Business and Government in Global Context

nName

nInstitution

nCourse

nDate

n

nStatement of Arguments

nSome companies fail to manage their emission in the environment leading to pollution. Consequently, it affects the ecosystem and humans life. Some motor vehicle release carbon monoxide, sulphur dioxides, nitrogen oxides and volatile organic compounds from their exhausts, which leads to environmental pollution (Blackwelder, Coleman, Colunga-Santoyo, Harrison and Wozniak 2016). Companies are bound by corporate social responsibilities, which encourage them to maintain safer and clean environment in their operations and products. Various countries have also enacted a wide range of rules and regulations aiming to control the emission of dangerous gasses in the environment from companies or their products (Zhang, Veijalainen and Kotkov 2016). For instance, the United States has introduced Clean Air Act, which provides a limit of gases to be emitted from industries. Furthermore, the legislation is intended to enhance the air quality of its citizens. Similarly, other countries such as the European Union have also formulated laws, which aim to protect the air quality of the member countries. In this regard, most countries have adopted the emission trading whose main objective is to reduce emissions by offering incentives through economic activities (Oldenkamp, van Zelm and Huijbregts 2016). Climate change has become a major issue across the world hence it is important for stakeholders to initiate trading system that would discourage companies from releasing large amount of greenhouse gases into the environment (Holland, Mansur, Muller and Yates 2015). Reports have indicated that Volkswagen Company has violated the provisions of Clean Air Act by using a program that controlled emission of NOx during regulatory testing but could not meet the set standards during the normal daily driving. Consequently, the company was involved in an emission scandal (Lane 2016). Research highlighted that Volkswagen motor vehicles were emitted more NOx in their eleven million vehicles across the world. In the United States approximately half a million Volkswagen vehicles were involved in environmental pollution through emission (Terry-Armstrong 2016).

nCase study: Volkswagen Group

nVolkwagen Company is a Germany giant automaker, which was reported to have violated the emission regulations in the United States (Carvalho 2016). The Environmental Protection Agency in the country noted that Volkswagen vehicle had software in their engines, which could sense when the vehicle was being tested in order to cheat the emission standards. The Environmental Protection Agency also tested approximately 450 000 cars which include other Volkswagen brands such as Audi, Passat, Golf, Beetle, and Jetta (Holland, Mansur, Muller and Yates 2015). The company management has accepted that approximately 11 million vehicles across the world. According to analysts, these vehicles could release approximately 1 million tons of greenhouse gases annually (Hankel 2015). A number of scholars at West Virginia University decided to conduct a test on different diesel vehicles in partnership with International Council on Clean Transportation (ICCT) (Verchick and Steinzor 2015). They identified three diesel vehicles, which included BMW X5, Volkswagen Jetta and Passat, which could test on real-world driving (Lane 2016). Prior to this test, all the vehicles were permitted under the California Air Resources Board because they were releases NOx below the limits (Zhang, Veijalainen and Kotkov 2016).. The emissions in Volkwagen Jetta were 15-35 percent higher than the limits while the Passat had exceeded by 5-20 percent. Moreover, the emissions of greenhouse gasses from these Volkswagen models surpassed legal standards in the United States and in Europe (Blackwelder, Coleman, Colunga-Santoyo, Harrison and Wozniak 2016). Therefore, there were abnormal levels of emissions in the country. Therefore, the company was violating the set standards pursuant to Californian gas emission limits as well as that of EPA. Both standards suggest that emissions should not surpass 0.043g/Km of nitrogen oxide for all engines at their complete useful life. The United states have one of the strictest regulations of NOx gases in the world (Oldenkamp, van Zelm and Huijbregts 2016). The Volkswagen had installed a device, which could defeat the testing systems in the car.

