Volkswagen Emission Gate Scandal: Ethical Analysis in Business

This presentation provides an in-depth analysis of the Volkswagen emission gate scandal, a case of unethical business practices that came to light in 2015. It outlines the scandal, triggered by Volkswagen's violation of the United States' Clean Air Act through the use of turbocharged direct injection diesel engines designed to manipulate emission controls. The presentation identifies the ethical issues arising from this case, including the intentional programming of engines to portray reduced NOX emissions, the provision of false claims about eco-friendliness, and vague communication with customers. It further examines the reasons behind these ethical breaches from Utilitarianism and Kantianism perspectives, focusing on the consequences for customers, management, employees, and shareholders. The analysis extends to principles of justice, equality, and empathy, highlighting the injustice and unfairness of Volkswagen's actions, the violation of equality in the industry, and the negative impact on stakeholders. The presentation concludes by reflecting on the rights and sufferings involved, emphasizing that Volkswagen's actions were unethical and unfair, leading to increased suffering for customers and other parties involved. Desklib provides access to similar solved assignments and resources for students.

VOLKSWAGEN EMISSION GATE SCANDAL
AN IN DEPTH ANALYSIS
NAME OF THE STUDENT
ORDER ID
NAME OF THE UNIVERSITY

OUTLINE OF THE CASE
 In the year 2015, Volkswagen, the German
automaker was observed to be involved in an
unethical business operation which was named
as emission gate scandal (Chossière et al.,
2017).
 United states government developed the clean
air act for the development of the better
environment which forces the automotive
organizations in controlling their emissions.
 Volkswagen violated the law with the
application of the turbo charged direct injection
diesel engines.

OUTLINE OF THE CASE
 California air resources board was observed to
conduct a study ion the emission discrepancies
amongst the vehicle models of the United States and
Europe from the information of international council
on clean transportation in the year 2014 (Li et al.,
2018).
 The case became a major concern for the senior
management of the organization as it was followed
by a series of resignation and suspensions inside the
organization.
 Along with that, the us federal judge was seen to
order a penalty of $2.8 billion as the criminal fine for
intentionally rigging the diesel powered vehicles.

ETHICAL ISSUES
 The mentioned organization intentionally
programmed turbocharged direct injection diesel
engines for activating the emissions controls so that
they be able o portray a reduced rating of the NOX
value of the emissions of their products.
 The application of the mentioned system enabled
the organization in fake limitation of the NOX
values of the products.
 The organization provided a fake claim of their
products being eco-friendly (Mačaitytė &
Virbašiūtė, 2018).
 The organization provided a vague communication
to the customers and forced them to use dirty
products.

ETHICAL ISSUES
The unethical business practices from
the part of the mentioned organization
was observed to be based o three
different aspects which are mentioned
below:
 Pressure.
 Opportunity.
 Rationalization.

REASON OF ETHICAL ISSUE (UTILITARIANISM PERSPECTIVES)
Utilitarianism:
The mentioned concept is focused in the evaluation of the consequences of
the actions in stating whether an action is good or not.
Considering the consequences:
 Customers were dissatisfied with defective products.
 Senior management were observed to face series of suspensions (Tarsa, 2017).
 Employees were observed to face the threat of job cuts.
 Shareholders were observed to concerned regarding the stock price fall and the
significant amount of reputational damage along with the monetary
penalizations.

REASON OF ETHICAL ISSUE (KANTIANISM PERSPECTIVES)
Kantianism: the concept is more concerned regarding the ethical completion of the
actions. The parameter for being ethical in the mentioned theory is not focused
regarding the consequences of the actions.
Some of the actions that led to the unethical business practices in accordance to the
mentioned theory:
 The company lied o the customers regarding the products.
 The company lied to the government regarding their products (Welch, 2019).
 The company influenced the employees to conduct unethical business practices.

JUSTICE
 According to the theory of fairness, justice is
“each person is to have an equal right to the
most extensive total system of equal basic
liberties compatible with a similar system of
liberty for all.”
 The organization was involved in
communicating fake statements to the
customers and the governmental agencies
regarding the quality of the products.
 The mentioned act is pretty significant in
stating the injustice conducted by the accused
company for their own profit.

EQUALITY
 Equality:
 The concept of equality is focused about making sure that each and
every individual has the similar opportunity to make the best out of their
capabilities and skills.
 The united states environmental protection agency was able to create the clean
air act.
 This forced the organization to invest a considerable amount of money in the
improvement of the quality of emission.
 Through installing the turbo charged direct injection diesel engines, the
organization violated the equality in the industry in terms of generating profit.

EMPATHY
The concept of empathy is observed to be focused in
experiencing other’s situations for perfect evaluation
of the feelings that a particular person has in a
situation.
 Customer: dissatisfied and frustrated with the
defective products (Zhang, Veijalainen &
Kotkov, 2016).
 Employees: concerned regarding their jobs.
 Shareholders: dissatisfied with the monetary loss
and reputational damage.
 Government: frustrated with the actions of the
company.

RIGHT AND SUFFERING
 Right:
 The concept of right thing in ethics is considered to be the actions that have
no chance of affecting anyone or any element in a negative manner.
 Suffering:
 The concept of suffering is observed to be linked with the right thing. The
focus of the concept is based on the possibility of the actions in affecting in a negative
manner.
 The organization did not conduct a right thing and their actions were not fair as well.
 The organization sold defective cars to the customers for generating higher amount of
profits. This increased the suffering of the customers. Hence the action were not fair.

REFERENCES
CHOSSIÈRE, G. P., MALINA, R., ASHOK, A., DEDOUSSI, I. C., EASTHAM, S. D., SPETH, R. L., & BARRETT, S. R. (2017). PUBLIC HEALTH IMPACTS OF
EXCESS NOX EMISSIONS FROM VOLKSWAGEN DIESEL PASSENGER VEHICLES IN GERMANY. ENVIRONMENTAL RESEARCH LETTERS, 12(3),
034014.
LI, L., MCMURRAY, A., XUE, J., LIU, Z., & SY, M. (2018). INDUSTRY-WIDE CORPORATE FRAUD: THE TRUTH BEHIND THE VOLKSWAGEN SCANDAL.
JOURNAL OF CLEANER PRODUCTION, 172, 3167-3175.
MAČAITYTĖ, I., & VIRBAŠIŪTĖ, G. (2018). VOLKSWAGEN EMISSION SCANDAL AND CORPORATE SOCIAL RESPONSIBILITY–A CASE STUDY.
TARSA, K. (2017). WON'T GET FOOLED AGAIN: WHY VW'S EMISSIONS DECEPTION IS ILLEGAL IN EUROPE AND HOW TO IMPROVE THE EU'S AUTO
REGULATORY SYSTEM. BC INT'L & COMP. L. REV., 40, 315.
WELCH, J. (2019). THE VOLKSWAGEN RECOVERY: LEAVING SCANDAL IN THE DUST. JOURNAL OF BUSINESS STRATEGY.
ZHANG, B., VEIJALAINEN, J., & KOTKOV, D. (2016). VOLKSWAGEN EMISSION CRISIS: MANAGING STAKEHOLDER RELATIONS ON THE WEB. IN
WEBIST 2016: PROCEEDINGS OF THE 12TH INTERNATIONAL CONFERENCE ON WEB INFORMATION SYSTEMS AND TECHNOLOGIES. VOLUME 1,
ISBN 978-989-758-186-1. SCITEPRESS.