Performance issues faced by Ford Australia

Write a Business Value Assessment Report of two Chosen Company.

Volkswagen and Ford are the two business organizations within the automobile industry that have been researched here. Volkswagen is one of the major German automaker that has its headquarters in Wolfsburg, Germany. The company operates worldwide and has a net income and revenue of €1.869 billion and €105.651 billion respectively. The parent company is the Volkswagen Group and it employs over 626715 staffs. The company operates in many countries including Australia, India, United Kingdom, United States of America, etc (volkswagen.com.au, 2018). On the other hand, Ford Motor Company is a reputed American multinational automaker that has its headquarters in Dearborn, Michigan, United States. The automaker also operates all over the world and other than the automobile manufacturing and production, other services include automotive finance, vehicle servicing and vehicle leasing. It has a net income of US$7.602 billion and US$156.776 billion revenue with an average numbers of employees of over 202,000 (ford.com.au, 2018). This automobile manufacturing company also operates worldwide and few to the countries to mention are Australia, India, China, US, etc.

One of the performance issues faced by Ford Australia is the customers’ complaints regarding the transmission issues in few of the popular cars of the company including the Fiesta, Focus and EcoSports. The performance issues were experienced due to the inappropriate functioning of the gears in the cars. The faulty transmission created problems like delayed and harsh shifting in gears and this even deteriorated the performance of the clutch. The ACCC created statements related to the penalizing of Ford Motor company of Australia Limited, because it was found to be involved in misleading or deceptive conducts and false interpretations were done. The Power Shift Transmission was not functioning properly, which created issues like shuddering and jerking of the cars and excessive noisiness (Carroll & Buchholtz, 2014). The company was fined with an amount of $10million for its wrong conduct over the inappropriate transmission systems in the vehicle.

Volkswagen failed in managing the corporate social responsibilities properly by emitting harmful gases after the vehicle tests. Previously, the company created a design to control the emissions and allowed the company to gain competitive advantage, though it failed to hide the fact that diesel engines could be highly contaminating. According to various researches conducted by the Australian Automobile Association, It was found that 14 percent more fuel was utilized, which resulted in higher emissions above the normal level of noxious gases. After the recall fix also, the tests confirmed that the diesel engines used more fuel and thus the vehicle software also changed, which resulted in higher emissions of poisonous nitrogen oxides (Bocken et al., 2014). It was much higher than the permissible limit at Australia. Though after the recall, the nitrogen oxides emissions decreased from 6.71 times to 4.11 times over the Australian standard, the fuel consumption became higher, i.e., from 18 percent to 26 percent.

Volkswagen’s emissions scandal

There were several differences found from the corporate social responsibility or CSR reports of both these two companies in Australia in terms of social environmental and economic issues. The ways by which, these two companies deal with those were also different and quite comprehensive for maintaining a good and sustainable position within the automobile industry of Australia. The content and style of the social reports of the two companies do not differ much, though their ways of functioning and ability to manage sustainability differ in certain areas. Volkswagen’s social report depicted the importance of stakeholders at first and then there were various areas including group, strategy, economy, people, environmental along with the CSR projects that are managed by the company (Wilson & Post, 2013). According to the social report, the company aimed to introduce environment friendly vehicles to maintain a healthy and safe environment. Due to the climatic changes, availability of lesser amounts of resources and urbanization, there were various challenges faced by the company, which made it follow the environmental laws, rules and regulations. The TOGETHER- Strategy 2025 aims to influence the stakeholders make significant contribution to the reduction of negative environmental impacts and achieve the sustainable development goals and objectives. This strategy is implemented keeping in mind the objectives of reducing the carbon footprints, emissions of harmful gases and decreasing the consumption of resources largely (Lawrence & Weber, 2014). The company even obtained the ISO 14006 Ecodesign Certificate to improve the environmental aspects of the design and interface of the cars, which could reduce the emissions and maintain ecological balance in nature. One of the issues was that after the recall, there were software changes, which resulted in higher consumption of fuel and slightly lowered nitrogen oxide emissions that were over the Australian standard (Gray, Adams & Owen, 2014).

