Posted: February 20th, 2021
1-2 paragraphs for each person. There are 6 people.
Overall what occurred in 2015 following the information of Volkswagen cheating the consumers, the market, and the EPA was fairly little in the grand scheme of things. The background surrounding Volkswagen essentially getting away with mass pollution and hoodwinking the industry for years is that a defeat device was installed within the vehicle’s engine that programmed it to run in a cleaner mode when hooked up to a test (Poeir, 2020). This obviously did not restrict the vehicle when performing on an open road. The device was eventually discovered and Volkswagen was billed for 25 billion dollars (Poier, 2020). However, the market share gained from this deception may have been worth it, as the vehicles outperformed all other competition in power and fuel economy that it resulted in the vehicles being ranked top in their respective classes that year (Poier, 2020).
However, what might Volkswagen do now to build back some of the trust within the corporate world? How can they redeem themselves economically? The first step arguably is to regain the trust of their shareholders and instill a set of ethics the likes of which cannot be questioned. Obviously, a drop in stock price is bad news, however, the company is by no means insolvent, and they quickly recovered following the incident. However ethics the company needs to advertise and explain to investors and to staff some sort of new ethical guidance that can convince people to purchase their products once again.
In regards to recovering legally, there’s been a fairly limited number of lawsuits, there were several major ones, however between the payouts of that and the fines levied against them from the EPA and other countries they seem to have paid the piper, the best way to address the issue legally and ethically would be to launch a voluntary recall in which people with the defeat devices may receive an upgrade at no cost to themselves. This would also address the philanthropic needs of the company. Additionally, many companies devote a sum of their profits to things that seem counter to their product, Coke for example sponsors huge numbers of athletic programs for children. Volkswagen may consider doing the same but planting some sort of forest to help deal with the carbon footprint. While I’m not the most creative individual in the world, it seems that there is any number of philanthropic things the company could do to earn them a “Subaru-Esque” reputation in the industry.
The Volkswagen diesel emissions scandal has been widely covered. The corporation used a “defeat device” to fool an emissions government test (Jacobs & Kalbers, 2019). There have been major ethical concerns and significant environmental & financial consequences due to the device’s release. The scandal has managed to ruin the reputation of Volkswagon. The image of the environmental friendly business has been destroyed. The vehicles had to be recalled; ultimately, Volkswagon had to pay fines and lost its customers’ trust (Jacobs & Kalbers, 2019). The activities Volkswagon may use to satisfy four components of corporate citizenship will be discussed.
Volkswagon has a responsibility to rebuild economically. The corporation has to regain the trust of its customers. Billions were lost due to the corporation’s deception (Jacobs & Kalbers, 2019). They must rebrand and try to find a way to create a reliable vehicle. They must also be very honest with the public when they make this vehicle. Volkswagon has to follow the law. There should be “checks and balances” set in place to ensure everyone is following the law and the cars are in regulation. The public should be well informed of this through media (to rebuild trust), and the organization has to adopt a strict policy.
In regards to ethics, Volkswagon must hold their higher management and engineers accountable for their actions. This device was created and developed by someone who knew exactly what they were doing. I am sure that the engineers were told or encouraged to build this device. I doubt that many employees who made the vehicles knew what was going on, but an environment that promotes honesty and integrity is desperately needed to revive the corporation. Violations should be reported, and a new set of guidelines should be created to prevent this from happening again.
Philanthropic can be done by investing in “green” technology. They also need to find a way to solve the emissions issue they have and offer assistance to those most affected by the emissions created as a result of their deception. Volkswagon has done quite a bit of damage, but the corporation can change by being honest, creating new policies, and delivering better products to their customers.
Company failures and ethical misconduct lies in the corporate culture of an organization. It is the CEO or the managerial and corporate board, who are responsible for providing ethical oversight, and responsible for monitoring the company’s culture. If the process breaks down then this is when we find ethical violations.
For example, one such case, is the issue with the Boeing 737 Max and its corporate culture. It should be noted that there is still an ongoing criminal and civil investigations against Boeing surrounding the 737 Max. My parents always said “One Oh crap, can quickly wipe out all the Atta boys” that you may have racked up. In this case, that is exactly what happened to Boeing. This organization was the face of safety and quality for all of its airplanes, but since they have suffered the two deadly crashes of the 737 Max, and the death of that many people, they have faced questions concerning commitments to safety versus a push to gain as much profit as possible.
Even after the CEO was fired, there was still information coming out about how poorly the 737 Max was designed, which is an ethical violation. Those two crashes placed a spotlight on their business practices and the lack of ethics in the organizations culture. It was only after the two crashes that one of bowings senior engineer Mr. Curtis EwBank finally filed an internal ethics complaint on how management tried to cover up a system that could have made a difference and uncovered errors in those AOA sensors that caused the crashes. That was too late because over 300 people are dead as a result and that is a serious ethical violation.
