Case Study: Myopic View Of Volkswagen

1655 Words 7 Pages
12490468 Professional Report
Volkswagen: Myopic view of Stakeholders
Executive Summary
This report attempts to provide the systematic analysis of the questionable management practices adapted by shareholders of the company and also imply the organizational theories to these identified management issues. The organizational theories that are discussed in this report are stakeholder theory and shareholder theory which is implemented by Volkswagen. Various suggestion and high-level recommendations are also stipulated in this report considering the analysis of various case studies in order to restore the trust of the consumers and make a mark in the market. This scandal can be evaluated as a case of business ethics, however, it is also a case
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Shareholder theory is the one that is particularly relevant to Volkswagen which has adapted its business structure in an attempt to maximize its profit by selling its cars with cheating devices. It can be said that Volkswagen did create value for its shareholders during the period it was selling cars with cheating devices (2008- 2015approx). After the scandal was exposed the value created disappeared and resulted in a decline in shares of Volkswagen. Ethics had taken a back seat and developers of this technology joined hands with the top management in order to manufacture the faulty products. The Ethical challenge for any leader is to take right decisions in the best …show more content…
The most affected are the once who purchase the vehicles. After the scandal, these consumers had to go through a lot of hassle of getting their car repaired or replaced. The Volkswagen management deliberate did not implement the stakeholder theory or they did not consider it as a priority before manufacturing the faulty equipment. This behavior of the company has risen many questions and doubts in the minds of stakeholders regarding the integrity of the company and social responsibility. The company should have adapted Normative stakeholder theory, as this theory suggest if the decision of the company affects the stakeholders, the company has to build ethics principle in order to align the companies interest with the stakeholder interest. I believe companies are dependent on stakeholders to obtain necessary resources for their survival. The legitimacy of the company depends on the value proposition reflected the stakeholders (Charles Fontaine,

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