CASE STUDY:

VOLKSWAGE
N EMISSION
SCANDAL
GROUP 2: APRIL JASMINE BAUTISTA
MENDELF BILLED
DONNA JANE GUICO
LOVELY VISPO
In 2015, it was discovered that Volkswagen (VW)
had been cheating on emissions tests for diesel
vehicles in the United States and Europe. The
company had installed software in the cars that
detected when they were being tested and
changed the emissions settings to pass the tests.
Outside of testing conditions, the cars emitted up
to 40 times the legal limit of nitrogen oxides
(NOx).
 1. Describe how Volkswagen violated the
principle of integrity and ethics in the emissions
scandal.
Violation of Integrity and Ethics
Volkswagen violated the principle of integrity and ethics in several ways during the emissions scandal:
- Deception and Fraud
VW deliberately designed and installed software known as "defeat devices" to cheat emissions tests. This
intentional deception was aimed at portraying their vehicles as environmentally friendly when
they were not. This deceitful act undermined the trust of customers, regulators, and the public.
- Lack of Transparency
The company failed to disclose this manipulation to authorities and consumers for several
years, allowing the deception to continue. This lack of transparency violated ethical
principles of honesty and openness.
- Environmental Impact
VW's actions had a direct and significant negative impact on the environment by allowing
vehicles to emit pollutants at levels far exceeding legal limits. This disregard for
environmental ethics demonstrated a lack of corporate responsibility.
 2. Analyze the consequences of Volkswagen's
actions for both the company and the
environment.
Consequences
- Financial Penalties
Volkswagen faced substantial financial penalties, including fines and settlements with governments and customers. The total cost of the
scandal ran into billions of dollars.
Based on March 2020 report from Reuters “Volkswagen said its diesel cheating scandal has cost it 31.3 billion euros ($34.69 bln) in fines
and settlements, and the German carmaker expects cash outflows to continue until 2021, adding that these have already been provisioned
for.”
- Reputation Damage
The scandal severely damaged VW's reputation and brand image. It eroded trust among customers and investors and led to a significant
decline in sales.
- Environmental Damage
The increased emissions from affected vehicles contributed to air pollution and environmental harm, which affected public health and
ecosystems.
- Legal Consequences
The company faced numerous lawsuits and regulatory actions, leading to legal challenges and potential criminal charges for some executives.

- Environmental Damage
The increased emissions from affected vehicles contributed to air pollution and environmental harm, which affected public health and
ecosystems.
- Legal Consequences
The company faced numerous lawsuits and regulatory actions, leading to legal challenges and potential criminal charges for some executives.
 3. Discuss what measures Volkswagen could have
taken to prevent the emissions scandal from occurring
and to adhere to the principle of integrity and ethics.

Preventative Measures
- Ethical Leadership
VW could have fostered a culture of ethical leadership, where honesty, integrity, and transparency are
prioritized at all levels of the organization.
- Ethical Training
Providing ethics training to employees could help them understand the importance of adhering to ethical
principles and the consequences of unethical behavior.
- Whistleblower Protection
Implementing mechanisms to protect and encourage whistleblowers within the organization could have
exposed the wrongdoing earlier.
- Independent Auditing
Employing independent third-party audits of emissions and compliance practices could have deterred
fraudulent activities.
4. Evaluate the role of the rule of law in addressing
the Volkswagen emissions scandal and holding the
company accountable for its actions.

Role of Rule of Law

The rule of law played a crucial role in addressing the Volkswagen emissions
scandal. Regulatory bodies and legal authorities investigated the company’s
actions, held it accountable for its violations, and imposed fines and
penalties. The rule of law ensures that companies are subject to legal consequences
when they violate regulations, thereby upholding the principles of justice and
fairness.
 5. Discuss the importance of transparency and
accountability in preventing similar failures in the future
and restoring public trust in corporate governance.

Transparency and Accountability

- Transparency
Open and transparent communication with regulators, customers, and the public is essential. Companies
should disclose all relevant information, including potential problems, in a timely manner.
- Accountability
Establishing clear lines of accountability within the organization, where responsible parties are held
answerable for their actions, can help prevent unethical behavior.
- Regulatory Oversight
Strong and effective regulatory oversight is necessary to ensure that companies adhere to ethical standards and
environmental regulations.
- Corporate Governance
Implementing robust corporate governance practices, including independent boards of directors and ethical
codes of conduct, can help prevent similar failures in the future and rebuild public trust in corporate leadership.
Summary…..
In conclusion, the Volkswagen emissions scandal serves as a stark example of
corporate misconduct, illustrating the importance of integrity, ethics,
transparency, accountability, and the rule of law in maintaining public trust and
protecting the environment. It highlights the need for companies to prioritize
ethical behavior and adhere to legal and environmental standards.
THANK YOU!

GROUP 2: April Jasmine Bautista

Mendelf Billedo
Donna Jane Guico
Lovely Vispo