Volkswagen Crisis: Analyzing CSR Issues and Recommending Solutions

This report provides an in-depth analysis of the Volkswagen (VW) emissions scandal, focusing on its implications for corporate social responsibility (CSR). The report identifies key issues, including misrepresentation, ethical breaches, and environmental sustainability concerns. It examines the impact of VW's actions on its stakeholders and reputation. The analysis explores alternative solutions, such as establishing a clear mission statement, focusing on innovation, and leveraging advertising and charitable initiatives to rebuild trust. The report offers recommendations for VW, including building on organizational competencies, implementing effective risk management strategies, adhering to ethical principles, and generating positive word-of-mouth. The analysis also highlights the importance of transparency and accountability in corporate operations to prevent future crises. The report aims to provide a comprehensive understanding of the VW case and offer practical strategies for companies to enhance their CSR practices and mitigate risks.

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VW Case
Corporate Social Responsibility
Name etc

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Executive Summary
Issues such as misrepresentation, not being truthful to the consumer community and not
abiding by ethical operations has been identified as one of the main issues that hindered the
performance of Volkswagen in the United States. A need for the improvement of the image of
the company was identified and thus alternative measures were taken in order to alter the
negative image of Volkswagen. As alternatives it was opined that the company should develop
a new mission statement, focus on innovation and communicate sustainable initiatives with the
help of advertising. Recommendations were passed in order to implement the plan that was
developed. It was recommended that the company should abide ethics while in operations,
focus on generation of word of mouth, identify and solve the potential risks and capitalise on the
advantages or competencies of the company.
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Contents
1.0 Introduction................................................................................................................................i
2.0 Analysis of the Critical Problems and Issues.............................................................................i
3.0 Analysis of Alternatives and Options.......................................................................................ii
4.0 Recommendations....................................................................................................................iv
5.0 Conclusion.................................................................................................................................v
References......................................................................................................................................vi
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1.0 Introduction
Corporate Social Responsibility is an issue that companies highlight in order to ensure that they
pay their dues to the community apart from the profit oriented activities. The CSR activities
encompass the activities carried out by a company that benefit not only the company, but also
the diverse stakeholder groups associated to the company (Cheng, Ioannou & Serafeim, 2014).
Volkswagen has highlighted various issues associated to Corporate Social Responsibility and
thus have been subject to mixed reactions from the diverse groups of stakeholders associated
to the company. The EPA or the Environmental Protection Agency has taken steps in
accordance with the issues associated to the operations of Volkswagen and has levied
instructions in case engines and the assimilated parts of the car as a result of the negative
issues that the company has been subject to while operating in the industry (Judson et al.,
2014). The aim of the paper is to highlight the issues that are associated with the operations of
the company in terms of CSR. Furthermore, the paper will analyze the issues that have been
identified and provide recommendations with the help of which the identified problems can be
mitigated.
2.0 Analysis of the Critical Problems and Issues
2.1 Issue1 – Inappropriate Representation
By the end of the 2000s it was found out that global warming had already become an
issues that the world was shaken by (McGlade & Ekins 2015). Therefore, it was found
that organisation were carrying out activities with the help of which the nature of the
degradation of the environment could be treated. Thus, there was a need that was
associated with the rise of environmental pollution. Furthermore, it was found that
vehicular emissions was one of the main sources of emission. Hence, sustainable
initiatives were identified as some of the major techniques with the help of which
problems associated with the environmental pollution could be managed (Jurado &
Fuentes 2014). Thus, it was necessary for the companies to be able to clear certain
regulations Volkswagen introduced a coded software that helped in engines run by
diesel appear to be perform better than they actually were. Thus, it can be opined that
the latter was a fraudulent activity that was carried out by the company so that they
were able to carry out other operations
2.2 Issue 2 – Cheating foreign company
It was found that false representation was a case that was highlighted in accordance
with the operations of the company. The above issues that was highlighted helped in
developing a perception in the automotive market that Volkswagen was operating in,
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was with false representation. The main aim of the company through the false
representation was to mitigate the issues that concerned the company as a result of the
intervention from the EPA. Hence, the company incorporated a software that helped in
stating that the company was complying with the standards that was being asked out of
every organisation operating in the automotive industry. This resulted in the
development of a belief that instated a feeling in the market which implied that the
company was not complying with the standards that was needed. It can be said that
false representation is an activity on the basis of which a company can lose both
potential customers and existing customers. Hence, the latter issues was deemed to be
an issues that would reduce the market share of the company in the market of the
United States.
2.3 Issue 3 – Environmental Sustainability
On a contradictory not to all the issues that have been highlighted in the afore mentioned
sections, the company was keen enough to develop comply with the environmental standards
with environmental sustainability related issues that helped in gain favourable nature of
outcomes when it comes to the contribution to the development of environmental standards.
