Vw Fraud Case Study

Volkswagen’s diesel fraud case is one scandal that has shook the company leading to billions of dollars in losses. However, one issue that arises from the incidence is business ethics and the role of the management in ensuring that business practices are ethical and meet other set standards. For the case of VW, the issue appears to be deeper than initially believed with all board members seemingly compromised. This essay examines VW’s fraud case and the associated blame game.

How would you assign responsibility for the VW scandal? What should have been done differently and by whom?

The entire management team of VW including the then CEO Martin Winterkorn should take responsibility for the VW scandal. This is because the fraud happened under

It is fair to expect employees, especially professionals like engineers and accountants to confront management over other directives that could be unethical because they have professional codes of ethics that they need to adhere to. These code of ethics should guide how employees and professional work regardless of the pressure from the management. The ethical duties should also be protected by the law such that management and employers are prohibited from forcing employee to act in ways that could be unethical.

Other than laws, there should be other structures like regulatory bodies that ensure that employees are protected from unethical directives and threats from the management. This would give employees, including professionals the support and legal grounds to confront management over unethical directives. For instance, in the case of VW, the German engineers would have had more power to confront the management and also refuse to produce vehicles that do not meet the required standards and

Firstly, the board needs to be more independent in terms of having board members who only serve the interests of the company and not those of other parties. The company should increase the number of independent members to about 10 or two thirds of the whole board to increase the watchdog function of the board. Independence of the board would also enhance good governance and corporate credibility of the company. This way, there would be more oversight to prevent future scandals.

Another change that is necessary to prevent future scandals is to increase the powers and influence of the supervisory board and minimize that of the managerial board. Currently, VW’s management board retains a lot of power and is not liable to the supervisory board. As a result, the management board does not even disclose vital operational information that could potentially negatively affect the future of the company. Making the managerial board less powerful and more answerable to the supervisory board would help prevent future scandal.

Lastly, the supervisory board should consist of members who have knowledge and expertise in areas related to management, operations and relevant areas to enhance their capacity to ask technical questions. This would enhance their supervisory role and help prevent future