The paper 'Stakeholder Management - Volkswagen Emission Scandal" is a good example of a management case study. Knowledge of a company’ s diverse stakeholders and their unique interests and expectations is a vital prerequisite for successful business. The knowledge determines how a company approaches its markets, adapts to diverse regulatory frameworks, as well as builds its reputation. Stakeholder management can assist a company to carry out dialogue with its stakeholders in order to balance corporate objectives and stakeholders concerns (Volkswagen, 2014). The key objective of principles of stakeholder management is to suggest guidelines essential for balancing corporate objectives and stakeholders concerns.
They also enable businesses to be more conscious of the diverse stakeholder they serve, as well as promote the efficiency of management processes. This report covers the issue of “ Volkswagen Emission Scandal. ” The case scenario is analysed using four principles of stakeholder management apply to the scenario: principle 1, 2, 3, and 6 2.0 Description/summary 2.1 Issues In the case scenario, Volkswagen had rigged vehicle software to cheat emissions test, leading to emissions that were nearly 40 times more than the permissible levels for driving.
As a result, Volkswagen’ s cars sold in the United States had contrivances in their diesel engines that designed to sense if they were being tested. In turn, they would alter the performance of the cars to provide misleading results. Volkswagen had also claimed that the vehicles met Tier II/Bin 5 emission, which implies that the vehicles were permitted to emit 0.007 grams of nitrogen oxide and nitric oxide per mile (Volkswagen, 2014). Volkswagen also carried out false advertising and misrepresentation of facts. This was unethical. The carmaker had engaged in huge marketing campaign to flaunt the diesel cars’ trademark low emissions.
However, the advertisement was a faç ade intended to cheat the customers, as the cars had no low emissions as indicated in the ads (Volkswagen, 2014). Volkswagen later made an open admission that it had cheated the emission test. It also revealed that some 11 million cars worldwide had been fitted with the device. This had potential hazardous effects on humans and the environment at large, as the cost of the damages caused by the emission are said to have been more than US$100 million (Volkswagen, 2014). 2.1 Stakeholders The key stakeholders include the US Environmental Protection Agency (EPA), which oversees the activities of Volkswagen in the United States, specifically the environmental implications of Volkswagen products.
In the case study, the EPA regulates the amount of nitric oxide and nitrogen dioxide gas that diesel engines can emit. The EPA also had the powers to fine Volkswagen for the violations. It is said that EPA may fine a firm up to $37,500 for each vehicles in the event that such breaches of standards occur (Volkswagen, 2014).
Customers are also major stakeholders of Volkswagen. In the case study, they bought diesel cars from Volkswagen and as result sustained Volkswagen’ s business. It is said that globally, 11 million cars had been fitted with the controversial software. This may mean roughly 11 million Volkswagen customers had been affected. Volkswagen was initially concerned with its possible damaged reputation after the scandal made negative headlines. The resale value of the diesel cars had depreciated, as more customers underrated them. Scandals lead to loss of reputation and profitability (Jeurissen 2007).
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