Volkswagen Business Ethics and Bad Behavior – What now?

Volkswagen is now in the news for unethical behavior on a massive scale.  Volkswagen’s installation of a software “defeat device” in 11 million Volkswagen and Audi diesel vehicles sold worldwide has led to a massive vehicle recall and an admission of guilt that has surprised many.  The question that is surfacing is how wide spread was the unethical behavior?  Was it limited to a select few or a massive cancer that was pervasive in the company?  One must question Volkswagen business ethics and their bad behavior!

The following appeared as part of an Ethics Alarms article:

Volkswagen, which manufactures many of the beasts, devised and installed a code functioning as a “defeat device” to sense when one of its diesel vehicles was being tested for nitrogen oxide emissions. test. Once a test was detected, the software would reduce torque and NOx emissions, while under normal conditions, that is, when the vehicle was not being tested for emissions, the car would be guided by a separate program that would increase acceleration, torque, and fuel economy.

Clever! Also unethical and, obviously, illegal.

An article from IEEE Spectrum stated the following:

“This is shocking,” says Yotam Lurie, a senior lecturer of business ethics at Ben-Gurion University of the Negev in Israel. “It’s shocking that the software engineers of Volkswagen overlooked and neglected their fiduciary responsibility as professionals. Professionals who have a semi-regulatory responsibility within the organization to ensure safety, in this case environmental safety, even when this is less efficient or economical.”

Lurie’s recently published paper on Professional Ethics for Software Engineers touches on the heart of this matter. That Volkswagen chose a software device is not surprising because software lends itself to special adoptions and is more difficult to discover then hardware changes, Lurie says. He compares the software engineers to the accountants in the Enron case who collaborated with the organization to create accounting loopholes and failed to protect the public by not providing proper auditing.

BBC News reports:

What started in the US has spread to a growing number of countries. The UK, Italy, France and South Korea, Canada and, of course, Germany, are opening investigations. Australia says it is monitoring the situation. Throughout the world, politicians, regulators and environmental groups are questioning the legitimacy of VW’s emissions testing. France’s finance minister Michel Sapin said a “Europe-wide” probe was needed in order to “reassure” the public.

The Ethics Question is Who Knew and When?

With the cat out of the bag, it is no longer a question of what happened.  For the most part that is now known.  The real question that moves toward the core of the Volkswagen brand is who knew and when?  The answer to these questions could mean the survival of Volkswagen and perhaps of diesel.

The board of Volkswagen has accepted Chief executive Martin Winterkorn’s resignation, although he denies wrongdoing. Beyond that in an article by engadget – author Jon Fingas states:

German newspaper Frankfurter Allgemeine Sonntagzeitung claims that technicians had warned about dodgy emissions practices in 2011, while Bild maintains that key supplier Bosch told “top circles” at VW about its emissions concerns back in 2007. It’s not clear just who knew about the issues and where the buck stops — VW is declining to comment, which isn’t surprising when it’s still in the midst of an investigation into what happened.

TheGuardian reports:

Volkswagen has blamed its emissions scandal on a “small group” of people and has suspended a number of staff as Matthias Müller was unveiled as its new chief executive.

Müller, who has been promoted from his role as boss of Porsche, pledged to leave “no stone unturned” and “maximum transparency” in an investigation into how the company cheated emissions tests on diesel cars. The new VW boss did not reveal how many staff had been suspended or who they were, but the company said the scandal was the result of “unlawful behaviour of engineers and technicians involved in engine development”.

Bernd Osterloh, chairman of VW’s work council and a member of the executive committee, said: “A small group has done damage to our company. We need a climate where mistakes are not hidden.”

What Now?

Volkswagen isn’t the only car company to face serious allegations regarding their choices.  Toyota, GM and Ford have had their day in the sun when it comes to choices they made regarding their automobiles and all survived.  The question for VW is what now?  Clean house?  Pay massive fines?  Get out of the diesel business?  Regain reputation?

Every choice has a consequence.  At this point the “consequence” phase is just now beginning and I suspect it will be years before we’ll see just how broad and impactful those consequences will be for VW.

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