nPower Theories

nParsons theory of authoritative conceptualization of power suggests that power is the comprehensive ability to protect the operations of binding roles by unit in a structure of collective society when the duties are legitimized in terms of producing collective goals (Stewart 2001). In addition, it occurs when there is a presumption of implementation by negative circumstantial sanctions. In this regard, parsons argue that authority and power equation has attempted to differentiate different aspects of conception and mobilization producing from consensus (Brock, Thomas and Raby 2011). Manns theory of Power as the complexities of ‘caging, explains the four sources of power in the society, which include political, military, economic, and ideological factors. These factors provide a network of relationships in the community aiming to accomplish human objectives and goals (Stewart 2001). According to Manns the exercise of power is affected by communication, logistics, control and organization in the process of controlling and managing territories, materials and people (Calhoun ed. 2012). The four sources provide an option in the control of society. Manns theory shares a common argument with Giddens theory with regard to power is not considered a resource. Additionally, this theory suggests that a person in power uses strategies and teleology in order to retain the capacity to accomplish objectives and goals via knowledge of the environment (Brock, Thomas and Raby 2011). Giddens Theory of Power as Dependency and Domination in the theory of power as dependency and domination proposes the idea of social power as a classified power (Stewart 2001). According to Giddens, power is practiced with regard to interaction, which can be categorized into narrow and wide senses. In this regard, power in wide sense explains a transformative ability of social agency where such ability means the capacity of the main player to interfere in a number of events aiming to change the course.

nCase study support

nAfter Volkswagen diesel engines were implicated of violating the set limits on environmental protection, the management accepted that indeed their vehicles were fitted with devices, which could allow cheating during tests on emissions (Verchick and Steinzor 2015). In addition, the vehicles seemed more efficient than they truly were. Furthermore, according to Zhang, Veijalainen and Kotkov (2016) the software permitted the vehicles to pass the test in the environmental labs but could not work when on road. Therefore, the car produced more nitrogen oxides and nitrogen dioxides than allowed by the regulations (Zhang, Veijalainen and Kotkov 2016). The software also used an algorithm, which utilized data concerning patterns of steering, use of engine and atmospheric pressures especially under inspection. Moreover, the company used the device to change the levels of carbon dioxides during lab scrutiny. Consequently, the company was contributing to high level of greenhouse gases that lead to global warming (Holland, Mansur, Muller and Yates 2015). In the modern automobile manufacturing industry especially in diesel engines, the vehicle is installed with a chamber, which holds a certain chemical substance referred to as urea. Therefore, the exhaust gases are converted into water and less poisonous nitrogen (Lane 2016). In addition, the urea also works as catalytic converter, which is fitted in petrol engines. Nonetheless, trade-off exists between the performance of engines and control of pollution. Controlling emissions suggests that efficiency of fuel is reduced which increases the cost of driving (Carvalho 2016). Due to this violation of Clean Air Act in the United States, Volkswagen was fined approximately $18 billion which means that the firm has to pay close to $37 000 per car annually (Barrett, Speth, Eastham, Dedoussi, Ashok, Malina and Keith 2015). Furthermore, the company would also be faced with criminal charges after the FBI and Department of Justice in the US started criminal investigations.

nFurthermore, the Civil Groups and the European Union has promised to begin file lawsuits against the company (Blackwelder, Coleman, Colunga-Santoyo, Harrison and Wozniak 2016). Currently, Volkswagen has allocated €7 billion to cater for charges relating to environmental degradation. After the scandal was exposed, the company experienced huge losses because its market shares decreased within days (Oldenkamp, van Zelm and Huijbregts 2016). Volkswagen CEO at the time of the scandal Mr. Martin Winterkorn was forced to resign in order to allow time for investigations. The executives also formally accepted that it was a plan to deceive the emission limits in the US and in Europe (Klier and Linn 2016). The official reports from the companys records indicated that more than 11 million vehicles were involved in the emission scandal. In this case, the company set aside $7 billion to cover for the cost of repairing these vehicles (Zhang, Veijalainen and Kotkov 2016). Therefore, the company intended to recall the entire affected vehicle. In this case, 8 million VW diesel cars would be recalled with approximately 3 million cars affected in Germany alone. The customers will not be required to pay for the repair of the cars aiming to meet the legal requirement without affecting the consumption of fuel or performance of engines (Carvalho 2016). Apart from global warming, the company contributed to massive negative health impacts across the world. For instance, violation of emission limits led to deaths and non-fatal effects on health (Verchick and Steinzor 2015). An independent research conducted in the US from 2008 to 2015 showed that excess automobiles gasses emissions caused about 60 premature deaths especially cars fitted with ‘cheat device in the United States. The majority of these deaths (88 percent) are caused by particulate pollution while 12 percent of these deaths are caused by ozone (Terry-Armstrong 2016).

