Case 7: Volkswagen’s Diesel Deception
1. Consider the corporate culture of Volkswagen in Germany. How did it affect this situation?
The company’s approach and philosophy regarding competition was stated by one senior
executive as “be aggressive at all times.” This points to a corporate culture which aggressively
2. Why did Volkswagen engineers decide to cheat the emissions tests? Should the engineers have
consulted with executives?
It is unclear why engineers decided to cheat the emissions tests, but for the fact that the company
invested significant money in its diesel program and that senior management believed that clean
diesel fuel would outsell hybrid vehicles. It is hard to believe that engineers did not consult with
3. What is your assessment of VW’s sense of business ethics and fair play as manifested in the
emissions cheating scandal?
The case seems to demonstrate serious deficiencies in VW’s sense of business ethics and fair
play. The emissions cheating software was not designed and implemented by accident but was
designed with the single goal to systematically pass those tests and in effect lie to their
4. VW has always been perceived to be a socially responsible corporation. In light of this, how
could an emissions cheating scandal like this occur?
VW spends a tremendous amount of money on advertising and it appears as though the corporate
brand that it has cultivated does not match with the corporate ethics internally. They appear to
the rules.
5. What roles should government regulators play in terms of emissions and fuel economy
testing?
Governmental regulators should set clear standards, should require reporting by manufacturers,
and should include audit and inspection of manufacturing plants, and interviews by key
6. Assume that you are a consumer who purchased one of the affected diesel vehicles in 2014,
before the EPA made its announcement. What might your reaction have been? What forms of
restitution would you have sought from Vow and Volkswagen?
7. Do research into what has taken place in the VW case since the end of this case. Are
circumstances looking better or worse for the company?
Volkswagen has emerged from the scandal with reporting record income for 2016, surpassing
Toyota as the world’s largest car manufacturer. Volkswagen must still work on improving its