What are the Triple bottom lines?Triple bottom line (TBL) is a measure of the how a company is able to effectively manage its operations for profits. Secondly, it involves a company relates to the community around, that is, the social engagements of the firm to the community it operates around. The third aspect is the environmental sustainability role of the company. Therefore a company that has a triple bottom line has sustainable profits, involved in corporate social responsibility, and lastly environmental (planet) sustainability agenda. Volkswagen is failing in its attempt at reaching the triple bottom lines. While the economic situation had a positive economic and social image before the emissions scandal, the environmental effects were disastrous with up to 40 times more pollution than allowed in the U.S.
What is the ethical corporate culture?
This involves defining the culture of an organization by providing clear guidelines to guide the behavior of people in an organization. In relation to this, Mohamad (2010) says that in connection codes of conduct must be provided with clear guidelines that do not conflict with the cultural beliefs of people working in an organization (p.152). For instance exchange of gifts is acceptable in Japan even among corporates. On the contrary, Western cultures do not practice this; they stick to the business of their meetings. A good ethical corporate culture on this understanding will, therefore, give guidelines on a wrong without stepping on the cultural beliefs and practices of those working in an organization especially in a multicultural work set-up.
It is important for a corporate leader to be flexible when applying the ethical guidelines of a company. This would affect the multinational companies which operate in different cultures. Mohamad (2010) illustrates this by comparing hiring of a close relative in Indian and Western culture. It is morally wrong to hire a relative in the Western culture. On the other hand, it is morally acceptable to hire a child of an employee. This is considered honorable in the Indian setup. Contrastingly, this is absolutely wrong in the West.
What is a moral theory?
Moral theory refer to guidelines and codes that determine what is right or wrong. Defining right or wrong is based on values, traditions, and beliefs (Crane and Martin 2010, p.3) of people. There are two categories of moral theories. First, normative moral theories which propose to guide in the right way of acting. Secondly, descriptive moral theories that provide a description of the code of conduct in a company. What is right or wrong may not be universal but it depends on the social context in which something happenings. This variation in the definition of what is wrong or wrong that depends is called cultural relativism (Mohamad 2010, para.1). However, there are some universally acceptable morality rules that cut across all cultures. For instance, stealing company property would be universally wrong. Volkswagen shareholders might go to court over fraud committed by the company. The company’s stunt has led to a widespread drop in sales for the company. This is because it was previously associated with being the best car manufacturer. The scandal has elicited the corporate greed side of Volkswagen.
Recovery (how company will solve this issue / please provide an example of another company that faced the same issue and how they solved it)
When a company experiences a tarnished public image, two questions should be asked (Klein 2005, para.10). First, what “is the nature of the scandal, that is, who was hurt and how badly? Secondly, who was hurt and how badly?” The severity and the nature of damage define the effect of a scandal to the company. The actions taken will, therefore, depend on the severity of an unethical issue.
Compensation of the culprits and firing of the officials responsible is the way to settle the matter is a solution for a corporate damage with apparent little negative impact. An example of a less severe case is when KPMG officials allowed some rich folks avoid taxes and were charged in a court of law. In response, the federal judge a compensation to save the image of the company. If the corporate damage is severe, post-crisis rebranding should be carried out.
Volkswagen can improve its image only through time. After it was revealed that the company used a cheat sheet to pass quality tests, management took proper precaution to ensure that those involved were relieved of their duties. Furthermore, there was a recall of cars leading to a large loss. Nevertheless, the only way they can get back is through time. The C.E.O. apologized and assured people that such a scandal would not happen again. Only time will tell if the company can regain customer trust.
Please explain if the issue is minimalist (Egoism) or maximalist (utilitarianism)
Egoism is basically concerned about individual survival. A person in this understanding can sacrifice anything to fulfill their personal objectives. Management of Volkswagen fall under this category as it focuses on profit regardless of environmental impact and its relation to individuals’ health. Utilitarianism claims that an individual should derive pleasure from everything they do. Therefore, right and wrong are abstract concepts in this regard.
Utilitarianism uses a relative approach to defining ethics. That is, what is wrong or right is dependent on the happiness and pleasure a person obtains from an action.
