VW Emissions Scandal

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

| - Make sure that punishments are given to those involved directly and indirectly with the scandal- Press government to act on the case- Supporting the victims

“Every person is to be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God” (Romans 13:1). This verse provides the spiritual rule, that when followed, prevents many negative incidents and their consequences. However, the engineers broke this command and made conscious decisions to design, develop, and produce vehicles that violated established law. In fact, the emissions produced were, “…as much as 40 times what is allowed by the U.S. standard defined by the Clean Air Act” (Mercuri & Neumann, 2016, p. 24).

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

Volkswagon was caught cheating on their diesel emissions by a man named Daniel Carder and his small research team at West Virginia University in late 2012 through May 2013. The team consisted of a research professor, two graduate students, a faculty member and himself. Their team originally wanted to investigate emissions to help the diesel cars in Europe. There has been much data suggesting vehicles in Europe have high nitrogen oxides and dioxides. The goal was to look at emissions in the U.S. where the emission standards were very strict. It was thought that if the cars were found to be clean, then they could take the data results to Europe, and say “why can’t you do the same in Europe?” The small research team had been granted $50,000

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 September the world of car industry went upside down when the U.S. Environmental Protection Agency (EPA) revealed the car manufacturer company Volkswagen had installed a software on their cars to evade the emission of high pollution during the tests. Volkswagen was proven of violating the United States code title 42 chapter 85 Subchapter I Part A 7412 that specifies that any modification in a product that increases the emission of any air pollutant is considered dangerous and violates the Clean Air Act. Other than Volkswagen more companies are being suspects like Robert Bosch who is believed of being the developer of the device.

Volkswagen stunned the world on September 18, 2015 with its response to the U.S. Environmental Protection Agency's (EPA), see that Volkswagen's "clean diesel" vehicles were seen to abuse the Clean Air Act. In its response, the German automaker accepted that it had deliberately arranged its line of Turbocharged Direct Injection (TDI) diesel engines with a "defeat gadget" that was relied upon to "neglect, fail, or render out for the count parts of a vehicle's release control structure" in the midst of emission testing. Initial reports proposed around 500,000 Volkswagen diesel vehicles, indicate years 2009 through 2011, were impacted by the device. As the shock continued spreading out, the assessed number of vehicles affected created to 11 million

The people at the West Virginia had tested vehicles as well as the EPA (Patel). Volkswagen chose to include rout programming device to cheat the system to pass the testing laws. Volkswagen as a corporation was basically trying to cut the cost of engines to be built by limiting the NOx emission system that controls how much dirty chemicals that goes into the air (Patel).By the company putting this device in their cars they were trying to cut down the cost that they would have to spend, at the same time Volkswagen cars had better performance. The ethical question would be is it really worth it to CHOSE to overlook the laws to save money on cash (Patel). "We expected better from Volkswagen," said Cynthia Giles, the E.P.A's. colleague manager for the Office of Enforcement and Compliance. She called the automaker's activities "a danger to general health of our

Another internal challenge that Volkswagen faces would be changing its complicated company culture which is overly opaque and hierarchical. With many complex layers and processes (McHugh, 2015), this makes it hard for unethical practices to be discovered as seen by Volkswagen deliberately deceiving their consumers.

Volkswagen group sells passenger cars under Bentley, Bugatti, Lamborghini, Audi, Porsche, Seat, Škoda and of course Volkswagen itself and is one of the biggest car manufacturers in the World. Unfortunately in 2015 it emerged that Volkswagen was involved in unlawful practice regarding their diesel cars not meeting emission standards and how they tried to rectify this problem in an unlawful manner.

Over the years, the corporate world has been and continues to be plagued with high profile scandals and unethical business practices on the pretext of creating social and business values. For most global companies, corporate social responsibility and sustainability have become mere watchwords despite the fact they claim being their prominent company agendas. The reality is companies are too blind and ruthless to draw lessons from the past. Exxon’s Climate change controversy(1980’s), Nike’s sweatshop crisis (1990s) or even BP’s Deepwater oil spill (2010) are some of the most outrageous corporate scandals that shook the corporate world. Despite all these scandals, the recent Volkswagen’s emissions scandal (2015) is a clear indication that businesses will resort to any means to make money. These short-lived decisions have no doubt yet again created public cynicism in corporations and will continue to haunt their social accountability and responsibility. Volkswagon’s (VW) reputation, built up over decades, was in tatters overnight because of poor leadership vision and unethical business practices. Its emission scandal caught the corporate world gobsmacked and brought business ethics to the forefront and ripped into the stakeholder’s consciousness. What was supposed to be fuel efficient, eco-friendly people’s car turned out to be an environmental polluting monster, duping 11 million customers globally of their trust in the process. VW’s outrageous culture to mislead the

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

The Board took note of a lack of emphasis in the Marketing Plan on Volkswagen’s green technology, as this is one of the company’s greatest strengths. Volkswagen has made significant efforts to increase efficiency, and has created the world’s most fuel efficient 5-seat vehicle, the Polo. The Board emphasized the fact that green technology appeals to American consumers. The company has leveraged this in other parts of the world and has had success, and The Board felt strongly that by implementing the current Marketing Plan, the company would be missing out on highlighting an important aspect of the brand.