nThe research also revealed that when these engines are compliant with emission limits, they are able to prevent further 130 premature deaths by 2017 (Oldenkamp, van Zelm and Huijbregts 2016). Similarly, nitrogen dioxide is a leading source of respiratory illnesses such as emphysema, bronchitis and asthma. Nitrogen oxides also increase the impacts of particulates such as soot that leads to heart problem (Coghlan 2015). In this respect, more than 50 thousand people are killed annually due to pollution from particulate matter. Environmental pollution also cause 45 000 DALYS and loss of life estimated to be more than $40 billion (CMA 2016). On the other hand, NOx is an environmental pollutant, which leads to acid rain. In addition, it contributes to smog that affects visibility. Nitrogen oxide and nitrogen dioxides are not part of greenhouse gases (Zhang, Veijalainen and Kotkov 2016). Nitrogen dioxide is also contributor of ozone at the ground level. Apart from the United States, various countries such as Australia, Belgium, Brazil, Canada and EU have stated investigations against Volkswagen for abuses of safety and consumer standards (Zhou 2016). Most governments have initiated investigations into the Volkswagen scandal to determine if the deceiving software was fitted in the vehicles sold in their markets (Blackwelder, Coleman, Colunga-Santoyo, Harrison and Wozniak 2016). For instance, in Brazil, the authorities established that approximately 20 thousand vehicles were fitted with these devices to evade emission tests in labs. In china, the agency that control quality of vehicles announced that approximately 2 000 units of Passat SUVs and Tiguan sedans would be recalled to repair the engines (Hermans and da Cruz Caria 2016). The European Union has also commenced a broad range of investigations across Europe. The European Parliament passed a legislation asking its member country to formulate an authority, which would supervise emissions in cars (Terry-Armstrong 2016).

nThe European Investment Bank (EIB) was also initiating investigations against Volkswagen, which would lead to recalling of its loan from the automaker. In German, the government has launched investigations against Winterkorn Martin, who served as VW CEO. Other staff in the company was also under investigations. The UK government responded by formulating a select committee which would investigate the violation of emission standards in Volkswagen company. After investigations, report indicated that most diesel engines produced pollutant gases up to 15 times more than the previous reports (Rhodes 2016). Other automobile manufacturers producing diesel engines such as Mercedes-Benz, Land Rover, General Motors, Chrysler, and BMW were under strict scrutiny (CMA 2016). According to Sayer (2012), Parsons theory of an authoritative conceptualization of power, focuses on coercive system of power, which select the suitable way to accomplish a goal, or limit which has been developed by a regulatory body (Sayer 2012). Based on this theory, organizations and the government in power have the ability to realize the set limits and goals by initiating a consensus between involved parties (Stewart 2001). The government in power such as the EPA or EU has the ability to organize resources in the social structure to accomplish collective objectives especially in the protection of environmental pollution. In addition, the decision-making ability of those in power should pay close attention on the collective process prior to taking superiority over those who are governed (Blackwelder, Coleman, Colunga-Santoyo, Harrison and Wozniak 2016). Therefore, this theory suggest that Volkswagen group should initiate an engagement with the various authorities in power in order to resolve the issue amicably and serve the interests of all parties involved (Schmidt 2016). Giddens theory of power as domination and dependency is very vital in explaining social power with regard to Volkswagen pollution scandal. According to this theory, the authorities should use a transformative ability of social action (Stewart 2001).

nMoreover, there should be interaction between those in power and the governed because collaboration between the two parties helps to solve the issue at hand (Calhoun ed. 2012). In this regard, the government actions across the world must ask for efficient communication and relations with Volkswagen Group aiming to promote transformation in the industrial sector. Giddens also argue that reliance on the perspectives of others enhances the quest of compliance in the environmental regulations and legislations (Sayer 2012). The theory perceives power with regard to the achievement and utilization of capabilities and resources witnessed in subordination and tussles. Based on the structuration theory, power is produced in and through the duplication of systems of domination. The assets, which establish systems of domination, involve authoritative and allocative (Zhou 2016). Therefore, in order to solve the issue of environmental pollution posed by Volkswagen group, the authorities and those in power should use strategies that promote social justice in the environment (Oldenkamp, van Zelm and Huijbregts 2016). Mann Michael explains the theory of power as the complications of caging which suggest that social examination cannot be used in association to different ideas of community as a simple, unitary entirety but instead in association of ideas of societys different networks of power in the community (Stewart 2001). This means that power is formulated via intersecting and overlapping networks in the community, which determine the ability of persons in power to establish their authority over others. The interconnection can be described in term of four factors of social authority, which include political, military, economic, ideological associations (Terry-Armstrong 2016). Conversely, power in less wider sense I interactive, a relational property and may be referred to as the ability to protect products where the understanding of these products relies upon the action of other people (Sayer 2012).

