Member of: CCIG FEDE FSEP AGEP ACICS Master of Business Administration CST 645 Corporate Social Responsibility Final Assignment Page!1 Geneva Business School Accredited by: IACBE ECBE EDUQUA Av. Blanc 53, 1202 Geneva, Switzerland T: +41 22 906 94 94 gbs-ge.ch F: +41 22 906 94 90 E: info@gbs-ge.ch W: Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS GENERAL INSTRUCTIONS This project must be done in groups of one or two (max). This final case study must be submitted in softcopy only on the assigned due date to assignment.gbs@gmail.com Hardcopy submissions will not be accepted PRESENTATION OF FINAL ASSIGNMENT You must include a title page that lists your name, Student ID and the unit number and title. Number all pages sequentially. Any published material you refer to must be properly referenced (Harvard Referencing) and included in a reference list at the end of your assignment. FINAL CASE STUDY SUBMISSION DEADLINE Due Date: Thursday, 10th November 2016 Weighing: 80% of total assessment LATE ASSIGNMENT SUBMISSION POLICY Any student submitting their assignments 2 days after the designated deadline will be considered as a Late Assignment Submission which will incur a penalty of CHF 100/SAR 390. The penalty amount will be automatically added to your subsequent month's Course Fee. Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS NOTE: The first page of each final case study must include the following declaration: I certify that this assignment is my own work, based on my personal study and/or research, and that I have acknowledged all material and sources used in the preparation of this final case study whether they be books, articles, reports, lecture notes, any other kind of document, electronic or personal communication. I also certify that the final case study has not previously been submitted for assessment in any other course or at any other time in this Course, unless by negotiation, and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons. I have read the GBS policy on plagiarism and understand its implications. Final case study that do not include the above declaration will not be marked. PLAGIARISM Plagiarism is a form of cheating, by representing someone else's work as your own or using someone else's work (another student or author) without acknowledging it with a reference. This is a serious breach of the Academic Regulations and will be dealt with accordingly. Plagiarism occurs whenever you do any of the following things without acknowledging the original source: Copy information from any source (including the study guide, books, newspapers, the internet) Use another person's concepts or ideas Summarize or paraphrase another person's work. How do I avoid plagiarism? To ensure you are not plagiarizing, you must acknowledge with a reference whenever you: use another person's ideas, opinions or theory include any statistics, graphs or images that have been compiled or created by another person or organization paraphrase another's written or spoken word You are required to use the below mentioned referencing system: The Harvard Referencing System; e.g. 'Smith (1985) listed five key factors' Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS FINAL CASE STUDY Volkswagen's \"Clean Diesel\" Scandal Volkswagen shocked the world on September 18, 2015 with its response to the U.S. Environmental Protection Agency's (EPA) notice that Volkswagen's \"clean diesel\" vehicles were found to be in violation of the Clean Air Act. In its response, the German automaker admitted that it had deliberately equipped its line of Turbocharged Direct Injection (TDI) diesel engines with a \"defeat device\" that was intended to \"bypass, defeat, or render inoperative elements of a vehicle's emission control system\" during emissions testing.1 Initial reports suggested approximately 500,000 Volkswagen diesel cars, model years 2009 through 2011, were affected by the device. As the scandal continued to unfold, the estimated number of vehicles affected grew to 11 million vehicles, across multiple brands worldwide.2 Some reporters have referred to the scandal as \"Dieselgate,\" a throwback to the Watergate scandal that led U.S. President Richard Nixon to resign in 1974.3 The September 2015 announcement was preceded by a series of events that began in early 2014 when U.S. and German researchers from the International Council on Clean Transportation (ICCT) conducted tests on diesel models of the Volkswagen Passat, Jetta, and the BMW X5 in hopes of confirming that the \"clean diesel\" technology these cars incorporated was in fact \"clean.