BUSM 3199: Integrate and Apply Contemporary Ethics & Governance Issues in a Business Context: Ethics and governance Assignment, RMIT, Singapore

Learning objectives assessed:

CLO1: Integrate and apply contemporary Ethics & Governance issues in a business context

CLO2: Critically analyze and apply ethics to contemporary business practice

CLO3: Critically analyze key perspectives on corporate social responsibility and its application

CLO6: Effectively communicate ethics and governance concepts and arguments in a logical manner

Case 2. Failure of Ethical Compliance The Case of Volkswagen

I. INTRODUCTION
The 1990s saw an accelerated development of formal business ethics in response to the emergence of multinational corporations with limited social responsibility (Jones, Parker & Bos, 2005). ‗Business ethics is rules, standards, codes, or principles which provide guidelines for morally right behavior and truthfulness in specific business situations‘ (Lewis, 1985, p. 381). Crane and Matten (2016, p. 5) describe industry principles as a study of industry situation, behavior, and decision where issues of correct and incorrect are addressed‘. Although common definitions emphasize the rightness or wrongness of behavior, scholars disagree on what is ethical or unethical (Lewis, 1985). Consequently, there is an absence of a generally recognized, specific definition of business ethics in the literature (Sparks & Pan, 2009).

Volkswagen faces two allegations: air pollution and cheating on emissions tests (O‘Dwyer, 2016). This paper focuses on corporate fraud in the American market (Li et al., 2018). Kantian ethics and Utilitarianism will be
used to argue that Volkswagen‘s rigging of emissions tests was unethical behavior on a massive scale (Warford, 2016). The assumptions and limitations of the theories are explored, followed by a discussion and conclusion.

II. CASE SUMMARY
The Volkswagen case highlights the failures of ethical compliance (Warford, 2016). The ethics scandal is about Volkswagen engineers altering engine operations to meet U.S. emissions testing standards (Rogerson, 2017). Volkswagen used ‗defeat devices‘ which ensured that emissions control would only be activated during regulatory tests (Trope & Ressler, 2016). Under normal driving conditions, exhaust emissions were forty times higher than the legal limit (VanSandt, 2016). This cheating continued for ten years until detected (Shepardson, 2017). The scandal started when Volkswagen was issued a notice by the U.S. Environmental Protection Agency (EPA) in 2015 for violating the Clean Air Act (Shepardson, 2017). The investigation found that 482,000 cars were using defeat devices (Plungis, 2016).

Relate to the Problem

As a team, relate to the situation and formulate a collective position on what the problem is. Remember, your role as future managers, or consultants, is to help clients formulate problem statements or to help clients identify organizational problems they are unable to see.

Find and Generate

Firstly, as individuals, each carry out a literature survey on one of the ethical theories, e.g. virtue, deontology, utilitarianism. As individuals become well versed in the selected ethics theory.

Synthesize

As a team, work out a process that would address the problem that was identified in the first stage. Bring together the different bodies of theory and your individual ideas. Communicate this to your team members and collectively, identify an approach that would assist the company address the problems.

Organize and Manage

Present your solution in a report structure showing the approach is taken and the solution, as you would present to a client.

Embark and Clarify

As students training to be problem solvers, make sure you engage with your tutors in-class and check at every stage. In the future, in your working life, you will often need to clarify and keep your clients up to date. Do not surprise your clients with a solution they did not want. This is the same as your assignment – do not surprise your tutor with a piece of work that is under-developed.

Communicate

Communicate your research and solution well. Communicate with your fellow students to ensure that you deliver this report in time and that everyone in the team behaves as expected.