Introduction to Volkswagen

Volkswagen is a German Automobile company founded in 1937. The meaning of the word “Volkswagen” translated from German is “people’s automobile”. For sure it has been people’s automobile for a long time and ruled the automobile world for decades in Germany and around Europe till the recent ethical failures that were pointed out in its emission systems. The third generation car introduced by Volkswagen was declared the European Car of the Year by the Car of The Year European Chapter (“Reviews & Awards: Golf: Volkswagen UK”, 2016). In the recent times, Volkswagen expanded and presented many models that became popular among automobile users. For example the models VW Golf, VW Jetta, VW Scirocco and SEAT manufactured in the first decade of the current century won Volkswagen recognition among an overwhelming number of automobile users in Europe and around the world. In North America alone, Volkswagen recorded a 4.9% sales increase in 2005 by selling 224,195 automobiles.

Volkswagen has been successful in establishing manufacturing plants around the world in different countries including US, Slovakia, China, India, Indonesia, Russia and many more other countries. Due to a dynamic approach in localization of its cars by building manufacturing plants around the world, Volkswagen has been successful to increase its sale from 6.2 million automobiles in 2007to 9.7 million automobiles in 2013 (Intell Reports, 2016).

Before the revelations of the ethical failures regarding emissions, Volksvagen had been regarded as a friendly place to work at where ethical standards have been followed to the letter and spirit. According to the Volkswagen itself, they lead by example and ensure active involvement of their employees and their customers (Group, 2016). Volkswagen was regarded as a corporation that believed in the high standards of social responsibility until it was discovered that they have been developing the software that can trick environmental safety procedures and instead of being emitting above the guidelines for vehicle emissions, there vehicle seemed to be under emitting when assessed.

Literature Review

Article 1

Wilhelm, B. (1997). Platform and modular concepts at Volkswagen—their effects on the assembly process. In Transforming automobile assembly (pp. 146-156). Springer Berlin   Heidelberg.

This article explains the different strategies used by Volkswagen when developing their automobiles. In this article the researchers have identified the two core phenomenon used to produce automobiles that will give their customers a great experience when they buy it. Volkswagen has been praised to employ a platform strategy in which they work on the overall making of the invisible machinery and structures of all the models of the car. All the models are looked from a single lens when it comes to developing the invisible parts. The second part of the platform strategy is to consider the visible parts of all the models separately and develop them.

The concept of Modular is divide each automobile into different module and assign teams to work on these different modules. This is where the article becomes more relevant to this paper. The main scandal that rose against Volkswagen was that the team responsible for the software module related to the emission system had developed a software that was able to trick the emission assessment system.

Article 2

Jürgens, U. (2002). Corporate governance, innovation, and economic performance: a case study on volkswagen (No. FS II 02-205). Social Science Research Center Berlin (WZB).

This case study sheds light on the strong governance system that has been employed by Volkswagen which ensures that they are leading in the right directions. The stakeholders with even greater share of more than 20% do not have special voting powers. To make a new plant, or relocate an existing plant, two-third majority vote of the supervisor comity is require.

What this case study tells us that it would not be easy to make a decision that does not enjoy the agreement of the majority of the stakeholders and the supervisory committee. The question that it raises for this paper is how was the decision to develop a software for the emission system to trick assessment reached? Did it have the agreement between the majority of the concerned people or not?

Article 3

Barrett, S. R., Speth, R. L., Eastham, S. D., Dedoussi, I. C., Ashok, A., Malina, R., & Keith, D.   W. (2015). Impact of the Volkswagen emissions control defeat device on US public    health. Environmental Research Letters,10(11), 114005.

This article aims at pointing out the ethical and legal breaches made by Volkswagen and its health implications for the general public. The article suggests that according to US Environmental Protection Agency (EPA), Volkswagen has violated the Clean Air Act (CAA) in its 2009-2015 models by developing a software that shows less emission exhausted by the car than what it actually exhausts.

The research suggests that the emission of gases by automobiles in access of what they are allowed can cause serious health issues among the general public. These gases could even cause premature mortality and morbidity of non-fatal outcomes.

Signals and Clues

There are some cues that can be viewed as the early signs suggesting that Volkswagen might be cheating or planning to cheat. For example in 2007, Volkswagen suddenly stopped the production of diesel engine automobiles due to emission problems. They said that they have found a fix to the problem but did not start to produce cars till last quarter of 2008. This is what gives us a cue that they were up to something that they did not want others to know about. They never brought to the notice of general public what fixes they applied.

In 2007 to 2009, other car manufacturing companies like Honda, Nissan and GM tried to launch their diesel automobiles but they were not successful. They had issues with keeping the emission within limits within the price range the cars were to be sold. On the other hand Volkswagen did not had any problems because, in my opinion they had found a “way around it”.

In the same time when other car manufacturing companies were struggling with developing a fuel efficient diesel engine, Volkswagen customers were reporting fuel economy on Fueleconomy.gov website which was unusual at that time. That is where experts should have given it a thought about what is going on with the diesel engines that they have lower emissions and high fuel economy. In my opinion Volkswagen wanted to be a leader in the diesel engine automobile market therefore, they did not think of the ethical or legal implication and just did what they considered was the best for the interests of the company and their stakeholders.

Ethical Issues in the Future

When we look around we do not have to go far to see which countries might have ethical issues in the near future. For example we can see that Chinese economy is growing rapidly and therefore, they have been growing industry in China at a greater speed. This would definitely be an issue for Chinese culture as there would reach a point where their carbon emission would become an issue for them and other countries of the world. Both China and America had issue reaching a deal on the climate change agreement for decades and it has only been a few months they signed the agreement in Paris.

Other example is India. India is growing economically at a greater rate. One of the side effects of the rapid economic growth is that it brings legal an ethical issues that if not addressed on time, would bring future problems. For example Indian government has raised the minimum wage to a level which companies believe to be more than what they can afford to pay their employees (Forbes, 2016). The decision seems to be political in nature. The employees consider it a violation of their rights when not paid what the government has standardized. In short and long run, this will become an issue for the government to inforce their decisions related to minimum wages and a social unrest could be resulted.

If we look at the around us, we see each and every person looking at their mobile phones and other smart devices. I believe that the time has come to look at how ethical is the production of addictive mobile applications? Application developers must argue that each consumer has a choice to opt the time they want to spend on a specific game. What these consumers do is use consumer psychology researches and adopt to practices that would help them get their consumers addicted to their applications which in my opinion is unethical. 

References

Desjardins, J. (2014). An Introduction to Business Ethics, 5th Edition. New York, NY: McGraw    Hill Companies.

Forbes Welcome. (2016). Forbes.com. Retrieved 22 October 2016, from             http://www.forbes.com/sites/timworstall/2016/08/31/indias-gross-mistake-in-raising-the-minimum-wage-its-already-too-high/#3fa3c53a3c2b

Group, V. (2016). Volkswagen Group Basic Principles. Volkswagenag.com. Retrieved 22             October 2016, from      http://www.volkswagenag.com/content/vwcorp/content/en/human_resources/basic_principles.html

Intell Reports. (2016). Retrieved 22 October 2016, from             http://www.intellreports.com/w/LIBRARY/100057/

Reviews & Awards : Golf : Volkswagen UK. (2016). Volkswagen.co.uk. Retrieved 22 October      2016, from http://www.volkswagen.co.uk/new/golf-vii/explore/reviews-and-awards

Truett, R. (2016). Were there signs that VW was cheating?. Automotive News. Retrieved 22           October 2016, from      http://www.autonews.com/article/20150928/OEM11/309289959/were-there-signs-that-vw-was-cheating%3F