\"4 ICCT enlisted the help of researchers from the West Virginia University (WVU) Center for Alternative Fuels, Engines and Emissions. At the same time, the California Air Resources Board (CARB) was conducting its own tests on the vehicles. The ICCT/WVU researchers road tested their vehicles under real driving conditions, while CARB's tests were performed in a lab. The results were shocking. Of the vehicles tested on the open road, the Jetta exceeded U.S. emissions standards by 15 to 35 times the upper Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS limit and the Passat tested at 5 to 20 times the standard; the BMW X5 passed the road test. Vehicles tested by CARB passed all of the emissions tests.5 The EPA and CARB were notified of the results and opened investigations into the matter. Initially, Volkswagen denied any wrongdoing. In December 2014, Volkswagen issued a voluntary recall of about 500,000 vehicles in the United States, citing a software glitch as the reason for the emissions problem and implementing a software patch. CARB continued testing the repaired vehicles and found little improvement. In July 2015, CARB and the U.S. Environmental Protection Agency notified Volkswagen that they would not certify its line of 2016 TDI vehicles unless they comply with emission standards. It wasn't until September 2015 that the Company, unable to explain the tests, finally admitted that the cars had been intentionally designed to provide inaccurate emissions test results. On September 23, 2015, CEO Martin Winterkorn released a statement accepting responsibility for the situation and resigned his position. The emissions scandal led to significant financial concerns for Volkswagen. Initial charges of 6.7 billion in the third quarter of 2015 have led the company to post of a loss of 1.7 billion related to the recalls. This figure does not include fines, penalties, or compensation, and analysts are projecting total costs for the scandal to rise to tens of billions of Euros. In the first two months after the scandal broke, the company's market capitalization dropped 40% and Moody's downgraded the Company's rating one notch.6 On September 25, 2015, Matthias Muller was named the new CEO of Volkswagen. His every move will be inspected as the company faces criticism from the nearly 11 million owners of vehicles affected by the 2015 diesel scandal. Previously he enjoyed an untarnished reputation and many years of success at Porsche. However, he will have many hurdles to overcome as he works to re-establish Volkswagen's reputation for environmental friendliness and restore the confidence of consumers, employees, government regulators, and the general public, in addition to developing a strategy to continue growing the company's sales in a highly competitive international industry. 7 Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS References: 1 Mays, K. 2015 VW Diesel Crisis: Timeline of Events. Cars.com. September 23. https:// www.cars.com/articles/vwdieselcrisis-timeline-of-events-1420681251993/ Accessed November 16, 2015. 2 Ibid. 3 Siciliano, J. 2015. Volkswagen scandal christened 'dieselgate.' Washington Examiner. October 2. http://www.washingtonexaminer.com/volkswagen-scandal-christened-dieselgate/article/ 2573316. Accessed November 16, 2015. 4 Plungis, J. and Hull, D. 2015. VW's Emissions Cheating Found by Curious Clean-Air Group. BloombergBusiness (Online). September 19. http://www.bloomberg.com/news/articles/2015-09-19/volkswagenemissions-cheatingfoundby-curious-clean-air-group Accessed November 12, 2015. 5 Ibid. 6 CNN Money staff. 2015. Volkswagen scandal...in two minutes. CNN Money (Online). November 9. http://money.cnn.com/2015/09/28/news/companies/volkswagen-scandal-two-minutes/ Accessed on November 13, 2015. 7 Blackwelder, B. 2016. Volkswagen Case Study, Robins School of Business, Univerity of Richmond. Published Date January 2016. [Website] http://scholarship.richmond.edu/cgi/ viewcontent.cgi?article=1016&context=robins-case-network Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS CASE OBJECTIVES 1. To discuss the ethical frameworks and values that should be incorporated when presenting the product for testing. 2. To refer to the importance of having Environmental-Friendly Transportation. 3. To highlight the inspection and follow up processes for Environmental-Friendly transportation. 4. To discuss the financial impact of Volkswagen's \"Clean Diesel\" Scandal on the company 5. To discuss the financial impact of Volkswagen's \"Clean Diesel\" Scandal on the German economy 6. To discuss the impact of Volkswagen's \"Clean Diesel\" Scandal on the community. 7. To illustrate the environmental effect of developing high gas emission's motors. 8. To discuss the roles of stakeholders and governmental regulator in controlling developing ecological sensitive products. 9. To discuss the moral responsibility of the Ex-CEO of Volkswagen. 10. To discuss the corporate social responsibility practices that could be implemented in the future to clean the current scandal. 11. To discuss the relation between management, stakeholders and workers in motor business. Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS BELOW MENTIONED DISCUSSION QUESTIONS SHOULD BE ANSWERED IN THE FORMAT AS DETAILED FROM PAGE 7 ONWARDS: Question 1 The Volkswagen's \"Clean Diesel\" Scandal has a very negative effect on the company's reputation, current and future financial position, environmental impact and finally law violation. Using the Triple Bottom Line with some examples from the case to support your evaluation.: Evaluate the scandal impact on People (include all types of stakeholders) (15 Mark) Evaluate the scandal impact on the Profit (current and future) (15 Mark) Evaluate the scandal impact on the Planet. (Search for more data on its effects.) (15 Mark) Debate whether or not the CEO Martin Winterkorn was morally responsible for the scandal? (10 marks) Question 2 Answer the following question USING YOUR OWN IDEAS AND THOUGHTS and based on your recent readings and references from different searching sources: If you have been hired as