The current business scenario is both having huge opportunities and challenges for the business organizations. This is due to the reason that the current business state of affairs is providing huge market opportunities for the business organizations and on the other hand, there are number of challenges that are also being faced by the contemporary business organizations. In the recent time, there are number of instances where the organizations came in to news for their unethical practices (Slade & Prinsloo, 2013). The industry that came in news for much number of times due to unethical business practices is the automobile industry. This industry is plagued with scandals and issues in the recent time.
The company that is infamous for their emission scandal in the recent time is Volkswagen. They are the second largest automobile company in the world just after Toyota in terms of sales volume. It is also reported that currently Volkswagen is having their market presence in more than 150 countries and having manufacturing facilities in 15 countries (Volkswagenag.com, 2018). Thus they are one of the leading names in the global automobile market. Volkswagen was founded in 1937 in Germany during the regime of Adolf Hitler with the objective of manufacturing affordable cars for mass markets. Currently, they are having vehicles ranging from vans and SUVs to sedans and hatchbacks including the performance models. Their product range varies in different countries on the basis on local trend and demand. However, the major setback suffered by them is in the year 2015 when the emission scandal publicized (Barrett et al., 2015). This led to fall in their share price, market share and lawsuits against their top brasses.
This essay will discuss about the different major news articles regarding the emission scandal involving Volkswagen. In addition, this essay will also critically analyze the incident based on the information in the news articles. The involved stakeholders will also be identified in this essay. Moreover, the identified ethical issues will be gauged against the ethical theories and the probable consequences of this issue will also be discussed.
According to the news report published on bbc.com, the main issue of the emission scandal emerged due to the defeat devices set by Volkswagen in their diesel cars sold in the market of the United States. According to the report, the defeat devices were uses to pass the stringent emission test of Environmental protection agency (bbc.com, 2018). It is also reported that more than 11 million cars were being affected by this. It is reported that the major stakeholders that are involved in this case are the top level management of the global team and also some of the board members from the sales and marketing department. It is reported that the process of installing the defeat devices was first initiated by the top level management in order to easily get the access to the diesel car market of the United States. According to the article, the response from the Volkswagen was not immediate and they admitted the scandal only after the issue became much serious (bbc.com, 2018). The first response from them came through their top boss of the American region Michael Horn and the chief executive of Volkswagen Martin Winterkorn. They admitted that Volkswagen had broken the trust of the customers and the public in general. In addition, Martin Winterkorn also resigned from his job due to the emergence of the scandal. It is also reported that Christian Klingler, head of sales and marketing is also leaving the company as the consequences of the scandal (bbc.com, 2018).
This article is being selected due to the reason that bbc is one of the leading forces in the news reporting across the world. In addition they are also one of the oldest names in this sector. Reports of bbc.com are being considered as reliable and authentic in different fields and there are no instances where they are accused for any fake news. Thus this article is being selected.
Another major news article published in relation to the emission scandal of Volkswagen is one firtune.com. This article described the incident in more elaborative manner compared to what bbc.com reported. However, the focus of this report is mainly on the accused officials who are involved in this incident and their consequences. According to this article, the response from the Volkswagen at the first stage was negative due to the reason that they continuously disagreed with the scandal and even tried to cover up the story (fortune.com, 2018). However, in the later stage, they finally agree but delegated the entire responsibility on a group of engineers. According to the statement of Volkswagen, it is the doings of some rogue engineers who have done the scandal and no top executives are involved in this case. This first name that came up is of Oliver Schmidt, engineer with Volkswagen. He was accused in this scandal and was given the imprisonment of 7 years (fortune.com, 2018).
Moreover, according to the report, even though the CEO of Volkswagen Martin WinterKorn was not directly accused in this incident but his name was emerged in the case and it was concluded that the engineers involved in installing the defeat devices was instructed by the top level management. Another stakeholder involved in this case was James Liang whose name also emerged in this report and he was also acted as engineer and was given imprisonment of 40 months. It is also stated that the current legal procedures are going towards the top level management of Volkswagen as well as to their associate brands. The major difference between the article of bbc.com and fortune.com is focused area. While bbc.com reported mainly about the timeline of the entire incident, fortue.com reported more towards the stakeholders involved (fortune.com, 2018).
