Volkswagen, largest German multinational automobile manufacturer which it’s headquarter is located in Wolfsburg, Germany founded on May 1937 by the founder, Ferdinand Porsche. According to the European Automobile Manufacturers Association, Volkswagen had maintained the major market shares in the Europe for twenty years. In 2014, Volkswagen is ranked as the eighth in the Fortune Global 500 largest company list ranked by the yearly revenues. Other than manufacturing of engines, passenger cars, commercial vehicles and motorcycles, the Volkswagen group also offering financial services such as leasing and consultancy. As mentioned above, Volkswagen group owning 12 different brands which are Volkswagen, Audi, Bentley, Bugatti, Seat, Skoda, Lamborghini,
Volkswagen has been consistent in its efforts of advancing and developing new technologies as well as creating a sustainable environment policy which would promote clean and green environment. In this regards the opportunities provided by digitization are immense. Upgradation of present technologies to serve future challenges is where Volkswagen is working upon and facing an immense challenge to bring about the required changes in the present
The German based automotive company Volkswagen (VW) was recently involved in a scandal that went public in 2015 regarding the discrepancies in the NOx (Nitrogen Oxide) emission from the vehicles. This scandal was believed to be the biggest scandal of all times and have come in a critical moment of time when VW was declared the largest automaker in the world for the first season of 2015. Thus it is affirmative that Volkswagen was involved in evaluating business ethics in their organisational practice. This considered paper would discuss the importance of business ethics for Volkswagen and the relevant consequences of the scandal. The Scandal – Ethical lesson The scandal of Volkswagen was by far the biggest of many scandals that automotive history has seen from the Pinto to the Toyota’s self-acceleration, GM’s ignition switches; but all have not impacted the public policy of ethics.
The selected corporation is the Volkswagen, a German car manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. The Volkswagen’s corporate website is http://www.vw.com/. According to the International Ethical Business Registry, there has been a dramatic increase in the ethical expectations of businesses and professions over the past ten years. Increasingly, customers, clients and employees are deliberately seeking out those who define the basic ground rules of their operations on a day to day. Volkswagen is no different, hence it created its own code of ethics in order to improve the company’s operation all over the world.
It was known that nearly half million of vehicles were effected from this problem in USA, and 11 million in Europe and Asia [4-]. The problem was not a technical issue, it was claimed that VW board of management hide this problem. For that reason, company had lost about 25 billion € of their shares in a short time. The main question is that why VW made this big mistake that it would drag itself into the business. One of the article about the subject claims that, brand manager Wolfgang Bernhard and engineer Rudolf Krebs were working on the new diesel engine to be used in the US [4-].
As stated by Volkswagen group (2016) the company operates many plants worldwide where production is done for that respective local market and different model are produced in different plants. These strategic decisions were taken by the company because the cost is lowered when special parts and cars have to be shipped shorter distance, additionally; each plant producing a different model reduces the assembly cost to the company. Materials are purchased from suppliers worldwide they are stored until they are needed in the production line. The “Just In Time” (JIT) approach is used to handle all raw material purchase. According to Volkswagen (2016) the company uses a highly efficient global network to manage its supply chain.
So, they will switch from low involvement to high involvement. They will need more information about the road safety and feel confidence from the brand. So, they are willing to purchase the Volkswagen’s vehicles. Also, they warned the drivers’ bad behavior. They will be well received by the public and brand awareness.
As reported by the association of certified fraud examiners in 2012, organizations typically lose approximately 5% of their earnings each year as fraud being the reason (ACFE, 2012). Across the years, corporate scandals have proved to one of the main reasons why companies face a huge loss. Being the world’s leading automobile manufacturer, one such company that experienced a downfall is Volkswagen. The company built a device in each car, embedded with the software that permitted them to cheat the emission test they were put through. The device altered the controls when being tested allowing it to injected more nitrogen oxide and carbon dioxide than reported.
Indeed, in December 2007, the group was committed to adopt a strategy that would position Volkswagen as a global economical and environmental leader, a pioneer. It was called « Strategy 2018 ». In 2013, CEO Martin Winterkorn explained to Forbes magazine, that: « the goal was to make Volkswagen “the world’s most profitable, fascinating, and sustainable automobile manufacturer” by 2018 ». If we forget one minute the Dieselgate scandal, Volkswagen was truly working on developing technologies that would be environmentally friendly such as « clean diesel » under the « blue motion » label. The group also promoted car sharing in big countries such as China.
Porsche has managed to use the AG iPerfomance in its products making it possible for them to produce effective products. It has also dominated the SUV market which is continuing to expand with less competitors to exploit. This gives it an opportunity and window to sell its high end SUV products with less competition. I t also produces hybrid powered Porsche Cars which are also seen as a positive move towards remaining competitive in the motor vehicle market. The Porsche cars are also movie and music glamorized, an idea that has not been embarked by most of other brand from its competitors in the market.