STRATEGIC CORPORATE SOCIAL RESPONSIBILITY
Executive SummaryCompanies are utilizing their corporate social responsibility (CSR) as a way of benefitting the community as well as improving its public relations. The emission scandal highlighted Volkswagens CSR failures. The company faced problems such as declining standards of ethics, external CSR challenges and inconsistent organizational goals. Resolving these issues require the company to implement the identified solutions and recommendations.
Contemporary markets are increasingly becoming competitive, prompting companies to be continually involved in practices which lead to the increase in ethical challenges which affect the companys operational strategies. Currently, it is increasingly becoming a requirement for companies to review and implement ethical programs, which epitomize their business ethical conduct (Crane & Matten, 2010). Through corporate social responsibility (CSR) policies, an organization provides a framework which will utilize to ensure that the community in which the company is situated, benefits from its operations. Evaluation is often performed to establish the impact of the organizations activities on a given environment or society. This task will focus on exploring and analyzing challenges linked to business ethics (CSR). This will involve using case in the real world (Volkswagen Case) to provide solutions and recommendations to the identified ethical problems.
2.0 Analysis of the Critical Problems and IssuesThe Volkswagen Case embodies the failure of an organization when it comes to the implementation of its CSR.
2.1 Issue1 - Declining Standards of Ethics
Apparently, Volkswagen deliberately embarked on designing means to circumvent emissions control through the application of stratagem which is known at the highest levels. The purpose of this approach is to enable Volkswagen to gain an unfair advantage over its competitor, ultimately becoming a leading car manufacturing brand, globally. The reality is that the Volkswagen is not producing environmentally friendly cars as it is purported but automobiles which are poisoning the earth. This is an indication that Volkswagen failed to adhere to the required ethical standards, ultimately disregarding its CSR programs and objectives.
According to Zeiger (2017), a decline or lack of ethics within a firm can result in various problems which can hamper the success of the company. For instance, poor moral standards in an organization can lead to legal issues, which can be injurious to the companys reputation. In the United States, both federal and state governments have established policies to govern business ethics. Failure to adhere to such rules and procedures can result into severe punishment from the government which can adversely impact on the operations of an organization, such as financial loss and tainted publicity CITATION Zei17 \l 1033 (Zeiger, 2017). The declining moral standards in Volkswagen regarding the manufacturing of the diesel engine which emit poisonous contents to the atmosphere is the main challenge to the companys operations.
The Volkswagen Case attests that the company has deliberately engaged in activities which demonstrate its declining standards of ethics. Volkswagen has failed to comply with environmental laws as well as failing to adhere to its CSR programs regarding the communitys benefits from the companys operations. Volkswagen did all it could to hide the fact that its diesel engines were highly contaminating. The companys head of CSR even denied acknowledging the possibility of its products contaminating the environment CITATION Gui17 \l 1033 (Gates, Ewing, Russell, & Watkins, 2017). This implies that the Volkswagens CSR programs are simply marketing exercises as opposed to the initiatives which can be utilized to improve the welfare of the people it is serving.
2.2 Issue 2 External CSR challenges
Some of the recent trends in the corporate world include the growing focus placed on the social responsibilities of firms. Currently, organizations are implementing various CSR programs to demonstrate their true commitment to serving a particular community. CSR practice is also a model of enabling the business to improve its public relations, which are a crucial tool when it comes to influencing consumer perceptions and the firms image CITATION Jos10 \l 1033 (Milton, Soares, & Farache, 2010). It follows that an effectively-managed CSR nurtures an environmental and social value while at the same time promoting the companys objectives or solidifying the stakeholder relationships. These elements are vital to the success of a given corporation.
Typically, companies are expected to implement various types of CSR with a goal of improving the well-being of the people depending on its operations. However, the Volkswagen Case reveals that the company has done little to benefit the community, which is supposed to benefit from its functioning. It is highlighted that Volkswagen has engaged in activities and application of strategies which are meant to hurt the public as opposed to benefitting the consumers.
The supposedly environmentally friendly cars manufactured by Volkswagen do not meet the required standards, ultimately releasing poisonous emission to the atmosphere, leading to public health implications CITATION Gui17 \l 1033 (Gates, Ewing, Russell, & Watkins, 2017). This is an indication that Volkswagen has not benefitted the community as it was expected. Instead, the company applied strategies which are injurious to the public. This highlights Volkswagens failings in its CSR programs, which can translate into adverse publicity, which can be detrimental to its profitability and success.
