Kantianism and the Volkswagen Scandal - Case Study Example

KANTIANISM AND THE VW SCANDAL Name of Student Institution Course Number Instructor Date Introduction Business enterprises engage in activities meant to generate profit and increase investment. The opportunities and activities in the corporate sector require the highest ethical behavior since they involve the customers and other stakeholders such as the government and the stakeholders. The impacts of the undertakings of an organization may spill over to the society or have an economic effect on the national GDP where the company operates on the large scale or is a state corporation. It is essential to understand that all business ventures work of guidelines designed by the internal management. However, each organization is also governed by the universal regulations defined by the existing legal frameworks (Brock & Harvey, 1996). Some businesses are blinded by the desire to generate escalated profits without considering the implication of their activities to the consumers, the government, and the society. Several notable scandals have occurred in the corporate sector, which was noted to have violated not only the internal requirements but also the norms and regulations of the business domain. Enron in 2001, Kmart in 2002, MG Rover Group in 2005, Dynegy in 2012, Banco Espirito in 2014, and Volkswagen in 2015 are some of the internationally recognized scandals in the corporate sector. This excerpt examines the Volkswagen Scandal and the ethical consideration based on the Kantianism theory of ethics. Brief Overview on Volkswagen Scandal Volkswagen is an automobile company that was formed in 1937 in Germany by the German Labor Front with its headquarters in Wolfsburg Lower Saxony. The company has produced designs of vehicles that are recognized worldwide such as the Volkswagen Golf, Volkswagen Beetle, and the Volkswagen Passat. The organization has grown to generate an average profit of about 13.4 billion US Dollars by 2014 with a magnitude of 425 Billion US Dollars of assets. The operation of the company has been recently affected by the diesel emission scandal that has been taking place since 2008 to 2015 when it was discovered. The company that is specializing in the manufacture of cars that are sold in Europe and other regions of the world was found in September 2015 to have violated the Clean Air Act. The company received a notification from the United States of America after the authority concerned with the environment standards found that Volkswagen brands of cars had violated the diesel emission requirements. The company had manufactured cars with fitted with Turbo charger Direct Injection (TDI) mechanisms that automatically altered the discharge volumes when under a laboratory testing through a programmed remote sensing device implanted within the engine (Terms, 2016). The vehicles with the planned system emitted the required amount of Nitrogen Oxide gas during the tests but on average driving the cars produced 40 times the maximum emission level in the US. The actions by the company were discovered when the radiation levels in the European model were different when a comparison was made with the patterns in the United States. The results by three West Virginia University ignited an international investigation where the Volkswagen cars were tested for the illegal devices. It was found out that over 11 million cars with TDI had been sold worldwide and 50,000 in the US. The company realized the magnitude of the scandal and started recalling the models with the programmed device. However, the international concern about environmental measures accused the company of ethics violation of the set standards and regulations established by the CARB and EPA. The process of recalling the vehicles for refitting will see the removal of the device from millions of cars (Terms, 2016). The scandal will affect the company for the next 15 years whereby the organization has distributed the loss caused by the unethical practice over the period. The company has set aside about 5 billion US Dollars to cater for the cost or recalling the vehicles initially sold. The action by Volkswagen AG is against the ethical expectations of the business enterprises. The company was already earning millions of profit annually but took a step to deceive the world through the TDI devices in the vehicles (Terms, 2016). Whenever a business organization is being set up, there are other responsibilities regarding their contribution to the welfare of the community that must be defined. The responsibilities include the security improvement, environmental protection, enhancing health, culture preservation, and maintaining the heritage. These are additional but mandatory participation in addition to generating profit. Kantianism Emmanuel Kant developed a set of guidelines that defined the obligation of individuals and organizations during service delivery or the process of conducting business activities. Kant outlined a set of philosophies regarding the ethical requirements and standards that govern the operation of agencies and workers (Massimi, 2012). The Kantianism theory is based on the moral obligation of duty rather than the emotions or expected objectives. The philosophy gives more power to the noble undertakings binding the activities of the enterprises (The Genesis of Neo-Kantianism, 2015). The views of Kant on rationality considered human beings as rational; therefore, he esteemed being intelligent as the supreme value for individuals and organizations. The reason that drives investors to form business ventures is the need for profit generation. The goods and services offered have a particular market as human beings in groups or existing as individuals. The consumers trust the brands available in the market based on the advertisement, education, or referrals. There are circumstances when the businesses engage in malpractices that can be associated with grievous consequences on the company as well as the market domain. It is essential to recognize that5 the market area incorporates the social, environmental, political, cultural, religious, and economic dimensions. The theory ascertains that the activities of business organizations should be sensible and not built on the emotions that tend to alter the initial objectives, visions, and aims of the venture. The theory also affirms that there exists a great danger whenever the end is used to justify the processes employed. The theory, therefore, generates criteria of determining the actions to pursue based on the maxima approach. The methods challenge individuals to consider the final situation whereby everybody around the world is adopting their choice of action or behavior. For example, if a person believes that violence is a solution, then they should picture a situation whereby everybody is adopting violence to solve their differences. Building argument to assist in making decisions regarding the intended actions will esteem ethical practices both by organizations and by individuals. The Kantianism particular imperative aspects ascertain that the first consideration of an action is the maxima effect on the globe (Holzhey & Mudroch, 2005). Hence, organizations and people should pursue the activities they will be comfortable when it becomes a universal law. Moreover, each party should examine the impacts of each action to the humanity before choosing what to do. The theory argues that