Prevention of the Emissions Scandal
In September of 2015 Volkswagen recalled around 500,000 diesel cars and the company lost around $16.9 billion dollars of the company’s market value (Jung and Bin, 2017). According to Jung and Bin (20117) 11 million of their diesel cars contained a device that would change emission levels during diesel-exhaust tests. When this scandal hit the media, Volkswagen had a huge economic damage occur and they lost many shareholders in the stock market. Diesel vehicles are typically known for the benefits they have with durability, repair cost, and fuel efficiency. So, when Volkswagen designed a car that was supposed to be the top of the line the sales sky rocketed which helped with Volkswagen’s ratings in the market. The Volkswagen scandal really hurt their reputation, and by the CEO of the company not being honest it made the consumers frustrated with the company and destroyed their credibility.
According to the bible “The Lord detests lying lips, but he delights in people who are trustworthy” (Proverbs 12:22, New International Version). As an employee or manager in the legal office or the engineering department I would have done a couple of things differently to prevent this problem. First if I was an employee and I noticed something was off or didn’t seem quite right I would have immediately reported the incident to the managers or executive team. This would have escalated the issue to the senior executives that way everyone is informed of the situation.
As a manager you have a couple of options that could have taken place in order to prevent this incident. I would have designed an ethics and compliance training program, made my team take the course, led by example, created a strong culture to enforce policies, and designed a strict hiring policy. When designing the ethics and compliance training program I would have made is mandatory for my team to take. In addition to this I would made my team sign a paper showing that they took the course. This would hold them accountable for their actions if any mischief or foul play were to of taken place. Next, I would lead by example. I would hold my team accountable for their actions and make actions have rewards and consequences. This would go in hand with creating a strong culture to enforce policies and procedures. Rules and laws are created for a reason. No acceptation. So, by holding my employees up to high standards you can set the expectation that foul play is not permitted. Lastly, I would create a strict hiring process to ensure you are hiring the most trust worthy candidates. In order to achieve this goal, I would design mandatory behavioral and personality test that will need to be taken prior to interviewing and do an extensive background check. By making candidates take a behavioral test you are able to gauge what type of personality they may have, that could lead up to foul play. There were several actions that Volkswagen could have taken to help gain credibility in the media but instead they decided not to admit their actions were wrong and deceiving. In result to their actions that they made they lost valuable customers and ruined their credibility in the market. As a manager I would of done several things differently to prevent this incident, held true to my morals and the way God would of wanted me to take action.
Damage Control and Honesty from the CEO
The CEO of Volkswagen was given an impossible situation to handle when the media broke free that the company and deceived so many people. “Corporate fraud committed under climate mitigation pressure is becoming more frequently observed in line with the ever-increasing environmental standards and relevant regulation enforcements” (Li, McMurray, Xue, Liu, Sy, and 2018). However, the bible say’s “whoever walks in integrity walks securely, but he who makes his ways crooked will be found out” (Proverbs 10:9. New International Version). Lying is never the answer, you will get caught. To live in a Godly way, you have to admit the mistakes made by you or your employees. Being honest helps with your credibility, the company’s credibility and ensures that we are making choices the way God would want us to.
When the media broke free about the scandal, as the CEO over the diesel division I would have first gathered all of the facts. I would have done as much research as possible, brought on a team of investigators to look into the incident, and immediately terminated those involved. As a final step I would have held a press conference to speak openly about the incident that occurred, and recalled all vehicles involved. During this press conference I would have gone over what we as a company are doing to handle all of the recalled vehicles, what we intend to do to accommodate those customers affected by the incident, and gone public about the termination of employees involved in the incident. By showing the public that we are taking matters very seriously could help save the company’s reputation. To prevent future incidents from occurring strong policy and procedures needs to be written and enforced. When the legal team is telling engineers not move forward with the incident and they do so anyways this needs to be escalated up to the proper executive. If the executives choose not to solve the incident than it needs to be reported so legal action can take place. When preventing future incidents than Volkswagen has to be up front and honest with the situation at hand. There are no exceptions to cheating to getting a head. You are ultimately hurting the company even more and aren’t living in the way of god. Investigations need to be occurring but at random time periods to ensure that the company is abiding by the rules. The findings of the investigations need to be made public. When rebuilding Volkswagen’s reputation, you need to be up front and honest about everything going on internally. It is important to live by the way of God, keep your morals, report anything unethical that is occurring, and remember that the customers are what drives the sales of the business. You will drastically hurt yourself in the market if they feel that they are being lied and manipulated. Since Volkswagen has made poor choices around their scandal they now need to do damage control and be transparent with their customers and make everything public.
Prevention of the Emissions Scandal