VW hopes its settlement with U.S. regulators will be the first step toward putting the scandal behind it. As part of its plea, VW agreed to a three-year probation, a ban on selling diesel vehicles in the United States, and an independent compliance monitor who will oversee VW’s operations over the next three years. However, truly restoring its reputation will require VW to incorporate ethics and appropriate practices into the organization from the inside-out, something that was severely lacking in the firm’s corporate culture prior to the scandal.

Because it is one of the world’s largest carmakers operating in an oligopoly, other global car companies may benefit from the scandal and gain market share from Volkswagen. At the same time, while they might benefit from a competitive standpoint, VW’s conduct has caused problems for the industry as a whole. Consumers are now questioning the environmental claims of other car brands, and automakers will have to work harder to prove that their claims are accurate. Consumer trust is easily lost and is not restored overnight.

Questions:-

1. Explain how the culture of Volkswagen created this ethical scandal.
2. While Volkswagen claimed to support ethics and sustainability, how can they recover from this ethical disaster?
3. Do you believe this scandal will lead to tougher scrutiny of companies’ environmental claims in the future? Why or why not?