The Volkswagen Scandal

Introduction

            Volkswagen refers to a German corporation, which manufactures engines, motorcycles, commercial vehicles, and passenger cars. In particular, it is one of the largest automakers globally. Besides motor products, the Volkswagen Groups offers leasing and financial services. The company takes ownership of several vehicle brands such as Bentley, Lamborghini, Volkswagen, Audi, Porsche, MAN, Skoda, and Scania. Volkswagen operates in over one hundred-and-fifty countries. The company does not have a definite mission statement, but its main goal is to provide safe, attractive, and environmental-friendly vehicles that can compete in the dynamic market and produce world standards in their countries of operation. Thus, from 2008, the company started producing ‘clean diesel’ vehicles to observe environmental requirements. However, the company created a cheating device that would ensure that the vehicle emits the required amounts of emission during testing and release more gas back on the road. By analyzing The Volkswagen Scandal case through the three ethical theories including consequentialism, deontology, and virtue ethics, it is apparent that the cheating actions of Volkswagen to the worldwide environmental test are deemed unethical.

            Key Words: (EPA): Environmental Protection Agency, The Federal Trade                          Commission (FTC)

An Overview of the Scandal

            Volkswagen joined other organizations and decided to ‘go green’ to uphold the clean air regulations. Therefore, they ‘developed’ technology that reduces harmful nitrogen oxides emissions and subsequently attracted thousands of environmentally conscious customers. In turn, the company sales rapidly increased as people. However, the ‘Clean Diesel’ campaign was found to be a ploy after The Federal Trade Commission (FTC) realized that the company had concealed “defeat devices” in the cars (Mansouri, 2016). In particular, these devices had software that concealed the vehicles emissions, which highly exceeded the emission standards. The devices turn on pollution controls when the car goes through emission testing and then turns them off when the car goes back to the road (Biesecker, 2016). According to the US government, Volkswagen cars emit about forty times the allowed Nitrogen Oxide emissions that contribute to childhood asthma, acid rain, smog, respiratory ailments among others (Biesecker, 2016). Regarding its advertisements on ‘clean diesel” vehicles, Volkswagen has been sued for making fake declarations on the vehicles ability to operate within the environmental friendly requirements (Cue, 2015). For this reason, FTC alleges that the company deceived its customers in a period of seven years that saw them sell more than five-hundred thousand cars using the fraudulent claims they made through their ‘clean diesel’ marketing campaign. In particular, the campaign involved print advertising, social media, and Super Bowl adverts that targeted ‘environmentally conscious” customers.

Volkswagen Response to the Allegations

            The chief executive of Volkswagen admitted to designing and manufacturing the two-liter diesel vehicles with the defeat devices to render, defeat or bypass elements of the control emissions. Thus, the then Chief Executive Officer, Martin Winterkorn offered a public apology and admitted that they had broken the trust of their customers. To amend their fault, The Company has decided to launch an internal inquiry to find out the extent of the damage (Botter, 2016). Besides, the company has accepted to compensate their customers and buy affected cars (Mansouri, 2016). In case the consumer decides to keep the vehicle, the company has accepted to fix the cars with a software update and a bigger catalytic converter to ensure the car releases the accepted percentage of emission. Besides, the company launched “Together-Strategy 2025” in June 2016-a strategy to create more than thirty e-vehicles, digitization, battery technology, and autonomous driving by 2025 (Botter, 2016). Moreover, the company has laid-off some workers to save to invest in electric cars.

An Analysis of the Scandal through three Ethical Theories

Consequentialism

            Consequentialism refers to the perception that morality is about producing the right consequences. For example, if a person believes that morality entails relieving suffering and spreading happiness, then the person agrees that consequences matter. In particular, consequentialism has failed to identify which types of consequences are bad or good. Therefore, people may consent that consequentialism matters but disagree of the kind of result that is bad or good. According to Suikkanem (2009), it operates on two principles; (1) whether an act seems wrong or right depends solely on the results of the action and (2) the more an act produces good consequences, the right the act. Examples of consequentialism include utilitarianism (emphasizes the importance of maximizing human well-being) and hedonism (emphasizes maximizing human pleasure). The consequentialism theory has several versions. Some of them include;

            Expectable Consequentialism: It demonstrates that an action, which is morally right and has reasonably expected results, is usually the best.

