Volkswagen Emission Scandal: Ethics and Corporate Misconduct
This paper examines the Volkswagen emissions scandal, in which the company installed defeat device software in its diesel engines to falsify emissions tests, resulting in nitrogen oxide emissions up to 40 times above acceptable U.S. limits. The paper analyzes the environmental consequences of the fraud, including accelerated greenhouse gas emissions and harm to global ecosystems. It also explores the ethical failures at multiple levels of the organization — from software engineers to the VP of Engineering to the company's President — situating the scandal within broader debates about corporate social responsibility, shareholder value, and organizational culture. The paper concludes with a discussion of what responsible leadership and engineering practices could have prevented the misconduct.
- Introduction: Overview of Volkswagen and the scandal's significance
- The Emission Scandal at Volkswagen: How the defeat device fraud was carried out
- Impact on the World: Environmental and regulatory consequences of the fraud
- Ethical Issues in the Scandal: Ethical failures across organizational leadership levels
- What Could Have Been Done: Prescriptive actions each role should have taken
- Conclusion: Corporate misconduct and ethical engineering failure summarized
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What makes this paper effective
- The paper moves logically from factual description of the scandal to environmental impact to ethical analysis, giving each layer of the issue its own focused section.
- It grounds abstract ethical claims in concrete detail — for example, citing the specific magnitude of excess emissions (40 times the acceptable limit) and the measurable loss of shareholder value (share price falling by one-third).
- The "What Could Have Been Done" section demonstrates strong applied ethics reasoning by examining the scandal from multiple role perspectives: the President, the VP of Engineering, and the emissions technicians.
Key academic technique demonstrated
The paper effectively uses multi-stakeholder analysis, evaluating the Volkswagen scandal not from a single vantage point but from three distinct organizational roles. This technique — asking what each actor should have done differently — is a standard method in applied business ethics writing and helps the author avoid oversimplified blame while demonstrating command of organizational responsibility.
Structure breakdown
The paper opens with background on Volkswagen and its corporate structure before narrowing to the specifics of the defeat device fraud. It then broadens outward again to assess global environmental consequences, followed by a focused ethical analysis of individual and organizational culpability. The paper closes with a prescriptive section outlining corrective actions and a brief conclusion that reinforces the central thesis. This funnel-in, funnel-out structure is well-suited to a business ethics case analysis at the undergraduate level.
Introduction
Volkswagen is a company headquartered in Wolfsburg, Lower Saxony, Germany, and is the original marquee within the Volkswagen Group. The Volkswagen Group includes different car brands such as Bentley Motors, Audi, Lamborghini, Bugatti Automobiles, and Scania, which manufactures heavy goods vehicles. Since its inception, Volkswagen has grown to become the third largest manufacturer of automobiles, after Toyota and General Motors respectively. However, the company was recently involved in an emissions scandal that has generated significant concerns within the industry and among the public. The scandal is attributed to the company's corporate misconduct, which is largely unacceptable from any perspective. The unacceptability of this misconduct stems from its impact on the world and its violation of business ethics.
The Emission Scandal at Volkswagen
Volkswagen is renowned across the globe as one of the leading and most successful car manufacturers, having experienced tremendous growth and profitability since its inception. Despite this success, Volkswagen has encountered various issues from time to time relating to its business practices. One of the most significant recent issues is the emissions scandal, fueled by corporate misconduct that is unacceptable from any perspective.
Volkswagen rigged its diesel engines to falsify emissions tests, attracting considerable media attention and public concern. According to Hotten (2015), the company installed defeat software — commonly referred to as a defeat device — in its diesel engines that could detect when a vehicle was being tested and alter engine performance accordingly in order to produce better results during emissions tests. The company admitted to cheating emissions tests in the United States through the installation of this device in its diesel engines.
The device works by putting the car into a type of safety mode in which the engine runs below its normal performance and power level. This occurred when vehicles were operating under controlled laboratory conditions — essentially when placed on a stationary test rig. Once the vehicles were on the road, the engines switched back to normal power and performance levels. This resulted in emissions of nitrogen oxide pollutants at levels approximately 40 times above the acceptable range in the United States (Hotten, 2015).
Volkswagen's decision to install the defeat device in its diesel engines was based on the assumption that investors care primarily about financial performance — particularly stock price — rather than the societal impact of the company's operations. This decision was driven by the belief that maximizing shareholder value is the primary financial objective of a business. It proved to be an erroneous decision, as evidenced by the reaction of shareholders: Volkswagen's share price fell by one-third, resulting in significant losses in company value. This outcome illustrates that unethical behavior and corporate misconduct ultimately destroy a company's reputation and shareholder value.
Impact on the World
Volkswagen's decision to cheat on emissions tests had considerable impacts on the company's operations, share value, and profitability. Beyond the corporate sphere, however, these actions also had meaningful effects on the broader world. Regulators, politicians, and environmental groups worldwide raised questions about the legitimacy of the company's emissions testing practices.
One of the most significant impacts was the increased emission of gases that damage the environment — particularly at a time when global climate change and global warming represent major international concerns. Through the cheating, Volkswagen's vehicles emitted gases at nearly 40 times the standard permissible level, causing substantial environmental harm. Second, the scandal highlighted the need for stricter testing standards, as analysts argued that existing mechanisms for testing diesel cars are outdated and insufficient to prevent excessive greenhouse gas emissions into the Earth's atmosphere. Third, through increased emissions of these gases, Volkswagen negatively affected the world's ecosystems. Elevated greenhouse gas emissions harm ecosystems by contributing to extreme weather conditions — both cold and warm — that affect humans, plants, and animals alike.
Conclusion
The Volkswagen emission scandal is an example of corporate misconduct and a failure of ethical engineering, fueled by the decisions, actions, or inactions of the emissions technicians, the VP of Engineering, and the President of Volkswagen Corporation. This situation could have been prevented through effective leadership and a suitable organizational culture that prioritized honesty, accountability, and environmental responsibility over short-term financial gain.
References
Argenti, P. (2015, October 13). The biggest culprit in VW's emissions scandal. Fortune. Retrieved December 8, 2015, from http://fortune.com/2015/10/13/biggest-culprit-in-volkswagen-emissions-scandal/
Hotten, R. (2015, November 4). Volkswagen: The scandal explained. BBC. Retrieved December 8, 2015, from http://www.bbc.com/news/business-34324772
Queen, E. L. (2015, September 26). How could VW be so dumb? Blame the unethical culture endemic in business. The Conversation. Retrieved December 8, 2015, from http://theconversation.com/how-could-vw-be-so-dumb-blame-the-unethical-culture-endemic-in-business-48137
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