International Business and Sustainability Assignment 1. Internatio...

1. Introduction
Volkswagen has positioned itself as one of the world-beaters in the manufacture of quality automobiles. Shortened as VW, Volkswagen is a German firm that produces automobiles, founded in 1937 by the German Labor Front (Blackwelder et al., 2016 and Karabakal, Günal, and Ritchie, 2000). VW became prominent for its “Beetle” brand, which was used in the Second World War. According to Lepage (2007), the Beetle was modified following an order by Adolf Hitler such that it became an all-purpose military vehicle. Consequently, VW and the Beetle became a household name across the world (Rieger, 2009; John, 2016; and Nolan, 2014). In 2016 and 2017, the company was identified as the world largest car manufacturing company by revenue. At present, the largest market for VW is China, which accounts for at least 40% of the company’s sales and profits. As a brand, VW is comprised of 12 brands from seven European countries (Volkswagen, 2020a). These are SKODA, Volkswagen Passenger Cars, Audi, Bentley, Ducati, Bugatti, Volkswagen Commercial Vehicles, Lamborghini, Man, Scania, Porsche, and SEAT (Terry-Armstrong, 2016; Hertrich and Mayrhofer, 2016; Blackwelder et al., 2016; and Ewing, 2017). Other than car manufacturing, VW also offers a range of financial services, which include customer and dealer financing, banking and insurance services, leasing, and fleet management (Volkswagen, 2020a). At present, VW is in the process of realigning its automotive core business by, for example, expanding the battery technology, introducing autonomous driving, and launching a further 30-plus fully electric cars (Volkswagen, 2020a and Bagdonat, 2017).
2. Background of the scandal
Despite the escalating VW prominence across the world, the firm was once embroiled in sustainability and ethical dilemma. The scandal is commonly known as the Volkswagen Fuel Emissions Scandal. Abdelrasool (2018) claims that in September 2015, the U.S. State Environmental Protection Agency made the VW ethical scandal to the public after the agency issued a notice that related to the violation of the Clean Air Act to the automobile manufacturer. McKay, Nitsch, and Peters (2015) reveal that the EPA came to know that VW had programmed its TDI (Turbocharged Direct Injection) diesel engines such that they would activate the emission controls set by the government only at the laboratory emissions testing level. At the time of testing, EPA discovered that the engines Nitrogen Oxide output was well within the U.S. standards (Siano, Vollero, Conte, and Amabile, 2017; Crête, 2016); Klier and Linn, 2016); and Rhodes, 2016). However, EPA established that once outside the laboratory the scenario was different. Thus, the agency came to know that the engines could produce at least 40 times higher than the standard (Lynch, Cutro, and Bird (2016). Also, EPA revealed that all the models produced between 2009 and 2015 all had the TDI engine type. Authorities estimated that VW had distributed at least 11 million cars with the TDI engine type across the world (Europe FDCI, 2017). The scandal had a deleterious effect on VW. Jung and Sharon (2019) and Eisenstein (2015 demonstrate that within only two weeks, the company had lost about 40% of its stock value. Additionally, Kieler (2016) and Tabuchi, Ewing and Apuzzo (2017) all present that consumers, shareholders, and the government representatives were infuriated after they discovered that the firm’s senior management was well aware of the TDI software and had even rewarded individuals who were involved in creating the program. According to Aljazeera (2015), the company lost $3.9 billion in revenues in the third quarter. The value of VW vehicles dropped by 0.2% in the UK (Boyle, 2015).
3. Influencing factors
A set of scholars and researchers have sought to discuss the various factors that motivated the scandal. For example, Jung and Park (2017) claim that austere leadership styles, drawbacks from the family feud, and insular corporate governance were the primary factors that led to the scandal (Shen, Deng, Wang, and Li, 2018). On austere leadership