The Volkswagen Emission Scandal
Discuss about the Ethics Codes And Codes Of Conduct As Tools.
Technology is considered to be an important asset as it provides human beings the leisure of doing work in an easy manner as well as saves time. But if looked in an opposite direction, technology can create issues and problems for human beings if it is used in a wrong way. Similar is the case of Volkswagen Emission Scandal. In the year 2016, the environment Protection of Agency found out that Volkswagen cars were emitting pollution and creating harm to the environment. Volkswagen is a well-known company in car manufacturing field. When come to talk about the ethical failure of any company, this case of Volkswagen is definitely the best example to be talked about. Ethical dilemma in any business is one of the situations where confusion is one of the most important things that play the role. Organizational managers or decision makers are confused between the two or three decisions to be taken and in the end takes the unethical moves which are harmful for everybody.
The German company “Volkswagen” is one of the leading companies in the world as they are well known for their designs and the engines. EPA found a software in the engine of the cars attached which used to control the nitrogen oxide emission at the time of the test in the laboratory and those cars were approved of going on the roads. While actually, the cars used to release 40 times more nitrogen oxide and that started creating pollution in the environment. VW had this belief that the production of the diesel cars would be great as it was just the few percentage of the US market until 2007 (Hotten, 2015). There were cars like Beetle, Audi, Passat and Golf etc. which were emitting pollution in the environment. EPA issued the notice for the violation of the “Clean Car Act” and VW also agreed that about 11 million cars all over the world had undergone that software. Earlier from this discrepancy, VW people said that this ethical issue was caused due to the technical mistake and later they agreed that it was the fault of the higher authorities who took this decision to earn short term profit. Volkswagen as a company had to pay 10 billion dollars to the consumers of United States in the form of compensation, dollar 2.7 billion as remediation fund and for vehicle clear projects they had to pay 2 Billion Dollar to EPA (Vlasic, 2017). 3 liter deiseal engine was attached in the cars like Porsche and Audi. Volkswagen was also charged for this. However, it was denied by VW that 10,000 automobiles were affected due to this scandal. Due to this unethical act of VW, the customer’s trust was broken and they no longer wanted to buy VW cars. An organization should maintain its image along with thinking about its customers too. The organization in which people have good minds would never ever think of hurt or betray their customers. A good business company’s tagline should be “customers first”. Later in the news about Volkswagen, it was found out that senior executives and the CEO was involved in this fraud (Trovey, 2018).
Kantianism and the Volkswagen Scandal
Kantian theory for founded by Emmanuel Kant (Delk, 2013). According to Kant, all the actions should be performed in such a way that it promoted growth and not any kind of downfall. For every organization, growth is the one and only aim which takes the company towards the success. This growth should be up to the level of competing with the competitors (Dierksmeier, 2013). In the case of Volkswagen, the company made profit for the short term by letting this technology stop the emission at the time of testing. By doing that Volkswagen sold a lot of cars in that year and gained the award of becoming the second largest selling company. Yet, morally they were wrong. Exploiting the environment was an unethical thing to do. Consumers have the full right to know about the real status of the cars before they buy it. Hence, the customers were also betrayed. This was also immoral. The higher authorities knew about the scandal and in fact some of them too the decision, but no one went against that decision and let the company do whatever was being done. The technical managers who were involved in the development of the software which stops the emission while testing was also at fault. All those people who were involved in this scandal were at fault.
This theory suggests that a huge number of people should be affected in a good way when any act is done. Utility here can be taken as the good impact of outcome that is performed by the company (Riley, 2010). According to Jeremy and John Stuart who were also the founders of this theory, utilitarianism is actually the amount of kindness and the goodness done in any kind of action instead of creating any painfulness for others. VW had its own interest in mind and polluted the environment which was not at all good for others and also for earth. The organization had this idea of negative impacts this act was going to create yet they went ahead with the act (Eggleston, 2012). On the whole, VW lost its image in the eyes of the customers when they denied the accusations and they also did not with complete heart apologized to the customers. The concept of this theory do not apply in this case as nothing positive came out of this act. This theory also advices the punishment in order to not repeat this task again. The stock of the company came down and the company had to incur a huge loss in the end.
Utilitarianism and the Volkswagen Scandal
Pros: In everyone’s opinion, absolutely nothing positive came out of this act. The company gained a short-term profit by this act but later it all went to vain. Hence, it can be said that nothing was positive.
Cons: As it was an unethical act, there were surely cons there which are to be discussed below.
- Long term loss to the company as VW had to bear too much loss in return of this scandal.
- VW lost its customers to betrayal and it was analyzed that the selling became less after this scandal.
- Stakeholders of the company were also accused of being with the company. Especially the external stakeholders.
- Financial loss of the company was done(Selin, 2015).
- Technology was used in the wrong way.
