Analysis

Who 

The issue related to business ethics embraces all organisation whether small or big and it is not just the latest fad with a restricted lifespan. In this context, managers of the commercial organisation have identified that ethical behaviour is necessary for managing sound and healthy business activities.

What 

Based on this ethical issue, it has been seen that there are revelations in the recent weeks of business that have awakened the suspicion related to ethics. In this context, Volkswagen Company in Australia has always enjoyed a good reputation that has been marketing their decision vehicles for the purpose of low emission vehicles whereas the engineering motors they used gave it a false reading.  To examine the unethical issue took place in the commercial sectors, the Australian competition and commission are investigating over the insider claims that the company has developed.  

Based on this specific issue that, the study investigates the ethical challenges faced by the organisation in Australian. In this regards, the study recognises the ethical issues that the company has currently faced in terms of their internal business.

Why 

Ethical scandals have seen around several organisation where the organisation has to face questions related to ethical decision making. All those scandals lead to huge loss of confident and breakage of reputation. In the existing market, the organisation tries to expand their profit in unethical ways that raise the problem of an ethical dilemma (Thompson 2018). In the present study business ethics are related to rules, standards and codes of ethics that provides the appropriate behaviour in terms of specific situations. These ethics have therefore become one of the most important areas of decision making that help to determine the corporate sustainability of the business.

Where and When

In this context of ethical scandal, Volkswagen also tried to address unethical ways to expand their business profits. The scandal took place in Volkswagen Australia. Their carbon emission falsification that came up with a lot of attention during the year 2015 (Ng et al. 2018).

How

Apart from the deceptive readings in the engineering motors of the Volkswagen Company, it has been seen that the convenience chain 7 eleven exploits as well as underpays several of its employees in different franchises. They also installed illegal software in the diesel cars to fake the carbon emission test that emitted 40 times more toxic gases that crossed the permissible limit. These reports of unethical as well as illegal business activities are in support of the contention that ethical behaviour is completely incompatible with the corporate beliefs.

Figure 1: Unethical emission of carbon setting in diesel cars

(Source: Thompson 2018)

Political 

On the basis of this statement, Ferguson et al. (2016) argue that these claims are unfair for the business managers who are concerned about the ethical values and are proud of following these rules. It can be said that it is growing level of competition and government regulatory framework that increased the amount of stress thereby forcing the company to take such a step. Moreover, being unethical while dealing with the employees and customers can be very bad for the business. For conducting such unethical practices, Volkswagen had to face millions of dollars in recalls and fines followed by a loss of brand image that led to the decline in sales as well. The founding chairman of the company had to resign as a result of which the newly elected chairman had to confront disgruntled franchisees.  

PESTLE analysis

Economic 

Economic elements includes the indexes of the external environment that influenced the market. There are several factors that may influenced the leadership and employee relations within the organisation. Moreover, fluctuation of currency creating an impact of the increase of goods tax may have forced the CEO of the company to take such steps. Volkswagen attempted to crate money and profits by planning to initiate the carbon emission. As a result of economic impact the company had to face 3.3 million of legal fine led by possible criminal persecution (refer to appendix 1). In addition to these, the company has 30,000 fine for each car with a total amount of $18 billion.

Jeanes (2017) argues that there needs to have respectful relations with the employees as well as client that helps to provide protection in service. These activities help to build public relations, the morale of the workers and helps to build consumer trust. However, underpaying the employees are ethically wrong, that eventually leads towards the corruption of the organisation.

Social 

However, arguments here is dependent on the contribution of ethical dilemma that is related to the social welfare of business that is in direct conflict between a requirement of business and doing the appropriate thing (Clarke and Boersma 2017). One of the Volkswagen franchise that exploited the workers by doing that they felt correct for running the business. In this context, Reamer (2017) stated that if the sustainability of the organisation depends on the underpaying the employees, then it strongly implies cutting down the ethical corners.

Technological 

Operating within an international environment where technological advances are increasing may have added to the unethical issues that these corporations usually face, but it is necessary for them to mainat8ing transparency for encouraging ethical behaviours (Ehrich et al. 2015). There will always be a business that may act in an unethical way, but it is the duty of the leaders to take an ethical step for reasoning out the pessimistic reform in the interest of avoiding unethical activities.

Legal 

Unethical activities are usually more prevalent in the small business organisation and smaller franchises as they low-profit margins and sustainability is always at a doubtful stage.  According to Ehrich et al. (2015), it is ironic that competitive, risk-taking and unregulated economic activities that politicians encourage is an environment that is prone to unethical behaviour. By doing such unethical activity the company has violated the rules of Clean Air act by faking carbon emission in diesel cars.

Environmental 

They faked the carbon emission activities by making their cares look less polluting than they are. The Australian environmental protection agency reported that there are almost half of million Volkswagen diesel cares that were emitting 40 times more chemical toxic fumes than they are permitted.  

Conclusion

The case, therefore, presents the ethical dilemma faced by the CEO of the company who is highly responsible for the unethical decision that followed by ethical justification. The unethical part that took place in the company is that they sold the cars by misleading the environmental examination. While applying Utilitarianism to the Volkswagen dilemma it can be said that the issue is engaged with several parties such as the company and its employees as well as the customers.

According to this theory of ethical dilemma, this unethical action of cheating on sales of cars and underpaying their employees are not permissible as they are not morally correct. This is specifically due to the fact that at the end of the issue no one was left happy. The permissibility of goodness is classified by the element of appreciation. However, the company has managed to lose its reputation owing to their unethical actions. The company may have taken this decision for the profit of the company, but did not move towards a greater good of the organisation.

In this context, punishment will be ethically obligatory for the organisation. At the end of the ethical decision, it is the about the fact that whether the act helps to expand the greater good of the organisation. In the case of Volkswagen and the manager of the company did not aim for greater well-being when it came to cheating their car sales and increasing profit.

Reference list

Clarke, T. and Boersma, M., 2017. The governance of global value chains: Unresolved human rights, environmental and ethical dilemmas in the apple supply chain. Journal of Business Ethics, 143(1), pp.111-131.

Ehrich, L.C., Harris, J., Klenowski, V., Smeed, J. and Ainscow, M., 2015. Ethical leadership in a time of increasing accountability. Leading and Managing, 21(1), p.22.

Ehrich, L.C., Harris, J., Klenowski, V., Smeed, J. and Spina, N., 2015. The centrality of ethical leadership. Journal of Educational Administration, 53(2), pp.197-214.

Ferguson, S., Thornley, C. and Gibb, F., 2016. Beyond codes of ethics: how library and information professionals navigate ethical dilemmas in a complex and dynamic information environment. International Journal of Information Management, 36(4), pp.543-556.

Jeanes, E., 2017. Are we ethical? Approaches to ethics in management and organisation research. The organization, 24(2), pp.174-197.

Ng, A.K., Wang, T., Yang, Z., Li, K.X. and Jiang, C., 2018. How is business adapting to climate change impacts appropriately? Insight from the commercial port sector. Journal of Business Ethics, 150(4), pp.1029-1047.

Reamer, F.G., 2017. Evolving ethical standards in the Digital Age. Australian Social Work, 70(2), pp.148-159.

Thompson, J. 2018. Despite the recent scandals, ‘business ethics’ isn’t a contradiction in terms. [Online] ABC News. Available at: https://www.abc.net.au/news/2015-10-05/thompson-business-ethics-isnt-a-contradiction-in-terms/6827488 [Accessed 4 Sep. 2018]