Literary Review Introduction This part of the paper presents information based on recent literature regarding the status quo of Volkswagen. It reveals the incident that acted as a whistleblower in identifying the scandal, the various unethical business practices that were involved and the impact it has as a result. The rest of the paper will elaborate the points of view of different scholars who analyzed this particular scandal and shared their thoughts pertaining to the unethical practices discovered in Volkswagen’s corporation based on evidenced facts. Ethics versus Profit In general, business ethics means getting to know what is considered right or wrong in the workplace and involves performing accurately in regard to effects of products, …show more content…
Any corporation involved in fraudulent activities will suffer from consequences that negatively affect the image of an organization. While the majority of companies earn …show more content…
The company has knowingly been involved in illegal installation of ‘cheat software’ in millions of its cars all over the world. This unethical act of theirs was a lie about the true potentiality of the cars that are sold to its customers. By being involved in such fraudulent behavior, Volkswagen not only cheated the people but also caused apparent damage to the environment by emitting 40% more nitrous oxide than the EPA’s standard. According to Edward L Queen, Director of Ethics and Servant Leadership Program in Emory University, Volkswagen intentionally deceived those to whom it owed a duty of honesty. This was not a mistake, an error, an ethical lapse, or poor judgment. This was an intentionally designed and executed violation of the law in both its letter and its spirit. It also was an ethical violation of the highest level (Queen, 2015). It should not be seen as a misunderstanding or a failure to communicate, but a purposeful wrongdoing that was conscious to the top management of the
On one of the article was the discussions about the act of dishonesty itself, and how the losses due to the cheating of the emission test stood up to losses incurred by other related problems. The writer also included the financial burden the cheating
Although Hollate introduced a compliance program and code of conduct when it went public, the programs were put on “the back burner”. This outcome is not surprised for that the company does not pay attention to the programs. It is, therefore, important to “reinforce the values” and “employee a boundary system when actions are inconsistent with the code of conduct” for the purpose of early detection. Tyco provides a good example after its scandal, by initiating “mandatory annual compliance training for all its employees worldwide” and creating the Tyco Guide to Ethical Conduct to familiarize employees with company expectations and help them make ethical decisions. As tips is the most useful method for internal and external sources to detect frauds, the whistleblower hotline should be well communicated with encouragement on reporting any suspicious activity. In addition, to improve the effectiveness of the compliance program and code of conducts, Hollate should implement management monitoring and evaluation on a regular
An organization that lacks a true culture of ethical compliance can create problems with integrity issues with stakeholders and customers. When a major company such as Enron, was structured their approach to ethics on the surface appeared to oppose progressive innovation. The policies and ethics programs were set up to protect the company and its shareholders. According to author Berenbeim, The Enron company had a detailed code of ethics it was not enough the organization needed to incorporate ethics and integrity throughout their corporate culture. Enron had to focus on business ethics issues raised by the conduct of the company’s directors, officers, accounts and lawyers (Berenbeim, 2002).
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
The standards of ethics serve as guidelines for the conduct of individuals and businesses alike. Uzi Nissan acted h...
This paper will illustrate the moral, social, and factual implications of the Volkswagen scandal regarding the case dealing with emission standards of the diesel Volkswagen vehicles. The reader should note that this analysis will be given from two different philosophical points of view. Namely from the Kantian and Rule-Utilitarian perspective. The paper will attempt to demonstrate the moral implications of the case at hand, and how this applies to Mr. James Liang’s actions. As the reader may know Mr. James Liang worked for the Volkswagen Company for more than 30 years. He and his colleagues worked on creating a low emission diesel engine. In the course of this project, it became apparent that the emission goal could not be achieved with respect
Tyco provides products and services across the world. The company is global and diversified providing a variety of products including electronics, healthcare, fire and security services and engineered products and services. While employing over 250,000 people worldwide they grossed approximately $40 billion in revenue in the year 2005. In 2002 Tyco was involved with the corporate scandal where the management mis-appropriated corporation funds. The previous CEO Dennis Kozlowski was convicted in 2005 on 22 counts of the 23 that he was charged with. This is an example of not only a legal issue of responsibility but also one of an ethical issue that the Tyco Corporation has had to face. In the face of the legal and ethical issues that this mishap had placed the corporation in, Tyco placed Ed Breen in as chairman and CEO. Mr. Breen joined the company in 2002 after the scandal and immediately began the rebuild of the company’s name. With the appointment of Ed Breen and his changing of the company’s ethical standards (to be discussed in the next portion of the paper) he promotes the legal responsibilities of not only the company’s employees but the responsibilities of the suppliers and buyers to report any wrong doing. This reporting also speaks to the ethics of the Tyco corporation employees as well as those of the companies th...
