Volkswagen Diesel Scandal Essay

Categories: Sales

The VW emissions scandal would probably not have happened had there not been constraints on the engineers designing the cars. As stated in the prompt, “The pressure of time and money – in this case, corporate pressures to make their products meet CAA standards while meeting production deadlines – caused engineers who were probably in other situations very mindful of their legal and moral obligations, to resort to criminal behavior.” Because they were backed up against a wall due to time limitations and cost restraints, they chose to knowingly circumvent the CAA standards in the product.

By doing this, they were able to make a product more profitable than it would have been if they had followed the proper regulations. However, due to restraints placed on them by their management, they failed to act appropriately. It is in this light that planning becomes incredibly important. If the company had a contingency plan or policies and procedures in place for this event, they would have had a course of action to take.

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As stated in chapter 8 of the textbook, contingency planning involves identifying courses of action that can be implemented if circumstances change. This means that if something goes wrong, there are corrective measures to take that are specified. In this situation, however, things were clearly going wrong for them in order for them to need to circumvent regulations to finish the product. Because there was no contingency plan in place when things were falling behind, the engineers broke the law because there was no prescribed action to take in that situation.

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The Volkswagen emissions scandal uncovered the poor leadership model and dysfunctional culture of its upper management. Increased pressure of time and money to make products that met the Clean Air Act’s guidelines while trying to challenge other automakers in the United States through mainstream mass production caused the engineers to resort to criminal behavior to meet upper management’s expectations. All of the organizational pressures put on middle managers by the top management team ultimately led to the unethical shortcuts that were utilized.

The groundwork for the emissions scandal was in progress as Martin Winterkorn was named CEO of Volkswagen in 2007. The auto industry was evolving away from standard combustion engine theory working towards innovative concepts in environmentally friendly technology. To stamp its claim in the competitive industry, Volkswagen put a huge bet on developing clean diesel automobiles that would deliver better fuel economy and lower emission compared to gasoline. This was a rational approach for the European market because diesel engines are popular and the emissions standards are relatively easy to meet. The company’s engineers hit a roadblock in the United States when the EPA implemented strict pollution limits for diesel engines. Fully aware that their diesel engines did not meet the EPA requirements, Winterkorn and his team actively pursued marketing their clean diesel vehicles in the United States. Winterkorn and the rest of upper management primarily put too much pressure on their engineers to deliver a product that was not possible at the time, resulting in a cheated fix to satisfy the needs of management and the EPA.

In John C. Maxwell’s book “The 21 Irrefutable Law of Leadership”, John mentions that leadership and management get construed as one and the same, when in actuality they are different. “Leadership is about influencing people to follow, while management focuses on maintaining systems and processes.” (Maxwell, John C, p. 13-14) Winterkorn and his team of managers had not led their team in a successful direction through leadership, rather it was their management styles that encouraged and forced their engineers to develop an unethical fix for the problem. When it was originally realized that the company would be facing a challenge dealing with the EPA guidelines, proper leadership would have examined the conditions of the problem before making commitments. This leadership technique is one of John C. Maxwell’s laws of leadership, the law of Navigation. By Winterkorn actively pushing the new Volkswagen clean diesel market to the United States consumer, he created a market with growing expectations. These expectations from the public joined with the time pressures from upper management put the engineers in a difficult situation. A better option for upper management to pursue would have been to figure in the costs of environmental disruption, losing market trust, and the astronomical amount of fines before committing their engineers to accomplish the impossible.

