By Stephan Manning.
The Volkswagen diesel scandal has been dominating recent news headlines. The U.S. Environmental Protection Agency (EPA) is accusing the German automaker of using a ‘defeat device’ that manipulates results of health-threatening nitrogen oxides emissions tests by switching the engine to a low-emissions mode when detecting a test. Following the accusations two weeks ago, VW’s stock price has dropped by 40%; Martin Winterkorn has lost his job as CEO; VW will be removed from the Dow Jones Sustainability Index; and the German multinational is facing a lasting damage to its long-built reputation. On top of that, the automaker will need to refit up to 11 Million diesel cars and vans running with the ‘defeat device’ worldwide, incurring costs of $7.3 Billion or more. Current investigations focus on various top executives responsible for letting the fraud happen, including research and development (R&D) managers Ulrich Hackenberg and Wolfgang Hatz. But is the scandal just the result of the ‘criminal energy’ of individuals, or is it a more systemic problem? Do rising pressures in a competitive global economy – meeting customer needs and shareholder expectations, driving down costs, adhering to norms and standards – perhaps promote individual cheating and corporate misconduct?