nThese factors of power are described as overlapping linkages of social interface. Moreover, factors of social authority are also official, organizations ways of achieving human objectives. According to Manns theory, many systems of power suffer from communication, logistics, control and organization, which increases the ability to control and organize territories, materials and people. Based on this theory, power is not considered an important resource. Therefore, the power analysis involves two systems such as via recognition of the main substitute media. Additionally, it includes sources of power via which power is practiced in the formulation of a methodology to promote the research of such media (Rhodes 2016). According to the arguments of this theory, government actions in the US, EU and the rest of the world should exercise power by formulating appropriate mechanism to curb violators of environment such as Volkswagen Group (Zhou 2016). Furthermore, the government should adopt new technology, and strategies aiming to eliminate polluters of the environment. Similarly, that in power has the capacity to attain and pursue goal via proper knowledge of the environment when exercising the social power (Calhoun ed. 2012). Social power includes two aspects, the collective and distributive issues. Collective power refers to the ability of people to collaborate aiming to increase their joint authority over nature or others (Sayer 2012). On the other hand, distributive power means the mastery practiced over other persons. In this regard, it is important for global governments such as USA, UK, China and Germany to exercise their power aiming to promote social good (Goel 2015).

nSummaries

nVolkswagen Group was involved in a pollution scandal after it emerged that the company was using software in its diesel engines that cheated on the actual emission level of poisonous gases. Reports indicated that the level of emission was 40 times higher as compared to the US emission limits (Prasetya and Laksana 2015). Approximately 11 million vehicles were implicated to be releasing NOx and CO2 gases contrary to the provisions of the EU and US. Some of its brands, which had the software, include Passat and Jetta. After the Environmental Protection Agency (EPA) exposed this issue, the company admitted that a devise was fitted in its vehicles, which assisted the car to detect when it was under scrutiny (Zhou 2016). Therefore, the emissions during the normal road driving were different as compared to that in the lab. Consequently, the firm faces huge amount of penalties for violating the emissions limits in various countries across the world. Government action has re-visited the methods of investigating cars emissions in order to determine what happens during normal driving tests. According to Sayer (2012), Manns theory on power, it is important for both the government and the Volkswagen Company to establish an association aiming to promote suitable social good in the society (Sayer 2012). The company should mitigate the effects of pollution. In addition, it should use appropriate technology to repair the effects of environmental pollution (Goel 2015).

nConclusion

nEnvironmental pollution is a major issue facing the current world because most of the large international organizations are involved in this. Various governments across the globe have introduced measures aiming to reduce the effects of environmental pollution (Georgeevski and AlQudah 2016). For instance, emission limits from cars has been implemented which compel the automobile manufacturers to produce engines that meet the NOx and COx limits (Prasetya and Laksana 2015). Moreover, the authorities have introduced the trade-offs aiming to create an incentives for large emitters of dangerous gases to produce low amount of gasses in the environment. Air pollution is the leading cause of health challenges such as death and respiratory and cardiovascular diseases. Volkswagen was involved in an environmental pollution scandal when it emerged that the firm had installed software, which enabled the vehicle to cheat when under investigations (Krall and Peng 2015). According to environmental analysts, Volkswagen brands could be causing additional 1 million tons of Cox and NOx annually in the environment (Barrett, Speth, Eastham, Dedoussi, Ashok, Malina and Keith 2015). Although the market share of the company has reduced since the scandal was revealed, the company is required to repair more than 11 million vehicles, which had been fitted with the cheating devise. Furthermore, the company was forced to pay penalties worth $37 thousands per vehicle per year in the United States aiming to mitigate the effects environmental pollution (Tuttle 2015). Various power theories propose that the government should initiate stricter measures to curb the violator of emission limits in the world.