By the reading of it, Volkswagen management expressed what seemed like genuine shock when the EPA and California’s Air Resources Board revealed their joint findings regarding the automaker’s manipulation of US emissions testing for diesel cars outfitted with a particular 2.0-liter, four-cylinder engine.
In the aftermath of Enron, Washington Mutual Bank, TYCO, and World Comm these companies went against the grain of what good ethical behavior is and what their respective company’s code of ethics were. The criminal justice system has made it clear that it will not allow companies and their executives to get away with the misuse of public trust by allowing them to make themselves rich at the expense of the employee. Where these crimes are both ethically and morally wrong, the CEO’s of major corporations are being punished by a ...
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil
In the Fall of 2015, Volkswagen was accused and found guilty of cheating on emissions tests that were put in place by the United States government in order to regulate the amount of harmful gases released when driving vehicles. In the aftermath of the scandal, their CEO Martin Winterkorn was replaced by Matthias Muller who found himself in need of drastically changing the corporate culture in order for VW to once again be a reputable automobile manufacturer. In order to understand why the scandal occurred in the first place an analysis of the historical culture that had dominated the company until recently. Volkswagen was established by the Nazi’s with help from Ferdinand Porsche and the majority of the company continues to be held by his descendants. Nazi Germany is infamously known to have been extremely authoritarian with orders being strictly followed coupled with a unparalleled sense of self-righteousness. This culture inevitably influenced how VW operated and led to it’s CEOs demanding perfection, setting
This paper discusses the role of ethics in corporate governance. I seek to show the application of moral and ethical principles in corporate governance. Ethics is a topic that has generated a lot of interest in the last decade especially after high profile scandals. The failures of prominent companies such as WorldCom, Enron, Merrill lynch and Martha Stewart portrays the lack of corporate ethics. The failure of such business has seen an increased pressure to incorporate ethics in corporate governance. The result of corporate scandals has been eroding investor and public confidence. The entire economic system has experienced some form of stress from loss of capital, a falling stock market and business failures.
The textbook defines business ethics as “the accepted principles of right or wrong governing the conduct of business people.” Business ethics also govern the members of a profession and the actions of an organization. Many organizations put into place an ethical strategy which is “a course of action that does not violate accepted principles.” These principles are used to guide organizations and employees to make the right decisions.
Toyota issues in automotive industry resulted from a lack of moral and ethical obligations to loyal customers. In fact, people encounter ethics at one time or another. A business expectation is to act in manner upholding society values. According to authors Trevino and Nelson, (2004) states, “a set of moral principals or values, or the principals, norm, and standards of conduct governing a group or individual.” On the other hand, three ethical criteria determined in this discussion like obligation, moral ideas, and consequences which this article highlights an ethical dilemma with automobiles makers.
Business ethics are a set of moral rules that govern how a business operates, how people should be treated within an organization, and how business decisions are made. They are a crucial part of employment and in managing a sustainable business, mainly because of the serious consequences that can result from decisions made with a lack of regard to ethics. Even if you don’t believe that good ethics don’t contribute to profit levels, you should realize those poor ethics have a negative effect on your bottom line in the long-run. Every business in every industry has certain guidelines to which its employees must stick to, and regularly outline such aspects in employee handbooks.