301005 Professional Practice: Mitsubishi Motors Assessment Answer

Answer:

Introduction

The news of the Volkswagen where it was proved that the company has rigged the diesel engine to completely falsify the test of emission is highly shocking. It is important to understand in this case that business leaders may not be right all the time however this case of Volkswagen got it completely wrong. This example of corporate based misbehaviour is not acceptable from any perspectives people study. In another case, the company called Mitsubishi Motors scandal where the company falsified the fuel based economy data for at least 4 of most popular models for minimum of 2 years (Tse et al., 2017). The case is very similar with the case of Volkswagen emission scandal. However, the details of both the cases are very distinct by nature.

The case

There is a lot of debate which is animated surrounds around the Volkswagen emission scandal to find main reasons that what kind factors can be paved from the ground for different scandals to take place and was also involved in the scandal. The scandal was also reported at different platform in different platforms along with media and news.

People participating in the scandal initially was reported that 9 managers are suspended for being a part of this high case of deceptions (Rhodes, 2016). It is also declared by the chairman of the company that one factor that is suspended by the group took this scandal since the overall mindset in some departments of the organization which completely fails to agree with the rules and regulations. In the year 2015, it was mentioned that the group of people working in the company have participated in the scandal is not very big. The CEO also announced to US lawmakers that whatever factors of a small group of software engineers has further embedded the devices in automobile. The CEO also discussed that he is completely unaware of the right number of engineers and the scandal was not corporate level decisions. At the later stage, a law organization Jones Day, that is external investigator of the company and it is conducted investigation and further revealed that approx. fifty members of staff usually in Wolfsburg further confessed that they were aware of emission based scandal functions (Rhodes, 2016). At the later stage, the news also learned that some engineers in the company and the technicians also informed the supervisors associated emission based rigging operations in the 2011 and the supervisors have ignored those alerts. In 2015, the number of people in the form of managers, engineers and technicians participated in the emission scandal functioned to defeat the device came with a lot of drama. There have been many places in the scandal and was defined that one person who can write the codes of the defeat device program and on the contrary also implemented the program to work with engine and other components needed with more staff to get involved in the process. In addition, as per the bode, junior staff of the company were not the part of the scandal test and in the end, it was declared that many managerial as well as non-managerial positions and file workforce were part of the diesel emission case. The managerial group that was suspended contain nine managers from board of supervisors along with quality control manager and engine designer along with plant manager and executive of sub-companies such Audi and others (Burki, 2015).

What the Volkswagen scandal has in common with Mitsubishi Scandal?

Both the scandal arose from the respective companies ambition to present their product as something better than its previous performance and to stand out in the competitive environment. Both the companies seem to have responses of development teams to intense top-down pressure from the present management. The company also revised it fuels targets as per the model in discussion which is five times in the space of approx. two-year growth period. Also, both happens to be the companies with poor histories of corporate based governance where the workforce can easily have had the opinions that a bit rule bending and can be tolerated if the outcomes were fine (Connor, 2017).

The overall narrative based arc has trivial things in common and where disclosure is low in process since the manipulation by Mitsubishi almost took twenty years to come to highlight where the company just took nine years as well as triggered the external pressure where for Volkswagen from the environmental protection agency. For Mitsubishi is scarcely less painful from the current commercial partners like Nissan which will want to pound for the damage to its corporate reputation. There is also some level of risk of slow drip of negative kind news which is out of an external investigation by the lawyers recruited by the company.

Provide judgement and analysis of the resulting outcome. 

In 2014, the company was considered as the second largest automobile in the world after Toyota Motor. In 2015, the company also admitted which rigged in emission test which causes the company to suffer from large amount of burden from cost (Boston et al., 2015). The company has also brought 3 public relations companies based in US, Germany and Britain to help the company to cope with the crisis. In addition, the company has further employed the former interaction of BMW as a consultant to function for sixty hours a week with salary of twenty-two thousand dollars every month. Following is the repercussions: -

