TITLE:
Analysis of Volkswagen’s Diesel Performance Scandal
AUTHORS:
Jiayang Cheng
KEYWORDS:
Volkswagen, Reputation Risk, Fraud, Scandal
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.11 No.12,
December
7,
2023
ABSTRACT: The
research aim of this study is to investigate the reputation risk of the
Volkswagen’s diesel performance scandal. Many Volkswagen cars being sold in
America were found to have a “defeat device”—or software—in
diesel engines that could detect when they were being tested, changing the
performance accordingly to improve results. This diesel performance scandal is
a deliberate fraud on customers with the purpose of improving sales volumes,
which brings reputation risk for Volkswagen. This study uses case study method
to make analysis of this event and reputation risk. It is structured as the
following: firstly, background and Volkswagen’s fraud scandal event is
described. Then, the concept of reputation risk is introduced. Next, Volkswagen’s case is relevant to reputation risk, why the scandal
happens, why Volkswagen’s fraud is hidden and solutions that Volkswagen provides for the fraud event are discussed. Finally, several
recommendations are provided for Volkswagen’s fraud event.