BUSINESS ETHICS ANALYSIS ASSIGNMENT 1
Business Ethics Analysis Assignment
School of Business, Liberty University
BUSINESS ETHICS ANALYSIS ASSIGNMENT 2
Business Ethics Analysis Assignment
In 2015, the U.S. Environmental Protection Agency found that Volkswagen illegally
installed software to provide false data to regulators regarding the emission levels of their diesel
engines (Jong & Linde, 2022). Volkswagen’s unethical and illegal actions are properly
characterized as a scandal because of the moral outrage it evoked (Jong & Linde, 2022). This
paper will answer the following questions regarding this scandal: how would I, as an employee
or manager in the engineering or legal department, prevent this scandal, and how should I
respond to this scandal and prevent future scandals if I were the CEO?
Prevention: How Would I have Prevented the Scandal
Fostering a Culture of Ethical Behavior
To prevent this type of scandal within the organization, there must be a focus on fostering
a culture of ethical behavior among all levels of employees, including management. Ethical
culture is likely the most important deterrent to unethical behavior (Sweeney et al., 2010). As a
manager in either the engineering or legal department, I would start with a “well thought-out and
enforced set of policies concerning ethical behavior” which will impact ethical decision making
(Sweeney et al., 2010, p. 534).
Next, I would focus on creating an atmosphere where raising an issue is valued and not
punished, where identifying flaws and providing solutions is rewarded. Punishing those who
identify problems or unethical behavior will lead to unethical outcomes because employees will
be deterred from speaking up for fear of losing their jobs.
Finally, fostering a culture of ethical behavior requires leadership to hold accountable
those acting unethically or illegally, even if the offenders are senior management. This is
contrary to the idea of a zero-defect culture because the focus is on the ethical behavior, not on
BUSINESS ETHICS ANALYSIS ASSIGNMENT 3
failure to complete an assigned task. Encouraging employees to act ethically and allowing them
to voice concerns when others are acting unethically will prevent these types of scandals.
Increased Communication
Closely related to fostering a culture of ethical behavior, I would focus on emphasizing
the importance of horizontal and vertical communication within the department and between
departments. As taught in Proverbs 16:23: “The heart of the wise teacheth his mouth, and addeth
learning to his lips” (King James Bible, 1769/2017). Following this counsel, I would require
constant communication to allow for continuous teaching and learning. In addition to the
horizontal and vertical communication, I would demand that in-house counsel be kept informed
of all significant decisions affecting the corporation to ensure there is a legal check on behavior.
Responding to the Scandal
How I Would Have Responded as CEO
Once the scandal became public, there were three lenses through which to view the crisis:
public safety, financial loss, and reputation loss (Painter & Martins, 2017). Any effective
response must account for these three areas.
After the discovery, Volkswagen went into damage control, producing “public
information statements, including press releases, statements to shareholders and investors, and
transcripts of oral evidence” (Painter & Martins, 2017, p. 204). What was missing from the
response was a swift investigation followed by honest communication.
Internal Investigation
Prior to making public declarations of wrongdoing, I would immediately attempt to
identify the problem or problems that led to this crisis. To find the problem, an internal
investigation would be necessary to assist with identifying the cause and why this was allowed to
BUSINESS ETHICS ANALYSIS ASSIGNMENT 4
happen. This investigation must be immediate and fast. Unfortunately, Volkswagen’s internal
investigation took three months (Raymonde, 2016), which was not responsive enough under the
circumstances resulting in poor communication with the public.
The investigation should be conducted by an independent party and include documentary
evidence and interviews with key employees. The result of the investigation should include
findings of fact regarding the unethical conduct leading up to the crisis.
