Volkswagen is currently implicated in emission scandal due to the company’s cheating emissions tests of diesel cars sold in the United States. The car giant will pay $10 billion to compensate its stakeholders, especially more than 480.000 people who own two-liter diesel cars (Volkswagen “to Pay $10bn” par. 2). Every owner may receive from $1000 up to $7000 “depending on a car’s age” (Volkswagen “to Pay $10bn” par. 3). Previously, the US Environmental Protection Agency (EPA) discovered that Volkswagen had installed a defeat computer software in diesel engines of a substantial number of its cars.
This device monitors engine operations, vehicle’s speed, air pressure, and wheel’s positions, it is able to detect when a car was tested according to its emission level of carbon dioxide, and change the performance to improve results (Volkswagen: The scandal explained par. 1). The multinational company admitted to cheating and later revealed that 11 million vehicles worldwide were equipped with this software (Volkswagen “to Pay $10bn” par. 11). Although Volkswagen chief executive apologized to all stakeholders for cause damages, the company currently faces massive fines from the US controlling authorities and accusations of installing the same software in the engines of its three-liter diesel cars. The company is waiting for the court’s decision and discussing the steps to reverse the situation with the Environmental Protection Agency and car owners’ lawyers.
The scandal with Volkswagen demonstrates the situation when the company infringes on business ethics and the legalities of a foreign country by taking risks of cheating to make more profit. The company wanted to enter the US market that is currently aware of saving energy and “producing products that cause less harm to the environment” (Nickels et al. 19). The US government regulates business and sets the standards that should be followed by local or multinational companies (Nickels et al. 13). In the contemporary world, the companies’ needs to gain profits should be balanced with “the need to protect the environment” (Nickels et al. 6). In the case of Volkswagen, the US regulators prescribe the limits of gas emissions from the vehicles with diesel engines in the territory of the United States that were exceeded by the German conglomerate (Burki 838). Moreover, the results were intentionally hidden, and in this way, the company fails to meet the requirements of the US legality.
Furthermore, the company has discourteously violated business ethics by cheating stakeholders. The responsible company that follows its ethic policy respects customers’ needs and demands, it is responsible for the quality of its products and offers credible information (Nickels et al. 15). Volkswagen was altering the results of the emission test in the US and previously other countries, while it launched a substantial marketing campaign emphasizing low gas emissions of its vehicles (Volkswagen: The scandal explained par. 2). The corporation has cheated its customers who care about the environment and feel their responsibility for the reduction of air pollution.
From the personal perspective, the actions of the Volkswagen corporation are inappropriate; it breaks the law, places the environmental safety under threat, and harms customers’ credibility. Any company should be responsible for its stakeholders and their needs. The nonperformance of obligations substantially affects the reputation of an organization negatively. The cheating of Volkswagen, its following revelation, and the scandal significantly influence its reputation and the reputation of its employees, dealers, suppliers, stockholders, and even customers as well.
As the contemporary competition between companies is highly intensive, business rivals from the same business sphere frequently try to assure customers that their suggested products are better and admittedly differ from competitors’ ones (Ryzhkova and Prosvirkin 23). However, there are various strategies that companies may follow to be successfully competitive. They may focus on exceeding customers’ expectations through reasonable prices and the high level of service or increase the quality of executed work by employees’ training and proficient equipment (Nickels et al. 16). In any circumstances, a successfully competitive company observes the activities of rivals to learn from them and avoid potential mistakes.
The emission scandal with Volkswagen cannot stay unnoticed by its competitors, and a rational rival corporation should definitely take advantages of the German car giant’s mistake. In the current situation, a competitor should take into consideration that the intentional violation of the US and other countries’ legalities will be inevitably revealed in the future, and any deception will result in criminal charges, massive compensations, and the loss of stakeholders’ trust and good reputation. That is why a competitor should focus on the quality of its products, the engines of this company’s vehicle should fairly pass the emission test. Later, the results should be highlighted in the advertisement to show customers the company’s sustainability in contrast to the German conglomerate that has failed.
In any case, to be a top-performing company that may efficiently compete with others, any corporation should focus on the quality and distinguishing characteristics of its products. It should constantly improve customer service, consider environmental safety, learn from competitors’ mistakes, and pay attention to employees and customers’ needs.
Burki, Talha Khan. “Diesel Cars and Health: The Volkswagen Emissions Scandal.” The Lancet Respiratory Medicine, vol. 3, no. 11, 2015, pp. 838-839.
Nickels, William G., James M. McHugh, and Susan M. McHugh. Understanding Business. 11th Edition. McGraw-Hill Education, 2016.
Ryzhkova, Elena, and Nikolai Prosvirkin. “Cluster Initiatives as a Competitiveness Factor of Modern Enterprises.” European Research Studies, vol. 18, no. 3, 2015, pp. 21-30.
“Volkswagen ‘to Pay $10bn’ for US Emissions Scandal.” Www.bbc.com, 2016, Web.
“Volkswagen: The scandal explained.” Www.bbc.com. 2015, Web.