Volkswagen was successful in identification of the issues that the company needed to comply
with the help of which they could contribute to the conservation of the environment. It has been
found out from the case that as a result of the efficiency of the engines that was developed by
the company, the company was able to ensure that the need of the company was to develop
engines that would help in minimising that environmental pollutants that was being released into
the environment. Not only with the market of the United States but also the global market was
characterised by environmental sustainable initiatives. The aim of the latter initiative was to
contribute to the environmental sustainable motives with the help of which all the companies
could collectively contribute to the development of the environment. It was found out that the
carbon emissions that is assimilation of different components of carbon. The company has been
keen of developing solutions with the help of which the particular issues can be coped with. The
carbon emissions would convert the possible CO2 emissions into oxides of Nitrogen that are
less harmful to the environment.
3.0 Analysis of Alternatives and Options
3.1 Alternative 1 – Establishment of a Mission Statement
A mission statement refers to a statement regarding the main motives of a company (Babnik eta
l., 2014). Thus, it can be said that a mission is a motive with the help of which the company can
effectively achieve the objectives that have been propounded by the company. It has been
found from the case that the company has made false statements regarding the activities
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carried out by the company in accordance with the needs of the EPA. Hence, it can be
suggested that the company should remain true to their personal motives and hence, develop
the ability to state issues that they can effectively implement. In the future, the company has
been subject to unfavourable receptions from the consumer community. Thus, it can be said
that the main solution that must be adopted by the company should be able to sustain the
mission statement that will be adopted by the company. The mission statement to be adopted
by the company should be backed up by a proper vision statement that will help in establishing
the point at which the organisation aims to be in the future (Loeppke et al., 2015). Furthermore,
it can be said that the company should be able to synchronise the vision statement with the
goals of the company. The latter would help in development of an effective mission statement
with the help of which the company can effectively develop a competency with the help of which
the company can ensure reduction of the unfavourable perceptions that have been created in
the said market.
3.2 Alternative 2 – Focus on Innovation
Innovation refers to the development of solutions in a manner that was not propounded or
implemented before (Gawer & Cusumano, 2014). Innovation can not only help in disrupting the
industry or the market, but also it helps in development of a competitive advantage in the
market. Innovation can help in development of forms of technology that was not thought of
before. Volkswagen has been subject to the perception of a foreign company that cheats its
customer by claiming that they comply with certain requirements that they clearly did not.
Hence, innovation can help in gaining favourable nature of outcomes in terms of returns from
the market (Gawer & Cusumano, 2014). Apart from the latter, it can be said that innovation
carried out by the company can help in gaining favourable proceedings that can help in
development of technology that can help in minimisation of the adverse effects that have been
suffered by the environment. Technological development can helps in gaining an edge in
gaining activities with the help of which the companies can solve the issues that they have been
able to identify. Furthermore, it can be said that the nature of outcomes that one might be
subject to can help in solving the issues that are associated with the development of the
environment. Focus on innovation not only helps companies in staying dedicated to the ultimate
goal of sustainable development of the environment with the help of technological solutions that
can bolster the effectiveness of operations of an organisation (Wallace et al., 2014).
3.3. Alternative 3 - CSR through advertising and charity
Charitable notions that have been carried out by the company have helped in developing
connections with the consumer community or the diverse groups of stakeholders associated to
the organisation. The latter are solutions that can help in mitigation of the unfavourable
impression or negative perceptions that Volkswagen has been subject to while operating in the
market of the United States. Thus, sustainable notions can helps in coping with the negative
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issues that the company has been subject to while they operate in The US automotive market.
Advertising is deemed to be an activity carried out by companies in order to increase their
returns in the short term. However, it should be noted that advertising can also help in
generation of awareness among the viewers who are subject to the issues or the concerns that
have been raised with the help of the advertisement that has been raised by the company.
Sustainable initiatives concerning environmental sustainability and others can help in spreading
information about the sustainable notions that have been raised by the company (He et al.,
2018). This, can help in maximising the chance that the company has in terms of mitigation of
the issues that are associated to the negative image that the company has been subject to.
4.0 Recommendations
4.1 Recommendation 1 – Building up on competencies
Understanding the organisational competencies is an important aspect that must be considered
when it comes to the development regarding the same (He et al., 2018). It can be said that the
main nature of outcomes that one must be subject to depends on the organisational
competencies as a whole. Furthermore, it can help in building up on the competencies that are
already present in the organisational operations. Hence, further development of the
competencies can help in ensuring a sustainable future.
4.2 Recommendation 2 – Risk Management
Risk management refers to the management of the risks that an organisation might be subject
to while they are operational (Cagliano, Grimaldi & Rafele, 2015). It can be said that the risks
that must be experienced by the company can help in identifying the areas that the company
must extensively pay attention to in order to avoid or minimise the possibility of risks.
