Clayton Alexander

Module 1 Chapter 6: Social Responsibility and Ethics

Case Study: Ethics at Volkswagen

6-18. Are you surprised that an organization as large as Volkswagen was caught engaging in
such unethical behavior? Do you agree that the organization’s culture could have encouraged
this behavior?
It is not surprising to me that organizations as large as Volkswagen engage in unethical
behavior. Multiple cases have led me to believe that specific large organizations only
care about their profits and are willing to cut corners. However, I am surprised at the
intensity of this ethical issue. To pollute the Earth with large amounts of nitrogen oxide
risks the lives of the immunocompromised and can kill wildlife and animals. I agree that
the organization's culture could have encouraged this behavior. An organization's
structural design can influence whether its employees behave ethically. Studies show
that employees persuaded to reach set goals in a competitive environment are more
likely to engage in unethical actions.

6-19. Are there structural variables that may have influenced the unethical behavior at
Volkswagen?
Yes, several potential structural variables may have influenced the unethical behavior at
Volkswagen. CEO Winterkorn has been described as a "hard-driving perfectionist," who
publically criticized employees. Studies show that employees persuaded to reach set
goals in a competitive environment are more likely to engage in unethical actions.
Therefore, it is very reasonable that Winterkorn's harsh management style made
employees feel like the only way to succeed in their position was to do whatever was
necessary to ensure the company's success.

6-20. Evaluate Volkswagen’s actions based on the factors in Exhibit 6-5. How would you
describe the issue intensity of Volkswagen’s actions?
There were over 11 million cars worldwide fitted with the software, each one polluting
the environment, so that is a large number of people harmed. Even the premise of the
car's software is unethical, and most people are in agreement considering Volkswagen
ranked last in a poll of 100 large companies. With each vehicle emitting multiple times
more than the allowed amount of pollutants, the environment, and everyone living in
could be harmed. These four variables should make this an intense issue. However, the
company does not feel very close to their victims, and the effect of their actions don't
appear very concentrated since they do not directly see the long-term effects of their
products. Overall, this a very significant issue based on these variables.

6-21. Moving forward, what do you think Volkswagen needs to do to avoid such an ethical
lapse in the future?
Moving forward, Volkswagen needs to remove employees that had an impact on
installing unethical software and encouraging ethical actions in future employees. There
are several things that upper management at Volkswagen can incorporate into their
company to promote ethical behavior. Beginning with the hiring process, managers can
 Clayton Alexander

hire employees with high ethical standards, establish codes of ethics, and lead by
example. Employees need to have realistically obtainable goals so that they are less
likely to consider unethical actions. Additionally, this organization needs to set up
mandatory ethics programs periodically to encourage ethical behavior.