On the other hand, the similarities between the two articles includes conclusion that Volkswagen tried to cover up the case in the initial stage. In addition, both the articles reported that Volkswagen even tried to pass on the responsibility to their engineers in order to safeguard their top officials. Fortune.com is selected due to the reason that fortune is considered as benchmark for measuring the standards of the companies such as the index of Fortune 100, fortune 500. Thus, their article can be considered as reliable and authentic.
According to the report on thesun.co.uk, the former CEO of Volkswagen is being charged with conspiracy and wire fraud by the United States regulatory bodies. In addition, it is also reported that another five top officials of Volkswagen are also being charged. Thus, according to this article, the top officials are involved in this case and Volkswagen also agreed to pay US$ 4.3bn as penalties (Harper, 2018). The major difference between this article and the other two is reporting of accusations against the top officials. While the other two have not reported of charge against top officials, the sun reported it. On the other hand, the major similarity between all the three articles is that CEO of Volkswagen is accused as key stakeholder in this case. This article is chosen due to the reason that it is considered as one of the leading brand in news reporting in the United Kingdom. In addition, they are also one of the very first newspapers who came up with the scandal of Volkswagen.
According to utilitarianism theory of ethics, if any act cause benefits for maximum people then the act can be termed as ethical (Moehler, 2013). Thus, in accordance to this theory, act of Volkswagen is unethical due to the act that it caused harm to major number of stakeholders including the environment. According to utilitarianism ethics, emission scandal of Volkswagen is unethical (KORTENK AMP & Moore, 2014). The consequences faced by Volkswagen from this issue are financial loss in terms of fall of share price and payment of huge penalties. They also faced issues in maintaining their goodwill, which affected their global business. Their market share got reduced by huge margin. In addition, they faced termination of top officials along with attracting number of lawsuits against them (Krall & Peng, 2015).
This issue has to be resolved due to the reason that according to the utilitarianism ethics, this issue will cause harm for maximum stakeholders and it will further degrade the brand value of Volkswagen. In addition, the more effectively and swiftly this issue will be resolved; the less will be the further damage for Volkswagen in the global market.
Conclusion
Thus it can be concluded that Volkswagen faced a major ethical issue due to the emission scandal. This essay discussed about the major three news articles that reported about the emission scandal of Volkswagen. It is identified that all the three news articles reported that the top executives of Volkswagen are involved in this case and they tried to cover up the matter. This essay also concluded that according to the utilitarianism ethical theory, the scandal of Volkswagen is unethical in nature and it should be mitigated properly. The consequences faced by Volkswagen are also discussed in this essay.
Reference
Barrett, S. R., Speth, R. L., Eastham, S. D., Dedoussi, I. C., Ashok, A., Malina, R., & Keith, D. W. (2015). Impact of the Volkswagen emissions control defeat device on US public health. Environmental Research Letters, 10(11), 114005.
bbc.com. (2018). Volkswagen: The scandal explained. Retrieved from https://www.bbc.com/news/business-34324772
fortune.com. (2018). https://fortune.com. Retrieved from https://fortune.com/2018/02/06/volkswagen-vw-emissions-scandal-penalties/
Harper, P. (2018). What was the Volkswagen emissions scandal and what was the car giant fined?. Retrieved from https://www.thesun.co.uk/motors/4002356/volkswagen-emissions-scandal-defeat-device-fix-limp-mode-vw-scandal/
KORTENK AMP, K. V., & Moore, C. F. (2014). Ethics under uncertainty: the morality and appropriateness of utilitarianism when outcomes are uncertain. The American journal of psychology, 127(3), 367-382.
Krall, J. R., & Peng, R. D. (2015). The Volkswagen scandal: Deception, driving and deaths. Significance, 12(6), 12-15.
Moehler, M. (2013). Contractarian ethics and Harsanyi’s two justifications of utilitarianism. Politics, Philosophy & Economics, 12(1), 24-47.
Slade, S., & Prinsloo, P. (2013). Learning analytics: Ethical issues and dilemmas. American Behavioral Scientist, 57(10), 1510-1529.
Volkswagenag.com. (2018). Volkswagen Group Homepage. Retrieved from https://www.volkswagenag.com/
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