Analysis of the Volkswagen Scandal through Business Ethics Theories

This essay provides a comprehensive analysis of the Volkswagen emissions scandal, examining the ethical dilemmas it presented through the application of various ethical theories. The introduction highlights the significance of business ethics and the impact of scandals on organizational trust and integrity. The essay delves into the background of the scandal, detailing Volkswagen's actions, the discovery of the 'defeat device,' and the resulting consequences. The core of the analysis applies deontology, utilitarianism, and egoism to evaluate the ethical implications of Volkswagen's behavior. Deontology emphasizes adherence to moral duties and principles, while utilitarianism focuses on maximizing overall happiness. Egoism prioritizes self-interest. The essay concludes with a discussion of the implications for business, including the importance of ethical leadership and the potential for unethical practices in various industries. The author also shares personal reflections on the case and its relevance to future business endeavors.

Running head: BUSINESS ETHICS
Business Ethics
Name of the Student
Name of the University
Author note

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Introduction
There are many scandals that have been going around in the international business
world. The organizations such as Volkswagen, Worldcon, Enron, Fords are taking decisions
which can be highly distrustful and have raised ethical questions. These scandals have also
contributed to the serious loss of trust and confidence for those organizations and within the
business integrity. In the contemporary business world, the organizations tend to increase
their profits and value which is also the primary reason behind seeking more ways to do that.
However, in the process of doing that, many organizations are making decisions that can be
harmful (Zhou, 2016). The recent scandal of Volkswagen indicates that the business ethics
are still significant to the business world and should immediately be addressed in the way of
increasing the profits of the organization. The carbon emission cheating of Volkswagen has
encouraged attention of the entire business world in recent times. The public and media
debate regarding the Volkswagen scandal have already got so much attention, that it is quite
easy to mark the scandal as unethical or wrong (Siano et al., 2017). This essay addresses the
ethical dilemmas of the scandal in the light of various ethical theories. The ethical theories
include deontology, utilitarianism and egoism theory. After the detailed analysis, the
recommendation and personal reflection has been presented in this essay.
Background
The case of ethical dilemma about Volkswagen had affected the historical journey of
the organization and its newly appointed CEO. The organization can be traced back in the
30’s where it first started the journey. In the year 2014, there was a regular on road testing in
California by the CARB or California Air resources. This road testing had led the
organization in investing Volkswagen for violating the federal and state vehicle emission
rules (Balbi, 2015). Furthermore, the researchers had tested the emission form two of the

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Volkswagen models. The examination has also revealed that those models were equipped
with 2-liter turbocharged 4-cylinder diesel engine. Later it was also found that these models
were emitting around forty times of the permitted level of NOx or nitrogen oxide and dioxide.
Later the organization accepted their fault and admitted that millions off their car models
were set with ‘defeat device’ (Preston, 2015). It was also disclosed that around 11 millions of
the diesel cars where around eight millions cars were in Europe, had been equipped with a
special software which has helped the organization to cheat in the emission test. The
credibility of the organization has been affected with this scandal to a great extent. The entire
business world was not ready to accept the fact that this scandal has happened without the
knowledge of the top executives of the organization (Nemeth & Carvalho, 2017). Therefore
the contemporary CEO has resigned taking the entire responsibility of the scandal. This
scandal has been one of the biggest leadership and ethical challenge in the recent times. This
incident has raised several questions regarding the ethical theories that the organization
should adhere to.
Explanation
Deontology
The view of Deontology belongs to the group of normative theories. This theory is
mostly focused on the moral actions and the choices of the individual, however in this case it
is the organization itself. This theory also judges the morality of the action on the basis of the
pre-determined rules. According to this theory, on the basis of the deontological ethics there
may raise different moral obligations from any of the internal or external sources such as
religious law, cultural or personal values or ethical naturalism. These choices can be
forbidden, morally required or permitted. Kantianism is also a significant part of the
deontology. As stated by Chakrabarty & Bass (2015), Kantianism has argued that one act can

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be ethically right only if they have obeyed the categorical imperative. It should also be noted
that this theory states that in order to make any act morally right, people should adhere to
their duties. Also, it has been said that the consequences of any action do not make it right or
wrong, rather the motives of the individual who perform the actions (Paquette, Sommerfeld
& Kent, 2015). Regarding this case, Volkswagen should act in accordance with the pre-
determined principles. However, considering the categorical imperative, Volkswagen should
offer safe, attractive and environmentally sound cars that are capable of competing in the
international automobile market. The organization has already set its standards for the last
few decades; therefore they should stick to it. It can also be argued that considering the
categorical imperative, Volkswagen has acted ethical as their ‘cheat software’ did not affect
the attractiveness or the safeness of the device; however it has affected the environmental
security to a great extent.
Utilitarianism
Utilitarianism is a part of consequentialism. This is an ethical theory that says that the
best action is the one which has the maximum utility and brings maximum happiness to the
world. The term ‘utility’ can also be defined in different methods such as well beings,
happiness etc. The founder of the ethical theory, Jeremy Bentham, defined the term utility as
the joint sum of all the possible pleasures which may result from a specific action. This does
not count the suffering of any person for the action (Shafer-Landau, 2014). As Utilitarianism
is a part of consequentialism, this adheres to the fact that there is always a standard of wrong
and right of any consequences of the action. Utilitarianism mostly states that one should
maximize the pleasure out of any context; therefore one should choose the action which can
contribute the most in increasing the happiness for most of the people. This theory also states
that if there is any life at risk, the choice of life can reduce a huge amount of pleasure (Weiss,
2014). With the help of this theory, it can be assessed that how ethical was the idea of putting

