Volkswagen’s culture of silencing dissent, absolute obedience and “forceful ambition” created the scandalous emission test deception and allowed it to continue for a decade, the New York Times recently reported.
The NYT said that VW chief executives, Ferdinand Piëch, who served from 1993 to 2002, and Martin Winterkorn, CEO from 2007 until the scandal forced his resignation, made Volkswagen “a place where subordinates were fearful of contradicting their superiors and were afraid to admit failure.”
Indeed, Volkswagen’s new management quickly attributed the emission crisis to a “chain of mistakes” and “culture of tolerance” for rule breaking that allowed the deception to last for as long as it did, reported the Wall Street Journal. The story followed a news conference by VW’s recently-installed leaders, Chairman Hans Dieter Pötsch and Chief Executive Matthias Müller.
The emission testing was a result of production challenges to meet tough US emission standards on time and within budget. To get around the challenges, Volkswagen engineers introduced software that lowered nitrogen oxides in VW, Audi and Porsche models. Now the company has to fix more than a million cars.
Did Volkswagen’s culture make engineers believe their actions would be accepted?
Edward Hadas, economics editor at Reuters Breakingviews, wrote that as early as 2007, and then again in 2011, VW received warnings about foul play and manipulation. Arrogant executives, bosses who didn’t delegate important decision-making, and subordinates who “are expected to succeed, not to moan about problems which they cannot solve” allowed the deception to continue.
“So it is easy to imagine the pressure on the engineers who had been ordered to find a low-price way to keep diesel emissions down on a new engine model,” Hadas wrote.
This argument was confirmed by several former and current employees who spoke to the New York Times. One high-ranking executive said the culture promoted “be aggressive at all times.” A former employee compared Volkswagen’s leadership to that of the nefarious North Korean system; and a former VW engineer wrote in a published letter: “Here at Volkswagen in the last few years, we have forgotten to say, ‘I won’t do this. I cannot. I am sorry.”
VW, to be sure, is not alone in cases where company culture can create serious economic or even legal issues. Hadas references the numerous trading scandals at investment banks: “At the banks, the desire for higher profits was much greater than the interest in a pure culture. Besides, in an environment where people were regularly fired for no obvious reason, asking hard questions promised more pain than gain. So few hard questions were asked.”
Another organization that continually analyzes its culture is the military. In “The HR lesson you can learn from Bowe Bergdahl,” Molly Moseley, a vice president at LinkUp Job Search Engine who has been named by LinkedIn as one of its Top 10 Voices on Management and Corporate Culture, analyzed the former POW/hostage’s assertion that he only left his unit to warn higher commanders of adverse conditions.
She recommended that companies can maintain open communication by creating a mechanism for employees to feel empowered and protected when they provide feedback. In addition to the feedback system mechanism, there is a need for planned action to create faith in it, she wrote.