n

nReferences

nBarrett, S.R., Speth, R.L., Eastham, S.D., Dedoussi, I.C., Ashok, A., Malina, R. and Keith, D.W., 2015. Impact of the Volkswagen emissions control defeat device on US public health. Environmental Research Letters, 10(11), p.114005.

nBlackwelder, B., Coleman, K., Colunga-Santoyo, S., Harrison, J.S. and Wozniak, D., 2016. The Volkswagen Scandal.

nBrock, D.R., Thomas, M.P. and Raby, R., 2011. Power and Everyday Practices. Cengage Learning.

nCalhoun, C. ed., 2012. Contemporary sociological theory. John Wiley & Sons.

nCarvalho, H., 2016. The end of diesel-powered cars?. The Lancet Respiratory Medicine, 4(1), pp.e2-e3.

nCMA, C.C.V., 2016. The Volkswagen Problem. Strategic Finance, 97(8), p.15.

nCoghlan, A., 2015. The curious case of NO x pollution. New Scientist, 227(3041), pp.10-11.

nCue, A., 2015. Volkswagens Diesel Emission Scandal “Dieselgate”. Risk Management, 62(10), p.4.

nGeorgeevski, B. and AlQudah, A., 2016. The Effect of the Volkswagen Scandal (A Comparative Case Study). Risk Management, 62(10), p.4.

nGoel, A., 2015. Volkswagen: The Protagonist in Diesel Emission Scandal. South Asian Journal of Marketing & Management Research, Forthcoming.

nHankel, A., 2015. Detected and Defeated. Quality Progress, 48(11), p.12.

nHermans, M. and da Cruz Caria, P., 2016. ‘The Volkswagencase; morally permissible?.

nHolland, S.P., Mansur, E., Muller, N. and Yates, A., 2015. Damages and expected deaths due to excess NOx emissions from 2009-2015 Volkswagen diesel vehicles. Environmental Science & Technology.

nKlier, T. and Linn, J., 2016. Comparing US and EU Approaches to Regulating Automotive Emissions and Fuel Economy. Busidate, 24(1), p.9.

nKrall, J.R. and Peng, R.D., 2015. The Volkswagen scandal: Deception, driving and deaths. Significance, 12(6), pp.12-15.

nLane, E.L., 2016. Volkswagen and the High-tech Greenwash. European Journal of Risk Regulation, 7(1).

nOldenkamp, R., van Zelm, R. and Huijbregts, M.A., 2016. Valuing the human health damage caused by the fraud of Volkswagen. Environmental Pollution, 212, pp.121-127.

nPrasetya, S. and Laksana, B., 2015. Volkswagen Emission Scandal (Jessica Natalie). Environmental Health Perspectives, 124(1), p.A19.

nRhodes, C., 2016. Democratic Business Ethics: Volkswagens emissions scandal and the disruption of corporate sovereignty. Organization Studies, p.0170840616641984.

nSayer, A., 2012. On Critique: A Sociology of Emancipation. Contemporary Sociology: A Journal of Reviews, 41(6), pp.798-800.

nSchmidt, C.W., 2016. Beyond a One-Time Scandal: Europes Onging Diesel Pollution Problem. Environmental Health Perspectives, 124(1), p.A19.

nStewart, A., 2001. Theories of power and domination: the politics of empowerment in late modernity. Sage.

nTerry-Armstrong, N., 2016. The Volkswagen Scandal-The high cost of corporate deceit. Busidate, 24(1), p.9.

nTuttle, H., 2015. Volkswagen Rocked by Emissions Fraud Scandal. Risk Management, 62(10), p.4.

nVerchick, R.R. and Steinzor, R., 2015. VW and GM Scandals Show Why Regulation Matters.

nZhang, B., Veijalainen, J. and Kotkov, D., 2016. Volkswagen Emission Crisis: Managing Stakeholder Relations on the Web. In WEBIST 2016: Proceedings of the 12th International conference on web information systems and technologies. Volume 1, ISBN 978-989-758-186-1. SCITEPRESS.

nZhou, A., 2016. Analysis of the Volkswagen Scandal Possible Solutions for Recovery.