As organizations seek to achieve their business goals, they also have the responsibility of safeguarding the interests of stakeholders. Businesses must avoid malpractices such as adulteration of products and providing customers with wrong information. Recently, regulators in the U.S. realized that Volkswagen had been falsifying carbon emission data of its diesel-powered cars. The issue had serious ethical implications not only to the senior managers at Volkswagen, but also to employees and investors.
One can perceive the scandal at Volkswagen in two viewpoints; the first is that it affected the company brand image since the scandal was highly publicized scandal. The second perspective is that Volkswagen was involved in deception without the knowledge of managers and employees. In addressing the latter, the CEO of Volkswagen claimed that he was unaware about the unethical practices until the news appeared in the mainstream media (Roberts, 2016). This notwithstanding, each employee and manager involved in the vehicle assembly had an ethical responsibility of preventing the deception. Moreover, the company’s legal apparatus should have been aware of the unfolding situation and taken appropriate preventive measures.
If I were an employee or a manager in the legal or engineering department, I would have ensured that the company upheld ethics at all times. From an ethical perspective, it seems that the company lacked effective communication frameworks and transparency. Lippe (2015) provides readers with an accurate and insightful view about what occurred during the scandal. He identifies some communication weaknesses between the engineering and legal departments. According to Lippe (2015), communication breakdown, whether accidental or intentional, constituted to 10% of the root cause of the scandal. In addition, Lippe indicates that lawyers were unable to intervene due to lack of information or knowledge about the engineering department.
As the manager in charge of the engineering department, I would also have ensured that I acted within the legal confines of the organization. As an engineer-manager, I may have lacked relevant expertise in the field of law. However, I would make efforts to promote transparency by collaborating with the legal team. Similarly, as a manager in the legal department, I would feel obligated to understand the basic mechanics and operations of the engineering division. Lippe (2015) states that, “In Volkswagen, not knowing was just as bad as knowing and acquiescing. Maybe we should start talking about a duty to know what’s going on”. In this regard, lack of communication is not an excuse for acting unethically or failing to detect the malpractice. I would only perform my role as a manager of the engineering or legal departments after ensuring that the communication systems are effective and open. However, the policy of transparency and open communication may result in loss of valuable trade secrets to third parties. One way I would address the issue of loss of trade secrets is through implementing non-compete policy. Under the non-compete rule, no employees would be allowed to establish rival businesses to compete with the company. In addition, I would introduce tight controls on technology systems such as e-mails to ensure the employees do not shares sensitive company data.
As a manager, I would also improve communication in the engineering and legal department by implementing a collaborative data-sharing system. Consequently, important decision-makers and employees would use the interactive system to exchange ideas and offer useful suggestions that are pertinent to their operational roles. The information sharing strategy would be for the overall benefit of the company in terms of rebuilding the brand reputation, which was negatively affected by the scandal. Furthermore, it would be my responsibility to ensure that consumers who were affected by the scandal develop a positive outlook on the company. According to Spector and Colias (2017), some of the units that consumers bought emitted toxic fumes that were 40 times above the allowable levels. To regain the trust of the consumers, I would promote an open communication, which would allow for participation from all stakeholders. For example, customers would have the opportunity to provide the company with feedback and offer suggestions on product improvement.
Because of my strict religious background, I would find it difficult to deal with a corrupt management. According to the Book of Proverbs 11:3, “The integrity of the upright guides them, but the crookedness of the treacherous destroys them”. From a biblical and Christian perspective, employees who know their rights would be able to choose the appropriate course of action when faced with unethical situations. Moreover, the U.S. government has enacted the Whistleblower Protection Act with the aim of protecting employees who report illegal practices to the authorities (United States Department of Labor, n.p). Because Volkswagen was in violation of the Clean Air Act, I would have the moral obligation to report the company to the authorities, especially knowing that I can benefit from the government witness-protection program
One of my responsibilities as the CEO of the diesel division of Volkswagen would be handling the damage control. Although Matthias Mueller, the CEO of the diesel division, claimed that he was unaware of the company’s practices, he was still responsible for being part of a corporate culture that prioritized profits over ethics. According to Roberts and Spector (2017), the company engineers deliberately inserted the falsifying devices in the diesel-powered cars when they realized that the engines would not meet the emission limits requirements of the U.S. The engineers may have felt justified to falsify the engine data, but their actions became detrimental to the wellbeing of the company. It would have been costly and time consuming to realign the engines to comply with the U.S. emission standards. However, the cost and time elements were not sufficient justifications for concealing crucial information about the engines.
As the CEO of the diesel division at Volkswagen, I would encourage employees to report any incidents they might find in their areas of operation. I would also ensure that employees who own up to their errors are not penalized. However, it is evident in the Volkswagen case that numerous individuals were involved in the cover-up exercise. According to Roberts and Spector (2017), an engineer working for Volkswagen provided an internal perspective of the car maker, revealing that company had “lost its ethical moorings in pursuit of increased market share and corporate profits”. One of my responsibility as the CEO is to correct the ethical and moral wrongs that the company and its employees had committed over the years. Evidently, the matter would have been different if one or two individuals were involved in the scandal. As Lippe (2015) reported, the company was involved in a concerted effort to conceal a fraud, which ultimately eroded its public goodwill. I would campaign for the complete overhaul of organizational culture and values to restore Volkswagen’s lost image. One strategy I would use to enforce a culture of accountability is the involvement of third party auditors. The external auditors would conduct periodic checks on the engines to ensure full compliance to emissions standards. By implementing a system of independent audits, Volkswagen and its customers would have the assurance that the engines of their cars comply with environmental laws.
The scandal at Volkswagen has two main dimensions; first, there is the element of the negative effects it has on the brand. Second, there is the issue of cover-up and deception among senior managers and employees. It is the responsibility of all employees to ensure that the company engages in ethical practices. As a manager in the legal and engineering department, I would promote interdepartmental collaboration to ensure unrestricted flow of information. At the same time, my role as the CEO of the diesel division would be to rebuild the brand though a drastic change of organizational culture. Another of my primary objectives would be to rebuild the company’s brand by demonstrating to the public that the company is committed to making environmentally-friendly cars.