4.3 Recommendation 3 – Abiding by ethics
There are various ethical issues that Volkswagen has been subject to while operating in the US
market. Hence, it has been suggested that the company should be able to identify the relevant
ethics while carrying out operations as usual. Carrying out ethical operations can help in
sustaining the nature of operations of the company.
4.4 Recommendation 4 – Generation of Positive Word of mouth
Word of mouth is a mode of marketing that helps in communicating the motives of the company
without any investment made on the same. Positive word of mouth is generated with the help of
favourable activities carried out by the company can help in generation of favourable word of
mouth (Lien & Cao, 2014). Positive word of mouth can help in converting the one time
customers to loyal customers and potential customers to actual customers.
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4.5 Recommendation Summary
Thus, it can be said that the company should be able to incorporate activities that can help in
mitigating the issues with the help of which they can increase the chances of mitigation of the
organisational activities. Capitalisation on the competencies can help in betterment in terms of
the activities that the organisation is already competent in. Risk management helps in
identification of the potential risks and can also help mitigation of the same. Ethics help in
abiding by ethical operations and furthermore, it helps in generation of favourable word of
mouth. This can help in mitigation of the issues with the help of which the negative image of the
company can be mitigated.
5.0 Conclusion
To conclude, it can be said that that Volkswagen was caught amidst issues that lead to negative
company image. Now, the company aims to mitigate the highlighted issues. Innovation, re-
establishment of the mission statement and highlighting sustainability through advertising are
the recommended ways to minimise the differences. It has been recommended that the
company should be able to carry out risk management, build up on the potential competencies,
abide by ethics while in operations and finally aim to generate positive word of mouth that can
help in mitigation of the negative image of the company.
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References
Babnik, K., Breznik, K., Dermol, V., & Trunk Širca, N. (2014). The mission statement:
organisational culture perspective. Industrial Management & Data Systems, 114(4), 612-627.
doi.org/10.1108/IMDS-10-2013-0455
Cagliano, A. C., Grimaldi, S., & Rafele, C. (2015). Choosing project risk management
techniques. A theoretical framework. doi.org/10.1080/13669877.2014.896398
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to
finance. Strategic management journal, 35(1), 1-23. doi.org/10.1002/smj.2131
David, M. E., David, F. R., & David, F. R. (2014). MISSION STATEMENT THEORY AND
PRACTICE: A CONTENT ANALYSIS AND NEW DIRECTION. International Journal of
Business, Marketing, & Decision Science, 7(1).
Gawer, A., & Cusumano, M. A. (2014). Industry platforms and ecosystem innovation. Journal of
product innovation management, 31(3), 417-433. doi.org/10.1111/jpim.12105
He, B. J., Zhao, D. X., Zhu, J., Darko, A., & Gou, Z. H. (2018). Promoting and implementing
urban sustainability in China: An integration of sustainable initiatives at different urban
scales. Habitat International, 82, 83-93. doi.org/10.1016/j.habitatint.2018.10.001
Judson, R., Houck, K., Martin, M., Knudsen, T., Thomas, R. S., Sipes, N., ... & Crofton, K.
(2014). In vitro and modelling approaches to risk assessment from the US Environmental
Protection Agency ToxCast programme. Basic & clinical pharmacology & toxicology, 115(1), 69-
76. doi.org/10.1111/bcpt.12239
Lien, C. H., & Cao, Y. (2014). Examining WeChat users’ motivations, trust, attitudes, and
positive word-of-mouth: Evidence from China. Computers in Human Behavior, 41, 104-111.
doi.org/10.1016/j.chb.2014.08.013
Loeppke, R. R., Hohn, T., Baase, C., Bunn, W. B., Burton, W. N., Eisenberg, B. S., ... & Hymel,
P. A. (2015). Integrating health and safety in the workplace: how closely aligning health and
safety strategies can yield measurable benefits. Journal of occupational and environmental
medicine, 57(5), 585-597. doi: 10.1097/JOM.0000000000000467
Martínez-Jurado, P. J., & Moyano-Fuentes, J. (2014). Lean management, supply chain
management and sustainability: a literature review. Journal of Cleaner Production, 85, 134-150.
10.1016/j.jclepro.2013.09.042
McGlade, C., & Ekins, P. (2015). The geographical distribution of fossil fuels unused when
limiting global warming to 2 C. Nature, 517(7533), 187. doi.org/10.1038/nature14016
Wallace, J. C., Butts, M. M., Johnson, P. D., Stevens, F. G., & Smith, M. B. (2016). A multilevel
model of employee innovation: Understanding the effects of regulatory focus, thriving, and
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employee involvement climate. Journal of Management, 42(4), 982-1004.
doi.org/10.1177/0149206313506462
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