Volkswagen’s scandal started in 2015 when the United States Environmental Protection Agency (EPA) declared that the renowned manufacturer had installed a cheating device to evade Nitrous oxides (NOx) emission tests. As a result, these cars continued to pollute the air for seven years until 2015, when this misconduct was recognized. Since then, VW has faced massive lawsuits that have significantly destabilized the company’s social and economic well-being and that of its stakeholders. Moreover, different critics have stated that the company is anchored on a corrupted ethical culture both the primary and secondary levels. In fact, VW is slowly closing down the case and finding new ways of gaining back its reputable status. Nonetheless, the whole scandal could have been avoided if the company and its engineers had followed their codes of ethics or legal procedures. As such, if they reacted promptly, they could have saved the company’s image. Therefore, to reveal the effects of the scandal on the entire organization, it is imperative to evaluate VW’s situation in all approaches, including legal and ethical as well discuss the appropriate course of actions.
The Volkswagen’s case of 2015 exhibited that the company broke its ethical practices on the primary and secondary levels. The dilemma at the first stage is seen through VW’s engineers, who were the first to break the engineering code of ethics by installing a “defeat device” in the diesel engine vehicles. For seven years, the engineers at this company knowingly continued to compromise their moral obligations, kept silent about this atrocity, and exposed innocent people to nitrogen oxides (Patel 1). Notably, the adversities perpetrated by the engineers clearly show that VW’s culture is corrupted from its grassroots as its employees lived by the ideology that the end results justify the means of production.
The ethical dilemma facing VW at the secondary level is seen through the top management’s misconduct to the extent of breaking the regulatory policies of the Clean Air Act in America. Due to this law, America has fewer diesel engine cars since they emit more than 10-40 times more nitrogen oxides in the atmosphere than those that use petrol (Patel 1). While the managers in VW knew all about this policy, they went ahead to break them an adversity which resulted in damaged trust within regulatory agencies, the customers, employees, environmental standards, and its economic stability.
Being a large company, Volkswagen has many stakeholders whose interests were significantly affected by this scandal. The first stakeholders were the customers with their primary interest in acquiring their preferred cars that could fulfill their comfort and desires (Ahmed 1). However, the scandal affected their loyalty as most were embarrassed and angered for being victims of such intense cheating. The employees at VW main interest were to have a job where they could work in a safe and ethical culture. After the scandal, they were labeled as unethical workers who are now faced with recurrent investigations due to the misdeeds of their colleagues. Dealers worked with VW to acquire a reputable brand that translated to good business deals (Hotten 1). However, the scandal tarnished VW’s prestigious name, leading to remarkable losses experienced by the dealers involved with the company.
Shareholders’ interests of investing and maximizing the profits at VW faced different consequences as they lost substantial equities and are now confronted with intense lawsuits for agreeing to manufacture a cheating automobile. The top management core purpose of operating a reputable business bore negative results as most of them lost their jobs while the remaining few were under the intense pressure of living up to the required corporate standard (Hotten 1). The environmental regulators, in this case, also expected VW to produce desired cars that upheld environmental sustainability. Instead, the U.S. atmosphere saw increased toxicity levels up to 40 times than the required air standards in this country.
To resolve this crisis, an engineer can result to fixing all the nine affected brands of diesel engine Volkswagen models to reach the required clean air standards in America. However, this step requires truthful clarification and identification of the types that need fixing, their repairing processes, and the time taken in each session for up to date new evidence keeps arising that more VW brands do not meet the global standard of nitrogen oxides emissions. The clarification of this fact has been essential since fixing each model requires the use of a different procedure. For instance, the vehicles with a 2.1 or 2.0-liter engine only need a software update to match up with the pollution control regulations, a procedure that takes about 30 minutes (Holder 1). On the other hand, larger vehicles with a 6.0-liter engine undergo a practical process, which takes at least one hour, with engineers installing a wire mesh near the air filter to help reduce the number of nitrogen oxides emissions when a person is driving.
Mostly, the individuals required to acquire this information are the customers, regulatory authorities, all the dedicated engineers, and car dealers. In fact, the Environmental Protection Agency (EPA), vehicle owners, and state transport authorities can help discover all the VW vehicles with air pollution problems (Holder 1). The EPA can conduct a thorough test on all the VW vehicles, provide a list, and then give it to the organization for posting on its website, while the transport authorities can enforce law on vehicle owners who refuse to adhere to the company’s recall
Engineers involved in this process should ensure to adhere to the fundamental engineering canons of honesty and integrity throughout the repair process. In this case, the engineer is expected to uphold integrity by being a faithful trustee and agent to the VW Company. Therefore, before the engineer can embark on any job, he or she will ensure there is a consensus among parties as per the provided relevant information in the statements, facts, and reports of the existing problems and processes that will be taken to rectify the problem (Trope and Ressler 29). Another fundamental canon that an engineer in this case, will adhere to is that of honesty by avoiding misrepresentation or omission of facts in the VW repairing decision.
Engineers with honesty and integrity are allowed by the engineering code of ethics to undertake a procedure that upholds the public interest and creates auto motors that adhere to sustainable environmental development initiatives (Trope and Ressler 29). In such a case, it is impossible to experience a conflict of interest as the engineering codes of ethics allow personnel who abide by the provided canons to design and repair environment-friendly passenger automobiles.
