The automobile industry is the large scale industry where the consumer is served on a large scale. In today’s time, Volkswagen is one of the big automobile companies and has also influenced the market with their inappropriate activity. From the research and analysis, it is found that a significant part has caused all the problems for the company. Volkswagen scandal done in the past year has influenced the stakeholders as the case is still in the court and judgment has not been concluded yet. This report contains the scanned report concerning to the Volkswagen. The company’s ethical approaches towards the environment are upgraded. Its vehicle’s emissions are checked annually. Integration of the renewable resources of energy are also employed to mitigate the risk factors.
Volkswagen is one of the biggest motor manufacturing company and have large consumer scale in the market. From the past scandal of Volkswagen, the US government is investigating to conclude the reason behind this scandal (Siano et al, 2017). This report discusses how the issue occurs and leads to huge failures and create a loss of billion dollars in the market. This report also analyzes the improvement strategies used by Volkswagen to improve its engine to provide better quality service and experience to the consumer and create the new brand image in the market.
The USA is a huge economy and every company wants to work in this economy to create wealth. Volkswagen has also tried to incorporate their business but the low emission requirement which has not been achieved by the company led to the failure for the company (Blackwelder et al, 2016). The company has put the effort to meet the ethics requirement by implementing the radical conversion techniques that will work to reduce the burning process of oxygen. To reduce the contamination result they have also attempted to use the blue tech system (Ewing, 2017).
But Volkswagen's other part has not accepted this new technology, therefore, the company has to create its own new system. The new system leads the company to have the lower fuel consumption system while it also helps them to compile with environmental laws and regulations (Bachmann, Ehrlich and Ruzic, 2017). This practice helps the organization to follow the environment friendly working operation. The company was not allowed to sell its latest model of 2016 until they submit their explanation to the required technology (Schiermeier, 2015). As a result, other manufacturing services have also asked whether they are using the same technology in their motors product. The US environment protection service has investigated the entire industry to understand the risk of implementing the new system.
This software was installed in more than 11 million cars of Volkswagen and helped to analyse the test in terms of speed, air pressure, steering position of the car, and the problem was revealed by the health administrative department of the state (Krall and Peng, 2015). Volkswagen Company has also invested in a huge amount in the marketing of its car to attract new customers and create the profitability of the company. Volkswagen company was operating in an environment friendly way but the manufacturing of the company was limited and facing tough competition. The company was having the feature in its product such as recognition of the emission from the car equipped with the TDI diesel technology. Then the information is also collected from the other part of the car to respond in an optimum way (Cavico and Mujtaba, 2016).
The failure of the Volkswagen Company occurred due to the poor marketing strategies, risk management, and the lack of internal control. Marketing strategies are widely used to construct an image in the market. But due to the company’s scandal, its reputation was lost and it affected the sale in advice way. This company has been heated by the emitter scandal. Therefore, it leads to the dame of the goodwill of the company and has also reduced the sale. To rebuild the brand image will be a tough task for the company and creating trust among the stakeholders will not that easy. The risk management strategies have been adopted by the company to improve from the crises and asses the financial implication of such risk if it materialized for a longer period. Although it is hard to deduct the risk scenario which falls under this category, as they do not cover from the experience. Ethics in the organization are very crucial as they led to increase in belief and loyalty towards the customers (Freeman, 2016). The company failed to thrust that compatibility with its customers and failed remarkably. There are some responsibilities of the organizations towards the stakeholders which can only be fulfilled if the organization practices good ethical ways. A wide range of approaches also exist which can be employed (Drugge, 2016). For example:
• Utilitarian approach: this approach allows to take decisions and choose the most appropriate and ethical option among the existing ones. This reduces the dilemma of the managers so the organization can be taken forward (Kumalo, 2017).
• Rights approach: this approach allows to take decisions that are morally right for the employees and customers.
• Fairness approach: this approach is taken in consideration to treat everyone equally and fairly.
• Common good approach: this defines whether the chosen decisions are fair for the company and the communities.
• Virtue approach: this helps in being a fair person showing the personal reflection. This allows the authorities to take better and effective approaches for the welfare of the community.
By applying these approaches, the company can sustain and develop with a loyal and trustworthy reputation in the market.
scandal has created a curiosity for the government authority and the consumer for their environmental implication of the motorcar. The Volkswagen car has to be evaluated to analyze the damages done to the environment due to its performance on the road. The rumours have also played a role to impact the brand image of the company among the stakeholders (Harrison, Freeman and Abreu, 2015). The EPV implementation has been done in the Volkswagen car. However, if the media coverage is believed then Martin Winterkorn has taken all the responsibility of the scandal. However, it is believed that in the later period, he had also apologized to the stakeholder for breaching their trust. For the past 60 years, the Volkswagen Company has maintained a big brand image worldwide (Barrett et al, 2015). The company has to work on their product with quality delivery.
The operating activity also needs to reorganize to avoid the mistake that has taken lead to failure. The new CEO of the company has worked to recreate the brand image of the company by applying the new policy to implement the environment rule and building trust among the stakeholders of the company. They follow an approach to mitigate the occurring environmental threats and function to seize the opportunities. For instance, the integration of the resources of the renewable energy, decarbonization, sustainable resource efficiency and supply chains (Layzer, 2016). The Volkswagen company has implemented the economically feasible methods to cut down the environmental impact caused by the vehicles. This reduction in the environmental impact is applied in all the operations, goods and services of the company. Moreover, the efforts of the company are verified at the end of the year by performance indicators. However, the company has made numerous amendments to improve its image that damaged due to the scandal. But the scandal was not something that can be forgotten easily by the customers (Act and Counsel, 2017).
Moreover, it still acts as an asset for other competing motor companies to pull down the image of the Volkswagen company. The scandal therefore, still tends to haunt the company. Even the company has paid fine of about $30 million along with other penalties and settlement of the lawsuits. It is affecting the company more because it exploited the ethical rights of the consumers. along with customers the company also affected the environment. The emissions from the vehicles were above permissible levels and they are hazardous for the health of animate and inanimate beings of the environment (Reitze and A.W, 2016). Therefore, the company will not get rid of the stain of the scandal anyway sooner. Even though it has made remarkable amendments to get back its previous reputation.
From the deep analysis of the above discussion, it can be seen that corporate have to comply with all the rules and regulations as notified by the government. The Volkswagen scandal has affected the stakeholders and the business of the company. The business process has been changed by the company to follow up the government guidance. If the company hires the skilled staff and train their existing staff to develop the product which fulfills the consumer need and compliance with the environment law then it can improvise the business performance. The company has to improve its performance to achieve the goal of the company so that the trust can be rebuild among the stakeholders. Moreover, it is seen that the application of different ethical approaches can further improve the reputation of the company.
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