Automobile manufacturers, supply chains, and consumers have been rocked by the recent discovery of Volkswagen’s decision to cheat emission standards on its diesel vehicles by integrating software designed to trick emissions tests. In the wake of Volkswagen’s exposure, recalls and fines have begun in multiple countries, VW’s stocks have dropped, and fellow German automobile makers have waited with baited breath to see if their own brands will suffer as well. Notably, VW’s CEO Martin Winterkorn also resigned in the midst of the scandal. To what extent should VW as a corporation or Winterkorn as its leader take responsibility for this scandal? And how should manufacturers, consumers, and supply chain leaders respond?
Notably, VW is not entirely unique in designing a go-around in meeting the demanding industry standards that require both fuel efficiency and environmental sustainability. Often, companies and their leadership can be blindsided by the need to deliver KPI’s and share holder returns by any means possible. Yet this unethical, illegal, and outright deceptive practice should not go unnoticed; in cases where it does come to light, personal and organizational accountability are critical. A slap on the wrist is insufficient.
There should be only one set of standards of punishment for such white collar crimes, and they should require guilty parties to take full accountability for the ripple effects that happen across supply chains.Debates, however,do emerge about how harsh punishment should be for VW or organizations like it. Are we desensitized? If so, as ethical thought leaders we should push against this desensitization, and we should refuse to rationalize unethical practices that put multiple industries and their consumers at risk.
We are responsible for generating changes in habit. Insofar as Winterkorn headed such a deceptive operation he should not in his resignation maintain the benefits of a golden parachute, getting compensated with a high salary, bonuses, and stock options while others deal with the losses he caused.
A key question then arises, and VW is positioned to help the industry address it: Are we willing to change, and to demand more from corporate citizens?
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