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Volkswagen has been producing vehicles since 1937 and they have become very well known as a leader in innovation. Although this scandal with their emissions is deceiving, I also am not surprised at the actions of Volkswagen because the automobile industry is so competitive with each brand of car trying to establish the newest features every year.
What I find most interesting about the article by Paul Lippe is reason #5 under his proposed theories. His statement that Volkswagen engineers did not bother to tell in-house lawyers and in-house lawyers didn't ask sounds the most reasonable to me.
This reasoning is still not a good excuse for the actions taken by the Volkswagen group because while many may disagree, withholding important information can very well be the same thing as lying. Just because internal auditors did not ask specifically about emission details, engineers should have come forward from the start because they knew the consequences of what was to come next, whether their intentions were positive or negative.
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From a legal or engineering perspective, I would have prevented such an incident like that of Volkswagen by closing the gap in communication and developing a strong sense of transparency. It is no secret that communication is the ultimate key in business and without it, mistakes are made because not everyone knows the plan.
Had there been meetings and open communication settings between in-house lawyers, engineers, and other personnel, this could have been prevented. Strong communication establishes a set of separation of duties as well because every member of every group can establish input into how decisions are made.
When left unattended, a constant occurrence of fraud can diminish the confidence in a company and their ability to perform work (1). This not only occurs with those on the outside (customers) but also within the company (shareholders, employees). Because of the lack of communication, this scandal will greatly impact Volkswagen and their sales among an already competitive market.
Another great method preventing the Volkswagen incident is to empower employees (Bradley, 2015). When employees are given responsibilities, they tend to be driven to do the right thing because they know their individual actions are making a difference.
What if the engineers were accountable to bring all product changes to the in-house lawyers? What if the lawyers and auditors were accountable to research every change that was occurring in the business and what if they had an interest in that? Being accountable to every part of the business (not just your own) makes individuals care and develop a sense of pride in their work.
After the scandal of Volkswagen became public, I would develop a formal apology to my staff, my customers, and the public. I would also call for future preventive action that would bring the company back up from its fraudulent actions. One thing I would not do as CEO is make any excuses. As the company's leader, I would need to be accountable whether I knew of the incident or not.
That's what makes a great leader, taking responsibility for yourself and for the company you represent. As for preventing future fraudulent actions, I would develop group live training sessions. Any company can have an anti-fraud policy but without any training on that, the policy becomes useless. It should come as no surprise that follow-up skills training is the most important anti-fraud tool that we can use (Dorsey, 2014).
Constant webinars to keep employees informed not only brings individuals together in a common goal but it also keeps the goal of fraud prevention a constant flowing river in people's minds. One session every 6 months simply does not cut it. Information sessions on good ethical standards need to be completed as often as possible and even more so after fraud has occurred.
Another important way to conquer the likelihood of future fraud is to understand why people (most notable employees) commit fraud. Opportunity, incentive/pressure, attitude, lack of awareness, intuition, and reasoning all play an integral role in the minds of those who commit deceit. People also consider the magnitude of consequences before they commit fraud (Murphy & Dacin, 2011).
I can't help but think that the engineers of Volkswagen may not have considered the effects of the general public and its consumers when they decided to cheat their emissions. Perhaps they just wanted to gain a stronghold in the auto industry by developing a more efficient diesel engine. All the motives stated earlier with fraud still tie back to communication and involvement.
When all company personnel are involved in each other's actions and decisions, there is a lower chance that fraudulent motives can gain traction. It's almost as if everyone is the boss of everyone else. In organizations, all individuals need to oversee the actions of their coworkers because without such controls, deceitful employees can let their unlawful reasoning run away with them.
As Proverbs 20:17 so lovingly puts it, "Bread gained by deceit is sweet to a man, but afterward his mouth will be full of gravel." The idea that Volkswagen could get ahead by cheating on their emissions sounded like a sneaky way to sell their vehicles yet after being discovered, they have fallen into a deeper hole than when they were just lying about it.
From this entire argument and from the reading of Paul Lippe's article, I can't help but wonder why Volkswagen did not think they would be caught by this lie. We live in a world where after such scandals as Enron, businesses are under a very high level of scrutiny and all matters will eventually be found out.
I will say that no business is perfect, but had I been the CEO of Volkswagen, I would do everything in my power to put internal controls in place, because in today's business world, you can never have too many safety precautions in place. In Psalm 44:21, it states, "Would not God discover this? For he knows the secrets of the heart." Not only does God know our actions but all those surrounded by our businesses know and will know what goes on because they have an interest in our businesses.
References
Preventing Corporate Fraud: Insights from Volkswagen. (2019, Dec 09). Retrieved from https://studymoose.com/history-of-volkswagen-essay
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