Another faulty feature of Volkswagen’s leadership model was the lack of trust within the organization. The management style Volkswagen practiced imposed rigid goals and punished the middle to lower level employees that were unable to keep up with the pace. This top-down control approach, originated by Frederick Winslow Taylor, stemmed upper management to formulate strategic objectives and timelines, while offering no insight from others in the company. Though this management style is prevalent in other corporations, the aggressive manner in which Volkswagen applied the control may have been “the likeliest explanation for why its engineers were willing to commit crimes and defraud the public to save their jobs.” (Rothfeder, Jeffrey) A person who had worked closely with Volkswagen explained “that intimidation at every level created an over the borderline unethical culture.” (Rothfeder, Jeffrey) Maxwell believes that another law of great leadership is the law of Solid Ground which states that “trust is the foundation of leadership”. (Maxwell, John C. p. 61) To be a successful leader, one must lead in such a way that their followers can openly share their opinions with the leader, even negative ones. The toxic organizational structure between employees and leaders created a divide in respect for one another disintegrating the ability to work together to solve the problem.

The combination of the controlling management style coupled with the companies failed leadership techniques were the sparks that lead the Volkswagen emissions scandal fire getting as far out of control as it did. Volkswagens use of the top down management style suppressed the creativity of the company as a whole by creating a disconnect between the engineers and management. A bottom-up, open channel culture of other large companies could have initiated more innovation that would have help develop a legal solution to the problem. The lack of respect and forward thinking were two leadership mistakes that would have helped the scandal from occurring.

Organizing is the process of arranging, connecting, and integrating people and other resources to accomplish a goal. An organization’s structure should effectively allocate tasks through a division of labor and coordinate performance results, which is something Volkswagen failed at. The company’s end goal to provide a diesel car with better fuel economy was a great goal, but it was achieved immorally since they allowed profit to overpower the qualifications set by the Clean Air Act. According to an article written by Jeffrey Rothfeder, “Volkswagen’s conceit was that individual brands had autonomy, and that new ideas would bubble up from these separate groups, ultimately to be shared with other teams who would adopt them in perhaps a different form for their own purposes.” However, this claim at an effective organization design was a sham. The pressure to meet timelines and impress higher-ups, which was the only path to promotion at VW, caused vehicle-model teams to share virtually nothing and keep secrets about new mechanical breakthroughs/design elements from one another. Clearly, Volkswagen did not care about performance results and instead formulated bold strategic objectives and deadlines for new products and services, with sparse input from others in the company. Although these aims were often presented as guidelines, not mandates, management rarely treated them as negotiable. In turn, employees were pressured by the expectations placed on them and tried to deliver at all costs to keep their jobs. This lead to a lack of employee empowerment across the company. Empowerment is a critical aspect, because it provides decision making authority to the employees, who are most capable of doing the work. In this case, VW employees were given little to no freedom to use their talents and contribute ideas. Overall, the lack of a cohesive organizational structure and nonexistent empowerment led employees to ignore their moral obligations and resort to criminal behavior.

The Volkswagen scandal had many reasons for failure. Managerial control is a contributing factor to why they failed to accomplish their goals. Controlling is used by managers to measure performance and accomplish results by taking the appropriate actions. Volkswagen displays a lack of controlling. According to an article written by NY times, managers show the inability to communicate effectively with their engineers but were also not prepared to fix the consequences. The “defeat device” as it is referred to in the article is almost a direct result of lack of self-control. The engineers felt the pressure presented by the new mission statement to go green but did not have the capability to fulfill this request in time. Another type of control that, market control, was present as well. Volkswagen’s desire to compete against Toyota and other car manufacturers in fuel efficient vehicles was a negative influence in the sense that it caused them to violate laws to gain a competitive edge. The entire transition of wanting to be the largest car manufacturer and go green would have been plausible but they lacked three effective types of controls. They failed at preliminary controlling because they did not have the resources to fulfill this request. There was a lack of concurrent controlling because at no point did they stop and try to eliminate the “cheat device” or try to solve the emissions problem correctly. The third controlling violated was feedback controls. It was not until they were discovered that they tried to fix their wrongs. Even after knowing what had been done, they chose to not kill off the cheat device in favor of finding a better solution. This once again shows a lack of self-control from both managers and engineers alike.

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Volkswagen Diesel Scandal Essay. (2021, Aug 17). Retrieved from https://studymoose.com/volkswagen-diesel-scandal-essay-essay

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