POLYTECHNIC UNIVERSITY OF THE PHILIPPINES 1

Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

GRADUATE SCHOOL

M.H. Del Pilar Campus

Sta. Mesa, Manila

CASE STUDY: VOLKSWAGEN EMISSIONS SCANDAL

Submitted to:

DR. MARIETTA REYES

MBA 652 Corporate Social Responsibility

Submitted by:

MARIA GLORIETTA M. DEOCAREZA

19 October 2019

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TABLE OF CONTENTS

Volkswagen Corporate Responsibility p. 3

Walmart’s Corporate Responsibility p. 4

Introduction p. 5

Background of the Study p. 5-6

Alternatives p. 7

Proposed Solutions p. 8

Recommendations p. 8-9

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VOLKSWAGEN CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Volkswagen Group of America, one of the world’s leading automobile

manufacturers and the largest carmaker in Europe. The group is unified by much

more than their dedication on building great cars. They also care deeply to their

employees, partners and the places they called home. Corporate giving and

involvement in the community is also part of their culture and believe that the public-

private relationship are critical to a strong, sustainable economic future.

The Volkswagen Group is committed to transparent and responsible

corporate governance. Implementing this across all levels and every step of the

value chain is a challenge, they are the world’s largest companies.

For the Volkswagen Group, sustainability means simultaneously striving for

economic, social and environmental goals in a way that gives them equal priority.

They want to create value, provide good working conditions and handle the

environment and resources with care.

The Volkswagen Group supports the arts and culture, education, science,

health and sport in a large number of projects and initiates development on regional

structures and conservation of nature. They are also promoting sound, balanced

social development in Germany and in other international locations.

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WALMART CORPORATE RESPONSIBILITY AND SUSTAINABILITY

Through innovations, Walmart has opened thousands of stores in the U.S and

expanded internationally. Their creating excellent experience to let customers shop

anytime and anywhere online. They are creating opportunities and bringing value to

customers and communities around the globe.

At Walmart, they aim to use strengths and collaborate with others to transform

the systems on which they rely, that’ includes advance their ambitious commitments

and goals within the priority areas of opportunity, sustainability and community.

The organization aims to strengthen local community while inspiring their

associates to give back. They design programs to meet specific social needs, and

enables to positively change the community some of the are programs are disaster

reliefs, hunger reliefs, community engagement, local giving and associate support.

Walmart’s job is to give opportunity to build career. They also gives back to

every community in which it serves. It is also considered as the largest onsite green

power generator in U.S.

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INTRODUCTION

Volkswagen is the world’s leading car maker, but due to irregularities in tests

to measure carbon dioxide emissions levels they were sued by the US justice

department. In January 04, 2015, Volkswagen characterized its emissions scandal

as a “chain of mistakes”.

BACKGROUND OF THE STUDY

As the world’s leading car maker, Volkswagen corporate sustainability means

pursuing economics, social and ecological objectives simultaneously and with equal

energy. They aim to create lasting values, offer good working conditions, and

conserve resources and the environment. They want to ensure that opportunities

and risks associated with the environmental, social and governance activities are

identified as early as possible at every stage of the value creation process.

The Volkswagen Group faces its social responsibilities head on by adhering

the two principles pf continuity and participation. They encourages knowledge

sharing and undertake sustainable projects through long-term partnerships. This

engagement ensures to become the learning platform for the company as a whole.

The organization uses national and international cultural projects and partnerships to

promote education in modern art. They also involved in resolving social issues just

like managing emergency aid, helping with language learning, training and

education. Volkswagen also engage with the non-governmental organizations and

academic institutions to developed and manage long-term partnerships.

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In 2015, Volkswagen seems to fail there company’s corporate social

responsibility. Supposedly environmentally friendly cars meanwhile become

poisonous to the planet. Volkswagen rejects ethical standards of engineering by

hiding the fact that its diesel engines were highly contaminated. The company has

equipped a staggering 11 million diesel cars since the 2009 model

Year with software called a “defeat device”. This defeat device are used to cheat on

emissions tests in which, when not being tested, the cars emit up to 40 times to

allowable levels of nitrogen oxide pollution. This scandal becomes a very disturbing

case of systematic corporate fraud that has harmed customers, governments and

the health and well-being of citizens in the society in which Volkswagen has been

given the license to operate. The company had broken the trust of the customers

and the public and as a result the Group Chief Executive resigned.

The company’s problem widespread all over Europe. Throughout the world,

politicians, regulators and environmental groups are questioning the legitimacy of

Volkswagen emissions testing. And for 15yrs, the company posted its first quarter

loss of Euro 2.5bn in the late October.

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ALTERNATIVES

Volkswagen’s emissions scandal in 2015, captures the attentions of the

media and damage the publics’ trust in the corporations and their social

accountability. Listed below are some possible alternatives that they might use to set

standard measures on the said incident;

Company’s head of CSR must know the essence of corporate social

responsible and not use as a marketing exercise.

R&D Dept. and all levels of management must take full responsibility

on documentations of every process of the product and to fully be

transparent on every record of their products.

More regulations about CSR involving each employees and members

of the organizations. They should pass or formulate such law to avoid

another incident and to punish the person in-charge who break the law.

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PROPOSED SOLUTIONS

What happened to Volkswagen Group is a mind- opener to all not just to auto

industry and carmakers. Volkswagen CSR nor sustainability strategies will not

prevent such incident to happen. Instead, we must formulate more intensified

regulations on how CSR must be implemented wherein both internal and external

customers must be responsible. We all have our role in every CSR of the

organizations, so we must take part on each process to avoid or at least lessen

people or individual to make use CSR programs for their own benefits. Regulations

was already on place, continue to walk the talk because no company has reached

perfection, so we must continuously move forward for the better community and

organizations.

RECOMMENDATIONS

Based on the findings and conclusions presented, the following

recommendations are suggested:

1. The researchers recommend that Sustainability Report must be

transparent to both STAKEHOLDERS and CUSTOMERS. We

recommend them to have a guaranteed truthful and transparent

Information with regards to their Sustainability Programs and

annual reporting.

2. The researchers recommend the management and

stakeholders to formulate regulations aligned to their

Company’s CSR to properly address the pros and cons and let

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them get involved to the organizations goals towards effective

implementation in CSR.

3. The researchers recommend that the organization must attend

several seminars and trainings to properly address possible

issues and problems concerning CSR activities and to be more

responsible on every decision- making and process that they

have within the organizations. And also, to early recognize risks

on the development process of their products and services.

4. The researchers also recommend to impose the Code on

Conduct Guidelines to every employees and members of the

organizations and to clear management structure in

coordination to their Corporate Social Responsibility.