Volkswagen and business ethics (CSR is not enough)

Five years ago, after months of deliberation we decided to buy a new family car in China. We took in consideration the amount of friends and family we wanted to transport, the safety of the car, and for the size of the car (a 7- seater) the emission and fuel efficiency. It turned out that the Volkswagen Sharan was the only sensible option (the Toyata Prius did not have a 7- seater at the time). It was a smooth drive in China until after 2 years and 11 days the engine blew up due to the bad fuel qualitiy in China…. But, kuddos to Volkswagen: they replaced the engine for free and told us to use the car only in countries with reliable gas stations around (Europe and the US).
Back in Europe now,  till three days ago, we drove happily around in the car, when we read about the Volkswagen implementation of a ‘defeat device’ in de millions of diesel cars (11 million cars). Really?!

Just think about it, the sheer amount of strategy, work and organisation to set up a con device like that in such a big company:

  • The research and development department to think up such a device, to have permission to do research on this device, tinkering the device to make it better.
  • Manufacturing department implementing the software.
  • The PR department to immediately to brake down the initial news from the US Universitiy (more than a year ago) that the emissions from the diesel Volkswagen cars were significantly higher than the test drive results in lab settings.
  • In short, all the employees involved thinking that this whole operation would fit in any way in the Volkswagen business ethics culture and code of conduct. 

This was not the mistake of a ‘loner’ who had the wrong access and the wrong kind of freedom to do what he wanted and thinking of getting away with it, this was a whole system of con artists.

Besides the legal, environmental en economic damage done, Volkswagen needs to have a look at itself. Not at its rules and regulations,  CSR policies and codes, but the real expectations, the actual values and behavior of their people, and the structures in the organisation that could support the implementation of con devices. These are questions in the field of business ethics, not corporate social responsibility. Let me explain:

  • Corporate Social Resonsibility is the outward responsibility of a firm towards its stakeholders (clients, environment, but also own employees) and can been written in a strategy program for a company on what they want to create as value (and/or dimish damage) for their stakeholders. CSR is a positive action towards stakeholders, beyond not above legal requirements.
  • Business ethics is the process of thought, a way of thinking about good and evil on profesional actions. It can not be put into codes and rules, ethics are reflections of real people,  dealing with real dilemma’s in their roles and responsibilities.

It will take quite a whole before Volkswagen can clean up such a big mess (it took Siemens quite some time), the interesting thing will be to see how they will do this, through new rules and new values (the Volkswagen values on paper are fine!)? How much people will get fired? What needs to change? The business case will be written in  few years….

(Translation of Dutch Comic: Fokke and Sukke will drastically bring down the emissions in China. – “But  how can we obtain the German software?”..)