700261 Csr | Business Practices Assessment Answers

Criticizing Volkswagen’s Business practices

Volkswagen has been seen in the middle of a corporate scandal due to the violations they committed through their defeat devices, where they failed to reveal the true nature of the emissions from their diesel cars. They tried to comply with the U.S emission standards using defeat devices, which cleans the exhaust. The devices were fitted during testing, and when driving, the devices were shut off to improve fuel performance and consumption. Consequently, the shutting down of the device led to emissions of up to 40 times more Nitrogen oxide than the recommended amount (Evarts, 2018). This level of emissions can cause a lot of environmental damage. The German-based company faced criticism after using monkeys in its funded tests to brand their vehicles as healthy and safe. They knowingly mislead customers to believe that diesel engines are cleaner than other engines. Further testing showed that fourteen different types of cars had the duping software. As a result, Volkswagen had to recall over 11 Million cars due to the software and engines which were deemed faulty. In Europe alone 10million cars were recalled, other cars are scantily spread in Africa and Asia which is not a significant number. Volkswagen has been taking appropriate steps to correct the faults since the scandal, at the same time trying to re-create their image (McWilliams et.al, 2016, p.1-18).

Ethical theory breached by Volkswagen

Kantianism is an ethical theory which, when defined loosely means an ethical duty to treat people with equal respect. People ought to be treated as autonomous and as equally capable. People should not be treated as a means to an end but as an end. Complexity can set in when it comes to determining rights because the scope of rights is involved as well as the justification of rights. It also involves determining the rights while resolving conflicts. Kantian ethics require that a business has to sustain the business ethics required to sustain the market. Volkswagen falsified the theory by trying to cheat on the levels of emissions. When they directly lied to their customers, employees, shareholders, and consumers, Volkswagen was immoral to Kantian ethics (Birch et.al, 2017 p. 85). They made people believe in images and facts which were not the truth, even to the extent of carrying out funded tests. They kept making shareholders buy shares and stock, while the customers kept buying cars. The employees kept working in the company building the damaged cars, while on the other hand, the dealers kept selling the cars. The Volkswagen company kept using all these people to keep their sales and business going; they disregarded the decisions of all the parties involved.

Importance of addressing Social and Environmental impacts

Multinational corporations such as Volkswagen are continuously addressing their social and environmental impacts because it leads to socially desirable outcomes. Consequently, this helps them in increasing sales while promoting their reputation, image of the brand and better employee and stakeholder engagement. For corporations to thrive, the client preferences matter a lot. Better risk management, employee satisfaction, and more engaged employees tend to spread the business name positively. On the other hand, cheating does not go a long way as consumers will find an alternative eventually (Haski-Leventhal, 2018.p. 53). Therefore, addressing social and environmental factors is key to improving sales while creating good relations with all the stakeholders.

Recommendations

Volkswagen can address their social and environmental impacts by going through an extra expense and take more time in building an engine which is cleaner. Volkswagen needs to be more transparent and honest to the shareholders, about the future and current cars, while producing cars which are environmentally safe (Haski-Leventhal, 2018).

Conclusion

Volkswagen could avoid the scandal if they made their decisions based on ethics rather than the need to drive sales and maximize profits. They sacrificed the image of their company and their integrity because of something which would have quickly been dealt with by just making the right decisions. The decisions they made, have cost them a lot, and ruined their image now and a few more years to come. They lost trust in investors and government, and also trust from the consumers (Evarts, 2018). However, Volkswagen can move past the unfortunate scandal. All they need to do is increase transparency while adhering to environmental requirements to the later. Volkswagen did a sweep on top employees after the scandal, and this is an excellent place to start in rebuilding trust.

Bibliography

Birch, D.K., Peacock, M., Wellen, R., Hossein, C., Scott, S. and Salazar, A., 2017. Business and Society: A Critical Introduction. Zed Books Ltd.

Dupré, S., 2005. Talk the walk: Advancing sustainable lifestyles through marketing and communications. UNEP/Earthprint.

Egbeleke, A., From Csr To The Ladders Of Corporate Responsibilities And Sustainability (Crs) Taxonomy. Ebookpartnership. Com.

Evarts, C.E, (2018, April 18) VW Brought bavck 300000 cars after its diseslgate scandal –and now they are sitting in 37 parking lots around the US. Business Insyder. Accessed at https://www.businessinsider.com/vw-bought-back-300000-cars-after-its-dieselgate-scandal-and-now-theyre-sitting-in-37-parking-lots-around-the-us-2018-4?IR=T

Haski-Leventhal, D., 2018. Strategic Corporate Social Responsibility: Tools and Theories for Responsible Management. SAGE.

McWilliams, A., Siegel, D.S. and Wright, P.M., 2016. Corporate social responsibility: Strategic implications. Journal of management studies, 43(1), pp.1-18.

Rasche, A., De Bakker, F.G. and Moon, J., 2013. Complete and partial organizing for corporate social responsibility. Journal of Business Ethics, 115(4), pp.651-663