Volkswagen Scandal: Case Study

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Not long ago Volkswagen’s group was among the companies whose authority and reliability were undoubted. The concern had impressive plans to push up its sales in America and worldwide. Its leader Martin Winterkorn overtly announced his ambitious plans to take his group to “the very top of the global car industry” in the shortest period possible (Hakim, Aaron and Ewing par. 2). However, the current events seem to have brought great changes to the future of the company. Today, taking into consideration the circumstances, it is absolutely evident that the great plans will have to be put off or even abandoned. It is now hard to say how long it will take the company to cope with the disastrous after-effects and to regain the trust of its clients.

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The scandal around Volkswagen has already become one of the most impressive news of the past decades. All of a sudden, it has turned out that the company has been installing the software that allowed them to cheat on emission controlling tests. This means that 11 millions of the already sold diesel autos are much greater pollutants than the set standards permit. A great percentage of these cars has been sold in America. The case is particularly curious considering the fact that a diesel-powered auto has been one of the main Volkswagen’s aces – the company has always emphasized the advantages of this vehicle opposing it to the hybrid-electric one. The low emission promised by the diesel cars has significantly contributed to the company’s “green” image. Today when the myth about “environmentally friendly” products has been dispelled, the company has to face serious troubles. The preliminary results of the investigation have already provoked a series of unpleasant consequences. The incident has primarily led to the resign of Martin Winterkorn. The former chief executive claims to have been unaware of the fraud (“Volkswagen scandal…in two minutes” par. 3). Nevertheless, he still does not deny the responsibility he bears. In one of the interviews, the ex-CEO admits that his team has “”broken the trust of our customers and the public” (“Volkswagen: German prosecutors launch investigation into former boss” par. 6). One should point out, that it is not only Winterkorn who has lost his job due to the incident – stuff reshuffle has touched upon the entire management department. However, personnel changes is not the only problem the company has to face. Volkswagen has already lost 7.3 billions of dollars and that is only the beginning. According to the specialists’ predictions the size of the final fine is likely to make up a sum of 18 billions of dollars (Hotten par.10). Moreover, apart from the incredible economic loss and the customer outflow, there is also a high chance of prison for some of the company’s employees. They can be sentenced to a ten-year imprisonment, in case the prosecutors account them guilty. Although the outcome of the incident remains unclear until the investigation is over, it is already clear that Volkswagen will have to run against a lot of difficulties before they manage to calm the situation and restore their reputation.

The scandal around Volkswagen concern has split the society into two groups. Some people firmly believe this incident should be regarded as a case of an outrages responsibility. In fact, they have a full moral right to say so, as the illegal activity of the company has exposed to risk both its customers and partners. Due to its image of the protector of the environment, the cost of a diesel car has always been rather high in comparison with a less “green” variant. Today even if the owners of the affected cars manage to sell them, their value will obviously be significantly reduced. As to the Volkswagen’s partners, it will now require them much effort to replace the demand filling by other companies. Moreover, the specialists believe the incident can lead to a series of dismissals and job cuts at different levels, this means the careless actions of the managers have let down their colleagues as well (Newman par.6). Therefore the question arises, concerning the moral responsibility the company is to bear. In fact, the public mood shows that the major part of the society seems to be quite satisfied with the ethical respond the company has provided. The fact that Winterkorn has made up his mind to leave the post until the investigation process is over has a positive influence over the almost destroyed image of the company. That part of the society that still puts the trust in Volkswagen’s concern believes that an adequate ethical respond has already been provided. People hope that the performed stuff reshuffling is likely to give good results. It should be noted that there are numerous famous personalities among Volkswagen’s supporters. Hermes EOS’s director Dr Hans-Christoph Hirt believes that the performed changes are apt to help the company “create a corporate culture which ensures that the trust of customers and society will never again be jeopardized in the way it has in the past” (Plumer par. 11)

In conclusion it should be pointed out that this case can teach us a good lesson, reminding us to think of the importance of liability and its enormous influence over one’s reputation. It perfectly illustrates the fact that the higher position you take, the larger responsibility you are to be ready to bear.

Works Cited

Hakim, Danny, Aaron M. Kessler and Ewing, Jack. As Volkswagen Pushed to Be No. 1, Ambitions Fueled a Scandal. 2015. Web.

Hotten, Russel. Volkswagen: The scandal explained. 2015. Web.

Newman, Rocky. Volkswagen scandal will send costly ripples through auto industry. 2015. Web.

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Plumer, Brad. Volkswagen’s appalling clean diesel scandal, explained. 2015. Web.

Volkswagen: German prosecutors launch investigation into former boss. 2015. Web.

Volkswagen scandal…in two minutes. 2015. Web.

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BusinessEssay. (2022, February 9). Volkswagen Scandal: Case Study. Retrieved from https://business-essay.com/volkswagen-scandal-case-study/

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BusinessEssay. 2022. "Volkswagen Scandal: Case Study." February 9, 2022. https://business-essay.com/volkswagen-scandal-case-study/.

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