Case study analysis and presentation on Dieselgate case and Volkswagen Pollution scandal.

1. Dieselgate- Heavy Fumes Exhausting The
Volkswagen Group

2. ABOUT THE COMPANY
 Volkswagen Group is a German multinational automotive
manufacturing corporation headquartered in Wolfsburg, Lower
Saxony, Germany.
 It designs, manufactures and distributes passenger and
commercial vehicles, motorcycles, engines, and turbomachinery.
 It also offers related services including financing, leasing and
fleet management.
 It has maintained the largest market share in Europe for over
two decades.
 The Volkswagen Group sells passenger cars like
Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda
etc. under the Volkswagen Commercial Vehicles brand.
 The company has operations in approximately 150 countries
and operates 100 production facilities across 27 countries.

3.  At the end of September 2015, Matthias Mueller succeeded Martin
Winterkorn as CEO for the Volkswagen group after he resigned over
the biggest automotive emissions scandal.
 Investigations done by USEPA proved that Volkswagen had installed
software in its most successful diesel engines, which were cheating on
the test stand and manipulating results.
 Shattered the worldwide brand and developed a threat to the formerly
pristine image of “Made in Germany” products
 Mueller took charge in maneuvering Volkswagen group out of the
crisis, finding technical solutions and regaining the trust of customers,
authorities and employees.
 A failure of proper corporate governance, over-ambitious target-
setting and an authoritarian management culture can lead a successful
company into crisis.
OVERVIEW OF THE CASE

4.  Diesel gate scandal refers to emission scandal by Volkswagen to
fit defective devices in the vehicle to fake the tailpipe-emissions
tests.
 Three phase model of crisis management divides the crisis into
three phases as follows:
• Pre-crisis: This phase become absurd for the management
as management was willingly involved in the scandal.
• During crisis: When the Crisis broke, the company failed
to give appropriate response as it was never ready for its
own lying and misrepresentation and intentional
wrongdoing.
• Post crisis: The company hired public relations firms to put
together the pieces of the brand shattered by the crises but
failed miserably.
How did VW respond to the Dieselgate
scandal after identifying causes and
preventive measures?

5. VS
Anglo-American Model
 The shareholders are given the important right to elect
all the members of the board.
 Is a shareholder-oriented model known as the Anglo
Saxon.
 The directors are independent of the management and
the companies are operated by professionals having
negligible ownership.
 Clear separation of ownership and management.
 Institutional investors only have the right to dispose of
the share in the market if they are unhappy with the
performance of the company.
 Large investors are discouraged to take active
participation.
European Model
Briefly discuss the difference between German and Anglo-American
corporate governance structures.
 Based on the belief that workers form the key
stakeholders within the company and hold absolute
right to participate in the management.
 Responsibility of two boards and is also known as Two
Tier Board Model.
 Supervisory board consists of the members responsible
for supervising the activities of the company.
 Shareholders elect the members of the supervisory
board.
 Management board has members responsible for
management of the company appointed by supervisory
board.

6.  Organizational culture was strictly hierarchical.
 Centralization of power and exclusive management from top
down.
 After the scandal broke, the organizational structure was
modified by improving accountability and responsibility at every
level.
 Inclusive management and introduction of transparency.
 Volkswagen needed to win back the trust of its consumers and
rebuild its image as a responsible organization morally and
socially.
 It is essential that ethics be prioritize within organizations and
accountability and responsibility take a front seat at every level
of management.
Comment on the corporate governance structure of VW group.

7. What were the causes of corporate misbehavior on such a large scale/
what could be done to prevent a similar crisis in the future?
Important for the organisation to have a proper code
of conduct.
Managers and leaders should lead by example.
Consequences for unethical and misbehaviour should
be clearly defined.
Appreciate the employees who live by the organization
values and work hard towards its goals.
The anti-harassment policy should be provided with a
lot of support from managers and leaders.
Lack of a code
of ethics and
policies
The fear of
reprisal.
Impact of peer
influence.
Misconduct on
part of leaders
at the top.
Causes of Corporate
Misbehaviour
Preventive
Measures

8. Corporate Social Responsibility can be aligned to an
Organizational Business Model.
 Makes an Organization more socially responsible,
accountable and bring such generous work to their various
stakeholders and the public.
 Creates much positive impact on various parts of Society
and bring change in Social Values, Environmental values,
Economic values.
 Make better strategic position and uplift brand value of the
organization.
 CSR activities bring morale and make Organizational
People and Organizations get connected across the world.
 CSR is considered as a significant strategy for major
company.
What should Corporate Social
Responsibility (CSR) truly mean?

9.  Create recycling practices which can bring better positive shifting in
the organizational business.
 Should look for values with why they are moving towards charities
and what are the associated causes.
 Should focus on local society, that may include Economic and
Educational Improvement in the local society.
 Continuously evolve and make all the applicable and associated
product/services more socially responsible.
 Should be more inclined to understand view from their staff,
employee and customers.
 Should redefine their business model and supply chain model and
look for a way in which CSR initiatives can be connected.
How can VW group integrate CSR throughout the company?

10. CONCLUSION
Conclusion:
 Newer and stringent policies by government bodies
to ensure compliance.
 The trust crisis that the scandal has bought on VW.
 Growing environmental concerns causing a decline
in the use of diesel.
 Staying aggressive at their game in the automobile
sector and redirecting focus.
Recommendations:
 Redirecting their focus towards newer technologies.
 Designing campaigns, that re- emphasis their goal
and help regain their lost trust.

11. THANK
YOU!!