Introduction:
The internal environment of a company is dependent to a large extent on the ethical attitudes among the employees. Often, it is not easy for employees to take moral and ethical decisions that go against the monetary interests of the company. Employees making an ethical decision adverse to the interests of the employer usually forms a part of whistle blowing and is often met with retributions and recriminations from the employer. While employees have some obligations to their company and to their employer, they also have wider obligations to the society and to the country at large. ‘Whistle blowing’ is commonly the practice of employees or ‘insiders’ in an organization who reveal major corruption, misconduct and wrongdoing by their employers to the public and the media .
The case of Volkswagen bears out the discrepancies for employees who have to choose between loyalty to the employers and their own personal sense of ethics and social responsibilities. Volkswagen was one of the top automobile manufacturing and marketing companies in the world based in Germany. The company was one of the most recognized and valued brands in the automobile market but due to controversies over its products causing pollution through its vehicle emissions, it entered into an ethical quagmire. This essay will attempt to analyze this on the basis of facts as well as ethical principles of whistle blowing and employee rights .
Overview of duties and ethical obligations of employees
Employees are hired by the company for the purpose of attaining the strategic business objectives. The whole service life of the employees have thus to be spent on working towards attaining those objectives. They are thus obligated to obey the orders and instructions of their employers. However, when the strategic business objectives of the company conflict with commonly held basic ethics and decencies, the employees face a dilemma .
Loyalty to the company is one of the ethical factors that a whistle blowing employee has to take into account. While employees rightfully fear for the loss of their jobs, they also feel that by blowing the whistle they might endanger the company itself which would lead to an automatic loss of their jobs. While loyalty to the employer is a part of basic ethics, so is loyalty to humanity and society. Thus, when Volkswagen was flouting emission norms, it posed a threat to society because the public health risks that harmful emission creates. Volkswagen deleting electronic records of emission tests in the US is doubly dubious in terms of morality. Thus, employees chose their higher moral obligation over the ethic of loyalty to the employer .
Employment at will and whistleblowers in the Volkswagen case
The main crisis with Volkswagen was that it had failed to declare that its products did not meet emission testing standards in the US and in the EU, and had tried to program its cars to behave differently at the time of tests. This was plainly cheating the system in order to pass initial tests but then return the car to its normal, polluting mode. This was obviously gross unethical conduct on the part of the company. The knee-jerk reactions of Volkswagen to the employee’s whistle blowing leaks were to terminate his employment on grounds of indiscipline. This in turn helped the company to avoid higher costs. Thus, the principle of employment at-will did prove to be an impediment to the full course of ethical workplace justice in this regard. With this course of action, Volkswagen probably stopped any further leaks from happening and any further whistleblowers from coming forward .
Thus, while Volkswagen wanted to appear to be an ethical company that complies with emissions regulations, it had no intention of actually doing so. It wanted to use the outward appearance of being environmentally-compliant as a marketing gimmick to boost sales among ethically conscious customers . Since ecological aspects of business are beginning to have an impact on customer tastes and preferences, especially in Europe and North America, companies like Volkswagen begin to see it as nothing more than a PR tool. Ultimately, when Volkswagen’s misleading got revealed, it lost out on the trust equation which it had developed with its customers over time .
There is another aspect of the risk assessment done by Volkswagen. While they assessed that the pollution and emission levels of their cars would not go ab0ve the dangerous levels within normal ranges of use, they did not asses the aspect of customer comfort and safety. The emissions from the VW car could well have proved harmful for the driver and passengers of the car itself, if not for the wider environment. The employees who acted against VW’s attempt to delete data records and evade prosecution have thus; also have acted in the interests of the customers of the company. Thus, the company is realistically not right when it defended dismissing the whistle blowing employee due to ‘indiscipline’ .
Thus, the company, VW was genuinely concerned about damage to its reputation in the market due to the fallout over this controversy, but its action in sacking the whistle blowing employee only added fuel to the fire. Loss of reputation cannot be a valid argument for muzzling whistleblowers as it only exacerbates the situation. What Volkswagen could ideally have done was to own up to its shortcomings and order a full-fledged internal probe that would give the employee the chance to present his side of the story. The crisis was not handled properly since VW was on the defensive since the first day of the leaks and the investigations, and never tried to appear to be fair or open to public scrutiny. This in fact has harmed the brand image of VW even more as it had to contend with extra public attention and also lost the image of being a responsible and sensitive brand, an image that was earned over more than five decades of dedicated public relations (Donaldson et. al., 2008).
The last aspect of this ethical crisis at Volkswagen relates to maintaining strong internal controls over misconduct and unethical behavior by managers. Business owners and large employers need to have established mechanisms of internal auditing, review, control and discipline in place. This ensures not only speedy conflict resolution between managers and workers, but also better command-and-control for the strategic management of the company. Whereas in cases of chaotic organizational review mechanisms, managers feel pressure from superiors and pass on that pressure to subordinates and frontline workers, creating an environment where a lax and licentious attitude towards ethics is encouraged. Although companies should ideally put the customer at the center of their business, accommodating non-monetary factors that indirectly affect revenues and profits should also be taken care of. Volkswagen has mostly failed in this .
In the case of this particular ethical crisis, Volkswagen put more emphasis on marketing the product and misleading emissions inspectors. The aim of the company was to just pass the emmissi0ons test, despite knowing that the basic car design would not be able to perform at the same level in the medium term. However, the narrow focus on short-term goals and profitability led to an internal atmosphere in the company which encouraged managers and employees to flout ethics and to be hostile to whistle blowers .
Conclusion:
The ethics policy of Volkswagen has mostly failed to live up to expectations caused by the most recent scandal regarding the emissions and testing corruption. This has caused a loss of public faith in the brand of the company, which for long was associated with reliability, stability and honesty. After having attempted to mislead customers as well as governments, it further tried to cover it up by terminating the employment of a whistle blowing employees, who went to court for it. Thus, while it could use the principle of employment at will to silence internal whistle blowers, it was a further public relations’ disaster for the company. Thus, it may be concluded that the company in question has mostly been unable and unsuccessful in using marketing and public relations exercises to repair the damage caused by the lapse in ethics.
References
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Donaldson, T., Werhane, P., & Van Zandt, J. (2008). Ethical Issues in Business: A Philosophical Approach, 8th edition. Upper Saddle River, New Jersey: Pearson Custom Publishing.
Ewing, J. (2016, March 14). VW Whistle-Blower’s Suit Accuses Carmaker of Deleting Data. Retrieved 06 20, 2016, from New York Times: http://www.nytimes.com/2016/03/15/business/energy-environment/vw-diesel-emissions-scandal-whistleblower.html?_r=0
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