Ever since the emission scandal exploded, Volkswagen has announced the recall of about 11 million vehicles, and set apart close to $7 billion (₹ 45,500 crore) towards costs arising out of the mischief. Volkswagen’s corporate website describes several areas of responsibility they take seriously. They talk of ‘social responsibility’ and you would now wonder about the impact of their decisions on the town of Wolfsburg, where the company’s main facility is; the majority of the population are dependent on the company.

They talk of ‘product responsibility’ and you wonder about the company that knew its product did not meet standards and lied to have it passed. They talk of ‘responsibility for workers’ and you wonder about the impact of cost cuts and layoffs on the lives of their 600,000 employees around the world. They talk about ‘environmental responsibility’ and you wonder about the nitrous oxide emissions from their sub-standard vehicles 35 times the permissible limits, contributing to smog.

And they talk about ‘corporate responsibility’ and you wonder about that in a company headquartered in a country where it forms a key part of the economy.

The company must be credited for moving swiftly to fire its CEO, Martin Winterkorn, and taking action. Michael Horn, the US CEO, has apologised and it is the content of that apology that bothers me. He has narrowed down the problem to “a couple of software engineers” who cheated on software. This must be part of the company’s effort to ‘contain’ the problem. This is incredulous.

It is easy to say that we have now found the boil that was generating the pus and it has been incised. But elsewhere, reports say that senior automotive engineers who could not find a way to deliver a clean diesel engine for the US market may have thought of the software fix. And again, we also read that the company under Winterkorn was on a tear to beat Toyota and GM. Such passions are said to result in cutting corners within the company.

One or two software engineers cannot be expected to take the blame for a managerial problem. If they did indeed initiate the cheat, somebody higher up approved its installation. Senior executives up the reporting line would all have been party to a nod-and-wink that all is good to go for the US market, even though a new engine has not been developed.

In short, the rot in a company cannot be contained so simply as a problem of erring engineers. Management scholars have often wondered what happens in a company that seems to be doing well until a scandal erupts. And the answer is that pressures to perform, both due to high internal and high external expectations, have to take the blame. We saw it happen in Ranbaxy. But that seems to absolve the managers of the moral/ethical standards within which they are expected to operate.

Individuals who have fixed a business problem even if by questionable means are often well rewarded for it and others at senior levels often suspect how it was fixed but do not want to know since the organisation has benefited. The bacteria, having found a home, begin to spread.

Sherron Watkins, the VP of accounting who first alerted the top management of Enron of the accounting irregularities, once observed that corrupt behaviour spreads in an organisation like a ‘sexually transmitted disease’. Volkswagen, and other organisations, may take a lesson from this.

The writer is a professor at Suffolk University, Boston, and Jindal Global Business School, Delhi NCR

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