Business Society and the Planet

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Business, Society and the Planet

BUGEN5930 Business, Society and the Planet

Part A – Business Values Assessment report

This activity is based on the exercise on page 226 of ‘Business Ethics’ (Crane & Matten, 2010) – a copy of the relevant pages are available on the course Moodle page.

You are required to consider and discuss the companies as a group, but must submit your responses to the questions as individuals.

  1.  Select two companies that produce social reports and whose values are identified on their websites or in other company documents (that are publicly available). At least one of these companies must have had the social responsibility and/or performance of their business activities queried that could present an ethical dilemma. 

Chosen Companies are: VOLKSWAGEN & TOYOTA

  1. As an individual, you are required to submit responses to the following questions:
  1. Identify and describe the two companies you have researched; the countries and/or industries in which they operate. (15 marks)
  2. What differences are evident between the two companies in terms of the range of issues dealt with in their social reports and the depth of coverage on specific issues? (15 marks)
  • To what extent can these differences be explained by the country or industry differences? What other explanations might there be? (15 marks)
  1. Assess the apparent quality of the social accounting approach utilized by each company according to Zadek et al.’s (1997) criteria. (15 marks)
  2. Discuss the extent to which the social reports provided by these companies reflect their stated values. (15 marks)
  3. Briefly reflect on your groups’ discussions of these companies. In what ways did the ideas presented by your group confirm your own conclusions, influence your thinking and/or present another perspective to you? (15 marks)
  • A score (10 marks) will be allocated for presentation, written expression, spelling, grammar, punctuation and referencing.

 Word limit: 2000 words

Referencing:  You are required to follow the APA style of referencing for this task. There is no set number of references required. It is recommended, however, that you independently seek out resources in addition to those provided by the lecturer.

 Due Date Wednesday 3rd May

Students are required to upload their assignment as a Word doc (with the FedUni Business School – Assignment Coversheet attached) via the relevant Turnitin link on the course Moodle page, as well as the regular link for assignment submission.

 Expert Partial Solution 

Description of the two companies

Volkswagen (VW)

It is a vehicle manufacturing company that is based in Germany with its head office in Wolfsburg (Wiese, 2009).  Reports regard it as one of the largest and most advanced car factories in the world. It is a German automaker which began its operations on May 28, 1937. The German Labor Front established the firm. It is the Volkswagen Group’s flagship marque. The company operates in the automotive industry in Germany (Kubik, 2011). It avails its automobiles worldwide. For instance, the company has factories in most parts of the world, either manufacturing or assembling vehicles for local markets. They include Mexico, the US, China, Slovakia, India, Russia Indonesia, Malaysia, Argentina, Brazil, Portugal, Poland, Spain, Bosnia, the Czech Republic, Herzegovina and South Africa. For a long time, VW has had over 20 percent market share with its core markets being Germany and China.

Toyota Motor Corporation

It is a Japanese automotive manufacturer whose headquarters are in Toyota, Aichi, Japan (Borowski, 2010). The firm was established by Kiichiro Toyoda in 1937. It was as the spinoff to create automobiles from his father’s company Toyota Industries. The company manufactures vehicles under five different brands which include the Toyota brand, Lexus, Hino, Ranz, and Daihatsu. It has factories in many parts of the world which either produce or assemble vehicles for local markets. They include; Australia, Japan, India, Canada, Sri Lanka, Indonesia, South Africa, Poland, Colombia, Turkey, the US, the UK, Brazil, France, Portugal. Most new markets are Mexico, Argentina, Malaysia, Czech Republic, Thailand, Egypt, Pakistan, China, Egypt, Vietnam, the Philippines, Venezuela, and Russia.

 Volkswagen’s social reporting/performance issue

The firm deliberately set out to formulate a strategy to circumvent emissions control with the aim of guaranteeing itself an unfair upper hand over the rivals in 2015. It intended to obtain the world’s number one car ratings, principally by the firm’s supposedly environmentally friendly vehicles while at was poisoning the planet. VW had developed particular lines of software that can switch the engine from test mode to “dirty mode” and vice versa. The scandal led to the resignation of the chief executive officer, Audi’s head of R+D and director of Porsche engine after downplaying the ethical standards of engineering thus suggesting that the Corporate Social Responsibility (CSR) was aware of the malpractice. It is assumed that VW did all it could result in an attempt to cover up for the highly contaminating nature of their diesel engines. It is perceived that the company was making CSR a marketing exercise. The fact that VW cars emitted 40 times the legal limit of nitrogen oxide, it still continued with the activity of producing the defective cars and releasing them into market worldwide. The firm resolved that it did not matter whether its brand of cars intoxicated the world as long as doing so made it the world’s leading car manufacturer. The VW case presents a stark on the need to reinvent CSR (Sherman, 2016). The scandal highlights the failings of capitalism relating to the system that is blind to the reality of the future and explicit unsustainable future.

 Evident differences between the two companies on social, environmental and economic issues addressed in their respective reports.

VW presents its report in an explanatory manner by making things clear and giving valid reasons for them. Toyota Company’s report follows a comprehensive format that provides a detailed account of its areas of focus.

Environmental Issues

Regarding the development and production, VW preferably designs a car from the very beginning in a manner that it can be manufactured, driven and one day recycled in a way that enhances environmental protection. The reports state that environmental experts are engaged in the initial design operations to ensure that the cars’ entire life cycle achieves the most efficient value concerning climate and health protection and conservation of resources. Toyota seeks to use sustainable materials minimize the utilization of the substance of concern in producing their vehicles (Jeffrey, 2010). The report also addresses the issue of use and recycling. VW has laid out strategies aimed at ensuring that every new car is at least 10 percent more efficient in comparison to its predecessor model. They have also managed reductions of up to 25% of emissions and fuel consumption by offering fuel-economy training courses to their customers meant to achieve sustainable driving. According to Toyota’s North American Environmental, the company has launched Prius Prime that offers the greatest fuel efficiency of all cars.It discusses the issue of protecting nature and species diversity. For instance, it collaborates with Germany’s nature conservation organization in facilitating projects entailing the protection of river and moor landscapes. Toyota has partnered with the Wildlife Habitat Council to bring together government, team members, conservation agencies and team members to preserve habitats and build connected communities. For example, its activities range from safeguarding pollinators to supporting national public Lands Day.

Economic Issues

According to VW sustainability report 2015, its market share was on the decline because of the increasingly strict regulations at international level which have contributed to volatility in the sales market and global procurements. In response, the firm intends to on high-growth regions and segments especially in China and India. It also aims at growing in the field of automobile mobile driving and e-mobility by using its new Mobility solution unit as a driving force. Toyota, on the other hand, considers the possibility of being affected by a compilation of market and social trends, technological growth and multiple regulations according to its sustainable management report 2016. The firm has resolved to strengthen its business base by engaging in the manufacturing of ever-better cars and enriching the lives of communities that would surpass expectations of customers.

Social Issues

VW reportedly outlined the framework of increasing the competence of their workforce to compete favorably with its rivals in the industry (Andreas, 2017). It decided to conduct online, and classroom courses on the topics of compliance, in general, were especially combating corruption. For instance, it is mandatory for all new employees to complete the online training module on the code of conduct (Lussier, 2012). Toyota has embarked on practices meant to improve labor condition that would lead to its prosperity by providing workers with opportunities aimed at achieving social contribution and self-actualization through their input…Read more

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