parties should treat the humanity as they expect to be dealt with not because it is a means to any end, but as an end in itself. Moreover, each party should act as if their actions are generating legislative standards for universal application where the duties define the terms. The three building blocks of this theory ensure that organizations and individuals are responsible for their action irrespective of the intentions or the pursued ends. The Kantianism and other ethical principles define the need to embrace ethics and be morally responsible for the activities we engage in to ensure that a safe and sustainable world is built. Application of Kantianism: Volkswagen Scenario The action undertaken by the Volkswagen AG took a process to be effected. The first stage involved the decision by the marketing and administration departments through the direction of the board of management. The success of the TDI device to survive in the market for years without being identified must have been established based on a succinct research of laboratory tests procedures. The manufacture of the cars and their distribution pattern depicts a planned strategy. The focus of the organization was to provide a design that met the environmental regulations to entice the customers, make notable global sales, and increase their profit margin. When a reputable firm as Volkswagen chose to deceive the public, then there is a concern for the evaluation of the activities of other organizations. The management did not consider the effect of their action both on the short-term and long-term basis. According to the Kantianism theory, they did not examine the maxima of their action; that is if all automobile companies could have fitted the TDI programming in their engines and the total Nitrogen Oxide emissions from the vehicles increases to 40 times the normal levels. The company focused on the end factors and could not contemplate on the consequences of their focus on profit accumulation without considering the reparations. The levels of Chlorofluorocarbons in the environment could have been escalated to levels that could have degenerated the ozone layer as well as contributing to air pollution and global warming. It is important for the company to consider the balance between the profit generated and the effect on the environment provided to the increased levels of the Nitrogen Oxide gas in the atmosphere. The action that was undertaken by Volkswagen AG was not justified since the company was already performing the tremendously regarding international market control and profit margin. However, the actions by the management altered the image of the organization, and it will take a long time to mitigate the effects caused by the scandal. It is important to note that the activities of any business venture should be guided by the ethical standards defined by the relevant authorities and the internal mechanisms (DesJardins & McCall, 2014). Unethical practices in an organization have consequences since the spirit of compromise may control the decision-making process and management activities. The action of Volkswagen AG will affect the business for the next 15 years, which is not even guaranteed that the company will sustain the loss for that long. Moreover, the action by a single company could ignite an investigation of the ventures in the industry and could affect the trust of the customers on the brands traded. Several factors may alter the performance of the company thus reducing their profit such as the stiff competition in the industry since the public image of the organization has been compromised. Such actions are always associated with alternatives that could have been pursued. As the Chief Executive Officer of the Volkswagen AG, I could have pursued other avenues that could generate profit and remain within the ethical requirements and regulations set by authorities. I could have incorporated technology that could have transformed the Nitrogen Oxide to less harmful byproducts. Moreover, I could have chosen to build engines that allowed full combustion of the diesel in excess oxygen to produce less toxic gasses. Besides, there are advanced converters that are fitted in the exhaust pipes to absorb the gas and produce acid that is directed to a can through the collecting duct. By using these measures could have achieved the Nitrogen Oxide emission levels and operated within the ethical domain for corporate organizations. My focus could have been to support the creation of a sustainable environment as well as generating the required profit for the group without altering the image of the company. The decisions of my management team could have been based on consultation of the stakeholder and the external appraisers to ascertain the viability of the idea before implementation (Crane & Matten, 2010). Whenever decisions are comprehensive and reflect the desire of the internal and external stakeholders, then the business is safe if the strategy is implemented. A significant percentage of the profit generated by firms should be channeled back to the society through a mechanism such as the activities undertaken as corporate social responsibility. The company can also participate in the process of community development by offering quality products that meet the requirements defined by the Standardization Boards. As the CEO of Volkswagen AG, I could have based my decisions on the long-term effect of the activities that are carried out as well as the creation of a sustainable corporate image worldwide. Conclusion In conclusion, the opportunities and activities in the corporate sector require the highest ethical behavior since they involve the customers and other stakeholders such as the government and the stakeholders. The company that is specializing in the manufacture of cars that are sold in Europe and other regions of the world was found in September 2015 to have violated the Clean Air Act. The company had manufactured cars with fitted with Turbocharge Direct Injection (TDI) mechanisms that automatically altered the discharge volumes when under a laboratory testing through a programmed remote sensing device implanted within the engine. The focus of the organization was to provide a design that met the environmental regulations to entice the customers, make notable global sales, and increase their profit margin. The action that was undertaken by Volkswagen AG was not justified since the company was already performing the tremendously regarding international market control and profit margin. References Brock, G. and Harvey, B., 1996. ‘European perspectives on business ethics’, Business Ethics Quarterly, 6(3), p. 385. doi: 10.2307/3857466 Crane, A. and Matten, D., 2010. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. 3rd edn. New York: Oxford University Press, USA DesJardins, J. R. and McCall, J. J., 2014. Contemporary issues in business ethics. 6th edn. United States: Wadsworth Publishing Co Holzhey, H. and Mudroch, V., 2005. Historical dictionary of Kant and Kantianism. United States: Scarecrow Press Massimi, M., 2012. ‘Natural kinds and Naturalised Kantianism’, Noûs, 48(3), pp. 416–449. doi: 10.1111/j.1468-0068.2012.00862.x Terms, P. I., 2016.Volkswagen emission scadal. Available at: https://prezi.com/m/ob0f-_pyynm5/volkswagen-emission-scadal/ (Accessed: 6 May 2016) The genesis of neo-kantianism, 2015. Choice Reviews Online, 53(01), pp. 53–0158–53–0158. doi: 10.5860/choice.191478 Read More