Running head: VOLKSWAGEN’S CSR SCANDAL 1

Volkswagen’s Corporate Social Responsibility Scandal

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Volkswagen’s Corporate Social Responsibility Scandal

It is irrefutably clear that organizations are obliged to make sure that their corporate

social responsibility is on point for effective functionality. What is corporate social responsibility

and what makes it a crucial aspect of an organization? Corporate social responsibility describes a

set of corporative initiatives that are meant to assess a company’s functions; specifically, its

effects on the environment as well as its social wellbeing contribution (Tai & Chuang, 2014).

Based on this aspect CSR policy functions are perceivably self-regulatory since it is the pertinent

business’s role in monitoring their compliance to these ethical standards. Apparently, various

companies have been on the hook for violation of their corporate social responsibility but the

most notable issue is Volkswagen’s infringe on the CSR principles.

Before the truth of the matter was revealed, Volkswagen had tricked the world into

viewing it as an organization that complies with the CSR principles and this even got it winning

environmental conservation awards. Little did the world know that Volkswagen was using

“defeated software” into making the people think that the cars were environmentally friendly

(Haski-Leventhal, 2018). This was unveiled in September 2015 after the Environmental

Protection Agencies (EPA) found out that the company had been tricking them all along. This

realization was catastrophic to this company bearing the fact that most of its investors deserted

the company. Because of failure to comply with the ethical standards as specified in the

corporate social responsibility, the company now has to deal with customers’ compensation as

well as deal with the regulators’ fine, the most harm being on the company’s brand.

From Volkswagen’s corporate social responsibility scandal, it is quite clear that its failure

to comply with the policies was harming the environment. Basically, the key role of a CSR is to
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ensure that the pertinent companies adhere to the set policies as a way of improving their effects

on the environment as well as improving social wellbeing (Matten & Moon, 2004). As of this

notion, adherence to the CSR principles would have saved Volkswagen from this particular

mess. This is purportedly so considering that CSR has specific strategic implications to an

organization. Moreover, using CSR strategic tools helps in building an organization’s reputation,

which helps improve its overall competitive advantage. If Volkswagen could have had good CSR

strategic management plans, then, it could have mitigated being unethical in its operations by

tricking the world using “defeated software”. With the right strategic planning, the company

would have progressed further by being more focused on making genuine productions that are

environmentally friendly.

In fact, from a more critical analysis, with the right CSR strategic planning, in case of

such a scandal, Volkswagen would have been fast to take responsibility, be transparent, and take

the necessary actions (Sitnikov & Bocean, 2017). Taking responsibility is a strategic plan

bearing the conception that Volkswagen would have publicly acknowledged its flaws and this

would actually help it in understanding the right course of actions. This means that based on the

CSR strategic planning, being transparent is obligatory since it helps the company to not only

understand its problems but also know how to mitigate such occurrences in the near future. In

overall, after analyzing Volkswagen CSR scandal, the indubitable aspect is that the company’s

failed strategic planning is what contributed to the witnessed occurrence. Thus, with the right

strategic planning there is the belief that the company will have approached the situation

differently and if caught up in its present situation it will know what is the right course of action.
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References

Haski-Leventhal, D. (2018). Strategic Corporate Social Responsibility: Tools and Theories for

Responsible Management. SAGE.

Matten, D., & Moon, J. (2004). Corporate social responsibility. Journal of business Ethics, 54(4),

323-337.

Sitnikov, C., & Bocean, C. (2017). Relationships Between Corporate Social Responsibility and

Strategic Planning. In Stages of Corporate Social Responsibility (pp. 121-137). Springer,

Cham.

Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.