Question

Identify and analyze an ethical issue pertaining to business either form the past or the present. Describe how management either handled the issue appropriately or inappropriately.

Explain what the ethical and social responsibilities are for a business owner and for employees.

What leadership/management theories and/or styles did you see applied or utilized?

Answer 1

answer-

in 2015, there was a business scandal of Famous company Volkswagen. This scandal known as Volkswagen emissions scandal in which Company faced legal and ethical issue of violating federal laws, endangering lives of people and damaging of our environment.

In this scandal, Volkswagen launched a diesel enginer car which cheats on emission test by manipulating the results while in reality cars emit up to 40 times more NOx in real-world driving and violating Federal EPA standards.

The management did not handled the issue at all because ex CEO did not take any action to correct the problem in diesel cars. He could have recall all the cars and correct them but he did not. Engineers first find the issue and report it to Martin winterkorn(Ex CEO) but he still focused on earning profit even it violated the EPA standards.Due to this, Company's share got down significantly and Volkswagen to pay a $2.8 billion criminal fine for "rigging diesel-powered vehicles to cheat on government emissions tests".

Business owner like Board of directors and CEO has responsibilities that its cars are safe for customers and environment as stakeholders. They also do business legally. Employees have responsibilities to report the issue which they did to CEO but CEO did not take the right action. He also told them to hide the issue otherwise they will lose thier job. So, CEO and BOD failed to fulfill thier ethical and social responsibilities.Due to the increament in air pollution, research find that air pollution kills 50,000 in the United States annually so Volkswagen cars also contributed to deaths and increament in air pollution.

The shareholder theory was applied in this case where the main aim of company is maximize the profit of its owners which Ex CEO did. He used autocratic leadership style and make his own decision without considering opinions of others.