Ford’s social report clearly stated its mission about creating a positive impact on the world, while remaining a successful business. The social report presented the activities managed by the company till now including the development and expansion of business model to transform. Maintaining the ethical standards, promoting human rights and engaging with the stakeholders to resolve issues. According to the social report, Ford, while driving innovation, was faced with issues regarding the bad transmission in cars. The company aims to engage with its partners and provide better mobility solutions for ensuring that lesser impact is created on the environment through reduced carbon emissions (Grey et al., 2013). The introduction of electric cars and autonomous vehicles were other aims of the company, considering the fact that water should be conserved and wastes should be disposed properly. Ford thought of a solution to use a new clutch material and enable a transmission control module to fix the issues that were faced earlier.

Comparison of CSR reports of Volkswagen and Ford

Volkswagen’s sustainability development goals are to reduce the level of poverty, manage zero hunger, maintain good health and well being of the clients, provide quality education to young children, manage gender equality, enable responsible consumption and production along with the development of sustainable cities and communities. Among these, the most important should be the development of sustainable cities and communities, managing consumption and production responsibly and providing quality education to children (Dyllick & Muff, 2016). Few of the projects associated with the development of sustainable cities are Green Silk Road, encouraging voluntary work and managing the resources efficiently along with recycling of wastes and management of wastewater. The sustainable mobility was promoted through campaigns, which introduced electric vehicles for ensuring both technical and economic feasibility. The TOGETHER Strategy 2025 creates scopes for bringing future evolution and manage collaboration between the individuals to maintain a skilled and dedicated workforce. This would transform the core business activities through strengthening and positioning the brands properly, developing drive train portfolio, developing battery technology as new core competence and enhancing the mobility solutions through secure funding and optimization of business portfolio (Byerly, 2013).

Figure: Sustainability framework (Byerly, 2013)

Volkswagen collaborated with Lamborghini to manage aforestation by planting many trees and analyzed the relationships between vegetation, climate and emissions of carbon dioxide. Group Environmental Policies are followed to develop an Ecodesign standard and improve the environmental aspects related to the vehicle at each stage of the life cycle.  The plants and machineries at Volkswagen were integrated with a EMAS register and certified to ISO 12001:2015 standard, which introduced the High level structure. This was done for reducing the amounts of emissions and created a healthy environment based on the integrated competitive approach to handle risks.  From the above sections, it was found that the company faced problems related to higher emissions and so these sustainability goals, when achieved, could bring an entire transformation of business positively (Burchell & Cook, 2013).

Ford also pledged to promote Australia for sustainable development through the alignment of sustainable development goals with the ways products and services were delivered to the customers. Based on the CSR report, the company aimed to reduce the carbon and greenhouse gases emissions, decrease the consumption of water and maintaining the highest standards for managing human rights and good working conditions. Ford focused on no poverty to maintain food an education for all, furthermore achieves food security and improved nutrition through promotion of sustainable agriculture. The healthy lives and wellbeing of people are promoted by maintaining good quality products and ensuring the customer satisfaction too. The socio-economic contribution and engagement of community also helped in raising awareness among people, furthermore maintain good quality within the environment (Mazutis & Slawinski¸2015). By enabling inclusive and equitable quality education, lifelong opportunities and scopes would be promoted, which could enhance the learning techniques and make people aware of the management of water and sustainability. A resilient infrastructure would be built, which could foster industrialization and innovation all throughout and introduce sustainable cities and infrastructures all throughout. The Climate Change Challenge by Ford Motor Company would help in undertaking actions for creating positive impacts on the changes in climatic conditions; furthermore reduce the negative environmental impacts too. This would not only reduce the carbon footprint, but could also result in fuel economy, process innovation and process biodiversity. Ford Motor company also strengthened the means of implementation and facilitated the global partnership to ensure sustainable growth and development in the future (Gao & Bansal, 2013). It should result in better supply chain management and ensure better socio-economic contribution and engagement of community altogether.

