Question

Business Management Case #1 – Volkswagen Scandal

Facts:

Volkswagen, in 2015, was accused of rigging software in its car to defeat emissions tests. This software could detect when testing was occurring and blocked emissions.

EPA investigation confirmed the car’s software gave lower results than EPA allowable maximum – when, in fact, the emissions were 40 times higher than allowable emissions.

After the scandal broke the CEO resigned and 9 top executives were fired.

This software affected 11 million vehicles affected, ½ million in US.

Volkswagen recalled the cars at a cost of $18 billion and paid customers affected another $14 billion.

The company fell to #2 from its previous # 1 slot in Europe.

Questions:

Identify the stakeholders and how they are affected.

Review the five principles of ethics and analyze the case from each of these ethical perspectives (egoism, utilitarianism, rights, duties, virtues) defining what actions you as head of the board of VW would do if you acted according to each principle and why.

Example:

Egoism principle says you will act in your own best interest for the long term—what would you do?

Utilitarianism says you what is best for the most people—what would you do? Etc, etc.

Answer 1

A- Identify the stakeholders and how they are affected.

Stakeholders that are affected are

1- Volkwages's group as a whole, their brand value decreases

2-Employees, their trust for the company decreases and causes mental instability that is fear of losing a job

3- Retail car dealers- product sale freezed until company fix the issues

4- Consumer with defected vehicles lost trust

5- Public that are concerned for health lost faith

6- Other Car manufacturing companies it increses their car sale

2- Review the five principles of ethics and analyze the case from each of these ethical perspectives (egoism, utilitarianism, rights, duties, virtues) defining what actions you as head of the board of VW would do if you acted according to each principle and why.

Ans

1- Egoism

• Egoism states that any act performed should be morally correct
• focussing on self interest as well organisation interest

so keeping in mind taking into conideration the long term effects should not be excised and proper enquiry should be done to find the person involved in the act

2-Utilitarianism-

It says the best act is that increases utility, due to this act it has degarded the company image and decreases utility, proper steps to be taken n car recalling should be done and copensation should be given and apology letter should be floated for the nation

3-Duty ethics- it takes into consideration the morality of duty against rules. so the person involved should be penalised

4-Virtue- If focuses on intensions. as the person involved has bad intentions they should be penalised for the same

5- Rights- it focuses on the rights that have been given to the employee which they have misused so they should be peanalised and these rights should be revoked.