An ethical crisis is when two organizations may be involved in a moral conflict that must be solved to address the issues. In this case, the ethical crisis between organizations may interfere with the principles of both organizations. In this case, the paper will analyze the case provided hence determining the ethical crisis between two organizations where Volkswagen has been caught in a scandal of violating business ethics. Thus, the ethical crisis described in the paper is associated with business ethics violations where a company copies another company’s ideas, performing modifications without a mutual agreement between two companies to perform the same act.
In the case provided, what happened is that Volkswagen was caught in a scandal that violated business ethics by being involved in fraudulent actions. The EPA discovered that the VW cars sold in the United States had a “defeat device” or software integrated into the engines that could detect and tell when they were tested (Hotten, 2015). Thus, this changed the performance of these cars since it improved the performance. In this case, the Germany car grant admitted that the dealers in the United States were cheating through the tests. In this case, VW aimed at selling diesel cars in the United States, which was backed up by huge marketing campaigns since these cars were deemed to produce low emissions. In this case, the EPA investigations found that they only cover 482 000 cars in the United States, including VW models Jetta, Audi A3, Passat, Golf and Beetle. However, VW admitted that approximately eleven million cars globally, including about eight million in Europe, are tailored with defeat devices.
Furthermore, EPA has also accused Volkswagen of changing the working condition of its cars by modifying software on 3-liter diesel engines, which are integrated into some of the cars, including VW models, Audi and Porsche. In this case, VW refused the claims admitted by EPA, which impacted approximately 10000 vehicles (Jung & Sharon, 2019). In this scenario, what caused the ethical crisis between Volkswagen in the United States and EPA is that Volkswagen modified cars that they did not initially start (Hotten, 2015). Perhaps, VW in the United States integrated software in the engine that could aid in telling when they are tested. This forced EPA to admit a claim that Volkswagen was cheating hence causing the ethical crisis narrated in the case.
The company leadership in Volkswagen U.S. should have adhered to the business ethical principles while modifying the VW vehicles. In this context, the company leadership failed to inform EPA of the modifications they wanted to make to the VW car engines. If the two companies had agreed, there could be no claims asserting that Volkswagen in the United States was cheating on the emissions. The Volkswagen scandal revealed how the company interfered with emission tests, clarifying that it undertook fraudulent actions to mislead the EPA. It is also true that Volkswagen’s leadership was involved in fraudulent actions since it integrated its cars with critical software that could easily detect and tell when the emission tests were being conducted without the consent of the EPA. The software was installed in over 11 million cars manufactured and distributed globally in many countries (Jung & Sharon, 2019). Thus, Volkswagen violated business ethics through cheating since it did not inform the EPA while installing the defeat software in the cars. Moreover, the carmaker did not use this software while making the cars which means that Volkswagen’s leadership in the United States was cheating.
Cases similar to the Volkswagen scandal can be prevented by adhering to moral business ethics. For instance, it was essential for Volkswagen to inform EPA before it modified VW cars (Welch, 2019). This would facilitate a mutual agreement between the two companies; hence there could be no cases of cheating. In this case, the companies must agree on any change made to a certain product. A whistle-blower is a person within an organization who reveals the secrets of an organization. In most cases, the secrets revealed by the whistle-blowers are illegal, illicit, fraudulent and immoral. In this case, the whistle-blower disclosed the illegal secrets of Volkswagen, where the company integrated the engines with a defeat device that could tell when the emissions are tested (Jung & Sharon, 2019). In this case, EPA had not been informed of the issue, admitting that the actions were fraudulent and cheating. In general, the Whistle-blower made EPA know what Volkswagen CEO was doing illegally.
In conclusion, the Volkswagen scandal portrays a company violating the business code of ethics and unethical behavior. The leadership hierarchy of the company, including the CEO, engineer and managerial team, made poor decisions that violated business ethics by being involved in the scandal. They installed software in the engines to help detect when the emissions are tested. However, EPA came to realize this and accused the company of cheating. In this case, Volkswagen’s leadership should have considered several key approaches before deciding. They should have informed the EPA of the decision and agreed on how the improvements should be made. Perhaps, they should have created an ethical corporate culture with a legal team that could advise on the most appropriate decision.
References
Hotten, R. (2015) Volkswagen: The Scandal explained, BBC News. Available at: https://www.bbc.com/news/business-34324772 (Accessed: 13 June 2023).
Jung, J. C., & Sharon, E. (2019). The Volkswagen emissions scandal and its aftermath. Global business and organizational excellence, 38(4), 6-15.
Welch, J. (2019). The Volkswagen recovery: leaving a scandal in the dust. Journal of Business Strategy.
write