Short description on ethical dilemma of Volkswagen

With increasing volatility of business environment, occurring chance of unethical actions increase because competitive profitability directly drives internal stakeholders. Volkswagen as a car manufacturer was trapped and it has committed unethical practises by negatively affecting environment. In 2015, Volkswagen was caught red handed while releasing and emitting toxic gases by Environmental Protection Agency (EPA) (BBC, 2015). 

Volkswagen was being accused by EPA on modifying software and it was found that there are certain irregularities where Volkswagen engine emits nitrogen oxide pollutants more than 40 times than what is allowed in US. Volkswagen has violated environmental laws and

EPA has power to impose penalty and fines of up to 37500 dollars for every vehicle, which broke standards (Guardian, 2015). Volkswagen has issued a recalling of 482000 cars in US and then halted its sales, which affected VW Jetta, Audi A3, Golf, and Passat diesel models.

Volkswagen has cheated emission tests by creating cars appear far less polluting than actually they are. German court for fraud over the Volkswagen, 2015 diesel scandal have become first former board members to receive sentence and it shocked the overall industry for upcoming 50 years (Guardian, 2015). 

Reflective Response To Volkswagen Ethical Dilemma

I think the issue or the scandal is wholly responsible for spoiling the environment where its internal stakeholders such as CEO in charge, supervisory board members and also the software engineers who were involved in developing cheating devices. Practising professional ethics comes directly from small ethical decision made in personal life through strengthening the decision making. Also, Volkswagen have not only disregarded EPA laws but also invented software to avoid it (BBC, 2015). 

It is important to understand that there is going back once penalties have been imposed and Volkswagen is found red-handed. I would suggest the Volkswagen or even if it is my company to focus on what has happened beneath and what further steps can minimise its impact on customer and recreate Volkswagen brand reputation. It is expected that each internal stakeholder complies with their duties such as software engineers are expected to use the appropriate skills for overall betterment of world, which they have used for fraud and damage to environment (Yuan, Chia, and Gosling, 2023).

R&D mechanical engineers should come with greener technology for cars, which can be electric enabling and no emission. Also, external stakeholder: EPA members should test continuously or in advance for compliances in producing cars. Also, introducing of code of ethical conduct for software engineers. Creating awareness regarding seriousness of testing procedures. Also, there must be increased interference or involvement of independent 3rd party for environment related certifications (Häyry, 2021).

I personally as a customer will not buy any of the Volkswagen car in future because of its poor brand image. I as an investor will not invest in such an unethical practises company and its profitability is not sustainable. In developing ethical mindset, I would study the wrong doings of company`s senior executive just to pace up manufacturing and meet the target sales. I would have responded in such a manner that existing internal stakeholders.

VWs have adopted steps in restoring customer trusts. They haves recalled VW vehicles in market and company face loss of Goodwill for upcoming years (Johnson, 2022). I will respond in the above pattern because I don’t want to cheated by any other organization or employee in future. Strict actions must be undertaken in such violation ethically so no other companies would think of doing it. On the contrary, if the investors or customers would not act in such a way then these companies would be encouraged to continue its scams and perform unethical operations (Garon, 2023). 

Some of the ethical codes, laws, and personal ethics applies to this situation are violation of EPA laws, data privacy, discrimination, sexual harassment, false accounting, lack of honesty, lack of transparency, and nepotism. Volkswagen kept telling false performance of company in regards to comply with environmental laws. Such fraudulent activities not only violate ethical standards but it has also violated regulations in Europe and US.

Volkswagen compromised professionalism and integrity through engaging unethical and illegal behaviour. In this way, building and creating brand image is quite difficult in long term and it can be rebuilt only by contributing more towards environmental sustainability. 

One action that must be chosen over another one is not argue the imposition of the penalties and laws imposed but there is a need to focus on company`s working and improve stakeholder`s view for corporate social responsibility. Decision of any organization to deceive and then commit fraud was not at all profitable because corporation have violated ethical principles through focusing on their products, improving quality, and then conquering devotion towards the company through maintaining best relations with both creditors and suppliers.

Cultural background and my bringing up will definitely affect choosing any ethical aspects. Teaching from parents on speaking untruth and guiding towards trustful things whether I have a committed a mistake. Cultural background can directly affect ethical beliefs as honesty, fairness, and respect for elders is not considered in every culture but it closely tied to some of the cultural backgrounds. Culturally in narrative form, historic events, experience can directly shape one`s attitude towards community`s welfare, social justice, and remain aware towards environmentally.