the New CEO Matthias Muller of Volkswagen. Identify FIVE potential innovative CSR projects and ideas that could be in place to increase future trust and profit? (25 Marks) Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS Introduction (5 marks) Detailed Introduction to the Case Study Question 1 - A The Volkswagen's \"Clean Diesel\" Scandal has a very negative effect on the company's reputation, current and future financial position, environmental impact and finally law violation. Using the Triple Bottom Line with some examples from the case to support your evaluation.: A/ Evaluate the scandal impact on People (include all types of stakeholders) (15 Marks) Question 1 - B The Volkswagen's \"Clean Diesel\" Scandal has a very negative effect on the company's reputation, current and future financial position, environmental impact and finally law violation. Using the Triple Bottom Line with some examples from the case to support your evaluation.: B/ Evaluate the scandal impact on the Profit (current and future) (15 Marks) Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS Question 1 - C The Volkswagen's \"Clean Diesel\" Scandal has a very negative effect on the company's reputation, current and future financial position, environmental impact and finally law violation. Using the Triple Bottom Line with some examples from the case to support your evaluation.: C/ Evaluate the scandal impact on the Planet. (Search for more data on its effects.) (15 Marks) Question 1 - D The Volkswagen's \"Clean Diesel\" Scandal has a very negative effect on the company's reputation, current and future financial position, environmental impact and finally law violation. Using the Triple Bottom Line with some examples from the case to support your evaluation.: D/ Debate whether or not the CEO Martin Winterkorn was morally responsible for the scandal? (10 marks) Question 2 Answer the following question USING YOUR OWN IDEAS AND THOUGHTS and based on your recent readings and references from different searching sources: If you have been hired as the New CEO Matthias Muller of Volkswagen. Identify FIVE potential innovative CSR projects and ideas that could be in place to increase future trust and profit? (25 Marks) Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS Conclusion (5 marks) References of your Case Study (5 marks) Citation: Last page of your assignment must include the complete list of the references used during the completion of your assignment with all the details. Format for referencing from print media like books: FAMILY/SURNAME, Initials. (Publication year in brackets) Book title - italicised or underlined. Series title and volume if applicable. Edition - if not the first. Place of publication: publisher. Example: NEVILLE, C. (2010) The Complete Guide to Referencing and Avoiding Plagiarism. 2nd Ed. Maidenhead: Open University Press. Format for referencing from electronic sources: Author of website FAMILY/SURNAME, Initials or WEBSITE name if no author is available. (Year - in brackets) Title of website in italics or underlined. Any numbers if necessary or available if website is part of a series. [Online in square brackets] Available from: URL. [Accessed: followed by date in square brackets]. Example: BBC NEWS. (2008) Factory gloom worst since 1980. [Online] Available from: http:// news.bbc.co.uk/1/hi/business/7681569.st m. [Accessed: 19th June 2012]. Report Format (5 marks) Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Member of: CCIG FEDE FSEP AGEP ACICS Grading Rubric Case Study Components Marks Obtained Allocated Marks Introduction The introduction should generally include three key types of information: Background, Aims/Objectives and Scope Write between half to full page introduction about the current case study. Show the company profile in brief and then the current problem and dilemma it makes. Explain the pathway of your assignment by rephrasing the assignment questions as different parts/sections of the assignment. 5 Q1- A/ Evaluate the scandal impact on People (include all types of stakeholders) 15 Q1- B/ Evaluate the scandal impact on the Profit (current and future) 15 Q1-C/ Evaluate the scandal impact on the Planet. (Search for more data on its effects.). 15 Q1- D/ Debate whether or not the CEO Martin Winterkorn was morally responsible for the scandal? 10 Q2: Identify FIVE potential innovative CSR projects and ideas that could be in place to increase future trust and profit? 25 Conclusion Conclusions must include three main parts: Aim, Brief Summary and Final Comments considering future. Please give more than half page on the total assignment. A good conclusion will show that you have successfully answered the question and know how to apply it. Suggest results or consequences or make a call for some sort of action. Make predictions or suggest solutions, if appropriate). Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 5 E: info@gbs-ge.ch W: gbs-ge.ch Accredited by: IACBE ECBE EDUQUA Referencing Harvard referencing format is followed for writing, citations and bibliography. Intext - referencing and Citations must be included. 5 Report Format Margins, Font, Line Spacing, Alignment, Pagination and Headings 5 Total Member of: CCIG FEDE FSEP AGEP ACICS 100 Av. Blanc 53, 1202 Geneva, SwitzerlandT: +41 22 906 94 94 F: +41 22 906 94 90 E: info@gbs-ge.ch W: gbs-ge.ch