Boeing violated (1) the engineer’s code of ethics, (2) the informed consent because the pilots were never told about the new anti-stall system and finally (3) the precautionary principle. After the first crash happened the CEO of Boeing called The President to assure him that there was no need to ground the plane, instead of using precautionary measures to do so. According to Herkert and his colleagues, “Bowings lack of transparency about the new software; and the lack of adequate monitoring of Boeing by FAA especially during certification of the masks and following the first crush, was part of bowings ethical failure. This is written in the ethical significance of the accidents, in particular the ethical responsibilities of the engineers at Boeing an FAA involved in designing and certifying the max” (Herkert, Borenstein, & Miller, 2020).
Reckitt Benckiser has been surrounded with many scandals the last few years. One incident specifically had to do with the 92 people that died from the humidifier sterilizer in South Korea (Geller, 2017). Rakesh Kapoor was one of the highest paid CEO’s in Britain; his pay was reduced substantially after the incident occurred (Geller, 2017). Agency theory and corporate governance had plenty to do with this case.
In relation to agency theory, the shareholders were very much involved in this process. They hired the CEO; the problem came when he did not act in the best interest of the shareholders. Kapoor failed to do his job and the expectation was to bring profit. Rakesh failed to do this and he also failed to do so in an ethical manner. This had an impact and corporate governance was carried out in this case. Kapoor failed to deliver, so he received a pay cut and lost his bonus (Geller, 2017).
Kapoor was once one of the highest paid CEO’s and there should have been more monitoring. I tried to find more information on the case and it was very hard to find more details. Kapoor was ready to retire and, in some ways, I think he may have had a lax approach towards the issues that were surrounding Reckitt Benckiser. In this case he did not fight with the investors and in most cases, this does happen with CEO’s in scenarios where there must be someone accountable for the issues that occur (Strand, 2020). In the end, Kapoor did not lose much, but there was pressure for him to leave the organization.
I agree that management today is more democratic than unions as there is a change in ‘how’ people work. Most employees’ job responsibilities differ from previous years with organizational change and technology. Due to the vast increase in employee makeup such as ethics, gender, and generations, organizations are now expected to follow a particular set of expectations. Organizations are now addressing various issues easier than before and with new changes in the workforce, organizations began considering employee involvement within decisions and strategies. By allowing more engagement with employees, organizations are now increasing productivity and sustaining a healthy atmosphere.
While employee job satisfaction is an essential factor, productivity and performance were other concerns for organizations. Using experience, organizations and employee relationship are now changing. Creating a labor-management relationship is now a critical aspect of organizations. Various aspects must be considered when dealing with unions, such as employees not having to file a grievance to be heard and the expectation that problems will be solved. While labor-management has taken significant steps to be where they are today, there is still room for improvement. According to Schneider and Stepp (1999), “the trend toward nonunion organizations will dominate unless management and labor more readily adopt the high performance partnership models that yield world-class performance.” Both organizations and unions must now work together in order to be successful.
Schneider, T. J., & Stepp, J. R. (1999). The evolution of US labor-management relations. REPORT-NATIONAL POLICY ASSOCIATION NPA, 1-6.
I disagree that “management today is more democratic than unions.” In many organizations, I believe that management practice has evolved into a more democratic atmosphere that allows employees to participate in workplace decision-making. Some managers seek input from their subordinates before making decisions. A workplace that follows a democratic model allows “employees collectively to take part in decision-making rather than just following the formal regulatory structures…Employees were able to influence the planning, organization, and development of work” (Knudsen et al., 2011, p. 393). This workplace model does occur, but I have not been in a workplace where management yields much power to the employees.
I have worked in two types of workplaces as an adult, churches, and state government. Some church staffs do operate somewhat democratically. While the congregation determines what kind of ministry is done, the day-to-day participation in decision-making is usually determined by the Pastor. While some encourage staff to participate in planning and programming decisions, many do not yield their power. My experience in state government has been with managers who seek some input from employees but do not involve them in many decisions. I see some agencies working towards a more democratic approach, but they are not the norm.
The structure and purpose of unions are very democratic. Unions follow the wishes of their members when it comes time to make decisions. “Union members do have the ultimate control of their labor organization, and the leadership can never ignore this fact of life” (Sloane & Witney, 2010, p. 186). I think that unions have played a large part in creating work environments that encourage more employee participation in workplace decisions. The labor movement began with workers’ desire to have a voice in their working conditions and pay rate, among other things. While working conditions have significantly improved, there is still work to do. I think that this change will be influenced both by unions and business leaders.
Knudsen, H., Busck, O., & Lind, J. (2011). Work environment quality: The role of workplace participation and democracy. Work, Employment and Society, 25(3), 379–396. https://doi.org/10.1177/0950017011407966 (Links to an external site.)
Sloane, A. A., & Witney, F. (2010). Labor relations (13th ed.). Pearson Prentice Hall.
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