VW Scandal - Case Study

Minhaj Shakoor Khatri Student ID: 18460

SCAND

Emission standards are legal requirements governing air pollutants released into the atmosphere. They are generally designed to achieve air quality standards and to protect human health. In the United States, emissions standards are managed by the Environmental Protection Agency (EPA). The state of California has special vehicle emissions standards. Over the last month, the German automaker, Volkswagen, has been in the hot seat for installing device that covered up diesel emissions during testing by the EPA. The Environmental Protection Agency (EPA) found that many VW cars being sold in America had devices in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. Following the scandal, Volkswagen’s share of the EU car market decreased to its lowest level for six months last month – to 23.3 percent of the region’s sales. VW remains the market leader with brands including Porsche, Audi, Skoda and Seat, but automaker has to come up with a strategy to halt this continuous shrink. In the past, there had been similar cases like GM’s faulty ignition switches (over 100 people died) or Toyota’s instant acceleration problem. However, GM and Toyota went on selling cars successfully despite dealing with legal and regulatory issues. VW will also survive and continue to sell cars. But customer loyalty has been hurt, and it has to be regained. To revive its brand: 1. VW needs a leader who can move this great organization beyond this incident. But make no mistake; it will take time, which is something that neither regulators, the media, nor shareholders are going to be happy about. New CEO has already been appointed. 2. VW needs to come up with a plan to fix all cars affected by the tampering hardware. The process has to be made so smooth that it does not further annoy customer. 3. VW needs to focus on both the short-term issue of compromised emissions tests as well as the long-term issue of a culture so focused on success and performance that it forgot to remind employees not to do anything they wouldn’t want to read about online the next day. A culture of social responsibility has to be cultivated among employees. 4. Explicitly state intolerance for wrongdoing and repeatedly suggest that nothing is worth losing your reputation over. All this must be communicated internally and externally and strict adherence must be practiced. 5. Go electric. VW need’s to focus its R&D into new technology. The automaker should start manufacturing electric cars as soon as possible. EGolf is being developed, but scandal has shortened the time for its launch. Till then, the automaker has to focus on hybrid technology.

Assignment No. 01 Faculty: Mr. Salah Uddin

None of this is going to be easy, and it will most definitely take years rather than months for VW to transform itself to the kind of company employees will be proud to work for, customers will be happy to buy from, and communities will be happy to welcome back.

Assignment No. 01 Faculty: Mr. Salah Uddin