price strategy such equivalent or skimming price in order to
attract large number of customers.
Thus, the above mention are some of the recommendation to an organisation. By the adoption of
such recommendation an organisation can regain market share in competitive marketplace as
well as can attain good public relation too.
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