Professional Conduct and Business Ethics
Professional conduct that serves as the standard for all business activities and supports the company's culture is referred to as business ethics. The moral values ensure a professional relationship with the clients that fosters loyalty and trust. Companies utilize ethics to determine how their staff engage with clients on their behalf. The ethics give the workers a comfortable working atmosphere free of any kind of harassment. The interactions between the industry, the clients, and the personnel are all impacted by ethics. The installation of software that may lower emissions during testing was unethical behavior on the part of the Volkswagen Company. even though it didn't have the information that was displayed since the software had corrupted it buy a car that did not have the presented information. Such behavior is very unethical since it entails deception of the customers.
Ethical Business Practices and Providing Correct Information
Ethical business practices dictate that the business has to provide the customers with the correct information on the product (Ferrell, Fraedrich & Ferrell, 2017). During the testing of the vehicles, the vehicles showed that the emissions were lower than the actual value. The business, through the employees, installed software that corrupted the measured emissions showing a diminished value. The firm collaborated with the employees towards cheating the customers by selling vehicles of lower standards as compared to the expected quality. The situation is very different at Volvo Company. The company received the award for the "Most Ethical Company" in the year 2017 due to a strict adherence to the policies in the business. The company has a strict policy towards the ethical interaction between the clients and the employees. The company provides training for the employees on how to interact with the clients in representing the company.
Different Perceptions of Business Ethics
Therefore, the company does not recommend any instances where the employees present the customers with deviated information for improving the sales. The two companies represent different perception towards business ethics. One company trains the employees to adhere strictly to business ethics while the other allows the employees to provide misleading information to the customers. Despite the competition in the field, Volvo Company ensures all the employees access accurate information on all the vehicles before buying. Such ethical practices ensure honest practices within the business. The customer develops a strong loyalty for such enterprises due to the honesty showed in the industry (Bredeson, 2012). However, Volkswagen Company lied to the customers leading to loss of trust with the customers. Such actions can make the company bankrupt due to loss of customers from the practice.
Unethical Behavior for Increased Sales
The reason behind the immoral business practice is to increase the sales of the vehicles in the company. Volkswagen Company was introducing the cars to the market in the United States. However, the emission rates were high especially with the ongoing campaign towards global warming. Therefore, the company installed software that could reduce the emission during the testing phase. The United States is very strict on the acceptable emissions of the vehicles accepted into the country. The company installed the software to ensure the nation allows the car into the market. It further capitalized on the reduced emission to beat competition from other companies producing diesel vehicles. The alteration affected over 800,000 vehicles in Europe and 11 million vehicles worldwide. The practice shows that the business broke the law concerning the allowed conditions of the vehicles.
Ethical Business Practices and Honesty
Business ethics entail that the business must uphold integrity in all interactions with customers. Fitting the device on the vehicles translated to dishonesty from the company. Ethical business practices attract more clients to the business due to the impeccable honor of the investment in the market. Unethical practices keep customers away due to fear of fraud from the employees (Greenwald, 2014). In Volvo Company, the employees observe the Competition Law strictly. The company does not invest in unethical practices as a means of increasing the sales from the company. Unlike the Volkswagen Company, Volvo directs all the employees to adhere to the Compliance and Ethics Program, which ensure ethical practices within the business. As such, Volvo Company is free of scandals that might taint the image of the company in any market. The award goes a long way towards growing customer confidence in the company improving loyalty from the clients.
Consequences of Unethical Behavior
After the revelation of the unethical behavior from the company, the business invested on rectifying the mistake by recalling the vehicle. The recall resulted in massive losses for the company due to the financial implications of the recall. Unethical behaviors might be very costly for the company. In Volkswagen, the Chief Executive Officer resigned as a way of taking responsibility for the conduct. During the time of the crisis, the customers avoided the company and the number of operations reduced. More so, the EPA fined the company for any vehicle sold bearing the device. Apart from financial losses, the scandal tainted the image of the company in breaking the Competition law (Bloom & Gundlach, 2001). Volkswagen instilled the culture of unethical business practices to the employees leading to the massive manufacture of the substandard vehicles.
Ethical Practices at Volvo Company
In Volvo, the management of the company understands the value of ethical practices in creating and maintaining good relations with the shareholders. Apart from the training of the employees, the managers undergo extensive training that aims at fostering good relationships with the customers and employees. The training offered to the managers ensures that they understand the expected ethical practices and uphold them in all the dealings. The situation is contrary to the traditions at Volvo. In the company, all the Chief Executive Officer had prior knowledge of the software but allowed the employees to manufacture the vehicles in the deviated form. Therefore, the culture of unethical behavior originated from the management towards the junior employees. At Volvo, the training offered to both the administration and the employees communicates the importance of ethical business and sensitizes the entire workforce towards ethical practices.
The Importance of Ethical Business Practices
Ethical business practices ensure honest dealings between the company and the customers. The ethical practices build a strong relationship with the clients leading to loyalty and profits for the firm. However, unethical methods might reduce the productivity of the business due to massive losses incurred by the company in the form of lawsuits from the customers. It is immoral for the industry to provide false information to the clients with the aim of improving the number of sales and beating the competition in the market. Volkswagen Company lied to the customers concerning the level of carbon emission generated by the diesel vehicles. At first, the information led to high sales. However, the revelation of the truth tainted the image of the company and led to high loses. On the other hand, Volvo Company enjoys high sales and awards for being the best company in observation of ethical practices. The firm invests in the regular training of all the employees to ensure strict adherence to business ethics for stronger relations with the clients.
References
Bloom, P. & Gundlach, G. (2001). Handbook of marketing and society. Thousand Oaks, Calif: Sage.
Bredeson, D. (2012). Applied business ethics. Mason, Ohio: South-Western/Cengage Learning.
Ferrell, O., Fraedrich, J. & Ferrell, L. (2017). Business ethics : ethical decision making and cases. Boston, MA: Cengage Learning.
Greenwald, H. (2014). Organizations : management without control. Los Angeles: SAGE.