zadek et al’s criteria	Volkswagen	Ford
Inclusivity Comparability Completeness Evolution Management policies and systems External verification Continuous improvement	Volkswagen also provided learning scopes and opportunities to people in the rural areas and in the remote areas for raising awareness among the people and ensuring proper management of health, wellbeing and reduction of carbon footprints too. The CSR reports furthermore helped in making investments to form green buildings and infrastructures along with the development of environment friendly cars for reducing the negative environmental impact (Luke, 2013).  This is a huge evolution that has brought continuous improvements and even helped in managing the external policies and procedures properly.	Based on the data and information presented by Zadek et al. (1997), the eight quality standards were to be applied for understanding the effectiveness of the social accounting approaches. It would help in understanding whether proper auditing had been done or not and report its activities to various levels of the organization. Based on the CSR reports of Ford and Volkswagen, it would be easy to understand whether the approaches undertaken to remain sustainable were feasible enough or not. Ford also empowered women and provided equal opportunities to both male and female workers (Grayson & Hodges, 2017). To create positive environmental impact, the climatic changes were managed properly and even the diversified workplace was managed consisting of people from different backgrounds and cultures.

Sustainability development goals of Volkswagen and Ford

The core organizational values are managing he human resources properly by providing corporate intelligence and determining the reputation and vitality through promotion of teamwork, coordination and management of human values and rights too. The products are formed after the people manage their efforts to serve the customers all over the world. Viewing the products is part of the way the organization has been viewed. The profit generated is the measurement of efficiency of products and services delivered to the customers for fulfilling their needs and requirements. The profit generated could allow the company to grow, develop and gain success. The guiding principles are followed to maintain the organizational values through maintenance of quality, focusing on the customers’ needs and preferences, enabling continuous improvement, engaging the employees, partnering with the suppliers and dealers and managing integrity (Akrivou & Bradbury-Huang, 2015).

Volkswagen’s organizational values include management of integrity, i.e., to do the right things, serving both internal and external customers, managing accountability, enabling continuous improvement, promoting teamwork and coordination and encouraging contributions to influence customers differentiate between the products and services of Volkswagen from another company products. Individual skills would be achieved and contributive feedbacks should be provided for resolving the personal conflicts and maintaining a steady culture (volkswagen.com.au, 2018).

Meetings were arranged and I discussed about the management of sustainability within the automobile industry. There was assessment of CSR reports and audits that showed the approaches consistent with the management of sustainability at the organizations. My personal skills and knowledge allowed to manage training and developmental session for enhancing the ability to form a diverse workforce and generate higher revenue. I interacted with the other team members for learning about the different concepts of sustainable management. Based on the social accounting approaches, it was found that utilization of knowledge and skills would be important for managing the workforce properly as well as generate higher production, growth in economy and management of sustainable business too (ford.com.au, 2018). By discussing about the various aspects, it was found that the education and learning experiences would be further promoted for improving the welfare of the community and create a sustainable business too.

References

Akrivou, K., & Bradbury-Huang, H. (2015). Educating integrated catalysts: Transforming business schools toward ethics and sustainability. Academy of Management Learning & Education, 14(2), 222-240.

Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.

Burchell, J., & Cook, J. (2013). CSR, co-optation and resistance: The emergence of new agonistic relations between business and civil society. Journal of business ethics, 115(4), 741-754.

Byerly, R. T. (2013). Business in society: The social contract revisited. Journal of organisational transformation & social change, 10(1), 4-20.

Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.

Dyllick, T., & Muff, K. (2016). Clarifying the meaning of sustainable business: Introducing a typology from business-as-usual to true business sustainability. Organization & Environment, 29(2), 156-174.

ford.com.au. (2018). Retrieved from https://www.ford.com.au

Gao, J., & Bansal, P. (2013). Instrumental and integrative logics in business sustainability. Journal of Business Ethics, 112(2), 241-255.

Gray, R., Adams, C., & Owen, D. (2014). Accountability, social responsibility and sustainability: accounting for society and the environment. Pearson Higher Ed.

Grayson, D., & Hodges, A. (2017). Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business.

Grey, D., Garrick, D., Blackmore, D., Kelman, J., Muller, M., & Sadoff, C. (2013). Water security in one blue planet: twenty-first century policy challenges for science. Phil. Trans. R. Soc. A, 371(2002), 20120406.

Lawrence, A. T., & Weber, J. (2014). Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education.

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Mazutis, D. D., & Slawinski, N. (2015). Reconnecting business and society: Perceptions of authenticity in corporate social responsibility. Journal of Business Ethics, 131(1), 137-150.

volkswagen.com.au. (2018). Retrieved from https://www.volkswagen.com.au/

Wilson, F., & Post, J. E. (2013). Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation. Small Business Economics, 40(3), 715-737.