The Result of a Decline in Business Ethics

The Result of a Decline in Business Ethics

Business ethics is defined by “the application of ethics to the special  problems and opportunities businesspeople experience” (Kubasek, Browne,  Barkacs, Herron & Dhooge, 2016, p. 16). When ethical decisions  appear in a person’s life, more likely than not, a plethora of choices  are considered when determining the best course to take for justifying  our actions. In many cases, we consider our Lord and Savior Jesus  Christ, his heavenly father God, our parents, our spouses, our children,  friends, colleagues, physical and mental emotions, plus more before  committing to one-way or the other. However, when the word “business” is  placed in front of ethics, the ramifications are often much larger,  including monetary value, and the effect decisions will have on  stakeholders and the public. First Timothy 6 verses 10 states “For the  love of money is the root of all-evil: which while some coveted after,  they have erred from the faith, and pierced themselves through with many  sorrows” (KJV). By highlighting the definition of Business Ethics as  well as 1 Timothy 6:10, we expose the very public lambasting of  Volkswagen Group, whom recently stated “11 million of its diesel cars  worldwide were equipped with software that was used to cheat on  emissions test” (Lippe, 2015). A multitude of responses, questions, and  political backlash reduced Volkswagen’s image in the public, however, we  will identify the steps that should have been enforced to prevent this  incident, starting at the managerial level and ending with the Chief  Executive Officer (CEO).

As children of God, we are instilled with the rationale between what is  right and wrong. James 4 verse 17 (KJV) states “Therefore to him that  knoweth to do good, and doeth (it) not, to him it is sin”. We are  endowed with the conscious capability to distinguish between doing  something right and doing something wrong, however, when we choose to do  something wrong, it is considered a Sin. Other factors may weigh  heavily for or against the determination of right or wrong to include  family beliefs, childhood, and life experiences. Nevertheless, as  employees working in the Legal office or the Engineering department of  Volkswagen, the responsibility to determine the best ethical, moral, and  legal path fell squarely on each and every employee to make the correct  decision, and if something was legally, morally, or ethically wrong,  say something to someone such as the Department Director, or CEO. If  fear of retribution was prevalent amongst the employees in these  departments, they should have contacted an anonymous reporting service  to present the evidence in question.

First, employees should have known there had to be something or someone  who they could report the infractions to regarding the software which  cheated diesel testing requirements. For instance, the Sarbanes-Oxley  Act of 2002 was established by Congress to protect corporate insiders  and create an anonymous reporting system for employees to present  suspicious activity by companies (McClurg,  2017). Additionally, the Dodd-Frank Act prevents Whistleblower’s, or  those who implicate their company for illegal activity, from being  discharged, demoted, suspended, threated, harassed, or removed for any  attempt of reporting the illegal activity (McClurg, 2017). Aside from  these provisions by Congress, there are multiple employee guidelines for  reporting suspicious behavior, on top of the character and courage to  stand up for what is right, and socially responsible from a company, and  an individual. Ideally, managers should have prevented this by asking  questions, remaining aware, and conscious towards the behavior of  employees and the reporting systems in place for protection, especially  since “If God is for us, who can be against us?” (Romans 8:31 KJV).

Secondly, managers or employees in Volkswagen Legal or Engineering  department, must have known that the people affected most by this  decision to cheat the software detecting system was there stakeholders,  which includes the company. For instance, Cremer and Taylor (2016)  reported that Volkswagen would take a $18.2 billion loss due to the  diesel deception scandal the company attempted in 2015. Although a loss  of $18 billion may not deplete Volkswagen of their assets, as it may  numerous companies across the world, the image and trust from customers  have drastically been impacted, and that is something that cannot be  repaired so quickly.

As the CEO of the diesel division of Volkswagen, they should have taken  full responsibility for the mistake and attempt to cheat software  detection. Afterwards, if not arrested by the Police, could have  launched a massive legal investigation into the reason why 11 million  cars were equipped with diesel deception software, in order to identify  the areas of failure from the management and legal/engineering offices,  and hold as many people accountable as possible. This response would  have revealed to the public, business ethics is much more complicated  than people imagine. In a competitive, business-run environment, money  and production become the figures of success, and through cheating the  diesel software technology, Volkswagen was able to attract more money,  product, and customers around the world. Additionally, this type of  legal investigation would perhaps reveal as Clegg, Kornberger and Rhodes (2007) stated:

Ethics  cannot be encapsulated in lists of rules that inform action; thus,  there can be            no ‘one best way’ in which good ethics may be  guaranteed through prescription, judgment or legislation. The concept of  ethics as practice cannot offer a clear black and      white grid that  divides the world into good and bad; things are more complicated. (p.  13)

Business ethics is not as easy as deciding upon right and wrong. There  are multiple ethical dilemmas that could appear, however, the basis for  decisions should be the best legal course that would potentially  increase value for the stakeholders, no matter the situation.  Additionally, an investigation into the failures of the Volkswagen  reporting system, would identify the reinvigoration of legal outlets for  suspicious reporting such as the anonymous report hotlines, employee  confidentiality policies, and clear guidelines to preventing something  like this from happening again. Also, the CEO or investigator leading  the investigation may unveil what systemic or deliberate cover-up  occurred such as Lippe (2015) belief that Volkswagen  engineers neither discussed with nor hid what they were doing from  Volkswagen’s in-house lawyers, and the in-house lawyers didn’t realize  what was going on.

Ultimately, Volkswagen’s decline in business ethics stemmed from the  competitive misconception that cheating was an attempt at achieving  company goals. The sorrows that follow the obsession with money can lead  to illegal activity, penalties, fines, and supporting the wrong-doings  of others. Furthermore, the lack of character or failure to report the  wrongdoings by employees, must be fortified and consistently addressed  from the executive level down to the lowest employee. Although an $18  billion loss is large and galvanizing, the timeline for repairing the  damage done to the environment, customers, and other stakeholders could  take decades and cost exorbitant figures.

 

References

Clegg, S. , Kornberger, M. and Rhodes, C. (2007), Business Ethics as Practice. British Journal of

Management, 18: 107-122.

Cremer, A., & Taylor, E. (2016). Volkswagen takes $18 billion hit over Emissions Scandal.

Retrieved from https://www.reuters.com/article/us-volkswagen-emissions-germany-

probe-idUSKCN0XJ19U

Kubasek, N. K., Browne, M. N., Barkacs, L., Herron, D., & Dhooge, L. (2016). Biblical

worldview edition of dynamic business law. N. J. Kippenhan (Ed.). New York, NY:

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Lippe, P. (2015). Volkswagen: Where were the lawyers? ABA Journal. Retrieved from

http://www.abajournal.com/legalrebels/article/volkswagen_where_were_the_lawyers/

McClurg, D. D. (2017). Whistleblower protections: Internal reporting and dodd-frank’s anti-

retaliation provision. Labor Law Journal, 68(3), 156-164. Retrieved from

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