2.3 Issue 3 - Inconsistent Organizational Goals
Organization goals epitomize the scope, direction and a general framework of the companys operations. According to Cunningham (2016), organizational elements such as vision and mission and objectives enable the company in implementing its policies such as CSR programs. It is revealed strategic organizational initiatives are accomplished through the setting of achievable goals, ultimately enabling a firm to be truthful to the promises or declarations made regarding service delivery CITATION Bar16 \l 1033 (Cunningham, 2016). However, unachievable or unrealistic organizational objectives can be harmful to the companys public relations, ultimately eliciting a negative perception from the public. The CSR objectives of a given corporation are measurable against the outcomes identified in its operational areas.
The companys shortcomings when it comes to meeting its CSR goals can be attributed to its empty and unclear mission and vision statement. The companys goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class (Volkswagenag.com, 2015). This is an indication that Volkswagens CSR programs promise to protect the environment through the manufacturing of environmentally sound automobiles. However, the companys emission scandal implies that Volkswagen lacks consistent organizational goals when it comes to the delivery of excellent products. The company was supposed, to be honest, and responsible regarding the manufacturing of its diesel engines, which were alleged to be poisonous to the environment. The growing unethical practices in the companys operations demonstrate that Volkswagen needs to rethink its goals and objectives to ensure its CSR programs are a success.
3.0 Analysis of Alternatives and OptionsVolkswagens present issues are attributed to the failures in its CSR. Resolving these problems require the company to apply both internal and external organizational mechanisms.
3.1 Solution 1: The Companys goals should match its CSR
Unrealistic organizational goals had significant contributions towards Volkswagens CSR failings. The company should restructure its objectives to ensure it adheres to its mission and vision statement which embodies its CSR policies and framework. The current organizational goal for Volkswagen is to ensure it becomes a leading corporation globally in the manufacturing of the environmentally friendly vehicles. However, in 2015, Volkswagen was embroiled in emission scandal. The company was accused of diesel dupe for being involved in the rigging of emission test CITATION Naz16 \l 1033 (Mansouri, 2016). It is imperative for the company to design a CSR aligned organizational goals as a way of preventing unethical practices.
3.2 Solution 2: Enhancing Internal Transparency and Accountability
Unethical issues which originate from internal stakeholders (employees) can adversely affect the outcome of the internal CSR efforts CITATION Gui17 \l 1033 (Gates, Ewing, Russell, & Watkins, 2017). The declining ethical standards in the organization have contributed the failures in the companys CSR programs. The diesel dupe which enabled Volkswagen to rig the emission tests attested the growing incidences of unethical behaviors in the workforce. Volkswagen employed various tactics to ensure it conceals the fact that its diesel engines were critically contaminating. This implies that the firms CSR department was aware of this strategy to gain an unfair advantage over its competitors at the expense of public due to the release of poisonous components in the atmosphere. Introducing internal mechanism which promotes transparency and accountability to help resolve the CSR issues beleaguering Volkswagen.
3.3. Solution 3: Public Relations initiatives
According to the current situation, Volkswagens image has been tainted, ultimately suffering from poor reviews from the community. Embarking on public relation (PR) programs will play a vital role in winning over the trust of customers again CITATION Naz16 \l 1033 (Mansouri, 2016). The PR initiative should focus on solving the issue of defective cars using diesel engines as well as demonstrating the firms commitments towards improving the welfare of the society. Volkswagen should consider recalling the cars with emission problems or allow the customers to sell them back to the company. These initiatives will enable Volkswagen to repair its brand, thus solidifying the customer loyalty.
After encountering a scandal, a business experiences significant challenges when trying to make a comeback. The diesel dupe issues adversely affected the status of Volkswagen. Adopting recommendations below will enable the company to re-establish itself as far as its CSR initiatives are concerned.
4.1 Recommendations 1: Improve The Companys Ethical Standards.
It is apparent that unethical practices within the organization had significant contributions to the failure of Volkswagen CSR. The company should consider introducing compulsory training programs on CSR and business ethics. Volkswagen should also restructure its codes of conduct to promote the creation of a corporate culture which is associated with relatively higher levels of transparency and accountability.
4.2 Recommendation 2: Intensify its PR Activities
The emission scandal had a detrimental impact on the Volkswagen image and reputation, which could ta...
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