Planning Team
After completing the investigation, I would put together a planning team to identify the
problems that led to the scandal—e.g., poor horizontal and vertical communication, rampant
unethical or illegal activity, a no-fail/zero-defect culture that led to the dishonesty. Using the
investigation, the planning team would be able to identify the problems and offer a few potential
solutions or courses of actions. The planning team would then simulate how each of those
potential solutions would play out in the areas identified above: public safety, financial loss, and
reputation loss. This simulation would help determine which course of action was most
appropriate and effective. Next, after choosing the most promising course of action, I would
execute the plan.
Minimize Legal Exposure
A critical part of the response would need to be minimizing the legal exposure created by
the deceit. Indeed, Volkswagen did this by settling with the various interested-parties (Jung &
Sharon, 2019).
Honest Communication
Another important aspect of the plan is the importance of forthright and honest
communication with all stakeholders, the public, and government officials. Unfortunately, the
BUSINESS ETHICS ANALYSIS ASSIGNMENT 5
actual CEO of Volkswagen was not completely forthright. He made a public apology but did not
admit to wrongdoing and brushed off the scandal as a mistake by a few individuals (Jung &
Sharon, 2019). Similarly, other statements made by Volkswagen executives offered little
acknowledgement of an attempt to deceive (Jung & Sharon, 2019). The more honest the
statements, the better it would play with the public, stakeholders, and Volkswagen’s employees.
Increase Horizontal and Vertical Communication
I would push for more horizontal and vertical communication within the departments as
well as plug the attorneys into the process to prevent this from repeating. As theorized by Lippe,
the most likely scenario leading to the scandal was that in-house attorneys were not aware of
what was going on because of the insufficient communication between them and the engineers
(Lippe, 2015).
Change the Culture
As discussed above, there needs to be a change in the culture, focusing on and promoting
ethical behavior.
How the Response Would Prevent Future Incidents
The response outlined above would prevent future incidents by informing all current and
future employees that unethical behavior and dishonesty would not be tolerated. Moreover, the
changed-culture would also eliminate the zero-defect culture that likely led to the unethical
behavior. When employees feel like they will lose their jobs if they cannot accomplish the lofty
goals of the corporation, they feel pressure to cut corners and engage in unethical behavior to
keep their jobs.
The increased communication horizontally, vertically, and with in-house counsel will
allow checks on the employees’ behaviors.
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References
Jong, W., & Linde, V. (2022). Clean diesel and dirty scandal: The echo of Volkswagen’s
dieselgate in an intra-industry setting. Public Relations Review, 48(1). https://www-
sciencedirect-com.ezproxy.liberty.edu/science/article/pii/S0363811122000017?via
%3Dihub
Jung, J. C., & Sharon, E. (2019). The Volkswagen emissions scandal and its aftermath. Global
Business and Organizational Excellence, 38(4), 6-15. https://onlinelibrary-wiley-
com.ezproxy.liberty.edu/doi/full/10.1002/joe.21930
King James Bible. (2017). Cambridge University Press. (Original work published 1769).
Lippe, P. (2015, October 13). Volkswagen: Where were the lawyers? ABA Journal.
http://www.abajournal.com/legalrebels/article/volkswagen_where_were_the_lawyers/
Painter, C., & Martins, J. T. (2017). Organizational communication management during the
Volkswagen diesel emissions scandal: A hermeneutic study in attribution, crisis
management, and information orientation. Knowledge and Process Management, 24(3),
204-218. https://onlinelibrary-wiley-com.ezproxy.liberty.edu/doi/full/10.1002/kpm.1544
Raymonde, C. (2016). The Volkswagen scandal from the viewpoint of corporate governance.
European Journal of Risk Regulation, 7(1), 25-31.
https://www.proquest.com/docview/1781761944?
parentSessionId=D4oMWi9xKXRhL3JFnje5OHDIHtZEu2wkGGhVu7t4ldA%3D&pq-
origsite=summon&accountid=12085
Sweeney, B., Arnold, D., & Pierce, B. (2010). The impact of perceived ethical culture of the firm
and demographic variables on auditors’ ethical evaluation and intention to act decisions.
