-Analyze business activities and locate the analysis in its pertinent context and environment.

-Explain the social responsibility and the related ethical and cultural issues in business organizations

Defeating the System: Ethics at Volkswagen:

In one of the worst business ethics scandals in history, the world learned in 2015 that Volkswagen intentionally circumvented government exhaust emission tests for years by installing so called "defeat devices" on their clean diesel vehicles.

Researchers at West Virginia University first discovered the violation when they started studying clean diesel engines. When they tested the performance of Volkswagen vehicles, they were surprised to find that on the road emissions exceeded government allowances by almost 40 times. Further investigation by the U. S. Environmental Protection Agency found that the vehicles were actually equipped with software that could essentially trick emission testing systems. The diesel engines could detect when they are being tested for emission and changed the vehicle's performance to improve testing results. Once on the road, the vehicle would switch out of the test mode, emitting excessive nitrogen oxide pollutants.

What's more problematic is Volkswagen's response to the scandal. The company first suggested a technical problem with the cars, but finally admitted the software devices were designed to cheat the system. Initially, the company reported only a limited number of cars were affected; however, as more details were uncovered, the company finally admitted that about 11 million cars worldwide were affected.

How could such a serious ethical violation occur? It may take years to sort out who is to blame. The CEO Mr. Winterkorn, who resigned in response to the scandal, initially claimed not to know about the devices. While many high-ranking executives were suspended, no one is sure who know about or authorized the software.

The CEO Mr. Winterkorn has been described as a hard-driving perfectionist who was committed to securing the top spot among global car manufacturers. He was known to criticize employee publicly, and this generate both fear among employees and the commitment to do whatever necessary to ensure the company's success. The company's culture has been described as "confident and cutthroat".

Questions:

1. Explain Volkswagen attitude towards social responsibility and discuss the complex issues, associated with ethics and culture in the organization. (8 Marks)

2. Analyze the business environment of Volkswagen, and state what the organization needs to do to avoid such ethical problems in the future?   (7 Marks)

Plagiarism maximum 15 percent

Due date Oct 6, 2020

Word limit:1000 words (2 pages single spaced)