{"id":2131,"date":"2020-01-06T07:17:45","date_gmt":"2020-01-06T12:17:45","guid":{"rendered":"http:\/\/blog.uvm.edu\/si-mba\/?p=2131"},"modified":"2020-01-03T14:23:48","modified_gmt":"2020-01-03T19:23:48","slug":"with-sustainability-should-motives-matter","status":"publish","type":"post","link":"https:\/\/blog.uvm.edu\/si-mba\/2020\/01\/06\/with-sustainability-should-motives-matter\/","title":{"rendered":"With Sustainability, Should Motives Matter?"},"content":{"rendered":"\n

This post was written by Lauren Frisch ’20<\/a><\/em><\/p>\n\n\n\n

As long as\nyou are making lasting sustainable change, should motives matter?  <\/p>\n\n\n\n

This past semester, we\u2019ve taken a deep dive into the world of corporate social responsibility (CSR), and thought about the different motives companies may have to invest in CSR practices. Some companies have economic motives.[i] Others want to build relationships with various stakeholders, called relational motives. Finally, some companies have moral motives, wanting to make the world, or their piece of it, run a little better.[ii] Consumers tend to digest CSR information better when there is at least a hint of a moral motive. But is this the right way to truly encourage CSR across the board? <\/p>\n\n\n\n

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Volkswagen stock prices before and after Dieselgate <\/figcaption><\/figure><\/div>\n\n\n\n

Let\u2019s use Volkswagen (VW) as an example. In 2015, news broke that VW had created technology that faked emissions levels in about 580,000 vehicles between 2006 and 2015.[iii] Defeat devices were created to register when a vehicle\u2019s emissions were being tested, and modify performance to achieve a particular emissions level. By March 2019, VW had paid more than $30 billion in fines, penalties, resolutions and settlements towards Dieselgate.[iv] The company agreed to invest in electric vehicle (EV) technology and infrastructure to offset some of the damage caused by their deceptive technology.[v]<\/p>\n\n\n\n

VW was able to survive this scandal and continue to thrive as a company, but not without a cost. The company had a turnover in high-level leadership after the scandal. The brand\u2019s reputation was tarnished and stock prices dropped 23%[vi]. Enter Herbert Diess, a new CEO with a plan to completely reinvent Volkswagen as a sustainable leader in the industry. Diess and his team created Together 2025, a vision for how VW would grow between 2015 and 2025.[vii] The main goal of Together 2025 is to transform VW into a leader in the EV market. The company hopes that by 2025, 25% of VWs on the road will be EVs, a lofty goal that will help transform the makeup of the worldwide auto landscape.[<\/a>viii] <\/p>\n\n\n\n

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Concept photo for Volkswagen\u2019s new I.D. Buzz, an electric bus<\/figcaption><\/figure><\/div>\n\n\n\n

The company has promised to launch a fleet of seven new electric vehicles, including four for VW, two for Audi and one for Seat.[ix] VW is also investing in new EV factory space and charging infrastructure, and the company hopes to establish and implement a carbon neutral supply chain by 2050.[<\/a>x],[xi]<\/sup> <\/p>\n\n\n\n

Critics of\nVW argue that the company should not be viewed as a leader in sustainable\ninnovation because they were forced to implement aspects of this radical\ntransformation to make up for Dieselgate. Others believe Diess is a\ntransformational leader with strong moral motives, and is using this colossal\nenvironmental mess up to inspire change and create an automotive industry that\nhe truly believes in. Consumers may never know the exact motives behind VW\u2019s\ntogether 2025 campaign, although the truth likely lies somewhere between the\nsuspicion of the cynics and the hope of the optimists. Almost all human behavior and corporate action is\ndriven by varying degrees of multiple motives.<\/p>\n\n\n\n

But should\nVolkswagen\u2019s motives matter if the company is able to advance renewable\ntechnology? What matters is that Volkswagen is on the road to becoming a leader\nin EV technology, and is investing not only in vehicle design, but factories\nand infrastructure that will help support growing demand into the future. It\nwould be best for the industry if Volkswagen\u2019s transformation is wildly\nsuccessful, because it will build momentum to advance critical EV technology at\nVW and may inspire other companies to make similar commitments. \n\nOf course, I\u2019d prefer if all companies had\nstrong moral motives to back their CSR work. But it\u2019s important for us to\nrecognize that people come from different experiences, and companies have\ndifferent priorities. At this stage, the change we\u2019re making matters more than\nthe reason we started on the path. And if companies can profit from solving a\nproblem for someone, hopefully it will encourage others to follow in their\nlead, and help sustain more change.\n\n
<\/p>\n\n\n\n

