Volkswagen's Unethical Conduct: A Management Case Study Report

This report examines the unethical conduct of Volkswagen, focusing on the Dieselgate scandal. It provides background information on the company and the environmental violations, detailing how the company programmed its engines to cheat emission tests. The report discusses the ethical and fairness issues involved, emphasizing the violation of environmental regulations, customer trust, and the pursuit of unethical competitive advantages. It explores the repercussions faced by Volkswagen, including financial penalties, damage to its reputation, and the need for organizational restructuring and marketing efforts to rebuild its brand image. The conclusion highlights the negative impacts of market competition and unethical business practices.

Running head: MANAGEMENT
Management
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Introduction:
The paper is focused in the description of an unethical conduct done by the company
Volkswagen. The paper provides a brief information regarding the background of the case
and along with that, describes the procedure of the violation of ethics and the business
fairness. Apart from this, the paper shows the methods in which the personal and the
professional ethics can be overridden in the decision making with a subconscious mind.
Along with this, the paper provides the necessary frameworks for the improvement of the
image of the company after the misconduct.
Discussion:
Volkswagen is a German company that operates in the automotive industry.
Volkswagen was founded in Berlin, Germany in the year 1937 (Volkswagenag.com, 2019).
The company is a market leader in the mentioned industry with 100 number of production
facilities across 27 countries (Volkswagenag.com, 2019). The excellence of the management
is able to conduct the operations in such manner that the company was able to generate a
revenue of 230.682 billion Euros in the year 2017 (Volkswagenag.com, 2019). However the
company came to limelight in repetitive manner due to the number of cases unethical
business conduct. One of them was the emission gate or the diesel gate case.
In the month of September of 2015, the Environmental Protection Agency of United
States was observed to issue a notice to the German company, Volkswagen for the intentional
violation of the Clean Air Act (Epa.gov, 2019). The agency conducted an investigation for
the evaluation of the emissions by the cars of the various organizations and found that the
mentioned company had programmed the turbocharged direct injection diesel engines in an
intentional manner. The objective of the company was to activate the emission controls
during the laboratory testing of the emissions to make sure that the NOX output of the

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vehicles of the company satisfies the US standards. The activation of the emission control
was observed to be only during the time of the laboratory testing and the actual emission of
the NOX was seen to be 40 times more than the recorded value in the laboratory. The
company was seen to deploy the programming software to eleven million cars across the
globe and 500000 of them belonged to the United States. The scandal came to limelight
during the time of the on road test (Epa.gov, 2019). In the year 2014, the California Air
Resources Board conducted a study on the discrepancies of the emissions between the
European and the United States vehicles from the evidences of the International Council on
Clean Transportation where the board was able to sum up data from three different sources of
15 vehicles. The group of scientists at West Virginia University detected the additional
emission during the live road test. Along with this, the regulatory agencies of various country
were seen to investigate vehicles of Volkswagen and the company faced the immediate
concern in the form of the decrement in the stock prices. The company was ordered to pay
2.8 billion US dollar as a consequence of the misconduct they did, by the US Federal judge in
the year 2017 (Justice.gov 2019). Several national and global media houses covered the case
and that decreased the reputation of the company along with decreasing the market value of
the company.
Considering the importance of the fairness and ethics in the business, the case is never
acceptable. The justification for this will be carried out with two different perspectives.
Firstly, the company ignored the importance of a sustainable environment and at the same
time, the company broke the trust of the customers in the try to pretend as an environment
friendly business organization. Along with that, the company’s try of avoiding the emission
legislation was seen to be significant try in getting the unethical competitive advantage over
the competitor organizations. Hence it is pretty evident that the company had conducted

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unethical business conduction in achieving the competitive advantage and the fine that was
charged against the company is absolutely justified.
The company was observed to recall all the vehicles which were tampered in this
fashion for the necessary rearrangements. The company was seen to have a complete
restructure in their organizational structure as an immediate impact of this. However, the
company was in need to have proper internal marketing communication to make sure that
they be overcome the detrimental impact of the case and the decrement of the reputation. In
order to restructure the brand image of the company, it is advised to make necessary calls for
the marketing activities to promote the operations and restructures that they conducted after
he activity as the solution for the case.
Conclusion:
On a concluding note, the case is significant in portraying the detrimental impact of
the notable amount of market competition in the global business context. Along with that, the
case shows the variety of losses that a particular company has to face after undertaking these
sort of unethical approaches.

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References:
Epa.gov (2019). US EPA. Retrieved from https://www.epa.gov/
Justice.gov (2019). Introduction To The Federal Court System. Retrieved from
https://www.justice.gov/usao/justice-101/federal-courts
Volkswagenag.com (2019). Volkswagen Group Homepage. Retrieved from
https://www.volkswagenag.com/