Ethics & Governance Organization Analysis Harvard Case Solution & Analysis

Ethics & Governance Organization Analysis Case Solution

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This paper has analyzed the ethics and governance principles of Volkswagen AG. The ultimate goal of corporate governance within an organization is the smooth running of the company by its management. A strong corporate governance system in place allows the managers to adhere to the codes of transparency, accountability, honesty, responsibility and clear level of the communication. However, at some point, these seem to have failed at Volkswagen AG and the biggest example of its ethical and governance failure is the 2015 scandal when the company had cheated the government regulators by installing software in its 11 million vehicles for passing the Nitrogen Oxide emission testing. This deceptive practice of the company had stripped the dealers and the customers of the company for its fraudulent and dishonest act. The dominant corporate culture has been identified as the main reason for the breach of ethical principles and its governance failures. The leaders of the company have taken a number of significant actions to restore the position of the company. However, the company still has a long way to go to achieve its true position of a legal, ethical and socially responsible automaker around the world.


Introduction. 3

Ethical and Governance Principles identification. 5

Analysis and Evaluation of Leadership. 7

Theory to Practice application. 9

Recommendations. 12

Conclusion. 14

References. 15  

Ethics & Governance Organization Analysis


Volkswagen Group of CW AG for short is a German multinational automotive manufacturing company with its headquarters in Lower Saxony, Germany. The company designs, manufactures, and distributes commercial engines, motorcycles, turbo machinery and it also offers other related services such as fleet management, leasing and financing(Calico, 2014).

The company had generated 10.3 million sales in 2016 and it became the largest automaker in the world. It has maintained the largest market share for nearly two decades. The operations of the company are divided into two separate divisions, which are Financial Services Division and the Automotive Division and has around 340 subsidiary companies. The operations of the company are spread around 150 countries out of which 27 countries have the production facilities for Volkswagen(Calico, 2014).

Volkswagen Group is a public company and it has primary listing on the Frankfurt Stock Exchange and secondary listing on the London Stock Exchange, SIX Swiss Exchange, New York Stock Exchange and Luxembourg Stock Exchange. Volkswagen Group faces a difficult and competitive industry outlook within the automotive industry(Schmidt, 2009). The industry is rebounding on a global scale with recovering growth in North America and heavy growth in China.

However, there are a number of companies in the industry, which are trying to capture a significant share of this growth. Some of the strong competitors of Volkswagen Group are General Motors, Ford Motor Company and Toyota. The industry is also characterized by pressures from customers and the suppliers(Sch mitt, 2009) However, the current manufacturers in the industry face relatively little or zero threat from the new entrants and also from the substitutes because of many barriers to entry.

Despite the difficult outlook of the automotive industry, Volkswagen Group is well positioned in the world automotive market to take advantage of the emerging opportunities in the industry and benefit from the threats of the industry. With great market opportunities in North America and China, the Volkswagen brand has emerged as a significant brand and a prominent market leader in these regions(Ethernet, 2016).

Furthermore, Volkswagen Group has traditionally offered fuel-efficient vehicles to its customers and that also with notable dependability and as a result, the strengths of the company pair perfectly with the prevailing threats in the market. The company is based in European Union where the automobile regulations are restrictiveness the world, but the company has long championed the use of the higher end super chargers, turbo chargers all of which are paired with the small engines(Eldon, 2016). In addition, one of the brands of the company, Porsche has initiated a new age of the hybrid cars in the world. Overall, the Volkswagen brand is famous around the world and the company is positioned strongly both in terms of financials and strategically.

Ethics & Governance Organization Analysis Harvard Case Solution & Analysis


Ethical and Governance Principles identification

Corporate governance and ethical principles establish a framework for supervising and managing the company. These include business policies and guidelines for ethically managing the business among other things. At Volkswagen Group, the supervisory board monitors and advises the Board of Management with regard to the supervision and the monitoring of the company. It directly involves all those decisions which are fundamental for the company(Danes, 2008)...........

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