BAN120 Volkswagen Case Q&A with case template

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Seneca College *

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Feb 20, 2024

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BAN120 – Template for Case Analysis Name: Shubham Hiteshkumar Jethwa IDENTIFICATION OF PROBLEM(S) - Volkswagen’s diesel car models were examined on the open road and its results stated that the nitrogen oxide emission was above 40 times higher than U.S. emissions regulatory standards. - Due to restriction of existing Diesel engines in U.S., there was high rise of negativity by consumers in U.S and other countries. DECISION CRITERIA - Around 500K diesel cars were already sold in U.S till the results came out. - As per the U.S. standards, The nitrogen emissions should be 40 times lesser than existing one and must be tested on open road by researchers.

ANALYSIS - Volkswagen diesel cars were driven by diesel engines which exhausted 40 times higher than legal limit in U.S. - As per the Management, there was a defected chip in the diesel engines which led the false examination and results. - Volkswagen group likely to redevelop the reputation by involving the electric cars in the market to compete other companies. - They should hire the new development team who are highly talented and motivated in order to develop the electric engines. - This innovation will help them to increase their consumer’s trust and which leads to rise of profits and market share price. ALTERNATIVES - Volkswagen should try to eliminate the diesel engine malfunction chips. - it would be great if they made the electric cars as soon as possible to increase their profitability and consumer trust. - Company should invest more in research the innovation of renewable energies to maximize their green technology innovations.

DECISION(S)/ RECOMMENDATIONS - Analyze the diesel engines and change them to the electric engines. - Make sure the new cars should have latest diesel engines which doesn’t exceeds the legal emission limit. IMPLEMENTATION - The electric cars will be game changer in the market and also price of the car will compete the other competitors. - Target audience will be U.S. consumers which have negative impact of improper diesel engines. BAN120 Case Question on Volkswagen’s Greenwashing Backfires: The Road to Redemption 1. Answer 1: - Greenwashing basically means that there is a big difference between what is said and what is done to be environmentally friendly. - For example, environmentalists often say that oil companies use vague or misleading environmental claims to show how good they are for the environment, even though their investments in renewable energy are small compared to how much money they spend on their fossil fuel divisions. - Volkswagen did greenwashing by saying that their "clean diesel" cars were good for the environment but in reality they used illegal software to cheat emissions tests. - The software was made to know when the car was being tested and adjust its emissions accordingly. This made the emissions much lower during testing than when the car was being driven normally. 2. Answer 2: - At first, Volkswagen’s CEO stated that this issue was brought by low-level engineers team. But when results of labs came out, they realized their mistakes and apologize to their consumers. - Also, they changed their senior management team including CEO as well. In addition, they recalled the inappropriate cars from their buyers and compensates them accordingly.

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- Overall, VW's apology was a good step toward admitting its role in the scandal, but it wasn't enough to fully address the ethical questions that were raised. - The company needed to take more proactive and serious steps to fix the damage it had caused and win back the trust of its stakeholders. 3. Answer 3: - There were few stakeholders in the Dieselgate issue shown as below: - Customers: The scandal had a big effect on VW's customers who bought diesel cars with problems. The cars they bought were advertised as being good for the environment and good on gas, but they actually put out more pollution than the law allowed. Customers who bought these cars lost faith in the brand, and many of them were left with cars that were worth less than what they paid for them. - Investors: The scandal also hurt VW's investors, since the company's stock price dropped after the cheating was found out. Investors who had bought shares in the company lost a lot of money, and a lot of them sued the company. - Regulators: The scandal also affected the regulators who had previously said that VW's cars met emissions standards. When it came out that VW had cheated on emissions tests, it hurt their reputation and made people wonder if their testing methods were good enough. - Employees: Employees of VW were also hurt by the scandal, which did a lot of damage to the company's reputation. The scandal also cost the company a lot of money and caused a lot of people to lose their jobs. 4. Answer 4: - After the Dieselgate scandal, VW has taken a number of steps to change how its brand is seen. Some of the most important strategies that the company has used are: - Changes to management and corporate culture: VW has made major changes to its management and corporate culture, such as hiring a new CEO and creating a new board-level position for integrity and legal affairs. The company has also put in place stricter testing and compliance procedures and promised to create a culture of openness and responsibility. - Putting money into electric cars: VW has put a lot of money into electric car technology and released a number of new electric cars in the past few years. The company has big plans for selling electric cars. By 2025, they want to sell 1 million electric cars each year. - Overall, VW's plans to re-position its brand after the Dieselgate scandal have been a mixed bag. Even though the company has put a lot of money into electric vehicle technology and taken steps to be more environmentally

friendly, it still has a long way to go to win back the trust of customers and stakeholders. - The scandal has done a lot of damage to the company's reputation, and it may take several years of hard work to fully fix it. Work Cited Department of Justice. (DOJ) (2016, June 28). Volkswagen to spend up to $14.7 billion to settle allegations of cheating emissions tests and deceiving customers on 2.0 liter diesel vehicles. https://www.justice.gov/opa/ pr/volkswagen-spend-147-billion-settle-allegations-cheating-emissions- tests-and-deceiving Eisenstein, P. (2017, April 21). Volkswagen slapped with largest ever fine for automakers. NBC News. https://www.nbcnews.com/business/autos/judge-approves-largest-fine-u-s-history-volkswagen- n749406

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