BUSINESS AND; GLOBAL SOCIETY Harvard Case Solution & Analysis


Question 2

The Volkswagen scandal was a case of hoax and defrauding its customers. Customers had complete trust on the brand and didn’t expect the company to cheat them. It was quite obvious that the investors didn’t take the news lightly as the share prices plundered by huge margin since 2015. Learning from the Volkswagen experience, it is quite obvious that we have to teach ourselves on how to stay away from unnecessary and unethical practices for achieving desired goals and objectives. If our customers are trusting us then then we should be responsible for giving them the best product. Not maintaining a healthy business culture actually led to this unethical scandal. In doing any sort of businesses, I need to make sure that the employees working under me are not hesitant to approach me and discuss the problems within the company. Employees being the stakeholders do care about the profits of a company.

Question 3

Corporate culture:

1960s was an era when there was awareness of an ethical corporate culture as it was not only required in businesses but also in Universities. However, the term was coined in 1980s, and got its fame in 1990s. Sociologists and mainly managers are believed to use the corporate culture in their organizations.

The 1979 economic recession saw many companies in US to face a fierce competition from outsiders particularly from Japan. To improve the competition, companies saw a strong need to maintain a strong corporate culture thereby learning from Japan as it was known to give values to those aspects which were neglected by the US corporations. Currently, in the wake of globalization there has been a surge to develop a better ethical organizational culture around the globe.

Comparing the US corporate culture with that in Japan, it can be found that Americans don’t take pride in the work they do. On the contrary, Japanese workers give their 100% when performing their tasks. Considering the importance of ethical corporate culture, companies are more involved in conducting CSR activities which improves their image and helps building their reputation within the industry as well.



Exhibit 1: Share price data Volkswagen

Figure-1: The declining share price since scandal event


Exhibit 2: Volkswagen Car Sales

Figure-2: the following graph shows the declining sales in 2015 as compared to 2014.

Source: (McKenzie, 2015)

Exhibit 3: Damages Incurred by Volkswagen

Buyback cars cost  $ 15,300,000,000
Compensations and criminal charges in US  $ 25,000,000,000
Compensations and criminal charges in Canada  $ 290,000,000
Criminal Charges in South Korea  $ 16,060,000
Total Damages Incurred  $ 40,606,060,000


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