Volkswagen’s CSR Report: Case Study Analysis- Report Writing Assignment

Internal Code: MAS1856

Report Writing Assignment:

Task: This will provide context of the problem and linkages between the different bodies of knowledge in your management major. 1) VW engineers programmed their 2009-generation TDI diesel (EA189) to operate within lab conditions. The sensors would easily recognise the emissions within this condition, however, would be able to when operating in real time. The engine management software (EMS) affected is an easy and permanent fix, as it reprogrammable. 2) There is much oratory about “defeat devices” and “rigged software” making it confusing to the public and misunderstood by news media. A car’s engine is controlled by algorithmic software.  VW’s engineers put in some additional lines of code in that software that would make their diesels perform better in emissions tests. 3) The engines in question (EA189) are being replaced by a new generation diesel (EA288). The stand-in is being phased-in over numerous model years; however, had the EA189 been introduced, DieselGate would have had less impact VW’s prospective production and earnings. 4) VW CEO Martin Winterkorn is the key mover behind VW’s successful globalization strategy and to his credit with the regeneration of the Audi brand. However, he resigns 11 November 2015. 5) The €6.5 billion provision VW announced in relation to the recall equates to €590 per engine affected. The remedy–reprogramming the EMS–is not an arduous one. However, the recall process in the U.S. alone is a notoriously expensive. Additionally, the EPA could possibly impose fines of up to $3,750 per affected vehicle. VW will have to pay a large fines (i.e., the US) and faces the threat of recalls of EA189 models in other global markets. 6) The damage to VW’s brand parity in the U.S. market alone will be extensive and enduring. The image of the “foreign” company cheating governments around the globe is going to stick with VW. 7) Diesel engines consume less fuel per given journey than do gas engines and therefore emit less carbon, because of their greater mechanical efficiency (20% on average). The tests that VW contrived were for the oxides within nitrogen (NOx,) not CO/CO2 emissions. The number 1 issue within the globe with regard to carbon footprint, diesel vehicles are still the more ideal types of engines to run. 8) VW shares have been thrashed by more than 35% and there will be more downside in the near-term from the current level of €127/share. Also refer to other relevant information in the media and via peer-reviewed scholarly sources. For example, you should review the critical perspectives on this case that are offered by Prof. Carl Rhodes, UTS. He writes in The Conversation, comments in the media, and writes extensively on business ethics in high quality peer-reviewed journals and books. This assignment is a simulated learning experience designed to test your knowledge about what you have learned in your degree so far. You will work in groups (as defined in week 3) to critically review and discuss the case study. In weeks 8 and 9, your group will produce creative syntheses (marked separately) to check/test your understanding of the case, your appreciation of the problem, your depth and breadth of analysis of the problem, and your preliminary findings and conclusions. In week 8, your first pitch on this case will adopt the ‘meditating on a problem’ technique, and your will get peer feedback on your ideas. In week 9, you will adopt the ‘systems thinking’ approach to refine your think on the case and your analyses. These tasks will assist you in developing the structure and content of your final report. Your report will be written and assessed individually, not as a group.