Ethics & Governance Organization Analysis Case Study Solution
The strategic orientation of Volkswagen AG is closely consulted by the board of management and the supervisory board of the company. The progress made in implementing the strategy is regularly assessed by the two boards. Compliance with all the international rules of the automotive industry, the fair treatment of the competitors and the business partners are among the guiding principles, which are followed by the board of Volkswagen AG(Ethernet, 2016).
The commitment of the company has always gone beyond the internal and the statutory requirements. Ethical principles and the voluntary obligations form an important part of the corporate culture at Volkswagen AG. At Volkswagen AG, the board has established a recognized and distinct group wide compliance management system for a number of years. In the year 2015, the compliance continued to play an important role in the governance principles of the company(Robertson, 2013).
The main role of the board at Volkswagen AG is to oversee the management and the governance of the entire organization, and they are tasked with the assessment and analysis of the performance of the senior management of the organization. The board of directors comprises of a number of the directors, which is deemed appropriate for the company in light of the articles of association. The screening process for the composition of the board is performed by the nominating committee, and they make these decisions with input from the CEO and the Chairman of the company (Lee, 2008).
A preventive compliance approach is followed by the management at Volkswagen AG through which all the potential breaches are identified before they actually occur and then immediate preventive measures retaken to raise the awareness among the employees and also to educate them(Robertson, 2013). The Group security and the internal audit regularly perform investigations for monitoring the compliance of the company and detecting any suspicion of infringements.
Volkswagen AG follows a strict code of conduct to guide and implement the ethical principles of the organization. The code of conduct has been communicated to the employees of all the brand companies and this forms a key component of the compliance training at Volkswagen AG. Each employee of the company is required to ensure that their demeanor in the eyes of the public does not change or damage their reputation(Editorial, 2015). The company respects and recognizes the human rights and supports the observance of these rights. The company also acts in accordance with the applicable requirements of the International Labor Organizations.
The company guarantees equal opportunity and fair treatment of its employees free from any discrimination. All the employees are chosen, hired, and supported based on their skills and qualifications. The company has maintained high standards of ethical behavior and corporate governance and all the employees of the organization are expected to maintain high personal standards for themselves such as maintaining their health and their performance(Harder, 2015). With the ethical principles of the organization, a guidepost is provided to the employees of the organization and these support all the employees at Volkswagen AG to master the ethical and legal challenges.
The company also has a group wide system of ombudsman and any suspicions and breaches regarding corruption, ethical misconduct and the violation of the human rights could be reported to the external lawyers who are appointed by the group. The group strives to achieve compliance with its code of conduct at all the major group companies, considering the cultural distinctions and the applicable laws at the different sites in the different countries of the world(Lawrence, 2015). The companies are also free to go beyond the code of conduct, but they should never contradict the code of conduct reached. Overall, the ethical and governance principles identified above are followed strictly at Volkswagen AG which defines the culture of the Group and its businesses around the world.
Analysis and Evaluation of Leadership
Volkswagen AG until recently,was regarded as one of the most prestigious, effective, efficient, honest and trustworthy companies, which made excellent products for its customers. However, in the September of 2015, a major scandal of dramatic proportions had engulfed the German automaker, regarding the company’s fraudulent deceiving of the government regulators,in their compliance with the pollution emission standards(Eldon, 2016).
The Environmental Protection Agency in US had accused the company of deliberately cheating emission tests in the US. It has been detected by EPA that many cars of the company had installed software or a defeat device, which was installed within the diesel engines, which changed the performance accordingly to improve the results when the cars were being tested. This programming caused the vehicles to emit Nitrogen Oxide output, which met the US regulatory testing standard however; in the real world, driving it would emit 40 times more Nitrogen Oxide(Cairns, 2015)……………
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