- Image of the company went down.
For the avoidance of such unethical issues, there are some points which should be kept in mind. They are:
- The vision statement should always be analyzed as to if it will help the organization in future or not. After then the actions should be taken so that the leaders and the managers would have the idea about the move they are going to make(Donaldson & Fafaliou, 2003).
- Organization should follow the code of ethics which are defined by the organization itself. This code of ethics should be able to clearly state the need of the organization. Also, they should mention the consequences of the unethical act.
- There should be an ethics officer appointed in every company so as to take care of the ethical acts going on in the company. This officer will make sure that the functions are being done ethically. Such type of officers usually foresees if any unethical move is about to be taken and if the strategy for such acts is going on(Zhou, 2016).
- In many of the organization, people know the importance of the virtue. All the ethical moves should be rewarded in order to influence people to always focus on performing ethically rather than allying the mind in doing something unethical.
- Every organization should not just monitor the behavior of the employee but also go deep in to the fact as to how an employee percepts the values of the organization.
- Ethics always comes in the way of leadership. It is the issue of leadership actually. Leadership always sets the rules, tone and standards of the company. Problems arise when the leaders themselves are diverted form the issues in the company. If the leaders pay attention to what is going on, the ethical dilemmas will be rare(Gilman, 2005).
- Ethics program and the trainings should be conducted in each and every organization to make people realize the fact that such kind of things are important for the organizations and employees will also feel the importance of ethical moves. After the turning, it would be easy to analyze the issues.
Conclusion
From the study of this scandal where Volkswagen manufacturers attached the software for the low emission of pollution at the tie of laboratory testing was done, it was clear that this unethical move did not do goodness to anyone. When the analysis of this scandal is done in terms of the ethical theories, it was proved that this act was not at all good and it harmed the organization itself. The ethical dilemma that was faced by the leaders of the company is discussed in this report. However, the higher authorities were the only people who took this decision and did wrong with the customers. There are some theories like Kantianism and Utilitarianism are discussed in terms of this VW emission scandal case. This is one of the most popular cases when ICT comes into picture. There is a thin line within the decision making, leadership and the ethics. All should go hand in hand in order to take the organization to a certain growth. This report also discusses the recommendations as to how a company can work ethically with the positives and the negatives of this act.
References
KarimiJahromi, P. S. (2016, July). iosrjournals. Retrieved January 23, 2018, from iosrjournals.org: https://www.iosrjournals.org/iosr-jhss/papers/Vol.%2021%20Issue7/Version-4/D2107043439.pdf
Donaldson, J., & Fafaliou, I. (2003). Business ethics, corporate social responsibility and corporate governance: a review and summary critique. European Research Studies, 6(1-2).
Zhou, A. (2016). Analysis of the Volkswagen Scandal Possible Solutions for Recovery. Retrieved May 10, 2018, from gps.ucsd.edu: https://gps.ucsd.edu/_files/faculty/gourevitch/gourevitch_cs_zhou.pdf
Gilman, S. C. (2005). ETHICS CODES AND CODES OF CONDUCT AS TOOLS FOR PROMOTING AN ETHICAL AND PROFESSIONAL PUBLIC SERVICE: Comparative Successes and Lessons. Retrieved May 10, 2018, from oecd.org: https://www.oecd.org/mena/governance/35521418.pdf
Hotten, R. (2015). Volkswagen: The scandal explained. Retrieved May 10, 2018, from bbc.com: https://www.bbc.com/news/business-34324772
Vlasic, B. (2017). Volkswagen Engineer Gets Prison in Diesel Cheating Case. Retrieved May 10, 2018, from nytimes.com: https://www.nytimes.com/2017/08/25/business/volkswagen-engineer-prison-diesel-cheating.html
Trovey, A. (2018). VW compensation case to start with carmaker demanding costs from plaintiffs’ lawyers. Retrieved May 10, 2018, from telegraph.co.uk: https://www.telegraph.co.uk/business/2018/03/26/vw-compensation-case-start-carmaker-demanding-costs-plaintiffs/
Riley, J. (2010). Mill’s extraordinary utilitarian moral theory. politics,philosophy & economics, 9(1), 67-116.
Eggleston, B. (2012). Utilitarianism. Encyclopedia of Applied Ethics, 4, 452-458.
Dierksmeier, C. (2013). Kant on Virtue. Journal of Business Ethics, 113(4).
Delk, E. (2013). A Kantian Ethical Analysis of Preimplantation Genetic Diagnosis. CedarEthics: A Journal of Critical Thinking in Bioethics, 12(2).
Selin, N. E. (2015). One of the biggest consequences of the Volkswagen diesel scandal. Retrieved May 10, 2018, from Fortune.com: https://fortune.com/2015/09/30/volkswagen-diesel-scandal-consequences/
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