            Rule Consequentialism: It states that an action only appears right morally when it upholds the set rules of behavior accepted by the general community.

            According to Cue (2015), Volkswagen has a corporate social responsibility that emphasizes sustainability of healthy environment for its workers and the public. The company has even gone ahead to initiate “The Fun Theory” that aims at protecting the environment by collecting recycle bins and garbage cans that involved the public in fulfilling the company’s eco-friendly strategy. However, they have failed to uphold their eco-friendly campaign with the installation of the ‘defeat devices’ in their vehicles (Suikkanem, 2009).             These cheating devices have continuously allowed Volkswagen vehicles to emit over forty percent Nitrogen Oxide gas into the air. In particular, Nitrogen Oxide is a harmful pollutant to both humans and the environment (Cue, 2015). The harmful gas can be carried by the wind and stay in the air for days or years. The emissions create smog, acid rain that affects streams or lakes, increases the degradation of structures and increases respiratory diseases such as lung inflammation in humans. Mansouri (2016) posits that Volkswagen vehicles with defeat devices have produced over 36.7 million kilograms of Nitrogen Oxide in the air. He adds that estimated impacts of this nitrogen gas have contributed directly towards thirty-one to thirty-four respiratory cases such as chronic bronchitis in the US (Mansouri, 2016).Thus, the company has negatively affected the ecosystem in ways they cannot imagine. By opting to install the cheating device in their vehicles, the company has shown the public and their customers in particular that they care more about making high profits than their health and environment (Suikkanem, 2009). Volkswagen, thus, appears selfish as the company only thought of the consequences of their actions to the company and not to their customers or the environment that they appear to care so much for in their corporate social responsibility values.

Deontology

            Deontology refers to an ethical approach that focuses on wrongness or rightness of actions. In particular, whether the situation appears bad or good depends on whether the action that brought the situation was right or wrong (Tanner et al., 2007). Therefore, this ethical approach prioritizes right over good. Deontological morals emphasize on moral duties. Therefore, for a person to make a correct moral choice, he or she has to understand his or her moral duties and the rules that govern the duties. For this reason, moral principles appear from consequences of any kind. Besides, deontology has two sets of duties; a general duty towards others and obligations towards oneself such as to personal relationships.   According to Tanner et al. (2007), organizations should not only use people as a means to an end. Otherwise, that would undermine the power of individuals to make rational choices. As a result, manipulation and lies (among others) do not allow people to make informed decisions. If people are involved in the activity, they should have the power to agree or disagree because ultimately the activity will affect them. Volkswagen sells its products to people who use them. Therefore, they should take their consumer’s interest at heart. As a corporate organization, Volkswagen has a duty to serve their customers in the most honest way possible (Tanner, et al., 2007). However, the company acted unethically by lying and manipulating their consumers through adverts. While their adverts insisted on how eco-friendly their vehicles were, the truth was their vehicles were emitting harmful gasses that would consequently affect their customers, the public, and the environment. The company knew of the effects of excessive nitrogen gas emission despites their senior official denying knowledge of the defeat devices (Cue, 2015). As a result, they used their customers as a means to benefit (Tanner et al., 2007). In turn, they have increased respiratory diseases that unfortunately affect some of their customers and thus failed to uphold their ethical responsibility.

