Ethical Leadership: The Volkswagen Diesel Emission Scandal

Literature Review

Companies, regardless of their sizes, are obligated to observe ethical values. Top leadership and management personnel are expected to be the chief facilitators of ethics in their respective work places. For leaders and managers holding top offices, their duties not only require their ethical observance but also their participation in supervising the ethical standards of their junior staff members. Company leaders and managers are expected to be at the forefront of promoting ethical standards in their respective companies’ activities. This paper mainly aims to analyze the concept of ethical leadership in the case of Volkswagen emission scandal. The essay bestows some of ethical misdeeds carried out by the leaders of the giant German car provider. The paper analyzes the case for Volkswagen emission scandal using relevant ethical leadership theories. Recommendations that could have been embraced by the company to curb the scandal are also suggested.  A brief conclusion functions to summarize the essay.

In 2015, the Volkswagen Diesel gate scandal dominated the US’s media platforms. The scandal was inspired by the discovery by Environmental Protection Agency (EPA) that Volkswagen manufacturers had installed software in their engines that enabled the car dealers to deceive environment regulators that the Volkswagen cars emitted less pollutant carbon and nitrogen oxides in the ecosystem (Krall and Peng, 2015, pp. 13). Burki (2015, pp. 838) narrates how Volkswagen manufacturers used a software that deceived environmental emission regulators of the amount of pollutant gas emitted. Volkswagen, being among the largest car providers in the world, was blamed to have used this ‘defeat device’ software so as to deceive its customers that Volkswagen’s products were environmentally friendly. 

Before the news broke out that the car company had been using software to control the amount that is reflected to have been emitted in the environment, the company had initiated a vigorous campaign that aimed at convincing the public that its products were environmental friendly. The company’s sales are recorded to have significantly increased after these campaigns. The company’s fraudulent campaigns had facilitated the company to sell more than 10 million cars. Considering that the company’s had fraudulent emission metres, lots of carbon dioxide and nitrogen oxides were emitted but not accounted for by the company. According to Oldenkamp, van Zelm and Huijbregts, 2016, pp. 125) Volkswagen’s top leaders’ unethical behaviours greatly put the world’s ecosystem at risk. The scholars record that for Luxemburg only, more than 43, 000 models of Volkswagen models with the fraudulent software were sold during these campaigns. Stanwick and Stanwick (2017, pp. 18) argue that Volkswagen toxic gas emission scandal was required actions, despite the company’s leaders admitting their previous faults.

Assignment What is Expected

Considering that the main difference between leaders and managers revolves around the activities of their junior staffs, the concept of ethical leadership is very fundamental for the success of a company. While a leader have people that work for them, managers have people that work for them (Chiu, Balkundi and Weinberg, 2017, pp. 337).  In essence, while leaders have followers, managers have subordinates that work for them (Hinrich and Hinrich, 2014, pp. 93). According to Tu and Lu (2016, pp. 135), ethical leaders play a major role in impacting the behaviour and the work ethic of their followers as well as their professional activities. According to Crete (2016, pp. 25), the Volkswagen gas emission scandal showcased the company’s top leadership total corporate misconduct. By ‘admitting’ that they have been on the wrong by installing fraudulent software in their car models should not be used as a justification. The company’s leaders must have met and decided to deceive the masses. The planned irregularities aimed to deceive the public and in return boost their sales and revenues. Were it not for the Environmental Protection Agency’s efforts, the company could have continued enjoying their increasing profits while the world’s ecosystem was suffering.

Ethical leadership practices entail the observance of the definitive principles of ethics. Through the concept of ethics, corporate leaders should look forward at convincing their followers and customers by following the principles of ethics. The five principles of ethics comprise of justice, honesty, community, respect and service (Chang and Chou, 2015, pp. 517). Corporate leadership comprises the following and observance of these definitive ethical principles. For the case of Volkswagen gas emission scandal, the company’s practices did not consider the community’s well-being. Courtesy of the ‘defeat device’ Volkswagen Jeeta model, for instance, released a quantity of toxic nitrogen oxide gases that was 35 times more than the legal permissible levels (Asiano, et al., 2017, pp. 30). According to McKay, Nitsch and Peters, 2015, pp. 271), Volkswagen engines gas emissions sometimes exceeded the daily legal emission levels by 40 folds. The scholars suggest that the scandal corporate governance and leadership in Volkswagen are blameworthy of the scandal, because it was their idea to instruct their juniors to install the ‘defeat device’ software in their cars. Were it not for the instructions and ideas of the top leaders in the Volkswagen Company, manufacturers and engineers could not have committed the ethical misconducts of installing the software in the car models. 

