ipl-logo

Corporate Governance Of Gas Scandal In The Automotive Industry

836 Words4 Pages

KOÇ UNIVERSITY

GRADUATE SCHOOL OF BUSINESS

DEPARTMENT OF BUSINESS ADMINISTRATION

KALENDER AKGÜL

MGMT 512: Corporate Governance

Exam-I

SUPERVISOR

Aymelek KOZİKOĞLU

ISTANBUL

2017

1 | P a g e

ABSTRACT

Volkswagen gas emission problem is of the major scandal in automotive industry in 2015.

This paper defines the reason of scandal as a corporate governance case. The reason of problem,

decision of VW management, and problem solving method is defined in this article.

2 | P a g e

Table of Contents

ABSTRACT ...................................................................................................................................................... …show more content…

It was known that nearly half million of vehicles were effected from this

problem in USA, and 11 million in Europe and Asia [4-]. The problem was not a technical issue,

it was claimed that VW board of management hide this problem. For that reason, company had

lost about 25 billion € of their shares in a short time.

The main question is that why VW made this big mistake that it would drag itself into

the business. One of the article about the subject claims that, brand manager Wolfgang Bernhard

and engineer Rudolf Krebs were working on the new diesel engine to be used in the US [4-].

However, it is defined that it has $ 335 cost per vehicle to bring vehicles to US emissions

standards. However, it is also asserted that head of Volkswagen 's finance department found this

cost very high and for that reason they suggested another way to solve this important issue.

Hence, they improved a new software or device that realizes that vehicle is in test condition. This

dishonesty situation caused that VW to save nearly 4 billion € in total. However, they lost 25

billion € of their shares in a short time and also VW was punished that to pay 15 billion €. In

addition to that, they called back nearly 600000 vehicles

Show More
Related
190 Words | 1 Pages

By Volkswagens falsifying and cheating pollution test by installing “defeat devices” to make their vehicles appear cleaner than they were, they’re now viewed by the public as liars and lose trust from consumers and stakeholders. The created meaning by Volkswagen actions is, they’re a fraudulent organization, which cares more about making money than it does about its stakeholders and safety of consumers. Volkswagen also goes against its huge marketing campaign trumpeting its diesel cars’ low emissions and co create the meaning of its cars not being environmental friendly. I feel the CEO of Volkswagen should issue a public apology owning up to their wrongdoings because a lot of consumers may feel duped. Rhetorically this establishes dialogue

Read More
1238 Words | 5 Pages

Over the years a popular yet devastating discovery has been revolving around the famous German vehicle manufacture Volkswagen. The case sparks an intriguing argument amongst engineering ethics and provokes many with compelling sides. The Volkswagen scandal was a strategic and innovative emissions cover up by Volkswagen engineers. A device created that allowed German vehicles to pass emissions test when they really weren’t. James Robert Liang a now former engineer for Volkswagen is the first in the scandal to be slammed with charges, Liang’s acts along with other engineers and Volkswagen as a company leave a phenomenal opportunity to discuss engineering ethics.

Read More
1262 Words | 6 Pages

In 2006 the company wanted to build diesel engine vehicles for the US. However, after realizing that this wouldn’t be possible with the strict US emission laws, they decided that their only option was to use a “defeat device” in order to pass the Environmental Protection Agency (EPA) inspection and the California Air Resources Board (CARB) inspection so that they could launch their new product (The US Department of Justice). Engineer, James Liang was in charge of creating the software that

Read More
1155 Words | 5 Pages

The selected corporation is the Volkswagen, a German car manufacturer headquartered in Wolfsburg, Lower Saxony, Germany. The Volkswagen’s corporate website is http://www.vw.com/. According to the International Ethical Business Registry, there has been a dramatic increase in the ethical expectations of businesses and professions over the past ten years. Increasingly, customers, clients and employees are deliberately seeking out those who define the basic ground rules of their operations on a day to day. Volkswagen is no different, hence it created its own code of ethics in order to improve the company’s operation all over the world.

Read More
733 Words | 3 Pages

Response to the Part 2: PESTLE Analysis on “Driverless Cars” in My City..... I am working in Hosur, Tamilnadu. Since already Mr. Kesavaraj covered his analysis on Hosur, I would like to take my Native City “Coimbatore, Tamilnadu” for my analysis. “Coimbatore” – Manchester, Nucleus & 4th Largest Cosmopolitan City of South India. It is well known for its year around awesome Climate & world’s Sweetest drinking water “Siruvani”.

Read More
1306 Words | 6 Pages

INTRODUCTION: Mercedes Benz is a globally known brand, originated in Germany. Benz is specialized in automobiles like cars, buses, trucks, etc. EXTERNAL BUSINESS ENVIONMENT: The automobile industry is a multi-billion industry with large brands in market. It’s important to carry out analysis on microenvironment before formulating strategies.

