The forth by the Clean Air Act. Not

The Environmental
Protection Agency has continued to tighten the control on emissions within the
atmosphere due to harmful effects on the environment. Since every gas-powered
car emits certain levels of nitrogen oxide, the agency enforces restrictions on
the amount of emissions each car can produce. This tight restriction forces the
automotive industry to create new and improved methods of reducing the
emissions that way each car abides by the regulations put forth by the Clean
Air Act. Not all automotive companies follow these regulations and the Volkswagen
scandal proves these industries can easily deceive regulation tests.

Volkswagen has
been successful in entering the United States diesel market but due to the
restrictions on nitrogen oxide emissions, the company has incorporated
unethical practices to trick diesel engine emission tests from thinking each
car is emitting the regulated amount of pollutants. The scandal started in May
of 2014 when the California Air Resources Board initiated an investigation of
Volkswagen diesel cars. West Virginia University initially found excess levels
of nitrogen oxide being emitted by VW cars and noted the cars were emitting
levels 40 times higher than the United States current regulation limit. In
September of 2015 a business reporter from BBC News stated, “The Environmental
Protection Agency found that many VW cars being sold in America had a defeat
device or software in diesel engines that could detect when they were being
tests, changing the performance accordingly to improve results” (Hotten). The
EPA also estimated 500,000 of the cars imported into the U.S. contained
deceptive devices resulting in more than 18 billion dollars in fines due to violating
the clean air act (Jung, Park). With
that being said, an executive Oliver Schmidt and a company engineer plead
guilty to deceiving regulators resulting in prison sentences and hefty fines.
Oliver Schmidt received a seven-year sentence and the company engineer only a forty-month
sentence. Since Volkswagen had such a significant presence in the diesel
industry and 11 million of their cars were equipped with regulation deception devices,
many stakeholders affected by the scandal.  

            This
case was extensive due to Volkswagen’s presence in U.S. and foreign markets,
which meant the number of stakeholders were significant. The stakeholders
derived from the scandal include many countries, people within the company, the
company itself, and more importantly, the environment. UK, France, South Korea,
Canada, Germany, and the U.S. represented the various countries affected by the
deception scandal. Each individual country was affected by the deception devices
but the country most affected was Europe because diesel vehicles accounted for
around 41% of all European cars (Jung, Park). Within Europe, Germany represented
the largest number of deception devices within their cars and it was noted that
out of the 11 million rigged with the devices, 2.8 million cars had those devices
implanted in them. The reason these countries were stakeholders because
Volkswagen was forced to initiate a recall on all of the cars fixed with the
devices and Europe currently had 8.5 million of those cars on the road and in
car dealerships. The scandal was only possible due to the individuals holding high
status inside the company and had the authority to incorporate such devices
within each car. It was mentioned that numerous individuals within Volkswagen’s
management and engineer departments were resigning from the company due to allegations
concerning the scandal. These individuals were potential stakeholders because
the actions committed by Volkswagen caused significant job losses within the
company resulting in important people, who contributed to the success of Volkswagen,
being fired in order to restructure the old management. The company itself
represented the most significant stakeholder because of the loss of revenue
following the scandal. It was recorded that Volkswagen took a net loss of 1.84
billion and sales dropped from 2.44 million in September 2014 to 2.35 million
in September 2015 (Jung, Park). Volkswagen stock was also sold off heavily in
September resulting in a market value loss of close to 17 billion (Jung, Park).
That being said, the company took a heavy blow within the diesel market, which
resulted in them becoming the most significant stakeholder. Lastly the most important
stakeholder in the case was the environment. Since nitrogen Oxide is a
greenhouse gas and these gases deplete the ozone, the environment was
negatively impacted more, since the clean air act regulations were violated. This
scandal affected many parties and an underlying moral issue was present that
contributed to the massive impact put upon the diesel industry.

