The Controversy Of Volkswagen's Prosecution

You have to consider the Ford Motor Company’s reputation after they made the decision to not recall the Ford Pinto to

Volkswagen is one of the largest automakers in the world and it has a global reputation as a high-quality German auto brand. Social responsibility is included in VW’s corporate culture and it seems that Volkswagen made some advances in Corporate Social Responsibility because the corporation was ranked 11th 2015 in the Global CSR Rep Track 100, which listed companies by reputation (Reputation Institute, 2015).However, the company has been threatened by an emission scandal which broke in September 2015, when the Environmental Protection Agency (EPA) disclosed that Volkswagen had installed defeat devices on diesel cars which were sold in the US. These devices equipped on VW cars cheated regulators in such a way that it could detect

The second item is if VW would be unwilling to change its ways and value sales and profit over integrity to stakeholders. VW was already caught cheating just to win awards and surpass its completion, but if its willing to continually do this and not change for the better it would be best not to continue the engagement with the organization.

The mistrust between the Volkswagen Company and their customers developed after the scandal associated with the incorrect emission of data and cheating of the system unfolded.  The scandal occurred on the eighteenth of September 2015 when it was found that the company had made a car with a turbo that released emission directly into the real word atmosphere. The allegations were genuine and were proved by the Environment Protection Agency in the United States (EPA) (Hotten, 2016).The chief

Volkswagen is under investigation following reports from the EPA that they had installed software into their engines that deceived emissions testers. Furthermore, engineers updated this software in 2014, claiming that they were improving the vehicles. James Liang, a senior engineer who had worked for Volkswagen for 30 years, admitted to investigators in September of 2016 that he had designed the software in question. Further investigation has revealed that this conspiracy may have involved executives of the company. It is unknown to the public whether Liang was acting under orders when he designed the software or he decided to create it on his own to meet requirements his superiors gave him. Both rule utilitarianism and Kantian duty ethics

Additionally, one of the plaintiff's had family members die because of the defective car. They both had reasonable claims to sue so they both filed a lawsuit against two powerful corporations.

Daniel Donovan’s lawsuit alleges that his company violated whistleblower laws in Michigan, the state where he was employed. Volkswagen claims that Donovan’s termination had nothing to do with the scandal and impending lawsuit involving false fuel emissions data, but Donovan persists that he was fired out of fear that he would soon go to the authorities with information about the emissions scandal. Under Michigan whistleblower laws, Donovan is protected from retaliation by his employers. However, his concerns about the illegal data deletion were met with the ultimate retaliatory act:

Loss of reputation and sales; fines for VW → loss of status and being made responsible for the scandal

As a multinational corporation, the implication of the scandal determines the fate of numerous stakeholders both internal and external. Internal stakeholders comprise of the board, managers and employees while external stakeholders subsume shareholders, customers and suppliers. The economic, political and social impacts of the dishonest practices would shape the fate of Volkswagen and affect the future prospects of the automotive industry. Common shareholders whilst not involved in the day to day running of the business placed faith and belief in the firm by providing capital had suffered severe economic loss as share prices (get something for stat). Despite the callous deception in advertising the defeat device displayed no signs of disturbing vehicle performance, however, customers of Volkswagen and its subsidiary vehicles suffer from lower resale value. In addition, even though the scandal was global, European consumers were the most affected with diesel cars accounting for 41% of all European cars (Fontaras, 2016). This high percentage in respect to other nations is a result of incentives provided by the European Union for the purchase of diesel vehicles such as subsidies towards the production process resulting in lower premiums compared to petrol counterparts (Vidal, 2015) In additional with sales falling suppliers of Volkswagen would likely lose future contracts or have current contracts downgraded as less parts are required. Thus, this loss of future

In today’s society we often come to many debates on several issues that go on in our world today. Recently there was an ethical debate on whether or not it is ethical to release vehicles with software that defeats emission testing by the EPA. Volkswagen is being accused of using illegal software designed to hide emissions during testing by installing cars with a software. The EPA accused Volkswagen of using the device in nearly over a half a million cars (Davenport). The cars are reportedly to have been installed with a software that had the ability to turn off the emissions controls when driving normally and turns them on when the vehicle is undergoing an emissions test. With all of these assumptions of Volkswagen cheating the emissions testing does that question their ethical corporate responsibility?

It is not hard to see that the scandal would cause a horrid blow to VW’s image. Until the incident, VW had, like many other German companies, the reputation of “German engineering” (Robertson, 2013). However, instead of using that innovation to develop diesel-fueled cars compliant with U.S. standards, it decided to try to scam its way in the market. Not only did the company admit to having 11 million cars with software intended to cheat tests (Gates, Ewing, Russell & Watkins, 2017), it also plead guilty to “destroying evidence in an elaborate cover-up” (VW Admits Emissions Cheating and Cover-up, 2017); building further distrust among its consumers.

1) What is your assessment of the new process for managing priorities at Volkswagen of America? Are the criticisms justified? Is it an improvement over the old process?

The CBA itself did not force Ford to act unethically, their greed and their sole priority to avoid extra cost even if it meant the loss of a human life drove them to an unethical decision. Ford faced a simple problem, do they fix the Pinto or do they kill innocent people. Sadly, they preferred the money saving option, which was to ignore the defect and to pay compensates to effected families and loved ones. The company defended their decision using the CBA model as if they were legally exonerated from any penalties due to their actions. Fortunately, the jury did not see it as if their decision was justifiable even if the method to evaluate the decision

As settlement, investors will receive $245 million to settle the charges with the Global Crossing executives’ fraud. In addition, according to the Ohio general office, former employees will receive $79 million for the loss of the purchase of company stock for their pension and retirement plans. $195 million will

After the announcement of the emissions scandal, Volkswagen is fumbling to figure out how to pick up the broken pieces of its brand image. Volkswagen had ruined the trust of all of its stakeholders. The announcement of the cheated emissions test has crushed Volkswagen’s stock price by almost 20%, which implies an almost $27 billion loss in market value. This scandal required the recall of 11 million cars with an expected cost of over $25 billion in penalty fees and the cost to fix recalled vehicles. This scandal of much higher than stated emissions directly contradicted with Volkswagen’s branding of a clean emission diesel vehicle. It could not have gotten much counter-intuitive. Volkswagen has spent 45% of its television advertising budget directly focusing on Volkswagen’s products’ low emissions. That marketing budget is now valueless. However, most importantly, Volkswagen upset its customer base. The owners of these recalled vehicles not only feel lied to and betrayed, they have to take time to bring their recalled car in to get fixed. But, one of the biggest complaints is the loss of resale value totalling nearly $5000. This may disrupt repeat customers and