Application of ethical frameworks

This part of the report will help to identify and then apply two relevant frameworks with this scenario. One relevant amongst all the approaches include Utilitarianism and virtue approach. 

I think the best approach is Utilitarianism because it is straightforward and also it is flexible in examining Volkswagen ethical decisions. Although I think utilitarianism lack objectives where companies are tending to expect a utility value out of their operations or even when they take corporate policies and decisions (Wright, Warren, and Snow, 2020).

On the basis of utilitarianism, it is seen that Volkswagen actions would be good or bad that are dependent on consequences. Volkswagen goal was to maximise the overall wealth of shareholders, which is the core aim of conducting business without considering any ethical implications. In this way, Volkswagen actions oppose utilitarian views, which might have severely affected from job loss, pay cuts, sales drop, damage in corporate reputation, stock devaluation and environmental pollution (Smart, 2020). 

On the basis of the utilitarianism, I think unethical actions of Volkswagen are unacceptable where greater good for the all the stakeholders. Fraud might have created utility for Volkswagen in short term in form of profitability and higher sales (Fowers et al., 2021). Utilitarianism seeks punishment if it leads to greater utility. Volkswagens deserves to be punished on the based on civil as well as criminal lawsuits that has been filed against to the company. It will discourage Volkswagen and other automobile manufacturers from involving in ethical concerns or violations in future (Slote, 2023). 

Virtue approach urges to pay off attention to contour communities as well as habits of the character that they encourage and also in still. It is not simply following certain moral rules and also learnings to apply them to any specific situation. Volkswagen has not complied to its ethical approach, which not only included being profitable but also followings ethical way of conducting business that could directly entrust customers.

In this way, it does not focus on full development of humanity through violating EPA rules and polluting air that might have caused respiratory issues to many common people. For example- it has violated certain ideal such as courage, honesty, generosity, fairness, self-controlling and also prudence (Yuan, Chia, and Gosling, 2023). R&D and engineering employees have certainly contributed to catastrophic decision, which are not at all driven by any factors of virtue approach. It led to pressure, rationalization, and opportunity for higher sales and higher profitability that has led to dangerous traid or the fraud triangle.   

From the conclusion point of view, critical lessons that any business can learn include ethical practises, accountability, and ethical business conducting. Key lesson is that there is a need to comply with people`s welfare and prioritise the sustainability concerns in long term. 

 

Top Management Samples

References 

BBC, 2015. Volkswagen: The scandal explained. Available on: https://www.bbc.com/news/business-34324772 [Accessed on: 07/07/2024]
Fowers, B.J., Carroll, J.S., Leonhardt, N.D. and Cokelet, B., 2021. The emerging science of virtue. Perspectives on Psychological Science, 16(1), pp.118-147.
Garon, J.M., 2023. Protecting Public Health Amidst Data Theft, Sludge, and Dark Patterns: Overcoming the Constitutional Barriers to Health Information Regulation. Akron L. Rev., 56, p.179.
Guardian, 2015. The Volkswagen emissions scandal explained. Available on: https://www.theguardian.com/business/ng-interactive/2015/sep/23/volkswagen-emissions-scandal-explained-diesel-cars [Accessed on: 07/07/2024]
Häyry, M., 2021. Just better utilitarianism. Cambridge Quarterly of Healthcare Ethics, 30(2), pp.343-367.
Johnson, A., 2022. Protection of Consumer, Employee, and the Environment. In Business, Society and Global Governance (pp. 153-193). Routledge.
Slote, M., 2023. Agent-based virtue ethics. In Philosophical Essays East and West: Agent-Based Virtue Ethics and other topics at the intersection of Chinese thought and Western analytic philosophy (pp. 83-95). Cham: Springer Nature Switzerland.
Smart, J.J.C., 2020. Utilitarianism and its applications. In New directions in ethics (pp. 24-41). Routledge.
Wright, J.C., Warren, M.T. and Snow, N.E., 2020. Understanding virtue: Theory and measurement. Oxford University Press.
Yuan, L., Chia, R. and Gosling, J., 2023. Confucian virtue ethics and ethical leadership in modern China. Journal of Business Ethics, 182(1), pp.119-133.