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Endnotes<\/em><\/strong><\/p>\n\n\n\n

[i]<\/a> Aguilera, Ruth V.,\nRupp, Deborah E., Williams, Cynthia A., Ganapathi, Jyoti. \u201cPutting the S back\nin corporate social responsibility: A multilevel theory of social change in\norganizations.\u201d Academy of Management\nReview. <\/em>3 Nov. 2007. <\/p>\n\n\n\n

[ii]<\/a> Aguilera, Ruth V.,\nRupp, Deborah E., Williams, Cynthia A., Ganapathi, Jyoti. \u201cPutting the S back\nin corporate social responsibility: A multilevel theory of social change in\norganizations.\u201d Academy of Management\nReview. <\/em>3 Nov. 2007.<\/p>\n\n\n\n

[iii]<\/a> \u201cExhausted by\nscandal: \u2018Dieselgate\u2019 continues to haunt Volkswagen.\u201d Knowledge at Wharton. <\/em>21 Mar. 2019,\nhttps:\/\/knowledge.wharton.upenn.edu\/article\/volkswagen-diesel-scandal\/<\/p>\n\n\n\n

[iv]<\/a> \u201cExhausted by\nscandal: \u2018Dieselgate\u2019 continues to haunt Volkswagen.\u201d Knowledge at Wharton. <\/em>21 Mar. 2019,\nhttps:\/\/knowledge.wharton.upenn.edu\/article\/volkswagen-diesel-scandal\/<\/p>\n\n\n\n

[v]<\/a> Voelcker, John.\n\u201cVW Electrify America plan for electric-car charging across the US released.\u201d Green Car Reports. <\/em>18, Apr. 2017,https:\/\/www.greencarreports.com\/news\/1109971_vw-electrify-america-plan-for-electric-car-charging-across-u-s-released.<\/p>\n\n\n\n

[vi]<\/a> \u201cExhausted by\nscandal: \u2018Dieselgate\u2019 continues to haunt Volkswagen.\u201d Knowledge at Wharton. <\/em>21 Mar. 2019,\nhttps:\/\/knowledge.wharton.upenn.edu\/article\/volkswagen-diesel-scandal\/<\/p>\n\n\n\n

[vii]<\/a> \u201c2018\nSustainability Report.\u201d The Volkswagen\nGroup, <\/em>Mar. 2019,\nhttps:\/\/www.volkswagenag.com\/presence\/nachhaltigkeit\/documents\/sustainability-report\/2018\/Nonfinancial_Report_2018_e.pdf<\/p>\n\n\n\n

[viii]<\/a> Keith, Travis.\n\u201cVolkswagen stock price plunges after emissions scandal.\u201d Column Five Media. <\/em>https:\/\/www.columnfivemedia.com\/volkswagen-stock-price-plunges-after-emissions-scandal<\/p>\n\n\n\n

[ix]<\/a> Rauwald,\nChristoph. \u201cVolkswagen\u2019s road to riches or ruin starts in this factory.\u201d Bloomberg<\/em>, 6 Sept. 2019, https:\/\/www.bloomberg.com\/news\/articles\/2019-09-06\/volkswagen-s-road-to-riches-or-ruin-starts-in-this-factory<\/p>\n\n\n\n

[x]<\/a> \u201c2018 Sustainability Report.\u201d The Volkswagen Group, <\/em>Mar. 2019, https:\/\/www.volkswagenag.com\/presence\/nachhaltigkeit\/documents\/sustainability-report\/2018\/Nonfinancial_Report_2018_e.pdf<\/a><\/p>\n\n\n\n

[xi]<\/a> Rauwald,\nChristoph. \u201cVolkswagen\u2019s road to riches or ruin starts in this factory.\u201d Bloomberg<\/em>, 6 Sept. 2019, https:\/\/www.bloomberg.com\/news\/articles\/2019-09-06\/volkswagen-s-road-to-riches-or-ruin-starts-in-this-factory<\/p>\n","protected":false},"excerpt":{"rendered":"

This post was written by Lauren Frisch ’20 As long as you are making lasting sustainable change, should motives matter?   This past semester, we\u2019ve taken a deep dive into the world of corporate social responsibility (CSR), and thought about the different motives companies may have to invest in CSR practices. Some companies have economic … <\/p>\n

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