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Volkswagen: Business Ethics and Values Essay

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Updated: Sep 3rd, 2021

The history of the Volkswagen car company stretches back to 1931 when Ferdinand and Zundapp designed and developed the “Auto fur Jederman” meaning, the car for everybody. Later on, Adolf Hitler submitted sketches to Ferdinand Porsche, christening it “the peoples car” having the capacity to carry two adults and three children, and the ability to do 100 km/ h. However, Porsche reformulated Hitler’s sketches. Therefore, there is lucidity in the thought that the Volkswagen car company started out by making economic family cars (Mahoney, Mahoney, Vallance 2003).

Initially, people held reservations towards the Volkswagen cars citing their seemingly rough ride, low engine and noisiness. However, with the accentuation of time, all these misgivings have been proved baseless with the Volkswagen car company scooping the fourth awards after Ford Model T, the Mini and the DS Citroen in the International Poll for the World’s Most Influential Cars of the 20th Century. In the same wavelength, the Volkswagen company has remained as the US top seller even after the renovation of of the hind wheels’ traditional sub compacts and their replacement with the front wheel drive make.

Further traces of development has been clearly demonstrated by the recent scooping of the first prize of the Celebrations of the Motor Trader National Awards which was held at Grosvenor House and Hotel in London. In this event that was held on the 13th July 2007, the Volkswagen car company was rated as having become the the most improved business in the face of stiff national competition. The criteria that were used to arrive at these merits were the financial performance, customer and affiliate satisfaction, business investment, and the overall entrepreneurial turnaround which had scaled upwards by 53%. According to the director of the New Groups Finance, Nigel White, the company had increased the new and reconditioned cars use volumes by 41% and its after sales services by 26%. In addition to this, Nigel continues that the Volkswagen company had a positive margin movement of 4.82% (Malachowski 2004). These above accruals that were received by the Volkswagen car company were attributed to the observation of business ethics and values.

On the other hand, business ethics and values are concepts that touch on the obligations of the employee, the employer and the clientèle in the field of business. The dominant issue here is the concept of right or wrong in the course of business transaction. Business ethics and values is multifaceted since the matters that touch on business transactions are diverse, ranging from accounts, human relations, sales and marketing, to production and globalisation among other things (Macfarlane, Ottewill 2001).

Ethics of accounts and auditing relate to the responsibility towards matters that touch on record keeping in relation to a company’s cash flow. It is a highly regarded norm by the Volkswagen car company that proper records of accounts are kept by the mother company in Germany and the rest of the subsidiaries world wide. However, copies of the subsidiaries are sent to the mother company and are also edited annually. The practice is observed to the latter since it is these same records that are submitted to the respective governments for taxation purposes. The Volkswagen company eschews fraud, accounting scandals and bribery by the keeping of comprehensive expenditure and revenue records. Of paramount importance is the observation of accounting ethics since the observation of other forms of business ethics are hinged upon it. For instance, the calculation of employees’ wages and benefits (human relations ethics), the setting aside of funds for community welfare and development such as the offering of scholarships (the ethics of communal responsibility), are arrived at through the use of accounting records (Mc Ewan 2001).

The ethics of human relations is chiefly concerned with the betterment of the work place and the welfare of the work force. The Volkswagen company in its section 2.6 clearly states that it is as an entity against any form of discrimination be it based on sex, age and colour during the recruitment drive (Vallance 1995). Herein, the privacy of the employees and the rights of the employees are dwelt on. Fairness of the contract is also clearly spelt out to ensure that no employee is terminated from the job without the maturation of the contract, or without valid reason. The ethics of human relations also transcend the organisational borderlines and touch on community ethics.

The Volkswagen company navigates this by ensuring that it is not only those that are highly skilled or learned who are employed as some organisations do as an artifice to increase productivity and subsequent profitability. Closely related to this, the company does not employ child labour. The company ensures that even the less educated get employment opportunities. The subsidiaries are also under obligation of ensuring that the natives are the ones given priority during the recruitment drive. The Volkswagen company is also compliant with the Occupational Safety and Health care measures to ensure that cases of injury among the employees are minimised. To ensure this, all the employees in the vehicle assembly and manufacture section are properly fitted with protective clothes (Burgoyne, Reynolds 1997).

The ethics of sales and marketing is also very highly observed by the Volkswagen company. The company ensures that there is fair pricing of its products in relation to the cost of production and the profit margin. In developed economies, the Volkswagen also takes into consideration the economic status of the country. The products’ spare parts are always made available to all countries at subsidised prices too. The Volkswagen also does not use the raunch culture (the use of, and the displaying of eroticism and sex) in its advertisements, and is very punctilious in its contents of advertisement.