Ethics does not evolve. What is wrong remains that way despite the personal fulfillment that accompanies and action. It is impossible to derive pleasure out of every action. Similarly, it is not possible to assume that eliminating every obstruction regardless of its moral consequences is the right to do. Both Egoism and utilitarianism seek individual ends in a world that requires harmonious living and coexistence. A wrong or right, therefore, should be defined in the context of the second person. What a person would not like done to them should not be done to another person.
Situational influences on ethical decision making
Situation influence on ethical decision making refers to the process of arriving at ethical actions based on the prevailing circumstances of influence. More often this is guided by descriptive morality. For instance, the existence of conservation laws that have legal consequences in case of noncompliance.
Individual influences on ethical decision making
Individual influence on ethical decision making refers to the process of arriving at ethical decisions in line with personal convictions, values, and beliefs. In the case of Volkswagen, some of the junior staff believed that fitting cars with a defeat mechanism were wrong. They communicated this to the senior managers who disagreed. The seniors went ahead and approved the use of the sleek algorithm which ended up costing the company heavily.
Theory of justice (related to VW)
In September 2015, Volkswagen underwent a major clean air compromise scandal in the USA. Volkswagen engineers had incorporated a defeat device that cheated on the lab test. The software was smart to recognize and behave to meet the EPA requirements. On the contrary, the software detected while on the road emitting over 40 times the level of allowed nitrogen oxides the conservation authority.
In response to the scandal, the United States Department of justice responded by filing a civil lawsuit against the company over the alleged compromise to the clean air act. Edward and Schectman (2016) say that the allegations could have cost the company at least $ 90 billion (para.2). The Volkswagen board, however, agreed to comply with the provisions of the act including taking part in the air clean-up program. Armour (2016) says that Volkswagen committed $ 18.4 billion as clean-up costs. The company would recall all the cars which had this software (para. 5).
Theory of human right (related to VW)
There was a gross compromise on human rights in the Volkswagen case. People are entitled to clean air and this right is protected by Clean Air Act of the Environment Conservation Authority. However, in its egoism, VW was determined to dominate the United States car market. The company fared well on the profits pillar of Bottom Line but failed on the Planet (environment) pillar. According to Armour (2016), the scandal which had thousands of cars sold across Europe and United States had serious respiratory repercussions. In the United States alone, the emissions could have caused 100 deaths. (para.2).
Who is accountable /and responsible
Ideally, in a corporate scandal like Volkswagen’s, the entire company is responsible for an ethical wrong. This is because the public focuses on the brand in entirety. However, it is the management who responsible for an ethical oversight since they have the mandate of putting strategies and implementing the corporate objective. A top official in the VW scandal was responsible for the signing of a controversial software to be integrated into the Volkswagen cars as a defeat mechanism. He could have refused to sign or ask the engineers to develop a more efficient engine that could not comply with the environmental conservation policies.
Nevertheless, the work of recovery should be a team agenda. The management has the responsibility of dealing with the tainted image by communicating the company’s commitment to morality to erase the bad image. On the other hand, the rest of the employees must be committed to ensuring superior products that meet the customer’s expectations.
Main factor in deciding the moral status of situation
The moral character of a situation determines its moral status. The integrity measure of a situation; honesty is a rule of thumb for a morally upright situation. A situation that puts others in an unfair position is questionable. Similarly, a situation that tends to elevate ends disregarding the process is also disputable.
- Crane, A., & Mateen, D (2010). Business Ethics and Corporate Social Responsibility, lecture 2. Week 2: What is Ethics? A Brief History of Business Ethics, PowerPoint Slides. Viewed: November 30, 2017.
- Armour, J (March 17, 2016). Volkswagen’s Emission Scandal: Lessons for Corporate Governance. Viewed November 30, 2017, https://www.law.ox.ac.uk/business-law-blog/blog/2016/05/volkswagen%E2%80%99s-emissions-scandal-lessons-corporate-governance-part-1
- Edwards, J and Schectman, J (January 4, 2016). Volkswagen faces billions in penalties as U.S. sues for environment violations. Viewed November 30, 2017, https://www.reuters.com/article/us-volkswagen-usa/volkswagen-faces-billions-in-penalties-as-u-s-sues-for-environment-violations-idUSKBN0UI1QP20160104
- Klein, Katherine (September 21, 2005). Brand Rehab: How Companies Can Restore a Tarnished Image. Viewed November 30, 2017, http://knowledge.wharton.upenn.edu/article/brand-rehab-how-companies-can-restore-a-tarnished-image/