Volkswagen's Clean Diesel Dilemma

by: Andrew Hoffman

Publication Date: March 1, 2016
Length: 24 pages
Product ID#: 1-430-484

Core Disciplines: International Business, Leadership/Organizational Behavior, Marketing/Sales, Social Impact, Strategy & Management

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Teaching Note

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Martin Winterkorn, CEO of Volkswagen Group, has just been notified that the U.S. Environmental Protection Agency and California Air Resource Board will begin investigating claims that some of the company’s diesel engine vehicles have violated emissions standards. It seems that workers installed defeat devices on the vehicles, allowing them to pass emissions tests and meet the tough standards of the U.S. market. The questions students will need to answer are: Who is responsible? And, does Volkswagen take sustainability seriously or has it just been green-washing all along?

Teaching Objectives

After reading and discussing the material, students should:

  • Illustrate how corporate culture affects a company’s values with respect to the environment.
  • Hypothesize how companies can balance market pressures, business objectives, and environmental responsibility.
  • Explain how regulatory entities affect a company functioning in multiple markets.
  • Justify the responsibilities, if any, a company has with regard to the environment and public health.
  • Formulate a decision-making process for future crisis.