            The most
notable moral issue outlining the actions within the case is deception. Since
regulations restricting the level of nitrogen oxide emissions from a diesel car
were so controlled, Volkswagen was forced to find new and innovative ways to
bring their levels down. The ways in which the company did this was through deception
rather than actually creating new ways of reducing the levels of nitrogen
oxide. This created a problem and is a moral issue because the company knew the
rules and regulations behind manufacturing cars and disregarded the EPA’s
restrictions. Deception is a moral issue because it entails lying or presenting
misleading information for the sole purpose of personal gain. This moral issue
aligns with a specific ethical theory learned throughout the course, which is considerably
important within business.

The contract view is an ethical
theory, which represents one of the important aspects of this case. The
contract view of the business firm’s duties to its customers is defined as “The
view that the relationship between a business firm and its customers is
essentially a contractual relationship, and the firm’s moral duties to the
customer are those created by this contractual relationship” (Velasquez 306). Volkswagen
not only had a contractual agreement between its customers to provide an environmentally
safe diesel car but also possessed a contractual agreement between the EPA to
abide by the regulations set for fuel emissions, in order to restrict the
levels being emitted. Velasquez also states within the contract view that the
business has the “duty to comply”, meaning “It is the duty to provide consumers
with a product that lives up to those claims that the firm expressly made about
the product” (309). The company failed to comply with the regulations set forth
by the EPA and initiated in acts centered around defrauding the emissions
tests. It was apparent the company was motivated by its significant presence in
the diesel market and it led to deceiving specific agreements towards the
safety of consumers and ultimately the EPA. The motives behind this deception
reflect a lack of responsible stewardship and dignity of the individual in
accordance with the Marian University Franciscan values. Responsible
stewardship was both present and not present in this particular case. This
value was present in the end when Oliver Schmidt formally acknowledged that he
was to blame for the scandal stating, “I only have to blame myself, I made bad
decisions, and for that I am sorry” (Vlasic). The quote was interesting because
this Volkswagen executive knew the actions being committed and continued to incorporate
deception within the company regardless of the consequences. Dignity of the
individual is the second Franciscan value that can be addressed because both
the dignity of the executive and the company was tarnished. The executive
showed a lack of dignity because instead of standing up for what was right he
created a company cultural revolving around deceiving emissions regulators.
Secondly the dignity of the company needs to be noted because it lacked respect
for the regulations put forth to ensure the environment was protected and
created an industry with the sole purpose of personal gains. It was discovered
that the Volkswagen scandal lasted over a decade but no one within the company indicated
any moral courage to stand up for what was right.

Moral courage entails standing up for
what is perceived to be right based on certain values or principles that
individual has affiliated themselves with. Kidder has incorporated three elements,
which outline moral courage that include principles, endurance and danger. He
defines morally courageous action as “A commitment to moral principles, and
awareness of the dangers involved in supporting those principles, and a willing
endurance of that danger” (Kidder 7). Volkswagen’s scandal can be associated
with Kidders three elements to moral courage because first, the principles set
forth by the company revolved around personal gain instead of factoring in laws
and regulations placed on their specific industry. This led to faulty values
within the corporation and resulted in harsh consequences. Second, the company was
fully aware of the dangers involved with the scandal because it entailed defrauding
the emissions tests. Lastly, Volkswagen was not ready to endure to consequences
of their principles and the dangers associated with engaging in this sort of
activity. Since the company was foreign, their views on what is ethical and
unethical differ from those in the United States. That being said, someone
within the company most likely possessed good moral principles and therefore
would have acknowledged the dangers involved in order to endure any hardships
associated with being a whistleblower. With any scandal, multiple perspectives need
to be looked at in order to determine what went wrong.

When looking at the case from an
alternative perspective the deception device used serves as a good means to
decrease emission levels of gas powered cars. I do not support this because of
the manner in which it was and can be used. I believe the device is a smart way
to determine how much pollutant a car is emitting but incorporating it into a car
needs to be for the sole purpose of lowering emissions all together rather than
temporarily.  

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