Ethical issues in the business
Introduction
Ethical issues in the business are challenging, and it affects the business image. The company needs to strive hard to focus on growth and make decisions that ensure corporate social responsibility. Some laws hold the business to work accordingly (Ghanem & Castelli 2019). Ethical issues in the industry encompass areas that are not addressed by the company, and ethical standards are not maintained. The ethical issues in the business include diversity, compliance and decision making. The business should understand key proper compliances and environmental measures. The report discusses Volkswagen’s emission scandal in the year 2015. The diesel cars were designed by the company to cheat in an emission test. The US Environmental Protection Agency addressed this. The report includes ethical issues, stakeholders impact, ethical decision making and understanding of business ethics.
Company background
Volkswagen manufactures and sells Passenger cars and commercial vehicles. The company is an integrated energy supply company which is managed by 670,000 employees all over the world. The automotive manufacturer continues to enhance leadership model while redesigning the portfolio and addressing regulation with digital transformation (Volkswagen 2020). Volkswagen has presented affordable mobility for people which ensures the new vision of the company.
Ethical issue
Volkswagen’s ethical issue had been addressed in the year 2015 when the company has been cheating by making cars that appear less pollution. The diesel cars that the company has manufactured were designed to cheat in emission tests. As per the US Environmental Protection Agency, the VW diesel cars by Volkswagen were emitting 40 times toxic fumes than the given permission. The ethical standards were not followed by the company, which resulted in cheating and affected more than 11 million cars worldwide (Hotten 2015). Environmental concern is one such ethical standard that the companies should address in the making standards (Weinbaum, Landree, Blumenthal, Piquado & Gutierrez 2019). There were harmful NOx emissions such as nitrogen dioxide that led to a danger to the people. As per the analysis, air pollution affected between 250,000 to 1 million tonnes every year, which was the damage to the economy due to VW vehicles. It means that environmental standards were not maintained by VW while being tested. With the EPA tests, the profiles were addressed, and the company was accused of the diesel dupe. The diesel engines could detect the changing performance, and the German car giant admitted the cheating that was done in the US. The emission test proved that ethical issues in the business are addressed while the company needs to take steps to reduce the emission and engage in moral standards.
Stakeholders impacted by the ethical issue.
Stakeholders of the company are the customers, government, public and society at large. Every business must consider stakeholder’s interest and make effective decisions (Javed, Rawwas, Khandai, Shahid & Tayyeb 2018). Towards achieving the goal of effective practices, VW addressed that more than 11 million car users are affected due to diesel dupe. The diesel car users worldwide affected 11 million users, including eight million in Europe. Therefore, the large manufacturer was accused of the diesel engine that fitted to Audi, Porsche and VW models.
Ethical decision
The decisions made by the company leads to unethical practices as the Environmental Protection Agency has addressed cheating on emission test. The company decisions led to health factors and caused inflammation which reacted negatively. Customer loyalty and brand image were seen to deteriorating company’s sale. The sales volume was affected by the unethical decisions that led to a significant investigation in the US. The company was fined $18bn on fixes and compensation, which was a considerable amount (Topham 2015). However, some criminal charges and actions were addressed on VW. Therefore, the unethical decisions made by the automotive manufacturer were reviewed, and the scandal was highlighted in real-life emissions. With the acceptance of screwing up the things, VW has broken the trust of customers and the public that resulted in low sales volume. The quarterly loss was observed by the company, which led to financial impact. The company has later made progress in leaving no stone unturned and working on ethical decisions.
Business ethics
I have addressed the case and learned the significant impact of ethical issues at work. I used to believe that ethical issues include employee standards and its well-being. Still, working on the case study, it helped me to gain the knowledge of considering code of conduct to be maintained by the organizations. It changed my level of understanding business ethics. I used to believe that ethical issues are limited to harassment, health and safety, whistleblowing and technology. Later, working on the case analysis, it helped me to gain knowledge about the environmental concern that is very important for the organization to consider ecological measures in the business. Business ethics are regarded by the organizations that ensure growth and development of the company while gaining brand image (Rhodes & Badham 2018). Customer loyalty is measured with the help of an ethical decision made by the organization. However, there are business practices that lead to transparency and openness (Tamunomiebi & Ehior 2019). With the advent of technology, I observed that organizations should work towards environmental measures which will help to reduce the pollution level and achieve direct competition.
Conclusion
The report proposes ethical issues at Volkswagen in the year 2015. The emission test was a major scandal in the automotive industry. The scandal highlighted the acceptance of the cheating that the company has been doing, and it has impacted 11 million users worldwide. As per the US Environmental Protection Agency, the company has emitted pollution to more than 40 times than permitted. The environmental standards were not followed, and the ethical decisions that were taken by the company proved to be a failure while impacting the financial position of the company.