VW and Recent CSR Challenges
Leaders are responsible for the vision, mission, and values of an organization, but in the modern global business environments leaders must also absorb the responsibilities of such areas as Corporate Social Responsibility (CSR) and corporate citizenship. In Week 7 we discuss quality management practices that include these elements and practices that performance excellence demand from leadership and organizations. How an organization should be led is as unique as how that organization should be motivated.
Review the article: Case Study: VW and Recent CSR Challenges
Case Study: VW and Recent CSR Challenges
BA-432 Quality Management
Mark M. Glenn, MBA, FMI
In 2012, a group of West Virginia University researchers were awarded a grant to study performance testing of clean diesel cars, which included driving them outside of the laboratory. Following the study, the group was to author a paper based on the data for the International Council on Clean Transportation (Lam, 2015). In May, 2014, it was announced that the West Virginia study had uncovered a large fraud being perpetuated on the environmentally friendly public by Volkswagen.
Though the Volkswagen organization had avoided revealing the truth for over a year, Duffer (2015) cited the EPA as saying, “Volkswagen admitted to installing ‘defeat devices,’ software programmed to switch engines to cleaner test modes during official emissions testing. When the software is off and the vehicles are operating under normal road conditions, the affected models can emit nitrogen oxides (NOx) from 10 to 40 times more than the legal limit.”
Duffer continues: “The benefit for Volkswagen to letting the cars run dirty was improved fuel economy and better performance. The scandal is worldwide. VW estimated on Tuesday that about 11 million diesel vehicles have ‘irregularities’ that need correcting.”
VW said in a statement, “A noticeable deviation between bench test results and actual road use was established solely for this type of engine.” The automaker has set aside $7.3 billion in the third quarter to cover the costs for the issue (Duffer, 2015). The VW CEO, Martin Winterkorn, has resigned his position (Lam, 2015).
According to Davenport and Ewing (2015), VW had been struggling to gain a competitive advantage in the U. S. automobile markets. Since the EPA investigation, VW’s sales dropped even farther. It is unlikely to recover anytime soon. “This is several steps beyond the violations that we’ve seen from other auto companies,” said Tyson Slocum, director of the energy program at Public Citizen, a consumer advocacy group. “They appear to have designed a system with the intention to mislead consumers and the government. If that’s proven true, it’s remarkable and outrageous. It would merit a heck of a lot more than just a recall and a fine. We would see criminal prosecution” (Davenport et al., 2015).
The new CEO, Matthias Mueller, warned stakeholders of massive cutbacks and that the company faces serious financial challenges from the scandal. While some cars could be fixed by replacing software, others would require mechanical fixes (Finley, 2015).
Davenport, C.; Ewing, J. (2015). VW Is Said to Cheat on Diesel Emissions; U.S. to Order Big Recall. The New York Times. Retrieved, March 27, 2016, from: http://www.nytimes.com/2015/09/19/business/volkswagen-is-ordered-to-recall-nearly-500000-vehicles-over-emissions-software.html?_r=0
Duffer, R. (2015). Volkswagen diesel scandal: What you need to know. Chicago Tribune. Retrieved, March 27, 2016, from: http://www.chicagotribune.com/classified/automotive/ct-volkswagen-diesel-scandal-faq-20150921-story.html
Finley, K. (2015). Volkswagen CEO Warns Employees of Massive Cutbacks. Wired Magazine. Retrieved, March 30, 2016 from: http://www.wired.com/2015/10/volkswagen-cutbacks/
Lam, B. (2015). The Academic Paper That Broke the Volkswagen Scandal. The Atlantic. Retrieved, March 27, 2016, from: http://www.theatlantic.com/business/archive/2015/09/volkswagen-scandal-cheating-emission-virginia-epa/407425/#about-the-authors
Through research from sources provided in the course and from academic and scholarly resources outside of the course, evaluate and discuss the following elements:
- Analyze how the recent leadership CSR challenges of Volkswagen, impact all organizational stakeholders.
- As a leader, create new quality management strategies and stakeholder engagement practices you would initiate at VW.
- Through research sources, evaluate how leadership in companies have recovered from quality control issues and what recommendations for the future leadership of VW would you make.
The paper should contain the following APA formatted elements:
- Title Page.
- Body of the essay (Your researched response).
- References Section.
The requirements below must be met for your paper to be accepted and graded:
- Write a response between 750 – 1000 words for the body of the essay (The title page, abstract, conclusion and References section are not counted toward the word requirement.) (approximately 4-6¬ pages) using Microsoft Word in APA style.
- Address all three elements fully.
- Use font size 12 and 1” margins.
- Use at least three references from outside the course material (You may use the academic resources included in the Week 8 Bibliography.) one reference must be from EBSCOhost. The course textbook and lectures can be used, but are not counted toward the five reference requirement.
- References must come from sources such as, academic and scholarly journals and essays found in EBSCOhost, CNN, online newspapers such as, The Wall Street Journal, government websites, etc. Sources such as, Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for academic writing.
- Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style. Provide citations everywhere information from the sources is used for foundational support and for validation of opinions.
- Use the third person narrative and avoid the use of the first and second person narrative and terms such as; I, me, myself, you, your, yourself, we or us (or related form such as let’s (let us) or we’ll, we’ve (we will / we have) among others). This will prevent the author or other parties from becoming the subject matter and will maintain the focus of the paper on the central theme and subject matter found in the elements.
- Be informational and avoid being conversational.