Legal Studies and Business Ethics Papers

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Book Chapter

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The Moral Responsibility of Firms

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In 2009, my family bought a new Volkswagen Jetta diesel relying on high scores this model received for its environmental characteristics. I don't recall the rating service we used, but the top-rated passenger car along this dimension was the Toyota Prius, and the VW Jetta came in a close second. We preferred the performance and "pick up" in driving the Jetta. In 2015, however, we learned along with millions of other owners of VW automobiles one reason for the difference in performance: VW had lied. Our Jetta did not deserve the high ratings it received for its environmental characteristics because VW had intentionally installed software designed to fool routine government testing. A "defeat device" programmed the engine to run with lower emissions when tested, but then shifted during normal driving conditions to spew into the atmosphere twenty to forty times more harmful nitrogen oxide than permitted under the relevant environmental regulations in the United States and Europe (Davenport and Ewing 2015; Hakim 2016b).1 Another corporate fraud scandal was born: prosecutors unleashed, product recalls ordered, and class action lawsuits filed. As this book goes to press, the story of VW's large-scale environmental fraud has only begun, but it serves to illustrate the practical relevance of the central question addressed in this book of the moral responsibility of firms—or not.

Copyright/Permission Statement

p. 206-221, The Moral Responsibility of Firms, edited by Orts, E.W. & Smith, C.N., 2017, reproduced by permission of Oxford University Press:

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Date Posted: 28 June 2018