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the cheat device n the Volkswagen models. It basically focuses on the consequences of the
action.
Egoism theory
The Egoism theory or the Ethical egoism is the ethical position which should be done
by the moral agents for their own self-interest. The egoism theory has three different parts
such as ethical egoism, psychological egoism and rational egoism. The psychological egoism
states that people will only act in the place where their self interest in fulfilled. On the other
hand, the rational egoism considers that it is only rational where there is one’s self interest
(Overall, 2016). However, ethical egoism holds that the actions which are beneficial to one’s
self interest, can be considered to be ethical in that terms. This theory is in fully contrast with
the theory of utilitarianism which states that one should not treat one’s self higher than the
others, however, egoism theory considers the self higher than any other being. This theory
can justify the Volkswagen scandal to a great extent.
Analysis and Evaluation
Applying utilitarianism in the Volkswagen ethical case, it can be said that it tend to
involve several sections. There are several parties that are included along with the
organization, such as the organization itself and its employees, the clients, the agency that
was checking the environmental testing or EPA and the other one was the indirect party
which is the people of the countries where Volkswagen has sold its cars. In accordance to the
utilitarianism theory, the acts of Volkswagen are not at all acceptable as they did not
contribute to any incensement of the greater good or the happiness (Jung et al., 2017).
Especially at the end, the organization was caught with the cheating and it did not make
anyone happy. The organization was also blameworthy for the actions they had performed, as
they knew it from before, what exactly was happening and what exactly could go wrong as

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the consequence of the actions. They had developed the software with the purpose of
cheating. They may have created utility for the company itself but it did not play any safe for
the environment. In such situations, there should be effective punishment for Volkswagen as
its actions have not led to something great. The punishment to the action should also be
obligatory for the organization as utilitarianism says that punishment should be permissible if
there is no chance of leading towards great utility. Volkswagen should not do this again.
Also, they have lost the marke of diesel cars and share prices dropped to a great extent.
As stated before, deontology also do not support the deed of Volkswagen of
misleading the environmental gas testing agency. As the car was considered to be the low
emission diesel cars, it could be sent to the various countries. Therefore, the customers could
also be charged more taxes that the allowed ones. Therefore considering the deontological
point of view, putting the cheat software in the cars was not a morally right thing to do as this
act goes exactly against to the moral duty. Volkswagen has been acting entirely against the
moral law, therefore it is quite expected what has should be done and the organization should
be punished for their deed.
The egoism theory goes exactly to the opposite of the previously discussed theories.
This theory puts more importance to the self and stats that one should exactly do whatever is
beneficial to his or her own self interest (Dybus & Lemmen, 2017). Considering the
Volkswagen case, the organization has put the cheat device in the cars as they wanted to
cheat the governments and the agencies as they wanted their diesel cars to be successful in
the market. However, as they have been caught with their cheat device, they have lost a huge
amount of share from the market and their decade long reputation was hampered. However,
egoism theory justifies the deeds of the Volkswagen employees as it was considered to be
beneficial for the organization itself.

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Implication for business
The research on the Volkswagen case has been helpful for me. Since I have a plan to
open up a business in future, I can utilize the learning in my business. In the restaurant
business, one popular yet unlawful business takes place sometimes, is to use the gas which is
not environmentally sound and it can hamper the environmental balance. There are many
organizations that try to use this gas as it is cheap and the production cost of the food
becomes quite low. However, this kind of gas emission is not easy to get as the government s
quite strict about the law. However, in my business, I will not use any such product which has
the possibility of violating the environmental balance. Any kind of unethical business will not
be taken in my organization. We all should be responsible enough to ensure that there is no
harm occurring due of our business.
Conclusion
This essay has explained the Volkswagen case study with the help of three different
ethical theories. It can be said that other than the egoism theory, which keeps the ego at the
very first place, all the other theories have considered the case to be morally permissible. The
first ethical theories, utilitarianism and deontology would consider Volkswagen to be the
culprit of whatever they did. These theories consider Volkswagen to be punished for
hampering the environmental balance as well. However, the egoism theory can justify the act
as it only considered the interest of the organization. However, in the long run, the
organization was not benefitted with their decision and this has hampered their decade long
reputation as well. In such situation, Volkswagen should bring a leader, for the organization,
who is new, strong and ethical, therefore he or she can work hard to bring the trust of thee
customers back on the organization. The organization need a strong and a moral person who
can manage the work morally.

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Reference list and Bibliography
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