Volkswagen Corporate Social Responsibility Essay

Introduction

The purpose of this report is to identify the faults in the governance of the Volkswagen (VW) in emissions scandal, provide various problems that led to the scandal. Further discussed are the consequences of the scandal on the company such as legal, ethical etc. The report then explains the implication for corporate social responsibility and corporate governance.

Volkswagen is a car manufacturing company based out of the state of Lower Saxony in Germany. The company employs more than 500,000 people worldwide and has a reputation for maintaining a good relation with CSR. However, in the recent light, the company has come under pressure, as they have been caught red-handed cheating the emissions regulations in the USA. The company

In addition, this means in turn that the economy’s means of production should be employed in such a way that production and distribution should enhance total socio-economic welfare. Social responsibility implies a public posture toward society’s economic and human resources and a willingness to see that those resources used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms (Frederick and William C, 1960, P60). A company nowadays is bigger than governments of some developing countries and carry a significant responsibility to make sure to run the business ethically and with good morals. Can a company be too big to control? A question with no conclusive answer, however, with more than 500,000 employees with so many departments, the task of managing the company efficiently is severe(McVeigh, 2015). This is where the need for corporate governance and control comes into

Mr Piech wanted VW to be the most selling company in the world and pushed the objective down on Mr Winterkorn. Instead of focusing on the greener hybrid system, which turns out to be a more ethical choice in the future, Winterkorn focused on selling more diesel cars. The immense pressure from Mr Piech created an obvious risk(Norman, 2015). Family disputes affecting company decisions tend to form a dysfunctional board. However, the company would have been better at governance if there was a common interest between the families(McVeigh, 2015). Nepotism has also been in existence in the company when Ursula Piech became the member of the supervisory board, the shareholders questioned her qualifications and experience, but later ignored as the family has major voting rights. Appointing a competent person with the right qualification and experience on the board should be an obvious thing to do in order to steer the company in the right direction (Jung and “Alison” Park, 2017,