Volkswagen emission scandal

1) Trust is a basic element in the relationship between the firm and the client. Evaluate
why and how trust broke down in the VW case including shortcomings in corporate
future performances. (6 points)
Ans) It is true on many basis that the trust is the basic element between the firms and the clients.
If the trust of the clients with the firm is not healthy then it will certainly take a back step in their
relationships. Considering the present case where the environmental protection agency has issued
a notice against the clean air act to the Volkswagen stating that they have found a lot of
irregularities in the emission software and it has been used by the company on diesel cars from
the year 2009 to 2015. The trust of the people broke down after hearing this news because people
had trust on the brand that Volkswagen cars are one of the best manufactured cars in market. This
was case of emission of nitrogen oxide in the environment. According to the standards of US
environment protection act, there are certain regulations on the emission of the NOx in the
environment (Keith, 2015). When it was checked by the scientists, it was found that VW cars were
emitting 40% more nitrogen oxide in the environment and it was contributing to the problems of
pollution in environment.
Due to the increased emission problems, people were not allowed to drive their cars. This
contributed in a significant way in putting down trust of the company. Ultimately the problem is
that general public is suffering who are the users of VW cars. They are not allowed to move their
cars because of this problem (Schiermeier, 2015). This certainly affects the trust of people on the
automobile brand and also trust of the government over the safety concern with car. Obviously, it
was not the software professionals who were involved in this scandal but there might be others
who approved the system of the cars and passed them during their emission tests according to the
standards of the particular country. It is against the rules and standards of the organization which
give out a question over the future performance of the corporate of VW. A single loose chance
given by the company will contribute in destructing the market image and also the trust of the
people.

Q.2- Analyse the emission software irregularities using the Josephsons six pillars of
character and modern moral philosophies. Explain the main effect on stakeholders
according with the above philosophies.
Ans) the six pillars of character that Josephsons have given are- trustworthiness, fairness,
respect, caring, responsibility and citizenship. These values help in guiding ones choices. These
values form the basis for ethical decision making that VW failed to follow.
2.1 trustworthiness- it is the main pillar of all. When a person trusts an organization it means he
believes in them and is satisfied with the service provided. Thus organization has the
responsibility of full filling the peoples expectations without any lies or hiding anything. VW
hided the information, regarding the false software present in the system. Integrity, honesty,
loyalty and reliability are the values which forms trustworthiness that VW failed in.
2.2 fairness- following proper standards of justice without being partial and disproportional can
be said as a fair decision. VW should have accepted and corrected their mistakes themselves. But
they ignored it that was unfair to the society.
2.3 respects- one should behave with others as he wants himself to be taken. If VW wanted
respect and trust from the people it was their responsibility to do the same. They didnt show
respect towards the environment as the false software damaged the environment a lot polluting it.
The higher emissions of NO2 could have caused acid rains (Burki, 2015).
2.4 caring- caring is believed to be heart of the ethical values. Caring can be shown through
honesty, rewards and benelovance. VW failed to show care about environment as well as people
because the emissions could have caused peoples death too.
2.5 responsibilities- a responsible person is accountable of whatever he does. A person who is
responsible has qualities of self-control and is away from any hatred, greed, lust and fear. VW
lost its self-control and did mistakes as they wanted to earn more in sake of better judgment and
longer vision.
2.6 citizenship - it explains that how the person promises to behave with the society. A good
citizen follows all the laws. A person who is a good citizen tries to give more to the society than
he takes. Here VW tried to take more in terms of profits instead of giving.

There is a myth that shareholders worry about the stocks price only and not the society.
May be VW followed this myth to give shareholders more returns earning more profits instead of
taking care of society too. Because of this scandal shareholders suffered a lot as the share prices
fell down drastically in three days. One of the shareholders of VW named Qatar who had 17%
stake in the company lost about $5 billion in this fall.