Gourevitch cs zhou Copyright No quotation or citation without attribution UCSD - GPS CASE - Analysis of the Volkswagen Scandal Possible Solutions for Recovery By Angie Zhou School of Global Policy and Strategy UC at San Diego Prepared for Professor Peter

Copyright No quotation or citation without attribution UCSD - GPS CASE - Analysis of the Volkswagen Scandal Possible Solutions for Recovery By Angie Zhou School of Global Policy and Strategy UC at San Diego Prepared for Professor Peter Gourevitch Course on Corporate Social Responsibility Winter CCopyright No quotation or citation without attribution Analysis of the Volkswagen Scandal Possible Solutions for Recovery The Volkswagen scandal is a notorious example of how corporations can shape the ethical and political issues of the environment The Volkswagen Group that is headquartered in Wolfsburg Germany owns Bently Bugatti Lamborhini Audi Porsche SEAT and ?koda Volkswagen ? s presence as a global company made this a signi ?cant event not because of the legal and ?nancial repercussions that occurred from di ?erent countries but because of the lasting damage on society and the environment that cannot be fully perceived Volkswagen previously had a goal of becoming the world ? s largest automaker by but the scandal caused the company to lose one third of the company ? s market cap In an attempt to compensate for the emissions violations Volkswagen ordered a voluntary recall issued a public apology and the CEO along with other directors of the ?rm resigned The company is also facing lawsuits and criminal charges and the future of the company looks grim In order to analyze how such a global company could commit fraud for so long on such a big scale it is bene ?cial to view this case as a problem of regulatory capture involving information asymmetry issues with oversight and private governance This analysis attempts to examine the problems of social concern presented by the behavior of Volkswagen in the international economy and provide some recommendations to increase the system of accountability within the global auto industry Action Forcing Event The action forcing event to this whole story began with a group of scientists at West Virginia University who were testing diesel cars on the road The International Council on Clean Transportation a nonpro ?t tried to provide independent research to environmental regulation Cli ?ord Atiyeh Everything You Need to Know About the VW Diesel Emissions Scandal Car and Driver Accessed March http blog caranddriver com everything-you-needto-know-about-the-vw-diesel-emissions-scandal CCopyright No quotation or citation without attribution government agencies It hired West Virginia University to perform standard emissions tests on diesel cars Volkswagen had been promoting their diesel cars to be one of the mots environmentally friendly and fuel e ?cient vehicles on the market which generated some of the highest sales However research assistant professor Arvind Thiruvengadam noticed dramatically di ?erent results from Volkswagen ? s claim of low emissions The team kept repeating the study in order to con ?rm their ?ndings Thiruvengadam stated ??And then I mean we did so much testing that we couldn ? t repeatedly be doing the same mistake again and again ? Sonari Glinton How a Little Lab in West Virigina Caught Volkswagen ? s Big Cheat NPR Accessed March www npr org how-a-little-lab-in-westvirginia-

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