Name: Pan Sin Yi

Student ID: DGD005348 (201704)

Title: Volkswagen Scandal Report
Subject: Problem Solving and Decision Making
Lecturer: Ms. Esther Hon
Content page

1.0 Introduction
1.1 Research Background 2

2.0 5W1H
2.1 When did it happened? 2
2.2 What is the possible root-cause of the scandal? 2
2.3 Who participated in the Volkswagen Emission Test Scandal? 3
2.4 Why is the behavior of Volkswagen unethical? 3
2.5 What are the consequences faced by the company after the scandal? 4
2.6 How did the company rectify the crisis? 4

3.0 Conclusion
3.1 Lesson learned 4

4.0 References 5
1.0 Introduction
1.1 Research Background
Volkswagen was known for the unethical programming done on their vehicles for the emission
test. It had been reported by the Environmental Protection Agency (EPA) that a “defeat device”
was programmed in the diesel engine with the motive to adjust vehicle performance in order to
achieve the required result.

Volkswagen conducted emission test with their vehicles within the research laboratory and
illegally programmed them to detect the situation where vehicles with Turbocharged Direct
Injection (TDI) diesel engines experience emission test and receives information from brakes,
accelerator, and steering. After that, the program created slight changes to engine setting with
the aim of decreasing the pollutant level emitted by Volkswagen diesel cars. However, it was
proven that the emission test of Volkswagen’s vehicles on road was thirty-five times more than
the cheated result in the laboratory. Resultantly, the emission test scandal conducted by
Volkswagen has received a number of dramatic consequences that has affected many
authorities.

2.0 5W1H
2.1 When did it happened?
Volkswagen appalled the world on 18 September 2015 with its response to the United States
EPA notice that Volkswagen’s “clean diesel” vehicles were found to be in violation of the Clean
Air Act. In its response, the German manufacturer admitted that it had deliberately equipped its
line of TDI diesel engines with a “defeat device” that was meant to “bypass, defeat, or render
inoperative components of a vehicle’s emission management system” throughout emissions
testing.

2.2 What is the possible root cause of the scandal?

The scandal happened as a result of technology deficiency that incited Volkswagen to cheat in
emission test. The administrator of Volkswagen uncovered to the public that a team of
engineers settled on the choice to rig diesel emission test in 2005 when the United States EPA
forced the hardest emission standards to the vehicle industry. The engineers carried out an
unlawful solution to meet the EPA emission standards due to the given time and assigned
spending plan, yet they wanted to keep rigging rather than executing a strategy to overcome the
technology shortcoming.

One of the other reasons that encouraged Volkswagen’s dishonesty is the corporate culture of
the organisation. The culture of Volkswagen is based on representatives being obliged to agree
to the standards, which prompted an atmosphere where workforces complete their errands
under a centralised structure. As per this culture, the expectation and demand of the
organisation ought to be satisfied without considering the workers' ability to play out the
undertakings.

2.3 Who participated in the Volkswagen Emission Test Scandal?

It was revealed by the external investigator of Volkswagen that fifty staff generally in Wolfsburg
admitted that they were mindful of the emission scandal exercises. However, it was stated by
the CEO of Volkswagen that the scandal was not a corporate choice.

The quantity of Volkswagen workers from different sectors who were involved in the emission
test scandal to function the “defeat device” started to grow in late 2015. There have been
different levers in this outrage. It is reported that one individual can compose the codes of
defeat device program; then again actualising this program to work with the engine and different
components require more workforces to be associated with. Besides, it was announced that an
extraordinary number of administrative and non-administrative the general population workforce
were associated with diesel emission scandal. The suspended administrative gathering
comprises of nine administrators from supervisory board, quality control and confirmation, motor
originators, plant managers, and chiefs of sub-organizations.

2.4 Why is the behavior of Volkswagen unethical?

By the end of 2016, Volkswagen vehicles with defeat device will have created extra harmful
contamination to specifically trigger the premature death of around sixty people just in the
United States. From the year 2008 to 2015, 428,000 Volkswagen vehicles directed out nitrogen
oxide forty times more than it was permitted by the Clean Air Act. It is assessed by the analysts
that with six years Volkswagen diesel delivered an overabundance of 36.7 million kg nitrogen
oxide to the earth. Specialists have evaluated that huge effects of nitrogen oxide delivered by
Volkswagen vehicles imperil 60 human lives from 10 to 20 years easily.

2.5 What are the consequences faced by the company after the scandal?
The terrible notoriety of Volkswagen has influenced its clients’ loyalty; in this way, clients
change from Volkswagen to its competitors, such as Toyota, General Motors and Ford, which
prompted a perceptible drop in sales Other than that, the share value of the company dropped
by 33% instantly once the emission scandal was uncovered. At the end of the day, the emission
scandal wiped billion dollars from Volkswagen's value.

2.6 How did the company rectify the crisis?

Volkswagen has offered a solid arrangement which has been upheld by United States
government organisations and environmental protection agency to tackle and settle the case of
the cheated emission test by offering choices to owners of Volkswagen with “defeat device” to
settle their vehicles based on emission standards of the United States or offer back their
vehicles to Volkswagen and nullify their loans. The proposed bargain incorporates considerable
compensation for vehicle owners of 2-liter diesels and furthermore offers a store for legitimate
remediation hardship for any environment damaging impacts caused by Volkswagen vehicles.

3.0 Conclusion
3.1 Lesson learned
According to the investigation done, Volkswagen's scandal is a disastrous case that boiled
down to undesirable consequences for its direct and indirect stakeholders. The lesson we can
learn from Volkswagen scandal is that we should always carry out an action with honesty and
morality. Communication with partners we work with is imperative as well, in order to bring out
the desired result that can eschew us from the effects of miscommunication.
4.0 References

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