Virtue Ethics

            Virtue ethics refer to an ethical approach that emphasizes on a person’s character as the main element of thinking rather than actions or rules (Bowden, 2005). In particular, virtues refer to character, dispositions or traits that enable a person to act morally. A person discovers virtuous actions through learning and practice. Virtues include fairness, integrity, fidelity, generosity, prudence, honesty, and compassion. In particular, virtues become habits with time such that they identify a person. An individual develops virtues within the community that she or he belongs. As a person grows up, his or her personality becomes influenced by characters or traits that his or her community encourages and by imitating the people that the community portrays as having admirable virtues. According to Bowden (2005), when a person acquires virtues, he or she becomes able to make moral decisions when faced with a difficult situation. Acting from virtue arises from particular motivation. Thus, for virtues to enables a person to make the right decisions, one requires correct motives. However, having a good character alone cannot make a person make the right decision.

            Volkswagen operates under a defined structure that is organised by people from the senior management to the lowest ranked staff. All these people strive to portray a positive company image by observing the company’s ethical policies (Bowden, 2005). As expected, the senior officials should set example by practising virtues that would encourage their subordinates to emulate. However, as Cue (2015) posits, the Volkswagen’s senior management do not appear to follow the same ethical policies. When EPA revealed the discrepancy found after testing the Volkswagen vehicles, the CEO during the time, Martin Winterkorn stated that he had no prior knowledge regarding the cheating devices. Later on, the organization blamed the engineers for placing the defeat devices claiming that the corporate management was not aware (Cue, 2015). Whether the engineers are to blame as the corporate management wants the public to believe, the latter have to inspect and approve the vehicles before they are released to the market. Therefore, it may be hard for the senior management team to convince the public that they were not aware of the defeat devices. Besides, all company employees have the responsibility to adopt and practise admirable virtues (Bowden, 2005). However, the employees have not displayed honesty and integrity as they continued selling the vehicles (with defeat devices) despite knowing that that behavior went against the virtue ethics. In addition, the company officials who knew of the defeat devices and decided to keep quite were not fair because they lied to their consumers claiming that the vehicles were environmentally-friendly. Their sacking after the scandal erupted shows that these individuals do not practise nor have virtues at all.

Summary

            Consequentialism states that a moral act is that which provides the best consequence. Volkswagen has a corporate responsibility towards its consumers, the environment, and the public. However, when the company decided to install defeat devices in their vehicles, they appeared to care about their consequences, which best suited them (making more profit) than ensuring that their actions produce the best consequences for every person in the community. Consequently, the company has increased respiratory infections in humans and has greatly harmed the ecosystem because of the large amounts of nitrogen gas emitted from their vehicles.

            Deontology ethics; on the other hand, emphasizes that a person’s duty towards other people and towards his or herself outweighs the consequences of his or her actions. Thus, if a situation appears bad or good depends on the positivity or negativity of the action that created the situation. For this reason, all organizations have a duty to serve the public in their various capacities. Thus, they should not lie or manipulate their consumers into taking actions that are not morally right. However, Volkswagen has not observed this ethical principle because they manipulated their consumers using false adverts to entice them to purchase their vehicles.

            Contrarily, the virtue ethics emphasizes more on a person’s character (virtues) than the consequences or the right and the wrong of his actions. If a person has virtues, he or she becomes able to make morally correct decisions. Thus, every employee of any organization should have and practise good character. Most importantly, the senior management should have virtues to influence their followers to emulate them. Conversely, Volkswagen’s employees have displayed dishonesty and unfairness by placing defeat devices that have made their vehicles produce harmful gasses to the environment. Thus they have not demonstrated good character and have failed their consumers.

Conclusion

            Volkswagen’s deceptive scandal has caused more damage to them than good. The company has demonstrated that it has some loopholes regarding ethical management. Their successful eco-friendly campaign has worked for them and they have amassed billions just like they expected. However, the company failed to plan for their consumers whom without the company cannot operate. They have clearly shown that they care more about maintaining their competitive edge and reputation at the expense of their consumers’ health. The fact that the company would have continued placing the defeat devices on their vehicles if not for EPA raises a fundamental concern regarding the organization’s ethical policies. And even if it is assumed that the ethical policies exist, they are merely to decorate the company’s books and not to be practised. After analyzing the poor decision making by Volkswagen using three ethical approaches, the auto-company’s actions are evidently unethical.