In Volkswagen Company transformational leadership style is usually the most utilized by the company’s top leaders. Sergio and Rylova (2018, pp. 122) affirm that in Volkswagen, the employees are highly involved in the execution of duties as discussed by their senior staff members and leaders. According to the scholars, there is high employee engagement, empowerment and retention incidences in Volkswagen. This means that the leaders cannot distance themselves from the actions and practices of their junior staff members. It means that the employees in the Volkswagen Group were encouraged to install their cars with the ‘defeat device’ software, eyeing for increased sales and revenues. Corporate leaders, in many instances, are directed and driven by greed and money, overlooking their moral responsibility to consider ethical behaviours in their practices. Although in Volkswagen’s CEO, Martin Winterkorn admitted that his company was guilty of installing software that would inhibit the correct reading of toxic gas emissions in their cars, the company’s leaders should be held liable of their past transgressions to the society and the ecosystem (Gandolfi and Stones, 2016, pp. 214). The CEO had admitted that their company’s leaders bestowed annoying ethical failures. The ethical failure by the top leaders in the company’ was the major reason behind the Volkswagen emission scandal. Considering that the company uses transformative leadership style, the top leaders of Volkswagen Group are liable for the installation of the software. The leadership style disqualifies the possibility of a worker or a section of workers, to have mischievously implanted the software devices on Volkswagen cars. Corporate leaders had fashioned this ‘hideous’ plan to capture more market share among the highly competitive automobile industry. Therefore, the corporate leaders in the company, including the CEO, were guilty of Volkswagen Group’s gas emission scandal. The scandal was not caused by erroneous mistakes by Volkswagen’s Group employees but rather the intentional directives by the company’s top leaders. The employees literally followed the instructions of their senior staff members.  

This expects you to write a 3500-word essay on the chosen case study. You are expected to use the literature from assignment 1(with developments/improvements made to it on the basis of the feedback received); apply it to the chosen Case (assignment 1) and make some robust recommendations. 

• This is the section where you will provide a brief overview of the Assignment 1. 

• Provide a brief overview and justification for the chosen academic theoretical perspective you wish to adopt to study based on Assignment 1 

• Briefly outline the challenges of leadership in that particular case.

 
• Provide a statement of Aim and a maximum of 3 statements of objectives for your study. 

• This section will be of 500 words approx. 

• Literature review should be critical in its focus. 

• Whichever theoretical leadership perspective you adopt to study the case at hand, you will undertake a thorough review of the extant literature around it to make robust arguments and critique of the literature. 

• This section is significant in that it provides the underpinning for your entire study. If the literature is strong the outcomes, analyses and recommendations will be strong too. 

• This section has a word count of 1000 approx. 

• As this is a case study therefore the expectation of this section, briefly, is for you to demonstrate, using methodology e-books, your understanding of what a case study is and what are the salient features of a case study based work. 

• This section ought not to be too detailed and is limited to 500 words approx. 

• This section/chapter is expected to bring together your empirical evidence with literature findings to create a narrative which ought to shed some light into the leadership challenge identified and also propose recommended solutions. 

• This is your opportunity to make a big impact with your own informed interpretation of the case details and the extant and existing literature. 

• You are expected to make recommendations for academic research (where can your findings lead the next researcher to); industry (what is your opinion on how to mitigate/reduce the negative impact of such leadership failings, if any and/or how to strengthen/reinforce the positives of great leadership, with examples, if any) 

• Provide a section on limitations of the study. This may include limitations of information access; literature limitations; word count limitations; methodology limitations etc. 

• This section is of 1500 words approx. 

• Structure, organization and coherence 

• Effective use of essay writing conventions

 
• Use of English grammar and spelling 

• Correct Harvard referencing