BATACAN, GWYNETH SYBIL R.

MGT109 B5_01

Questions:

Please answer briefly in a detailed, concise and easy to understand manner

1. Given that you are part of the decision-making board; do you believe that the company
should be restructured?
Yes. Volkswagen is a multinational corporation that has created a
financial and public relations disaster for itself. As a result, responsibility for the
company's response and recovery must rest with the company itself. In the realm
of global business, it is undoubtedly difficult to emerge as a powerful rival after
self-harm, but there may be a formula for doing so.
There are four major factors that contributed to this quick change. The
corporation sought to change the organization's structure, the strategy, the
leadership, and the product's branding. Although it would take a while, the
corporation was able to make great efforts toward restoring its good name and
might offer some intriguing insight into the best strategies for handling corporate
crises.

2. Identify the three main problems that the company is facing. Among the three, what is
the most important problem the company is facing? How would you recommend the
company address this public relations nightmare and regain sales traction? How would
you turn this company around? Provide your reasoning for your recommendation(s).
The installation of emissions-cheating devices in the company's vehicles,
which increased pollution, legal proceedings for breaching the Clean Air Act, and,
finally, a loss of $33 billion in vehicle upgrades and regulatory fines were the
three main issues the corporation was facing. I believe that the most significant
issue the company was dealing with was the installation of an emissions-
cheating device as it was the root cause of all other issues.
The company must concentrate on its biggest areas of weakness and that
is to restructure itself by implementing corporate governance and promoting
ethical behaviors. These are essential in the company’s development. Only then
will it be able to increase sales. With that, the organization needs to reinvent itself
to become associated with honesty and trustworthiness in order to win back the
trust of investors and customers.

3. Based on the four fundamental principles of corporate governance, how is Volkswagen

affected in terms of:
● Transparency
○ Every company lives by the principle of transparency and integrity. In the
case of Volkswagen, it is being perceived that the company undergoes
series of development and changes just to gain better output of their
 product from a short-term vision. However, the company fails to establish
mechanisms that affect not only the product but also its organization due
to constant regulatory changes which created an impetus for the
company to deceive millions of people. So in this manner, by establishing
well thought out processes for collecting information, open
communication and training the employees to share accurate information
is very important as this contribute to nurture an innovative environment.

● Equality/ Equity
○ Volkswagen engages in unfair competition because of its use of
emissions-cheating technology to circumvent laws. Every automaker is
required by law to submit to and pass specific emission tests. In the end,
this fraud enabled Volkswagen to satisfy the federal emissions standards
even though the vehicles were not in compliance with the laws when
being driven regularly. In addition to selling diesel cars in the USA,
Volkswagen was able to earn sizable government subsidies intended for
low emissions vehicles thanks to the artificially low emissions levels it
achieved during testing. Such circumstances are strongly discouraged
since they are unfair to other car companies who use honesty and correct
ethical methods in order to compete in the market.

● Corporate social responsibility

○ CSR seeks to advance social responsibility and have a beneficial effect
on society. Being environmentally conscious or participating in
environmental efforts are two ways that a business can embrace CSR.
Volkswagen, on the other hand, refuses to acknowledge eco-
consciousness because their violations of the Clean Air Act revolve
around the topic of cheating on government emission tests by fitting their
vehicles with "defeat devices." CSR is essential to a company's
performance in retaining employees, recruiting investors, and establishing
a positive brand image. Even though Volkswagen made a lot of money
from this short-term strategy, it also led to significant losses, and sales fell
for a whole year. Along with the reputational and financial harm caused
by the controversy there were also personnel losses.

● Accountability
○ Accountability is enabled by transparency. The company's leadership was
unable to appreciate the role of ethics in its operations, which lacked
principles like integrity, honesty, and justice. Volkswagen even neglected
to provide proper information to all parties involved. In order to be held
accountable, a firm must consider how its actions impact the community
and whether they contributed to the repercussions of any misconduct. In
the case of Volkswagen, the company's investment and environmental
 impact decisions cause it to lose the trust of its consumers, regulators,
and markets.
4. Among the four listed principles, which principle is mostly affected? Which aspect is
least affected? Explain your answer.
 For me, transparency was the most affected. In this principle, due to unequal
information dissemination, this generates a lot of consequences which greatly
affected the company which manipulates and deceives millions of people.
With that, the company has lost the trust of the public and its customers. This
also made the some environmental groups, politicians and regulators
question their legitimacy. The least affected is the equality because I believe
it’s not only Volkswagen made so much innovation just to join the market
competition. It’s just that they overuse and take advantage their strength in
surpassing series of emission tests. it is arguably clear that Volkswagen has
emerged from the brink of complete disaster just to move forward into a
favorable future.