1. Threatens the health of people: by year end of 2016, Volkswagen automobiles also defeated the devices and will have manufactured added toxic pollution to directly trigger the death in premature stage of about sixty people merely in US. From the time of 2008 till 2015, approximately four lakhs and twenty-eight thousand vehicles and Audi diesel car were pumped with nitrogen oxide which forty times more than it is permitted by the act of Clean Air. It is further estimated by the people who researched that within period of six years of company and Audi diesel manufactured an excess of thirty-six million kg nitrogen oxide in the environment (Stanwick and Stanwick, 2017). The Nitrogen oxide is mainly an element of specific and smog based matters which further paves the ground for many problems like bronchitis and cardiovascular diseases.
2. Slum in staff bonus: at the time of rigging in emission of diesel engines further revealed in public, that sales of the automobile by the company was impacted. Thus, the company to cope up with the crisis has further announced that the bonus of the CEO can be decreased substantially. The company also passed a statement that many models were set up for fair and rational solution for all the participated parties and it is a deliberated step. As an outcome, this further lead to a lot of diminution of variable salary. The decrease in bonus also consist of management board and a group of executive position that assist the management to function in the day to day routine of the company (Posada, 2015).
3. Loss due to drop in sales: however, the emission scandal of the company has resulted in important impact on the company’s group brand namely Skoda and Audi and there was major slump in sales of vehicles of the company than group based brands. The bad goodwill of the company has also impacted the customer loyalty towards it and thus the customer further switches from the company to its competitors which lead to a major drop in sales.

With this judgement and analysis relate it to the relevant industry sector’s professional code of conduct.

The issue of public interest by the company must be held responsible to the actions however, another major issue is how the current manipulation of software went completely undetected for number of years. If it were not for the existence of the NGOs like ICCT, the scandal may never have been highlighted and the company would have proceeded to function with harmful gases above the allowed levels. The environmental groups also warned previously about the national level care permit based on authorities and the European Commission that the diesel cars further emitted less NOx in official based laboratory tests than just being on the roads (Schiermeier, 2015). There are number of people who also knew that this was because of the tricks utilised by the producers however regulators did not take any necessary measures for the same.

As per international centre for Finance Regulation also called as ICFR, is a kind of corruption that happens when the agency was supposed to work in the interest of public, instead of choosing in advance about the commercial level concerns of special interest group or sector it is charged with regulations. Just a month after the scandal, the officials of the European Union came together in Brussels and discussed the consequences however, failed to push the optional testing methods like testing auto emission on the road which could have defeated the manipulation software (Cavico and Mujtaba, 2016). The representatives from Spain further urged for the proposals and the reason was to overhaul the system of testing so that it can be watered down to save the overall destruction of some highly qualified jobs and save the negative impact on the economy of the Spain. At the same time, representatives from countries like UK, French and Germany also took same kind of stance and later the commissioner of EU feared that the conversation will collapse so he requested everyone to back or support the deal.

Conclusion

As per the findings as well as analysis which was discussed in the report, Volkswagen emission scandal and the company’s deception is very complicated case and it have created many dramatic hassles for its indirect and direct stakeholders. It is obvious that the company cheating in diesel emission tests was not a right action and it resulted in series of disastrous repercussions and the proposal of green punishment can be the right solution to finish the case (Gates et al., 2016). Also, electronic cars ensure that environment protection agencies also save the cost as well as the time for deciding the new system to control emission tests. In addition, this way the company is not just penalized but also must pay compensation for the scandal in right manner.

References

Boston, W., Geiger, F. and Spector, M., 2015. Audi Engines Implicated in Volkswagen Emissions Scandal. Wall Str. J.

Burki, T.K., 2015. Diesel cars and health: the Volkswagen emissions scandal. The Lancet Respiratory Medicine, 3(11), pp.838-839.

Cavico, F.J. and Mujtaba, B.G., 2016. Volkswagen Emissions Scandal: A Global Case Study of Legal, Ethical, and Practical Consequences and Recommendations for Sustainable Management. Global Journal of Research in Business & Management, 4(2), pp.303-311.

Connor, J.M., 2017. The German Auto-Emissions Scandal: Likely US Antitrust Response.

Gates, G., Ewing, J., Russell, K. and Watkins, D., 2016. Explaining Volkswagen's emissions scandal. New York Times, 19.

Posada, F., 2015. Volkswagen emissions scandal undermines confidence in analytical chemistry.

Rhodes, C., 2016, January. Democracy, Business Ethics and the Volkswagen Emissions Scandal (WITHDRAWN). In Academy of Management Proceedings (Vol. 2016, No. 1, p. 12743). Academy of Management.

Rhodes, C., 2016. Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), pp.1501-1518.

Schiermeier, Q., 2015. The science behind the Volkswagen emissions scandal. Nature News, 25.

Stanwick, P. and Stanwick, S., 2017. Volkswagen Emissions Scandal: The Perils of Installing Illegal Software. International Review of Management and Business Research, 6(1), p.18.

Tse, Y.K., Zhang, M., Doherty, B., Chappell, P., Moore, S.R. and Keefe, T., 2017. Exploring the hidden pattern from tweets: Investigation into Volkswagen emissions scandal. In Supply Chain Management in the Big Data Era (pp. 172-198). IGI Global.