In essence, the engineering code of ethics partly encompasses the first ethical dilemma facing VW as it addresses the engineers in this organization. However, on the secondary level, directors and top managers should ensure that the agreed business culture promotes legality and morality within an organization. In fact, to exhibit business morality, VW senior officials should nurture a utilitarian culture amongst their workers and the entire team (O’Dwyer 2). Henceforth, every business approach in this organization will be preceded by a consistent emphasis on the greater good of society. Therefore, the high performance and great sustainability cars produced will have positive impacts on the society, thus leading to a larger volume of sales for the VW. By using this approach, VW will be considered morally upright since the firm will reconcile its previous acts with acceptable business values meant to benefit the people.
On a legal approach, Volkswagen ought to take social responsibilities more seriously (O’Dwyer 3). Being socially responsible means that the organization should come out and take accountability for its wrongdoings, recall all the wrongly designed vehicles, and compensate the affected clients and stakeholders as required. Notably, this is the only approach that VW can use to regain its corporate values since this is the best way of showing that the organization recognized its mistakes and amidst other existing business plans, the transparency remains the firm’s top priority.
Considerably, Volkswagen could still be on its feet if it had first taken certain reasonable courses of actions. The company’s first course of action would have taken accountability for all its actions by publicly stating the problem at hand, stopping all its business activities, and recalling all the default vehicles for proper fixing. In addition, the organization could have reacted by providing a temporary resolution to all its clients by inserting the selective catalytic reduction technology system to ease the problem (Brunning 1). The third course of action would have been to provide a long-term resolution of either reprograming the engine software or installing a wire mesh near the air filters to reduce the amount of nitrogen oxides emissions released into the air.
Now that VW has lost its credibility with most of its clients, the firm requires establishing new courses of actions. First, it can consider rebranding and restarting operations under a new name (Zhou 11). The purpose of this step is to improve the company’s brand image in the sense that the new firm will be smaller and more efficient in operating. Secondly, VW can partner with other independently verified agencies to rebuild the confidence the company once had with its trusted clients. However, the firms that VW intends to venture with should be at the forefront of campaigning for a sustainable future so that the tarnished reputation of Volkswagen can change through depicting the organization as a renewed company. Its third course of action can be posting a bond to regain the trust of the public, a step that assures the public that the company has resolved to change and no further implications can occur (Zhou 14). With the three approaches, Volkswagen is assured of regaining its credibility ones again and becoming the leading global automobile operator in the world.
The first possible course of action was the most justified step that Volkswagen could have taken. The reason being that recalling all their vehicles and closing down all their other business priorities could have shown that the organization has taken full accountability for their actions (O’Dwyer 3). Moreover, by so doing, VW would have shown the world that the entire corporation did not agree upon the “defeat device.” Instead, only the involved personnel would still be answering to the charges of violating the Clean Air Act in America. Recalling all the default vehicles and compensating the stakeholders involved in this catastrophe would have shown that this organization is socially responsible and upholds the virtue of maintaining a sustainable environment globally.
Nonetheless, this approach could have resulted in severe financial setbacks for Volkswagen, considering that all their businesses would have closed down and they would be compensating large amounts of money even for vehicles whose value had depreciated. However, Volkswagen’s reputation could still be intact as people could view the organization as one built on integrity and a firm that cares for the benefit of the citizens. Although VW’s economic state would have been shaken, it is clear that its reputation would still be intact to date. As such, the organization is almost collapsing since its public trust has dwindled substantially alongside its economic well-being.
Apparently, the above discussion has shown that VW broke its primary ethical practices through its engineers, while the company’s top management did so at the secondary level. As a result, all its stakeholders’ interests, including the customers, dealers, shareholders, employees, senior managers, and the environmental regulators, became negatively affected. With the repair process underway, engineers involved should ensure to uphold truthfulness and integrity to promote a sustainable future. The company should also become socially responsible and develop a business culture founded on moral grounds. In addition, the company should consider rebranding, getting into a joint venture, or posting a bond to show its credibility. However, it is crucial to understand that this scandal could have been avoided if VW had gone public with its problem, provided a temporary solution, or recalled all its vehicles for the provision of a long-term resolution procedure.
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Brunning Andy. “The Chemistry of Vehicle Emissions Reduction & The Volkswagen Scandal.” Compound Interest, http://www.compoundchem.com/2015/09/30/vehicle-emissions/. Accessed November 18, 2016.
Holder, Jim. “VW Emissions Scandal: Nine VW Vehicles have False CO2 Ratings.” Autocar, http://www.autocar.co.uk/car-news/industry/vw-emissions-scandal-nine-vw-vehicles-have-false-co2-ratings. Accessed on November 18, 2016.
Hotten, Russell. “Volkswagen: The Scandal Explained.” BBC News, http://www.bbc.com/news/business-34324772. Accessed November 18, 2015.
O’Dwyer, Kate. “Utilitarianism: Protection for Volkswagen’s Immoral, but Legal, Emissions Cheat?” Corporate Responsibility Network, 2016, pp. 1-4.
Patel, Prachi. “Engineers, Ethics and the VW Scandal.” IEEE Spectrum, http://spectrum.ieee.org/cars-that-think/at-work/education/vw-scandal-shocking-but-not-surprising-ethicists-say. Accessed November 18, 2015.
Trope, Roland, and Ressler, Eugene. “Mettle Fatigue: VW’s Single-Point of Failure Ethics.” IEEE Computer and Reliability Societies, 2015, pp. 12-30.
Zhou, Angie. “Analysis of the Volkswagen Scandal Possible Solutions for Recovery: UCSD – GPS Case 16 – 12.” School of Global Policy and Strategy, 2016, pp. 1-17.