This is based on the Volkswagen Scandal which have been analysed based on the ethics, corporate culture and professional practices.

1. Volkswagen

2. How big is VW?

3. VW Scandal?
What is

4. More than 20 Billion Euros cost for
VW
11 Million VW and Audi cars affected
Called back 11 Million cars
Devastated 50+ years goodwill of VW
brand

5. How does the defeat device work?
 The defeat device -read steering wheel position, tire rotation,
atmospheric pressure, duration of engine run-time to determine if
car was on-road or in emission testing
 If testing for emissions- Increase the amount of fuel being burned
+ lower nitrogen oxide and pollutant emissions.
Photo Courtesy: CNN

6. Fuel Consumption Vs. Being Green
Source: http://www.nytimes.com/interactive/2015/business/international/vw-diesel-emissions-
scandal-explained.html

7. Source: http://www.nytimes.com/interactive/2015/business/international/vw-diesel-emissions-
scandal-explained.html

8. Who were affected?
VW itself
• This scandal
hurt the good
will of the long
standing brand
VW and its
subsidiary
brands
Ignorant Customers
• The hearts of
green customers
who bough VWs
were broken
Professionals
• The credibility of
Software
Engineering
Professionals,
Management
Professionals
were degraded
Innocent Environment
• Environment pollution

9. Source: http://www.nytimes.com/interactive/2015/business/international/vw-diesel-emissions-
scandal-explained.html

10. Who were responsible & what were
their roles?
Martin Winterkorn
 Senior executives including the CEO in charge at Volkswagen
 Supervisory board members
 The Software Engineers who developed cheating device!
Picture courtesy :BBC

11. The legal and ethical perspective
Volkswagen Scandal

12. What is an ethical dilemma?
An ethical dilemma is a situation in which all alternative choices or
behaviors have potentially negative consequences. Right or wrong can’t be
distinguished.
(Daft,2012)
The following approaches can be used to make proper decisions in ethical
dilemmas
• Utilitarian Approach- Take the decision which produces the greatest good for
the greatest number
• Individualism Approach-Actions are ethical when they promote the
individual’s best interest
• Moral Rights Approach- Ethical decisions are those that best maintain the
fundamental rights of the people affected by them
• Justice Approach-Ethical decisions must be based on standards of equity,
fairness and impartiality.
(Daft,2012)

13. Applications of theories of ethics
Volkswagen fixing a defeat device on the diesel VW and Audi vehicles
• This deceives the customers and other stakeholders of the actual
level of emissions and does bad to majority of the stakeholders such
as customers, authorities, shareholders and environment. So this is
Unethical (Utilitarian Approach)
• This decision is not ethical because it doesn’t support the
stakeholders’ best interest (Individualism Approach)
• Customers have a right to be fully aware of the standards+quality of
what they buy. So this decision is unethical (Moral Rights Approach)

14. Professional lapses identified of the persons
responsible
 Martin Winterkorn- As the CEO is expected to be fully aware of what’s
happening beneath.
 Environment Protection Authority (EPA)- Is expected to advance their
standards in testing for compliances
 Software Engineers- Is expected to use their skills for the betterment of the
world. But used to fraud and damage the environment
 R&D Team and Mechanical Engineers- Is expected to come up with the newest
Greenest technology for cars which they didn’t.
 VW as a whole- Any brand is expected to deliver the promises it makes to the
customers.

15. How could such be avoided from repeating?
 The importance of Micro Management
 Introducing and inducing Code of Ethics for Software Engineers
 EPA of Europe being more responsible and increasing the
seriousness of the testing procedures
 Increased involvement of independent 3rd party involvement for
quality and environment related certifications
 An overhaul of the regulatory structure, business ethics, corporate
culture, and also engineering education

16. Professional bodies relevant to the industry.
 European Council of Engineers Chambers (ECEC)
 Exemplary to behave
 Civic to get involved
 To maintain professional ethics
 IEEE-CS

17. The code of conducts
 PUBLIC - Software engineers shall act consistently with the public interest.
 CLIENT AND EMPLOYER - Software engineers shall act in a manner that is in the best
interests of their client and employer consistent with the public interest
 JUDGMENT - Software engineers shall maintain integrity and independence in the
professional judgment.
 MANAGEMENT - Software engineering managers and leaders shall subscribe to and
promote an ethical approach to the management of software development and
maintenance.
 PROFESSION - Software engineers shall advance the integrity and reputation of the
profession consistent with the public interest.
 COLLEAGUES - Software engineers shall be fair to and supportive of their colleagues.
 SELF - Software engineers shall participate in lifelong learning regarding the practice
of their profession and shall promote an ethical approach to the practice of the
profession.

18. The role of professional body in avoiding such
circumstances
 The professional bodies should actively participate in the
professionals’ development throughout their lives
 Professional bodies should come up with common standards
for industry wise-not from professional body to body.
Shanon Vallor, University of Sata Clara

19.  Volkswagen is now facing $18bn (£12bn)
in penalties under the US Clean Air Act,
which allows fines of up to $37,500 per
car.
To what extents ethics can go?
• The US Department of
Justice and Federal
Bureau of Investigations
could also bring criminal
cases.
• The German company
has set aside €6.7bn to
deal with the penalties it
faces.

20. PR Disaster!

23. Being unethical won’t make you ended up in bars. But the
repercussions may make you ended up in ROAD!

24. References
Daft, R.L, 2012. The New Era of Management. 10th ed. USA: Canage
Learning.

25. Credits
 BBC news
 CNN world wide news
 New York Times news

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Thank you!