A leader in the diesel automotive industry, Volkswagen once was the leader of the pack. Now with unethical practices at Volkswagen all over the news, it’s clear that Volkswagen has fallen from grace by committing what amounts to fraud. Was it the 
fault of an engineer or a bigger issue of an unethical culture?
Unethical Practices at Volkswagen
Since the scandal broke a year or so ago, nearly 40% of the company’s market value has disappeared. Volkswagen admitted to fitting 11 million cars with software designed to cheat emissions tests. That isn’t just unethical it’s illegal. But then again, as a business ethics expert, I see this all the time. A simple idea designed to meet a problem becomes a series of actions that seem harmless that become a sub-culture that invades the organization creating wide spread fraud.
There are multiple challenges here: (1) when did senior management know; (2) once discovered what did Volkswagen do about this illegal activity; (3) how could Volkswagen assert that they have a culture of ethical actions?
Seems these are dandy questions as nothing appeared to be done till the the U.S. Environmental Protection Agency alerted the world to the issue at Volkswagen.
So Now What?
After a massive devaluation of the company – in April a $6.2 billion loss for 2015 was recorded – now investors having filed some 1400 lawsuits are seeking $9.1 billion for losses they sustained. Overwhelming the German courts most of the lawsuits are filed by private investors with two filed by institutional investors.
A news report states:
Volkswagen has already agreed to pay $15.3 billion in civil penalties to compensate owners of its U.S. diesel cars, including an agreement to fix or buy back the cars.
Every Choice has a Consequence!
What most likely started as a temporary fix to meet an urgent need became a multi-billion dollar devastating loss to Volkswagen and a tarnished record that few will forget. I have to wonder when this all started if anyone ever considered the tremendous damage that would be the outcome?
Let this be a lesson – choices always have consequences. Hind sight for Volkswagen would have produced the truth – that meeting the emissions standards weren’t technically possible – which might have cost sales, but most certainly would not have been as costly as unethical actions that became fraud.
YOUR COMMENTS ARE WELCOME!
