Ethical Strategy Of Volkswagen

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In this article, written by Darden professor, Luann Lynch, Volkswagen’s determination to position its diesel products in a U.S. market, where only five percent of market was diesel, was too alluring for a company whose lofty goal, under then CEO Martin Winterkorn, was to be the world’s largest seller of automobiles. The U.S. market was viewed as neglected, making it an excellent market for growth for Volkswagen. Volkswagen’s strategy was to position their product in the market as a solution promoting environmental sustainability, then utilize a sense-of-mission-marketing to aid the company in defining their product in social terms, rather than in product terms, to appeal to their target markets (Armstrong & Kotler, 2017). Volkswagen could have been well on its way to dominate the world car market if it was not for the corporate culture Winkerton and his predecessor, Ferdinand Piech, fostered, which was a culture of control, micromanagement, and fear. Lynch describes the environment as containing three factors: pressure, opportunity, and rationalization, which can lead some individuals into unethical behavior (Lynch & Santos, VW Emissions and the 3 Factors That Drive Ethical Breakdown, 2016). Volkswagen’s leadership also set aggressive goals while also making it clear to employees that failure was not an option. The eventual downfall of the Volkswagen diesel push into the United States market was based on claims that diesel was cleaner and provided more power than current

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