Read More
836 Words | 4 Pages

However, since 2010, this longstanding quality reputation has been unabatingly shattered by increased vehicle recalls that have seen virtually every class of consumer affected (Rajasekera, 2). Recognizing that its reputation and brand is at stake, Toyota has endeavored to not only publicly apologize, but also settle a class-action law suits totaling $1.1 billion. While this strategy may look inept to many, research provide that leadership requires swift acknowledgement of mistakes and fitting solutions which is what Toyota has done. Going forward, Toyota will need to fully embrace innovation as its key strategy, especially given the fact that the current industry life cycle has overstayed its maturity, which means that most automakers will be looking to create new demand and create more innovative

Read More
1695 Words | 7 Pages

Besides, technical implementation tools could let it follow the cars, locate them and thus create better logistics for the cars, and managing them to be rented out and returned to the company. The company also realized that moving to a different car manufacturer could save them money and, possibly, could be done even more by moving to a cheapest maintenance

Read More
799 Words | 4 Pages

The Strategy for VW it is focusing on positioning the Volkswagen Group as a global economic and environmental leader among automobile manufacturers. To achieve the goals the company has defined the most important objectives that it needs to meet to be the most competitive car manufacturer in the world and the goal is to make Volkswagen the most successful, fascinating and sustainable automaker in the world. • Volkswagen intends to deploy intelligent innovations and technologies to become a world leader in customer satisfaction and quality. We see high customer satisfaction as one of the key requirements for the Company 's long-term success. • By reducing the sales price and reintroduce the brand into those countries where its position is weak; the U.S.,

Read More
1669 Words | 7 Pages

The Importance of a Company’s Culture The culture of a company is one of the most important and sometimes overlooked factors in an organization. The culture can increase employee engagement and increase productivity which will allow a company to reach its goals, “From productivity and engagement in the organization’s day-to-day, to an employer brand that naturally fuels recruiting efforts, to creating a lasting brand that customers immediately recognize, there’s no escaping it – culture radiates outward into the marketplace” (Straz 2015). The culture can have a great impact on the employees. Employees thrive in a positive working environment and the ability to engage with their managers without fear of retaliation.

Read More
948 Words | 4 Pages

Many laws, and restrictions have been passed over the last few decades, restricting manufactures to specific requirements for their emissions, vehicles in general, and even the gasoline that they run on, with requirements for detergents and such,. Unfortunately, it is claimed that these systems don’t have big enough impact on lowering the environmental problem, due to the amount of vehicles out there. Luckily, since electric vehicles are becoming more affordable, practical, and appealing, the amount of problems associated with the amount of claimed pollution will

Read More
1537 Words | 7 Pages

However, the Toyota massive recalls show a very different situation and involves more serious consequences. We have seen that almost 9 million of Toyota vehicles around the world had to be recalled within a few months, and the potentially defective quality involved were mainly focused on unintended acceleration problems, which were closely related to the most important thing for drivers – safety driving. It’s thus hard to believe that there was nothing wrong with Toyota’s “quality” cars. The massive recalls were indeed a disaster for Toyota: not only means that they had to pay for the extensively financial losses due to repairing costs, market and stock share dropping down, production suspending, civil penalty, and other relevant expenses for dealing with the troublesome issues; but also it has heavily hit to Toyota’s intangible assets – its brand image and reputation of quality, which have been ethically shaped over time

Read More
924 Words | 4 Pages

The initial decision was for Volkswagen to take a 42.0% stake in Porsche AG by the end of 2009, and it would also see the family shareholders selling the automobile trading business of Porsche Holding Salzburg to Volkswagen.[68] In October 2009 however, Volkswagen announced that its percentage in Porsche would be 49.9% for a cost of €3.9 billion (the 42.0% deal would have cost €3.3 billion).[69] On 1 March 2011, Volkswagen has finalized the purchase of Porsche Holding Salzburg (PHS), Germany's leading specialty automobile distributor, for €3.3 billion ($4.55

Read More
1346 Words | 6 Pages

A system to check and balances the benefit of all the board of directors and to avoid some of top management from making decisions that only benefit themselves is created and named corporate governance. Corporate governance means the system of rules, practices and processes by which a company is directed and controlled. The set of rules provided as a guidelines for the board of directors to make sure that accountability and fairness in a company’s relationship with its stakeholders such as financiers, customers, management, employees, shareholders and also society in order to achieve company’s goals and targets in a manner that add a value to the company. All of the stakeholders play an important role in corporate governance to ensure that

Read More
1601 Words | 7 Pages

External Analysis: Microenvironment Introduction The two major competitive factors controlling the external environment are the Macro and the Micro environments. While the Macro deals with the PESTLE affects, the Micro environment deals with the current structure of the industry and the effect of the roles played by the giants of the industry. Figure A-1 The Microenvironment includes the effect of rivalry, suppliers, buyers, distributors and the general public towards the strategy formulation by the company.

Read More

More about Corporate Governance Of Gas Scandal In The Automotive Industry

Related Topics

Open Document