In a matter that is closely related to this, the Volkswagen’s consumer satisfaction ethics ensures that the company produces only high quality products. To this end, the company produces vehicles and vehicle parts that are durable. An average Volkswagen has a lifespan of 20 years (Cowton, Crisp 1998). The consumer satisfaction is also recognised by the Volkswagen company since presently, according to the company’s policies, anyone who purchases goods or services worth 50 Euros and above is accorded chance of wining sundry types of expensive prizes by being issued with a raffle ticket.

As far as matters of the ethics of production go, the Volkswagen company does well since it does not manufacture inherently harmful, defective or addictive products- a problem that bedevils companies such as the tobacco or alcohol manufacturing companies. However, because the Volkswagen company manufactures diesel reliant vehicles, it pays heavier taxes to governments that have introduced measures to abate green house effects. Animal rights that are always infringed upon through animal testing does not relate with the Volkswagen company. On the other hand, the part of the personnel that carry out road tests are always comprehensively insured and equipped against potential harm. In the same vein, the Volkswagen company has designated dumping sites and has within its programs, conformity with the earth day to facilitate the coming together with the rest of the community to take care of the environment (Fisher, Lovell 2006).

The ethics of intellectual, knowledge and skills divulges on the philosophical problem of the putative owner of the intellectual rights (ie. whether it is the employee with the skills or the business entity that trained him/ her). Herein, copy right matters, trade marks and the raiding of the employee are tackled. To curtail these problems and the related problem of conflicts of interests, section 3.3 of the Volkswagen company stipulations prohibit the employment of personnel who are already working with another automobile firm. The dispositional duties of collaborations has also been spelt out in the National Conventive Agreement in the article 15 of the VW. Group Italia SP4 (Fredrick 1999). The Volkswagen company ensures the employment activities are tampered with need and not solely pegged on the socialisation and the qualification of the personnel. The Volkswagen company also in its activities does not practice biopiracy since it deems the act as being purely unethical. The trade marks and product logo (bearing the encircled marks VW) of the Volkswagen vehicles and products are so distinct that they are well known throughout the world and can therefore ward off imitations. This instead has bolstered the Volkswagen market base.

The more global businesses have become, the more problems have arose in the global scene. This is proved by the fact that while business ethics emerged in the 1970s, international businesses ethics did so in the 1990s. International business has necessitated the need to look for global values on the basis of global community behaviour. In addition to this, the need to compare, contrast and design ethical traditions among different countries has ushered in the need to come up with concepts and guidelines touching on the ethics of international business and economic systems (Hornann, Kaslowski, Luetge 2007). Matters touching on globalisation and the entrenchment of cultural imperialism, varying or contradicting global trends such as, the use of child labour, are hereby addressed. The Volkswagen company addresses these these issues comprehensively. It is on this backdrop that the Volkswagen company highly seeks to assimilate aboriginal cultural prospects into its modi operandi and its business culture that is normally exhibited through advertisements. The Volkswagen company also does not support or employ child labour, neither does it as a multinational use the concept of outsourcing to manipulate globalisation to lower the wages. There are no companies that the Volkswagen as a company has ever outsourced with to manipulate the production cost and to achieve maximum profit.

Reference

Burgoyne, J., Reynolds, M., 1997, Integrating perspectives and theories on management learning, Sage, London.

Cowton, C., Crisp, R., 1998, Perspectives on the practice of business ethics theories, Oxford University Press, Oxford.

Fisher, C., Lovell, A., 2006, Individual and corporate perspectives in business ethics and values, FT Prentice Hall, London.

Fredrick, R., 1999, Business ethics: a companion, Blackwell Publishing Press, Blackwell.

Hornann, K., Kaslowski, P., Luetge, C., 2007, Business ethics and globalisation, Ashgate Publishing Limited, London.

Macfarlane, B., Ottewill, R., 2001, Effective learning and teaching in business ethics and management, Routledge GBI., London.

Mahoney, J., Mahoney, J., Vallance, E., 2003, Business ethics and values in New Europe, Springer, London.

Malachowski, R. A., 2004, Critical perspectives on business ethics and management, Routledge, London.

Mc Ewan T., 2001, Managing organisation values and beliefs, Finance Times Prentice Hall, London.

Vallance, E., 1995, Business ethics and values at work, Cambridge University Press, Cambridge.

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