Question

700 wordfs, APA Citation/References

Research a specific company that has dealt with public criticism from various stakeholders, and include all weblinks where you find your information. Share the name of the company, mission of the company, and type of business that it provides. Identify the stakeholders involved in the criticism, what the specific criticisms were, and the business’ response to the criticisms.

Answer 1

CSR. Which stands for Corporate Social Responsibility is playing a major role in today’s business world, it is pushing companies to consider “triple bottom line”: people, planet and profit. Corporations need to take consideration of not just stakeholders desire to gain more and more profit but also care about the environment of this planet and people who are involved in manufacturing, growing and production of its commodities. Here we are going to see an example of a German Automobile company ‘Volkswagen’ which had an emission scandal in late 2015 and went through a CSR nightmare in its wake.

Volkswagon does not show its mission statement in its website of USA, which is not a normal feat in corporate world, however at vw’s other sites I could find which they claim as their mission statement “At Volkswagen it is our mission to build long term strategic partnerships with our customers. To assist them in making the right choices for their business needs, by minimizing fleet costs and providing world class customer service.”

They also have a page which shows their CSR in bit of detail as what do they believe as their responsibilities as a corporate, towards environment, towards their workforce, their products and for the society in which they operate.VW divide its stakeholders in four groups corporate (shareholders and banks), partners (employees and suppliers), customers (dealers and consumers) and society (Govt., public authorities, Ngo etc.). VW was criticized primarily by EPA (the Environmental Protection Agency) that the company is cheating in its emission test, they had a ‘defeat device’ or software in their cars which turns engine off from its optimum level output so it can pass its emission test while on the road it was spewing 40 times more emission in environment than it was supposed to. This discovery shocked the world as there were about 11 million cars which had those defeat devices included in them and are damaging the environment while people think of it as a clean and environment friendly car, they were criticized by all groups especially by society and customers.

Main criticism of VWs action was its dubious action of cheating which cause distrust in VWs brand, and its impact on environment, they certainly did put a blow in their social responsibility claim which is their commitment to environment and a huge impact on customers who trusted their claim of making an environment friendly car, which is why they lost almost 40% of their market capitalization and resignation of their chief executive .

Although they denied the accusation for a while but soon after admission of guilt, their acknowledgment came with apologies to all groups which were dealing with VW at times, after resignation of their CEO and acceptance of hefty fines towards EPA and their customers, they hired the former boss of Porsche, who is trying to gain the trust back in VW brands, they also started an internal inquiry and promise to recall millions of cars and fixing them. According to ftc.gov VW will provide up to $10 billion to owners and lessees of their 2.0-liter diesel cars which said to have advertised wrongfully in USA alone.